First Practice Examination
AC 206 – Managerial Accounting
Fall Semester 2010
Question No. 1
Attached is a sheet containing T-accounts for Susie’s Old Fashioned Rag Rugs for the year ended
December 31, 2009.
Required:
1. Using the attached T-accounts determine the following:
a) Ending balance for WIP Inventory ___________
b) Product finished during the period _________
c) Actual manufacturing overhead _________
d) Amount of MOH variance ______________
e) Selling and Administrative Expenses _____________
2. Prepare a cost of goods manufactured schedule in proper form.
3. Prepare an income statement including a detailed cost of goods sold section in proper form.
4. Why do firms prepare a cost of goods manufactured schedule?
5. What are the three inventory accounts used in a manufacturing concern?
Question No. 2
Lynette’s Puppy Supplies makes a high-end dog food. Variable manufacturing overhead is based on
machine hours. The standard costs for 20-pound bag of dog food.
Standard Quantity Standard Cost
Direct Materials…………………………………… 22 lbs $ 0.25 per lb
Direct Labor…………………………………………. .5 hours $ 10.00 per hour
Variable Manufacturing Overhead…….. $1.00 Per DLH
During August 11,000 bags of dog food were produced:
a. 250,000 pounds of raw materials were purchased for $67,500.
b. 235,000 pounds of raw materials were used during August.
c. 4,800 direct-labor hours were worked at a cost of $50,400.
d. Actual manufacturing overhead incurred was $5500.
Question No. 2 Continued
