final accounting
Question Content Area Using the direct method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced. It allocates Cafeteria Department costs based on the number of employees served. It has the following information about its two service departments and two production departments, Cutting and Assembly: ______________________________________________sq. ft___________________# of employees____ janitorial dept. 100 20 cafeteria dept. 10000 10 cutting dept. 2000 60 assembly dept. 8000 20 The percentage (proportional) usage of the Janitorial Department by the Cutting Department is
20%(Based on square footage and ignoring the support departments (under the direct method), the proportional usage of the Janitorial Department costs by the Cutting Department is 20%, or 2,000 ÷ (2,000 + 8,000).)
Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to determine Bounty's variable utilities cost per machine hour. Round your answer to the nearest cent. CostMachine HoursMarch$3,003 15,082 April2,605 10,061 May2,824 11,543 June3,721 17,991
$0.14
Given the following information, determine the activity rate for setups. ActivityTotal Activity-Base UsageBudgeted Activity CostSetups9,200 $62,600 Inspections23,600 $142,700 Assembly (dlh)74,700 $383,900
Activity Rate = Budgeted Activity Cost ÷ Total Activity-Base Usage = $62,600 ÷ 9,200 setups = $6.80 per setup
The cost of goods sold for Michaels Manufacturing in the current year was $233,000. The January 1 finished goods inventory balance was $31,600, and the December 31 finished goods inventory balance was $24,200. Cost of goods manufactured during the period was
Cost of Goods Manufactured = Cost of Goods Sold - Beginning Finished Goods Inventory + Ending Finished Goods Inventory = $233,000 - $31,600 + $24,200 = $225,600
If the contribution margin ratio for France Company is 47%, sales are $412,000, and fixed costs are $108,000, the operating income is
$85,640
If sales are $303,000, variable costs are 75% of sales, and operating income is $51,400, the operating leverage is
1.5
Morocco Desk Co. purchases 6,000 feet of lumber at $6 per foot. The standard price for direct materials is $5. The entry to journalize the purchase and unfavorable direct materials price variance is
Direct Materials 30,000 Direct Materials Price Variance 6,000 Accounts Payable 36,000
Question Content Area Department S had 700 units 74% completed in process at the beginning of the period, 8,000 units completed during the period, and 800 units 35% completed at the end of the period. What was the number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories? Assume the completion percentage applies to both direct materials and conversion cost.
Equivalent units = (700 × 26%) + (8,000 - 700) + (800 × 35%) = 7,762 units
Which of the following describes the behavior of a variable cost per unit?
It remains constant with changes in the activity level.
Reynolds Manufacturers Inc. has estimated total factory overhead costs of $95,000 and expected direct labor hours of 9,500 for the current fiscal year. If Job 117 incurs 2,300 direct labor hours, Work in Process will be debited and Factory Overhead will be credited for
Predetermined Factory Overhead Rate = Estimated Total Factory Overhead Costs ÷ Estimated Activity Base = $95,000 ÷ 9,500 labor hours = $10 per labor hour Amount Credited to Factory Overhead = Predetermined Factory Overhead Rate × Direct Labor Hours = $10 × 2,300 labor hours = $23,000
Question Content Area Jensen Company reports the following: Direct materials used$345,000Direct labor incurred250,000Factory overhead incurred400,000Operating expenses175,000 Jensen Company's product costs are
Product Costs = Direct Materials Used + Direct Labor Incurred + Factory Overhead Incurred = $345,000 + $250,000 + $400,000 = $995,000
Question Content Area Standard costs are used in companies for a variety of reasons. Which of the following is not one of the benefits for using standard costs
They are used to indicate where changes in technology and machinery need to be made.
Question Content Area In the manufacture of 9,800 units of a product, direct materials cost incurred was $173,600, direct labor cost incurred was $113,000, and applied factory overhead was $43,200. What is the total conversion cost?
