Raiborn 5-36

Raibornn 5-46

Raiborn 5- 65

65. Products at Redd Manufacturing are sent through two production departments: Fabricating and
Finishing. Overhead is applied to products in the Fabricating Department based on 150 percent of direct
labor cost and $18 per machine hour in Finishing. The following information is available about Job #297:

Fabricating Finishing
Direct material $1,590 $580
Direct labor cost ? 48
Direct labor hours 22 6
Machine hours 5 15
Overhead applied 429 ?

What is the total cost of Job #297?

a. $2,647
b. $3,005
c. $3,093
d. $3,203
ANS: D
Direct Labor Fabricating $429/1.50 = $286

Applied Overhead Finishing 15 hrs * $18 =

$270

Fabricating Finishing

Direct material $ 1,590 $ 580

Direct labor cost 286 48

Overhead applied 429 270

Total Costs 2,305 898 $ 3,203

Raiborn11-29

29. Which of the following is a commonly used joint cost allocation method?
a. high-low method
b. Regres sion analysis
c. approximated sales value at split-off method
d. weighted average quantity technique
ANS: C
Raiborn11-56

Versatile Company produces four solvents from the same process: C, D, E, and G. Joint product costs are
$9,000. (Round all answers to the nearest dollar.)

Disposal Final

Sales price cost Further sales

per barrel per barrel processing price

Barrels at split-off at split-off costs per barrel

C 750 $10.00 $6.50 $2.00 $13.50

D 1,000 8.00 4.00 2.50 10.00

E 1,400 11.00 7.00 4.00 15.50

G 2,000 15.00 9.50 4.50 19.50

If Versatile sells the products after further processing, the following disposal costs will be incurred: C,
$2.50; D, $1.00; E, $3.50; G, $6.00.

56. Refer to Versatile Company. Using a physical measurement method, what amount of
joint processing cost is allocated to Product C?
a. $3,495
b. $2,447
c. $1,748
d. $1,311
ANS: D
(750/5,150) * $9,000 = $1,311

Raiborn11-86

Raiborn 4-28

Raiborn 4-98

Raiborn 7-11

11. A total variance is best defined as the difference between total

a. actual cost and total cost applied for the standard output of the period.
b. standard cost and total cost applied to production.
c. actual cost and total standard cost of the actual input of the period.
d. actual cost and total cost applied for the actual output of the period.
ANS: D

Raiborn 7 51

Marley Company

The following July information is for Marley Company:

Standards:
Material 3.0 feet per unit @ $4.20 per foot
Labor 2.5 hours per unit @ $7.50 per hour

Actual:
Production 2,750 units produced during the month
Material 8,700 feet used; 9,000 feet purchased @ $4.50 per foot
Labor 7,000 direct labor hours @ $7.90 per hour

53. Refer to Marley Company. What is the material quantity variance?

a. $3,105 F
b. $1,050 F
c. $3,105 U
d. $1,890 U
ANS: D

Material Quantity Variance = (AQ - SQ) * SP

= (8,700 - (2,750 * 3)) * $4.20
= $1,890 U

Raiborn 7-74

Raiborn 6-37

37. Normal spoilage units resulting from a continuous process

a. are extended to the EUP schedule.
b. result in a higher unit cost for the good units produced.
c. result in a loss being incurred.
d. cause estimated overhead to increase.
ANS: B
Raiborn 6-19

19. Transferred-in cost represents the cost from

a. the last department only.
b. the last production cycle.
c. all prior departments.
d. the current period only.
ANS: C

Raiborn 6-58

Raiborn 6-89

Cherub Co.

Beginning inventory (30% complete as to Material B 700 units

and 60% complete for conversion)
Started this cycle 2,000 units
Ending inventory (50% complete as to Material B and 500 units
80% complete for conversion)

Beginning inventory costs:

Material A $14,270
Material B 5,950
Conversion 5,640

Current Period costs:

Material A $40,000
Material B 70,000
Conversion 98,100

Material A is added at the start of production, while Material B is added uniformly throughout the
process.

89. Refer to Cherub Company Assuming a FIFO method of process costing, compute the
average cost per EUP for Material B.
a. $20.10
b. $31.25
c. $20.00
d. $31.00
ANS: B

Material B Costs Equivalent Average Cost

(Current Period) Units per EUP
$70,000 2,240 $31.25