28. Last month a manufacturing company had the following financial data: Gross M

Question

28. Last month a manufacturing company had the following financial data: Gross Margin Ending finished goods inventory Beginning finished goods inventory Sales S63,000 $71,000 $84,000 $505,000 What was the cost of goods sold for the month? A) $429,000 B) $492,000 C) S442,000 D) $455,000 31. The total manufacturing cost of Job #5942 assuming normal costing is composed of: A) direct material and direct labor. B) direct material, direct labor, manufacturing overhead, and outlays for selling costs. c) direct material, direct labor, manufacturing overhead, and outlays for both selling and administrative costs. D) direct material, direct labor, and applied manufacturing overhead. E) direct material, direct labor, and actual manufacturing overhead. 32. Which of the following is (are) example(s) of a semi-variable (or mixed) cost? I) A building that is used for both manufacturing and sales activities. II) An employee's compensation, which consists of a flat salary plus a commission, III) Depreciation that relates to five different machines. IV) Maintenance cost that must be split between sales and administrative offices. A) I. B) II. C) I and III. D) I, III, and IV.

Explanation / Answer

28 Cost of goods sold for the month is Sales 505000 Ending finished goods inventory 71000 Total 576000 Less : Gross Margin 63000 Beginning Finished goods inventory 84000 Cost of goods sold 429000 So, the correct alternative is A 31 The correct alternative is D Alternative A is incorrect as it is not consisting of Manufacturing overhead Alternative E is incorrect as manufactured overhead has to be applied not to be actual Alternative B & C are incorrect as selling and administrative costs does not form part of manufacturing cost in normal costing. So the correct alternative is D which has all the correct element of manufacturing costs 32 The correct alternative is B-II That is because other alternative are totallu fixed costs in nature 33 The correct alternative is C The work in process itself speak about the a job or Jobs which is in process of completion. So the ending balance represents the uncompleted jobs in hand. The other alternatives are incorrect because they do not possess the above understanding. 36 The correct alternative is D Total conversion costs is 100% Manufacturing overhead is 60% So Material and Labor cost is 40% Going by above assumption if 40% equals (52000+28000) The other 60% equals 120000 and thus the correct alternative is D 41 The correct alternative is D, the calculation of which is as follows Raw Materials inventory as on August 1 5000 Add : purchases made during the month 25000 Less : Raw Materials inventory as on August 31 3000 Direct material used 27000

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