Total Conversion Cost = Direct Labor + Factory Overhead = $113,000 + $43,200 = $156,200
When Job 117 was completed, direct materials totaled $18,063; direct labor, $27,740; and factory overhead, $18,709. A total of 2,304 units were produced at a per-unit cost of
Total cost = Direct materials + Direct labor + Factory overhead = $18,063 + $27,740 + $18,709 = $64,512Per unit cost = $64,512 / 2,304 units = $28
Question Content Area Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000.
Work in Process—Department 1 100,000 Materials 100,000
Question Content Area Principal components of a master budget include
all of the above
Question Content Area In a process cost system, the amount of work in process inventory is valued by
allocating departmental costs between completed and partially completed units
Question Content Area Planning for capital expenditures is necessary for all of the following reasons except
amounts spent for office equipment may be immaterial
Cost of goods sold for a manufacturer equals cost of goods manufactured plus
beginning finished goods inventory less ending finished goods inventory
Question Content Area The point where the sales line and the total costs line intersect on the cost-volume-profit chart represents the
break-even point
Question Content Area Which of the following is an example of direct materials cost for an automobile manufacturer?
cost of interior upholstery
The systematic examination of the relationships among selling prices, volume of sales and production, costs, and profits is termed _____ analysis.
cost-volume-profit
In a job order cost accounting system, the journal entry to record the flow of direct labor costs into production consists of a
debit to Work in Process and a credit to Wages Payable
When preparing the cash budget, all the following should be considered except
depreciation expense
Question Content Area For a supervisor of a manufacturing department, which of the following costs is controllable?
direct materials
Activity rates are determined by
dividing the cost budgeted for each activity pool by the estimated activity base for that pool
A disadvantage of static budgets is that they
do not allow for possible changes in activity levels
Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as
factory overhead cost
Question Content Area Under variable costing, which of the following costs would not be included in finished goods inventory?
fixed factory overhead cost
Which of the following budgets allows for adjustments in activity levels?
flexible budget
Accounting designed to meet the needs of decision makers inside the business is
managerial accounting
Question Content Area The document authorizing the issuance of materials from the storeroom is aQuestion Content Area The document authorizing the issuance of materials from the storeroom is a
materials requisition
Shubelik Company is changing to an activity-based costing method. It has determined that it will use three cost pools: setups, inspections, and assembly. Which of the following would not be used as the activity base for any of these three activities?
number of units to be produced
Question Content Area If the actual quantity of direct materials used in producing a commodity differs from the standard quantity, the variance is a _____ variance.
quantity
Question Content Area Which of the following is the correct flow of manufacturing costs?
raw materials, work in process, finished goods, cost of goods sold
Question Content Area Which of the following costs incurred by a tool manufacturer would not be included in conversion costs?
raw steel
Question Content Area Which of the following is the most difficult but most accurate of the commonly used methods for allocating support department costs to production departments?
reciprocal services method
The budgetary unit of an organization that is led by a manager who has both the authority over and responsibility for the unit's performance is known as a
responsibility center
The relative distribution of sales among the various products sold is referred to as the
sales mix
If the actual direct labor hours spent producing a commodity differ from the standard hours, the variance is a _____ variance.
time
The amount of time spent by an employee on an individual job is recorded on a(n)The amount of time spent by an employee on an individual job is recorded on a(n)
time ticket
In a cost-volume-profit chart, the
total cost line begins at the total fixed cost value on the vertical axis
Which of the following activity bases would be the most appropriate for gasoline costs of a delivery service?
