Chapter 10 Quiz

Indicate whether each of the following costs of a cabinet manufacturer would be classified as direct materials cost, direct labor cost, factory overhead cost, or period cost A) Plant manager's salary_________ B) Office administrative assistant's salary_________ C) Depreciation on factory equipment__________ D) Rent on office building__________ E) Varieties of wood_________ F) Varnish for coating cabinets______ G) Utilities cost on the factory______ H) Cabinet assembly worker's salary________ I) Advertising costs__________ J) Screws and glue used in assembly process__________

A) Manufacturing Overhead B) Period Cost C) Manufacturing Overhead D) Period Cost E) Direct Materials F) Manufacturing Overhead G) Manufacturing Overhead H) Direct Labor I) Period Costs J) Manufacturing Overhead

Factory overhead is applied to production using a predetermined overhead rate. A) True B) False

A) True

For an automotive repair shop, the wages of mechanics would be classified as direct labor cost. A) True B) False

A) True

Inventories of finished products are reported as current assets on a manufacturer's balance sheet. A) True B) False

A) True

Non-manufacturing costs are generally classified into two categories: selling and administrative. A) True B) False

A) True

Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP). A) True B) False

A) True

Contia Inc. forecasts that total overhead for the current year will be $12,600,000, and total machine hours will be 300,000 hours. However, the actual overhead is $3,250,000, and the actual machine hours are 98,500 hours. If the company uses a predetermined overhead rate based on machine hours for applying overhead, the overhead will be _____. A) overapplied by $887,000 B) underapplied by $887,000 C) overapplied by $9,350,000 D) underapplied by $9,350,000

A) overapplied by $887,000

The following information is available for the first month of operations for Brandt, Inc.: ​​ Sales: $570,000 Gross profit: 210,000 Indirect labor: 20,000 Indirect materials: 5,000 Other factory overhead: 37,000 Direct materials cost: 390,000 Total manufacturing costs: 658,000 ​ Calculate direct labor cost for Brandt, Inc. A) $226,000 B) $206,000 C) $231,000 D) $218,000

B) $206,000

Compute factory overhead cost from the following costs: Depreciation on factory buildings: $ 45,950 Depreciation on office equipment: 32,980 Direct materials used: 96,840 Indirect labor: $ 6,580 A) $73,000 B) $52,530 C) $96,840 D) $78,930

B) $52,530

Robbson Manufacturers has estimated total factory overhead costs of $184,000 and 25,000 direct labor hours for the current fiscal year. If job number 115 incurred 1,200 direct labor hours, the Work-in-Process account will be increased and factory overhead will be decreased by _____. A) $25,000 B) $8,832 C) $7,022 D) $153

B) $8,832

Heedy Winery accumulates the costs incurred in the labeling process in an activity cost pool. Costs for the labeling process are estimated to be $320,000, and the winery expects to generate 640,000 labels for the coming year. Production for its top-selling wine is estimated at 160,000 bottles. How much overhead from the labeling process will be allocated to this particular variety of wine? A) $40,000 B) $80,000 C) $160,000 D) $320,000

B) $80,000

Which of the following is an example of a factory overhead cost? A) Repair and maintenance cost on the administrative building B) Factory heating and lighting cost C) Insurance premiums on salespersons' automobiles D) President's salary

B) Factory heating and lighting cost

Upon completing a job, direct materials totaled $4,500; direct labor, $2,500; and factory overhead, $3,500. Units produced totaled 2,100. What is the per unit cost? A) $2 B) $1 C) $3 D) $5

D) $5

If the cost of direct materials is not a significant portion of the total product cost, it may be classified as _____. A) direct labor costs B) selling and administrative costs C) miscellaneous costs D) factory overhead costs

D) factory overhead costs

Which of the following best explains a job order cost system? A) It provides product costs for each manufacturing department or process. B) It is often used by companies that manufacture custom products for customers or batches of similar products. C) It is often used by companies that manufacture units of a product that are indistinguishable from each other. D) It is used by companies that manufacture units of a product using a continuous production process.

B) It is often used by companies that manufacture custom products for customers or batches of similar products.

The cost of wages paid to employees directly involved in the manufacturing process of converting materials into finished product is classified as _____. A) factory overhead cost B) direct labor cost C) wages expense D) direct materials cost

B) direct labor cost

Depreciation on factory equipment is an example of a_____. A)period cost B) product cost C) selling cost D) prime cost

B) product cost

The following information is available for the first month of operations for Bluemoon, Inc.: Sales: $850,000 Gross profit: 330,000 Indirect labor: 35,000 Indirect materials: 14,000 Other factory overhead: 9,000 Materials purchased: 360,000 Total manufacturing costs: 670,000 Materials inventory, end of period: 20,000 ​ Based on the information provided for Bluemoon, Inc., calculate the cost of goods sold. A) $670,000 B) $418,000 C) $520,000 D) $650,000

C) $520,000

Which of the following would be a period costs for a textbook printing company? A) Wages of a press operator B) Utility costs of the factory C) Advertising expenses D) Paper costs

C) Advertising expenses