ACCT 2302 test problem

Using the following information, compute the direct materials used. Raw materials inventory, January 1 $ 20,000 Raw materials inventory, December 31 40,000 Work in process, January 1 18,000 Work in process, December 31 12,000 Finished goods, January 1 40,000 Finished goods, December 31 32,000 Raw materials purchases 1,700,000 Direct labor 760,000 Factory utilities 150,000 Indirect labor 50,000 Factory depreciation 400,000 Operating expenses 420,000

1,680,000

Hayward Manufacturing Company developed the following data: Beginning work in process inventory $900,000 Direct materials used 700,000 Actual overhead 1,100,000 Overhead applied 800,000 Cost of goods manufactured 1,200,000 Ending work in process 1,500,000 Hayward Manufacturing Company's total manufacturing costs for the period is

1,800,000

In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 90,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. How many units were transferred out of the process in June?

100,000

20,000 units in a process that are 70% complete are referred to as:

14,000 equivalent units of production.

Boswell Company manufactures two products, Regular and Supreme. Boswell's overhead costs consist of machining, $3,000,000; and assembling, $1,500,000. Information on the two products is: Regular Supreme Direct labor hours 10,000 15,000 Machine hours 10,000 30,000 Number of parts 90,000 160,000 Overhead applied to Supreme using traditional costing using direct labor hours is

2,700,000

Thomsen Computer Company produces three products: Earth, Wind, and Fire. Earth requires 80 machine setups, Wind requires 60 setups, and Fire requires 180 setups. Thomsen has identified an activity cost pool with allocated overhead of $960,000 for which the cost driver is machine setups. How much overhead is assigned to each product?

Earth: 240,000 Wind: 180,000 Fire: 540,000

Raw materials that can be conveniently and directly associated with a finished product are called materials overhead.

False

The sum of the direct materials costs, direct labor costs, and beginning work in process is the total manufacturing costs for the year.

False

When raw materials are purchased, the Work in Process Inventory account is debited.

False

Which one of the following is not a direct material?

Lubricant for a ball-bearing joint for a large crane.

Bark Manufacturing has three activities in its manufacturing process: machine setups, machining, and inspections. Estimated annual overhead cost for each activity is $80,000, $162,500, and $28,000, respectively. The expected annual use in each department is 1,000 setups, 12,500 machine hours, and 875 inspections. Compute the overhead rate for each activity

Machine setups 80 per Machining 13 per machine hour Inspections 32 per -Machine setups = $80,000 ÷ 1,000 = $80 per setup -Machining = $162,500 ÷ 12,500 = $13 per machine hour =Inspections= $28,000 ÷ 875 = $32 per inspection

Manufacturing costs that cannot be classified as either direct materials or direct labor are known as

Manufacturing Overhead

Crawford Company has the following equivalent units for July: materials 20,000 and conversion costs 18,000. Production cost data are: Materials Conversion Work in process, July 1 $ 6,400 $ 3,000 Costs added in July 50,400 42,000 The unit production costs for July are:

Materials: 2.84 Conversion: 2.50

Which of the following is true of activity-based costing?

More cost pools

Which of the following is a value-added activity?

Packaging

Which one of the following should be equal to the balance of the Work In Process Inventory account at the end of the period?

The sum of the costs shown on the job cost sheets of unfinished jobs

A job order cost system identifies costs with a particular job rather than with a set time period.

True

Both direct labor cost and indirect labor cost are product costs.

True

Finished goods inventory does not appear on a cost of goods manufactured schedule.

True

In a process cost system, costs are tracked through a series of connected manufacturing processes or departments, rather than by individual jobs.

True

In a process cost system, total costs are determined at the end of a month or year.

True

Total manufacturing costs for a period consists of the costs of direct materials used, the cost of direct labor incurred, and the manufacturing overhead applied during the period.

True

Each of the following is a limitation of activity-based costing except that

it decreases control over overhead costs.

Managerial accounting applies to each of the following types of businesses except

managerial accounting applies to all types of firms.

Use of activity-based costing will result in the development of

multiple activity-based overhead rates.

Molina Company has beginning and ending work in process inventories of $130,000 and $145,000 respectively. If total manufacturing costs are $680,000, what is the total cost of goods manufactured?

665,000

Charley Company's Assembly Department has materials cost at $2 per unit and conversion cost at $4 per unit. There are 20,000 units in ending work in process, all of which are 70% complete as to conversion costs and 100% complete as to materials. How much are total costs to be assigned to inventory?

96,000

In a job order cost accounting system, the Raw Materials Inventory account is

A control account

Which of the following is a true statement about process cost systems?

A process cost system has one work in process account for each process.

Which of the following manufacturing cost elements occurs in a process cost system?

All of these.

A job order cost system is most appropriate when a large volume of uniform products are produced.

False

Actual manufacturing overhead costs are assigned to each job by tracing each overhead cost to a specific job.

