Objective Type Costing Questions

Objective Type Costing Questions 

1. Which one of the following does not appear on the  balance sheet of a manufacturing company?

  • Raw materials inventory
  • Finished goods inventory
  • Work in process inventory
  • Cost of goods manufacture

2. Cost of goods manufactured is calculated as follows:

  • Beginning WIP + direct materials used + direct labor + manufacturing overhead + ending WIP.
  • Direct materials used + direct labor + manufacturing overhead – beginning WIP + ending WIP.
  • Beginning WIP + direct materials used + direct labor + manufacturing overhead – ending WIP.
  • Direct materials used + direct labor + manufacturing overhead – ending WIP – beginning WIP.

3. Which one of the following is an example of a period cost?

  • A change in benefits for the union workers who work in the New York plant of a Fortune 1000 manufacturer
  • Workers’ compensation insurance on factory workers’ wages allocated to the factory
  • A box cost associated with computers
  • A manager’s salary for work that is done in the corporate head office

ISCOM 305 Complete Week 5

ISCOM 305 Entire Week 5

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ISCOM 305 Week 4: Taylor Inc., Widget Production

Taylor Inc. manufactures widgets. There is a particular assembly line for Widget X. This assembly line includes the assembly of various raw materials, subassemblies, and packing of the finished widget. Currently, approximately 27% of the total labor time is utilized in walking by assembly line personnel to obtain the needed parts required to accomplish their assigned tasks. The average hourly cost,

English: Orange Unimog U400 on the assembly li...

including all benefits, is $43 per hour. Seventeen people are required on the assembly line. Lifting containers that weigh approximately 42 pounds is required in several of the respective tasks. The current output of finished widgets is 208 per 8-hour shift. The company incurs an average of four worker’s compensation claims per year in back injuries due to lifting. An average claim equals $109,000 and the employee is out for an average of 280 hours. The injured worker must be replaced to sustain production. By improving the physical layout, productivity may be improved and worker’s comp claims reduced. Two layouts have been proposed.

Alternative One reduces wasted motion (walking) to 1% of total labor used on the assembly line. Physical lifting is reduced to no more then 12 pounds. Six people will be required on the assembly line. Productivity in finished goods per 8-hour shift will increase to 392. It is anticipated that worker’s comp claims will be reduced to .3 per year; however, a capital investment of $1.3 million is required in robotics and mobile storage carts. Useful life of the equipment is 7 years.