Accounting Final Chapter

1. In what account are the costs of building a chair accumulated until the chair is sold?

Materials

Labor

Finished goods inventory

Cost of goods sold

2. During its first year of operations, Martin Company paid $4,000 for direct materials and $8,500 for production workers' wages. Lease payments and utilities on the production facilities amounted to $7,500 while general, selling, and administrative expenses totaled $3,000. The company produced 5,000 units and sold 4,000 units at a price of $7.50 a unit.

What is the amount of finished goods inventory at the end of the first year?

A) $4,000

B) $5,000

C) $2,500

D) $16,000

3. During its first year of operations, Martin Company paid $4,000 for direct materials and $8,500 for production workers' wages. Lease payments and utilities on the production facilities amounted to $7,500 while general, selling, and administrative expenses totaled $3,000. The company produced 5,000 units and sold 4,000 units at a price of $7.50 a unit.

What is the amount of gross margin for the first year?

$20,000

$12,000

$7,500

$14,000

4. Which of the following is NOT an overhead cost related to producing tables?

A) The production supervisor’s salary

B) The cost of miscellaneous factory supplies

C) The cost of a wood tabletop

D) Depreciation of manufacturing equipment

5. Johnson Manufacturing paid $5,000 for materials, $4,000 for production labor, and $5,000 for sales salaries. It also had $3,500 for depreciation of manufacturing equipment and $2,500 for depreciation of office furniture. What is the average cost per unit to produce 50 units?

$400

$350

$300

$250

6. Alex Company spent $2,500 cash to build 10 desks: $940 for materials, $1,270 for a carpenter's labor, and $290 for tools used to make the desks. None of the desks have been sold. What amount should Alex Company expense for the desks?

$0

$1,270

$1,560

$2,500

7. Which of the following is NOT a product cost?

Direct materials

Direct labor

Manufacturing overhead

Selling and administrative expense