False

Factory labor should be assigned to selling and administrative expenses on a proportionate basis.

False

Managerial accounting is primarily concerned with managers and external users.

False

Manufacturing overhead is the only product cost that can be assigned to jobs as soon as the costs are incurred.

False

Which would be an appropriate cost driver for the machining activity cost pool?

Machine Hours

Not all activities labeled non-value-added are totally wasteful, nor can they be totally eliminated.

True

To achieve accurate costing, a high degree of correlation must exist between the cost driver and the actual consumption of the activity cost pool.

True

A manufacturing company reports cost of goods manufactured as a(n)

component in the calculation of cost of goods sold on the income statement.

The two basic types of cost accounting systems are

job order and process cost systems.

Which of the following is not typical of traditional costing systems?

Use of multiple cost drivers to allocate overhead.

Ogleby Inc.'s accounting records reflect the following inventories: Dec. 31, 2016 Dec. 31, 2017 Raw materials inventory $120,000 $ 96,000 Work in process invt. 156,000- 174,000 Finished goods inventory150,000- 138,000 During 2017, Ogleby purchased $980,000 of raw materials, incurred direct labor costs of $175,000, and incurred manufacturing overhead totaling $224,000. How much is total manufacturing costs incurred during 2017 for Ogleby?

$1,403,000

At the beginning of the year, Monroe Company estimates annual overhead costs to be $2,400,000 and that 300,000 machine hours will be operated. Using machine hours as a base, the amount of overhead applied during the year if actual machine hours for the year was 315,000 hours is

$2,520,000.

Assuming that the direct materials used are $1,700,000, compute the total manufacturing costs using the following information. Raw materials inventory, January 1 $ 20,000 Raw materials inventory, December 31 40,000 Work in process, January 1 18,000 Work in process, December 31 12,000 Finished goods, January 1 40,000 Finished goods, December 31 32,000 Raw materials purchases 1,700,000 Direct labor 760,000 Factory utilities 150,000 Indirect labor 50,000 Factory depreciation 400,000 Operating expenses 420,000

$3,060,000.

During 2017, Cotte Manufacturing expected Job No. 59 to cost $300,000 of overhead, $500,000 of materials, and $200,000 in labor. Cotte applied overhead based on direct labor cost. Actual production required an overhead cost of $295,000, $570,000 in materials used, and $220,000 in labor. All of the goods were completed. How much is the amount of over- or underapplied overhead?

$35,000 overapplied

Gannon Company had the following information at December 31: Finished goods inventory, January 1 $ 50,000 Finished goods inventory, December 31 150,000 If the cost of goods manufactured during the year amounted to $2,200,000 and annual sales were $2,750,000, the amount of gross profit for the year is

$650,000

One of Matheny Company's activity cost pools is inspecting, with estimated overhead of $200,000. Matheny produces throw rugs (700 inspections) and area rugs (1,300 inspections). How much of the inspecting cost pool should be assigned to throw rugs?

$70,000.

Reynoso Corporation manufactures titanium and aluminum tennis racquets. Reynoso's total overhead costs consist of assembly costs and inspection costs. The following information is available: Cost Titanium Aluminum Total Cost Assembly 500 mach. hours 500 mach. hours $60,000 Inspections 350 150 $100,000 2,100 labor hours 1,900 labor hours Reynoso is considering switching from one overhead rate based on labor hours to activity-based costing. Using activity-based costing, how much assembly cost is assigned to titanium racquets?

30,000

Direct labor is sometimes the appropriate basis for assigning overhead cost to products. It is appropriate to use direct labor when which of the following is true? (1) Direct labor constitutes a significant part of total product cost. (2) A high correlation exists between direct labor and changes in the amount of overhead costs.

Both

Which of the following is not a manufacturing cost category?

Cost of goods sold

Which one of the following would not be classified as manufacturing overhead?

Direct Materials

Which of the following is not classified as direct labor?

Wages of supervisors

A materials requisition slip showed that direct materials requested were $66,000 and indirect materials requested were $9,000. The entry to record the transfer of materials from the storeroom is

Work In Process Inventory 66,000 Manufacturing Overhead 9,000 Raw Materials Inventory 75,000

Traditional costing systems use multiple predetermined overhead rates.

false

Identifying and classifying activities is the

first step under ABC

In a process cost system, a production cost report is prepared

for each processing department.

The Manufacturing Overhead account shows debits of $30,000, $24,000, and $28,000 and one credit for $86,000. Based on this information, manufacturing overhead

has been overapplied.

The first step in activity-based costing is to

identify and classify the activities involved in the manufacture of specific products, and allocate overhead to cost pools.

Zibba Company enters materials at the beginning of the process. In January, there was no beginning work in process, but there were 200 units in the ending work in process inventory. The number of units completed equals the number of

units started less 200.