ACCT 221 WEEK 9 HOMEWORK

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Question 1
Train Company had no beginning inventory and adds all materials at the very beginning of
its only process. Assume 100,000 units were started, and 80% complete at month's end.
Total costs were $24,000 for material and $16,000 for conversion. The cost per equivalent
unit of conversion is _____________.
a) $0.16
b) $0.20
c) $0.36

2. d) $0.40
e) none of these
Question 2
Train Company had no beginning inventory and adds all materials at the very beginning of
its only process. Assume 10,000 units were started, and 5,000 units completed. Ending work
in process is 60% complete. The cost per equivalent unit of conversion is __________.
a) $1.00 if total conversion cost is $3,000
b) $1.00 if total conversion cost is $5,000
c) $1.00 if total conversion cost is $8,000

3. d) $1.00 if total conversion cost is $10,000
e) none of these
Question 3
Train Company makes units, and each unit requires 2 pounds of material at $3 per pound.
500 and 700 units will be built in May and June, respectively. Train keeps material on hand
at 20% of the next month's production needs. How much is the material cost for May's
output?
a) $2,400
b) $3,000
c) $3,240

4. d) $4,200
e) none of these
Question 4
Anticipated unit sales for January are 5,000; sales for February are 4,000; and sales for
March are 8,000. Finished goods are consistently maintained at 80% of the following
month's sales. If units cost $10 each to produce, how much is February's total cost of
production?
a) $0
b) $40,000
c) $72,000

5. d) $80,000
e) none of these
Question 5
Total production of 1,000 units of finished goods required 3,900 actual hours at $12 per
hour. The standard is 4 hours per unit of finished goods, at a standard rate of $11 per hour.
Which of the following statements is true?
a) The labor rate variance is $3,900 favorable.
b) The labor rate variance is $4,000 unfavorable.
c) The labor efficiency variance is $1,100
favorable.

6. d) The labor efficiency variance is $1,100
unfavorable.
e) none of these
Question 6
If beginning work in process was 600 units, 1,400 additional units were put into production,
and ending work in process was 500 units, how many units were completed?
a) 500
b) 900
c) 1,400

7. d) 2,000
e) none of these
Question 7
Train Company had no beginning inventory and adds all materials at the very beginning of
its only process. Assume 10,000 units were started, and 5,000 units completed. Ending work
in process is 60% complete. The cost per equivalent unit of material is __________.
a) $1.00 if total material cost is $3,000
b) $1.00 if total material cost is $5,000
c) $1.00 if total material cost is $8,000

8. d) $1.00 if total material cost is $10,000
e) none of these
Question 8
Assume that actual overhead consisted of $30,000 for indirect labor, $20,000 for indirect
material, and $10,000 for depreciation of factory equipment. Based on the preset rates,
$65,000 of overhead was applied to work in process. Which of the following statements is
true?
a) overhead is underapplied
b) this is viewed as an unfavorable situation
c) there will be a $5,000 debit balance in
Factory Overhead

9. d) all of the above
e) none of these
Question 9
The contract interest rate for bonds ___________.
a) must equal the effective interest rate
b) is greater than the effective interest rate when
bonds are issued at a premium
c) has no relation to the cash flow associated
with a particular bond

10. d) will fluctuate over the life of a bond
e) none of these
Question 10
Train Corporation issued $100,000 of 7%, 15-year bonds on April 1, 2014, at 101. Interest is
paid on April 1 and October 1. The proper entry to record issuance of the bonds includes a
debit to Cash for ____________.