Problem 1:
The T&R Company's production costs for August are: direct labor, $13,000; indirect labor, $6,500; direct materials, $15,000; property taxes on production equipment, $800; heat, lights and power, $1,000; and insurance on plant and equipment, $200. T&R Company's factory overhead incurred for August is
a. 2,000
b. 6,500
c. 8,500
d. 21,500
e. 36,500
Problem 2: If one unit of Product X used $2.50 of direct materials and $3.00 of direct labor, sold for $8.00, and was assigned overhead at the rate of 30% of direct labor costs, how much gross profit was realized from this sale?
a. 8.00
b. 5.50
c. 2.50
d. 1.60
e. 0.90
Problem 3: The FIFO method does not use the costs of beginning inventory in computing cost per equivalent unit for the current period