4210 Practice Exam 1 Solution Essay - 1423 Words

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