ACCOUNTING 2, CH 1, 2, & 3

Rosebuck industries reported the following data for the year just ended: sales revenue - $875,000 cost of good sold - $490,000 cost of good manufactured - $280,000 and selling and administrative expenses - $85,000 rosebuck's gross margin would be:

$385,000

The accounting records of bronco company revealed the following information: raw materials used - $60,000 direct labor - $125,000 manufacturing overhead - #360,000 work-in-process inventory, 1/1 - $50,000 finished-goods inventory, 1/1 - $189.000 work-in-process inventory, 12/31 - $76,000 finished-goods inventory, 12/31 - $140,000 bronco's cost of goods manufactured is:

$519,000

The accounting records of brownswood company revealed the following information: work-in-process inventory, Jan 1 - $58,000 work-in-process inventory, Dec 31 - $49,000 finished-goods inventory, Jan 1 - $125,000 finished goods inventory, Dec 31 - $158,000 cost of goods manufactured - $754,000 brownwood's cost of goods sold is :

$721,000

Norwood appliance produces washers and dryers in an assembly-line process. labor costs incurred during a recent period were: corporate executives - $100,000 assembly-line workers - $80,000 security guards - $18,000 and engineering manager - $30,000 the total of norwood's direct labor cost is:

$80,000

Sandy's stuffed toy company produces and sells a stuffed toy dog for $75 per unit. the first month of operation 2,000 units were produced. information for the month includes: variable manufacturing costs - $20.00 per unit variable marketing costs - $3.00 per unit fixed manufacturing costs - $7.00 per unit administrative expenses, all fixed - $15.00 per unit number of units sold - 1,750 what is the contribution margin using a contribution format income statement?

$91,000

The accounting records of Tacoma company revealed the following costs: direct materials used - $170,000 direct labor - $350,000 manufacturing overhead - $400,000 and selling and administrative expenses - $220,000 Tacoma's product costs total:

$920,000

Which of the following employees of a commercial printer/publisher would be classified as direct labor? a. book binder b. plant security guard c. sales representative d. payroll supervisor

book binder

Which of the following manufacturers would most likely use job-order costing? a. chemical manufacturers b. microchip manufacturers c. custom-furniture manufacturers d. gasoline refiners

custom-furniture manufacturers

If the total cost of alternative A is $50,000 and the total cost of alternative B is $34,000, then $16,000 is termed the: a. opportunity cost b. sunk cost c. out-of-pocket cost d. differential cost

opportunity cost

The salary that is sacrificed by a college student who pursues a degree full time is a(n): a. sunk cost b. out-of-pocket cost c. opportunity cost d. differential cost

opportunity cost

Which of the following is an example of a fixed cost? a. property taxes paid by a firm to the city of Los Angeles b. the wages of part-time workers who are paid $8 per hour c. gasoline consumed by salespersons' cars d. surgical supplies used in a hospital's operation room

property taxes paid by a firm to the city of Los Angeles

Which of the following would NOT be considered a direct cost with respect to the service department of a new car dealership? a. repair parts consumed b. property taxes paid by the dealership c. salary of the service department manager d. depreciation on new equipment used to analyze engine problems

property taxes paid by the dealership

Which of the following is a product cost? a. sales commissions b. advertising c. the salary of the vice president-finance d. rent on a factory

rent on a factory

Media Inc., an advertising agency, applies (allocates) overhead to jobs on the basis of direct professional labor hours. Overhead was estimated to be $150,000, direct professional labor hours were estimated to be $15,000, and direct professional labor cost was projected to be $225,000. During the year, Media incurred actual overhead costs of $146,000, actual direct professional labor hours of 14,500, and actual direct labor costs of $222,000. By years-end, the firms overhead was:

$1,000 underapplied

Oregon manufacturing incurred $106,000 of direct labor and $11,000 of indirect labor. the proper journal entry to record these events would be to include a debit (increase) to work in process for: a. $0 because work in process in not affected b. $11,000 c. $106,000 d. $117,000

$106,000

The account records of hill corporation revealed the following selected costs: sales commissions - $40,000 plant employees - $94,000 administrative expenses - $185,000 Hill's period costs total:

$225,000

Dale company, which applies overhead at the rate of 190% of the direct labor cost, began work on job no. 101 during June. the job was completed in July and sold during August, having accumulated direct material charges of $27,000 and labor charges of $15,000, respectively. on the basis of this information, the total overhead applied to job no. 101 amounted to:

$28,500

The barnett company uses high-low method to analyze cost behavior. the manager has determined that machine hours best explains the company's utilities costs. the company's relevant range of activity varies from a low of 5,000 machine hours to a high of 10,000 machine hours. the following data is available for the first six months of the year: month / utilities / machine hrs Jan / $24,900 / 5,250 Feb / $24,000 / 5,500 Mar / $36,400 / 7,500 Apr / $44,160 / 9,750 May / $45,000 / 9,500 the cost equation (formula) is: a. Y = $43,191 + $0.19X where X = machine hrs b. Y = $4,875 + $5.25X where X = machine hrs c. Y = $2,430 + $4.28X where X = machine hrs d. Y = $41,900 + $0.23X where X = machine hrs

Y = $2,430 + $4.28X where X = machine hrs

A typical job-cost sheet would provide information about all of the following items related to an order EXCEPT: a. the cost of direct materials used b. administrative cost c. applied manufacturing overhead d. direct labor hour worked

administrative costs

Which of the following would NOT be characterized as a cost object? a. an automobile manufactured by general motors b. the new York fire department c. a burger king restaurant located in Cleveland, Ohio d. all of these are examples of cost objects

all of these are examples of cost objects

Regency company incurred $90,000 of depreciation for the year. 80% relates to the firm's production facilities, and 20% relates to sales and administrative offices. if all items are handled in proper manner, a review of the company's accounting records should reveal a: a. debit (increase) to depreciation expense for $90,000 b. debit (increase) to manufacturing overhead for $72,000 c. debit (increase) to work-in-process inventory for $18,000 d. debit (increase) to manufacturing overhead for $90,000

debit (increase) to manufacturing overhead for $72,000

The accounting records of Diego company revealed the following costs, among others: factory insurance - $32,000 raw materials used - $256,000 customer entertainment - $15,000 indirect labor - $45,000 depreciation on salespersons' cars - $22,000 production equipment rental costs - $72,000 Costs that would be considered in the calculation of manufacturing overhead total:

factory insurance - $32,000 indirect labor - $45,000 production equipment rental costs - $72,000 Manufacturing overhead = $149,000

Managerial accounting: a. focuses only on historical data b. is governed by GAAP c. focuses primarily on decisions that affect the future d. provides information for parties external to the organization

focuses primarily on decisions that affect the future

Webster has the following budgeted costs at its anticipated production level (expressed in hours): variable overhead - $150,000 fixed overhead - $240,000 if Webster now revises its anticipated production slightly downward, it would expect: a. total fixed overhead of $240,000 and a lower hourly rate for variable overhead b. total fixed overhead of $240,000 and a same hourly rate for variable overhead c. total variable overhead of less than $150,000 and lower hourly rate for variable overhead d. total variable overhead of less than $150,000 and higher hourly rate for variable overhead

total fixed overhead of $240,000 and a same hourly rate for variable overhead

Which of the following statements regarding work in process is NOT correct? a. work in process is partially completed inventory b. work in process consists of direct labor, direct material, and manufacturing overhead c. work-in-process inventory appears on the year-end balance sheet d. work-in-process inventory is credited (decreased) when good are sold

work-in-process inventory is credited (decreased) when good are sold