total miles driven
Myers Corporation has the following data related to direct materials costs for November: actual costs for 4,650 pounds of material at $5.00 and standard costs for 4,420 pounds of material at $6.00 per pound. The direct materials quantity variance is
$1,380 unfavorable
Question Content Area Finch Company began its operations on March 31 of the current year. Finch has the following projected costs: AprilMayJuneManufacturing costs*$157,200$199,200$201,200Insurance expense**880880880Depreciation expense1,8901,8901,890Property tax expense***600600600 *Of the manufacturing costs, three-fourths are paid for in the month they are incurred; one-fourth is paid in the following month.**Insurance expense is $880 a month; however, the insurance is paid four times yearly in the first month of the quarter, (i.e., January, April, July, and October).***Property tax is paid once a year in November. The cash payments expected for Finch Company in the month of May are
$188,700
The standard costs and actual costs for factory overhead for the manufacture of 2,700 units of actual production are as follows: Standard CostsFixed overhead (based on 10,000 hours)3 hours per unit at $0.75 per hourVariable overhead3 hours per unit at $1.96 per hourActual Costs Total variable cost, $17,900 Total fixed cost, $7,800 The total factory overhead cost variance is
$3,449 unfavorable
A business operated at 100% of capacity during its first month, with the following results: Sales (112 units) $604,800Production costs (140 units): Direct materials$81,724 Direct labor20,866 Variable factory overhead36,515 Fixed factory overhead34,775173,880 Operating expenses: Variable operating expenses$6,231 Fixed operating expenses4,70410,935 The amount of gross profit that would be reported on the absorption costing income statement is
$465,697
A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (19,200 units): Direct materials$173,400 Direct labor226,400 Variable factory overhead260,500 Fixed factory overhead100,000$760,300 Operating expenses: Variable operating expenses$132,100 Fixed operating expenses40,400172,500 If 1,700 units remain unsold at the end of the month, the amount of inventory that would be reported on the variable costing balance sheet is
$58,463
Question Content Area McBride's Dairy has 200 gallons of cream and 600 gallons of skimmed milk and has incurred $1,000 of joint costs at the split-off point. The amount of this cost that will be allocated to cream using the physical units method is
Based on the physical measure at split-off, the percentage allocation of cream is 25% or [200 ÷ (200 + 600)], which is then multiplied by the joint cost incurred to determine how much of it is allocated to the cream (25% × $1,000 = $250).
Question Content Area Journalizing the entry to record a job completed would include a debit to
Finished Goods
Which of the following is not an example of a cost that varies in total as the number of units produced changes?
insurance premiums on factory building
Which of the following would not be an appropriate activity base for cost analysis in a service firm?
inventory produced
Question Content Area A cost that has characteristics of both a variable cost and a fixed cost is called a
mixed cost
Under variable costing, which of the following costs would be included in finished goods inventory?
only variable factory overhead cost
If selling and administrative expenses are allocated to different products, they should be reported as a
period cost
For purposes of analysis, mixed costs are
separated into their variable and fixed cost components
Support departments are sometimes called
service departments
Which of the following is not one of the methods used for applying overhead?
single investment application rate
Question Content Area Stephanie Corporation sells a single product. Budgeted sales for the year are anticipated to be 637,000 units, estimated beginning inventory is 102,000 units, and desired ending inventory is 82,000 units. The quantities of direct materials expected to be used for each unit of finished product are given below.Material A 0.50 lb. per unit @ $0.58 per poundMaterial B 1.00 lb. per unit @ $2.23 per poundMaterial C 1.20 lb. per unit @ $0.90 per poundThe dollar amount of material A used in production during the year is
step one : add anticipated budgeted sales for the year (637000) and desired ending inventory (82000). = (!) step 2: subtract the beginning inventory = (!) -102000= (@) step 3: multiply (@) x material A quantity and then that times the cost per pound of the material.622000 x .5 = 311000311000 x .70 = 217700answer = 217700
Question Content Area The total manufacturing cost variance is
the difference between total actual costs and total standard costs for the units produced
All of the following can be used as an allocation base for calculating factory overhead rates except
total units produced
Jase Manufacturing Co.'s static budget at 7,800 units of production includes $31,200 for direct labor and $2,340 for electric power. Total fixed costs are $43,600. At 10,900 units of production, a flexible budget would show
variable costs of $46,870 and $43,600 of fixed costs
Question Content Area Consider Derek's budget information: materials to be used totals $64,700; direct labor totals $199,100; factory overhead totals $397,500; work in process inventory January 1 is $185,700; and work in progress inventory on December 31 is $195,100. The budgeted cost of goods manufactured for the year is
$651,900
Question Content Area The controllable variance measures
the efficiency of using variable overhead resources
Question Content Area Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows: ProductUnit SellingPriceUnit VariableCostUnit ContributionMarginX$110 $70 $40 Y70 50 20 Rusty Co.'s sales mix last year was
12.5% X; 87.5% Y
Nuthatch Corporation began its operations on September 1 of the current year. Budgeted sales for the first three months of business September, October, and November are $238,000, $311,000, and $405,000, respectively. The company expects to sell 30% of its merchandise for cash. Of sales on account, 80% are expected to be collected in the month of the sale and 20% in the month following the sale. The cash collections expected in September from accounts receivable are estimated to be
133280
Zeke Company sells 24,100 units at $16 per unit. Variable costs are $9 per unit, and fixed costs are $38,400. The contribution margin ratio and the unit contribution margin, respectively, are
44% and $7 per unit
Question Content Area The following data relate to direct labor costs for the current period: Standard costs6,900 hours at $11.50Actual costs6,100 hours at $10.40 The direct labor time variance is
?
