Business
Cena Company (CC) manufactures sporting equipment and it provided the following information for its most recent year of operations (all raw materials are used in production as direct materials):Purchase of raw materials $ 45,000Direct labor $ 53,000Manufacturing overhead applied to work in process $ 68,000Actual manufacturing overhead cost $ 68,000Inventory balances at the beginning and the end of the year were as follows:Beginning EndingRaw materials $ 10,000 $ 22,500Work in process $ 35,000 $ 69,000Finished goods $ 0 $ 39,500The company has asked you to explain the flow of costs within the Schedules of Cost of Goods Manufactured and Cost of Goods Sold to its senior management team. To aid your explanation, you have decided to create visualization that depicts the flow of these costs.(Note that for all questions below you may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)1a. The conversion costs of $121,000 (shown in item 7) contain which of the following costs?check all that apply 1Direct labor + Manufacturing overhead applied to work in processDirect materials used in production + Direct laborDirect materials used in production + Manufacturing overhead applied to work in processRaw material purchases + Manufacturing overhead applied to work in process1b. Which of the following equations reflects the flow of costs within the three inventory accounts included in the schedules of cost of goods manufactured and cost of goods sold?check all that apply 2Beginning balance Additions Ending balance = Transferred outBeginning balance + Additions Ending balance = Transferred outBeginning balance Additions + Ending balance = Transferred outBeginning balance + Additions + Ending balance = Transferred out1c. Which of the following statements is true?check all that apply 3The cost of goods manufactured transfers out to cost of goods sold.The cost of goods manufactured transfers out to raw materials inventory.The cost of goods manufactured transfers out to finished goods inventory.The cost of goods manufactured transfers out to work in process inventory.1d. The total amount of product costs included in this visualization that would be recorded as an expense in the income statement would be:check all that apply 4$80,000$32,500$119,500$199,5001e. If the companys actual manufacturing cost had been $70,000 instead of $68,000, what effect would it have had on the cost of goods manufactured (COGM)?check all that apply 5It would increase the beginning balance of work in process inventory by $2,000.It would decrease the cost of goods manufactured (COGM) by $2,000.It would increase the cost of goods manufactured (COGM) by $2,000.It would have no effect on the cost of goods manufactured (COGM).
