Pick the correct answer Bryant Company designs and builds fancy dining room tabl
ID: 2386551 • Letter: P
Question
Pick the correct answer
Bryant Company designs and builds fancy dining room tables for individual customers. On July 1, there were two jobs in process: Job 391 with a beginning balance of 21,700 dollars and Job 392 with a beginning balance of 8,790 dollars. Overhead costs are applied by using a rate of 70% of direct labor costs. Both jobs are unfinished on July 31. Data on July costs for both jobs are as follows:
Job 391 Job 392
Direct materials 5,100 dollars 9,200 dollars
Direct Labor cost 2,700 dollars 11,00 dollars
1. What is the total of the Work in Process Account at July 31?
a. 28,000 dollars
b. 58,490 dollars
c. 68,080 dollars
d. 37,590 dollars
e. None of these
2. Wright’s construction builds custom houses for individual buyers. On July 1, it had one job started with a beginning Work in Process of 56,000 dollars. During June the job finished and sold. Direct labor for the job in june was 75,000 dollars and the direct materials used were 57,000 dollars. Overhead is computed at a rate of 65% of direct labor. There is a markup of 35% on all sales. What was the selling price of the house?
a. 319,612.50
b. 236,750
c. 82,862.50
d. 272,600
e. 262,087.50
Laudermild produces dairy equipment. Most of its jobs have a number of units per job. The company has two different departments through which all jobs pass. Overhead is applied using a plantwide rate of 13 dollars per direct labor hour. Direct labor wages average 8 dollars an hour. Data for Job number 3 for the year is:
Direct Materials 40,000 dollars
Direct Labor Costs
Dept. A 60,000 dollars
Dept. B 12,000 dollars
Machine hours used
Dept. A 200 dollars
Dept. B 2,400 dollars
Units Produced 20,000 units
3. What is the cost PER unit?
a. 11.45
b. 5.60
c. 5.73
d. 11.58
e. None of these
4. Which of the following businesses is most likely to use process costing?
a. Chemical plant
b. Architectural firm
c. Dentist’s office
d. Manufacturer of fine furniture
5. Conversion costs include:
a. Direct materials and direct labor
b. Direct labor and manufacturing overhead
c. Direct materials and manufacture overhead
d. Direct labor and administrative
Explanation / Answer
1. What is the total of the Work in Process Account at July 31?
c. 68,080 dollars
Job 391 Job 392
Beginning WIP $21,700 $8,790
Direct materials $5,100 $9,200
Direct Labor cost $2,700 $11,000
Overhead cost
70% of Direct Labor $1,890 $7,700
Ending Work In Process $31,390 $36,690
Total Work In Process $68,080
2. What was the selling price of the house?
a. 319,612.50
Beginning WIP $56,000.00
Direct Materials $57,000.00
Direct labor $75,000.00
Overhead
$75,000 x 65% $48,750.00
Total cost $236,750.00
Add:Mark up 35% $82,862.50
Selling price $319,612.50
3. What is the cost PER unit?
a. 11.45
Direct Materials $40,000
Direct labor
Dept. A $60,000
Dept. B $12,000
Overhead
($60000+$12000)x$13/8 $117,000
Total cost $229,000
Cost per unit
$229,000 / 20,000 $11.45
4. Which of the following businesses is most likely to use process costing?
a. Chemical plant
5. Conversion costs include:
b. Direct labor and manufacturing overhead