Author: Anonymous

Goblet Industries manufactures drinking cups which it sells to retailers. Goblet operates separate production lines for Large cups, Medium cups, and Small cups. The estimated annual manufacturing overhead costs and machine hours associated with each of these production lines are as follows:   If Goblet uses a single plantwide rate to allocate its $7 million of overhead using machine hours as the allocation base, which products are over-costed or under-costed?

Eagle Enterprises manufactures mailboxes. Eagle plans to produce 5,700 mailboxes during the current year, and Eagle’s plant manager uses a cost equation to estimate the total manufacturing costs. The plant manager expects Eagle’s current year total fixed manufacturing costs and per-unit variable manufacturing costs to be the same as in the prior year. During the prior year, Eagle produced 4,300 mailboxes at an average per-unit manufacturing cost of $35 per mailbox, and Eagle’s total fixed manufacturing costs were $60,200. What is the estimated total cost of manufacturing 5,700 mailboxes in the current year? Round to the nearest whole dollar and do not enter a dollar sign (e.g., enter 89, not $89.00).

Glory Industries manufactures brass trumpets. Glory manufactured 3,000 trumpets in April and 3,900 trumpets in May. Here are data regarding Glory’s manufacturing costs: Which costs are properly classified as mixed costs?

Pelican Inc. manufactures decorative lamps. Pelican’s relevant range is 3,000 to 4,500 lamps per month. Pelican’s total fixed manufacturing costs are $680,000 per month. During the month of April, Pelican produces 4,000 lamps at an average per-unit manufacturing cost of $324 per lamp. During the month of May, Pelican’s production drops 15% from 4,000 lamps to only 3,400 lamps. What is the percentage increase in the average per-unit manufacturing cost of the lamps produced in May as compared to the lamps produced in April? (Round to two decimal points.)

Discount Tire Store’s income statement for the current month is as follows:   Each tire sells for $150. Variable selling expenses are $8.50 per tire, and the remainder of the selling expenses are fixed. Variable administrative expenses are 7% of sales, and the remainder of the administrative expenses are fixed. Assume “Y” equals the total selling and administrative expenses and “X” equals the total number of tires sold. What is the mixed cost formula for total selling and administrative expenses?

Oak Industries uses predetermined overhead rates based on direct labor costs to apply manufacturing overhead to jobs. For the machining department, the predetermined overhead rate is 200% of direct labor cost. For the assembly department, the predetermined overhead rate is 50% of direct labor cost. Job 862, which was started and completed during the year, was charged with the following costs: What is the total cost of producing Job 862? Round to the nearest whole dollar and do not enter a dollar sign (e.g., enter 89, not $89.00).

Birch Enterprises uses a process costing system. The company has only one processing department. At the end of the period, work in process inventory consists of 10,000 units that have a total cost of $22,550. The cost per equivalent unit is $2.00 for direct materials and $3.00 for conversion costs. With respect to direct materials, the units in ending work in process inventory are 70% complete. With respect to conversion costs, the units in ending work in process inventory are:

Alpine Products has two processing departments and uses a process costing system. Here are data regarding the work in process inventory of the second processing department for the month of May.   The units in ending work in process inventory are 100% complete with respect to direct materials and 75% complete with respect to conversion costs. What is the total cost of the units in ending work in process inventory?

On September 1, Palm Enterprises’ work in process inventory had a balance of $9,500 and included only one job (Job 17). During September, $40,800 of direct materials and $18,000 of direct labor were used to complete Job 17. Manufacturing overhead costs are allocated at a rate of 120% of direct labor costs. Palm did not start any new jobs during September and Palm completed Job 17 on September 24. What is the total cost of producing Job 17? Round to the nearest whole dollar and do not enter a dollar sign (e.g., enter 89, not $89.00).

Quick Stop, Inc. operates a gas station and convenience store along with a car wash housed in a small building located adjacent to the store. The manager of Quick Stop is analyzing the costs and benefits of replacing its old car wash machine with a new car wash machine that would provide customers with a more premium service and would lower Quick Stop’s operating costs. The new car wash would reduce maintenance and utility costs and would give customers the option of both washing and waxing their cars. Instead of investing funds in the new car wash machine, Quick Stop could purchase additional refrigeration units for the beverage section of its convenience store. Which of the following statements regarding the decision to replace the old car wash machine with a new car wash machine is not true?