4210 Practice Exam 1 Solution Essay

1423 Words Mar 4th, 2015 6 Pages
Accounting 4210, Practice Exam 1 Solution Name______________ Section___

Instructions:
You have 75 minutes to complete 11 questions on this exam.
The 10 multiple choice questions are worth 4 points each.
a. Credit will only be given for clearly circling one of the four options.
The workout questions are worth a total of 60 points.
a. Credit will only be given if you clearly show your work, and clearly indicate the final answer.
Good luck!

1. SuperFine Restaurant Supply Company reported the following information for the year just ended. Estimated Actual
Units sold 1,000 1,100
Direct labor hours 2,000 2,050

Sales Revenue $140,000 $145,000
Direct materials cost 30,000 31,000
Direct labor cost 20,000 22,000
Manufacturing overhead cost
…show more content…
Creative Costumes, Inc., presented the following information about January 2011:

Depreciation on sales force cars $15,000
Direct labor used 140,000
Indirect materials used 17,000
Machinery depreciation 65,000
Office building rent 38,000
Plant manager salary 150,000
Property taxes on plant 37,000
Raw materials purchased 240,000
Raw materials used 210,000
Rent on the plant 56,000
Sales force salaries 175,000
Storage costs for raw materials 25,000

Compute Creative’s total manufacturing cost incurred in January.

A) $875,000
B) $675,000
C) $940,000
D) $700,000

The correct answer is D, $700,000. The nonmanufacturing costs are the costs incurred to make the inventory are crossed out below. Notice that purchasing raw material is not the same thing as incurring a cost. You have simply traded one asset for another. You have not yet used it to make a product, or provide a service.

Depreciation on sales force cars $15,000
Direct labor used 140,000
Indirect materials used 17,000
Machinery depreciation 65,000
Office building rent 38,000
Plant manager salary 150,000
Property taxes on plant 37,000
Raw materials purchased 240,000
Raw materials used 210,000
Rent on the plant 56,000
Sales force salaries 175,000
Storage costs for raw materials 25,000

Use the following information regarding Hampton Company to answer the next four questions

Hampton Company has three support service departments (supervision, maintenance, and

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