Test 1

Managerial Accounting

Answer all the questions:3*5= 15 Marks

1. Lompac Products manufactures a variety of products in its factory. Data for the most recent month's operations follow:

Beginning raw materials inventory

$

340,000

Purchases of raw materials

870,000

Ending raw materials inventory

210,000

Direct labour

245,000

Manufacturing overhead

560,000

Beginning work-in-process inventory

150,000

Ending work-in-process inventory

170,000

Required:

Prepare a schedule of cost of goods manufactured for the company for the month.

2. Last month Bims, a wedding dress retailer, had total sales of $3,000,000, selling expenses of $315,000, and administrative expenses of $385,000. The company had beginning merchandise inventory of $250,000, purchased additional merchandise inventory for $950,000, and had ending merchandise inventory of $100,000.

Required:

Prepare an income statement for the company for the month in good form.

3. Martinez Company's relevant range of production is 7,500 units to 12,500 units. When it produces and sells 10,000 units, its unit costs are as follows:

Amount

Per Unit

Direct materials

$

6.00

Direct labour

$

3.50

Variable manufacturing overhead

$

1.50

Fixed manufacturing overhead

$

4.00

Fixed selling expense

$

3.00

Fixed administrative expense

$

2.00

Sales commissions

$

1.00

Variable administrative expense

$

0.50

Required:

a.If 15,500 units are produced, what is the total amount of manufacturing manufacturing cost, overhead cost incurred to support this level of production?