Materials purchased on account during the month totaled $190,000. Materials requisitioned and placed in production totaled $165,000. The journal entry to record the materials purchased on account is
Materials190,000 Accounts Payable190,000
Under the net realizable method of allocating joint costs, which of the following equations is used to compute the value of products processed beyond the split-off point?
Net Realizable Value = (Final Selling Price × Quantity) - Additional Processing Costs
Darwin Company reports the following information: Sales$76,500Direct materials used7,300Depreciation on factory equipment4,700Indirect labor5,900Direct labor10,500Factory rent4,200Sales salaries expense15,600Office salaries expense8,900Indirect materials1,200 Period costs are
Period Costs = Sales Salaries Expense + Office Salaries Expense = $15,600 + $8,900 = $24,500
Question Content Area Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. OverheadTotalDirectLabor HoursDLH per Product A B Painting Dept.$245,100 10,200 57Finishing Dept.71,300 11,700 67 Totals$316,400 21,900 1114 The single plantwide factory overhead rate for Adirondack Marketing Inc. is
Single Plantwide Factory Overhead Rate = Total Budgeted Factory Overhead ÷ Total Budgeted Plantwide Allocation Base = $316,400 ÷ 21,900 direct labor hours = $14.45 per direct labor hour
The primary budget in a nonmanufacturing business is the _____ budget.
Staffing
The budget that summarizes future plans for the acquisition of fixed assets is the _____ budget
capital expenditures
In the variable costing income statement, deduction of variable selling and administrative expenses from manufacturing margin yields
contribution margin
Costs that can be influenced by management at a specific level of management are called
controllable costs
Management will use both variable and absorption costing in all of the following activities except
controlling inventory levels
Question Content Area A business operated at 100% of capacity during its first month and incurred the following costs: Production costs (18,900 units): Direct materials$171,400 Direct labor227,100 Variable factory overhead261,200 Fixed factory overhead101,300$761,000Operating expenses: Variable operating expenses$128,100 Fixed operating expenses45,600173,700 If 1,800 units remain unsold at the end of the month, the amount of inventory that would be reported on the absorption costing balance sheet is
$72,486
McBride's Dairy has 200 gallons of cream and 600 gallons of skimmed milk and has incurred $1,000 of joint costs at the split-off point. The amount of this cost that will be allocated to skimmed milk using the physical units method is
$750 (Based on the physical measure at split-off, the percentage allocation of skimmed milk is 75% or [600 ÷ (200 + 600)], which is then multiplied by the joint cost incurred to determine how much of it is allocated to the skimmed milk (75% × $1,000 = $750).)))
Question Content Area Department W had 2,160 units, one-third completed at the beginning of the period; 13,000 units were transferred to Department X from Department W during the period; and 1,050 units were one-half completed at the end of the period. Assume the completion ratios apply to direct materials and conversion costs. The equivalent units of production used to compute unit conversion cost on the cost of production report for Department W, assuming the company uses FIFO, are
12,805 units
Question Content Area Which of the following statements is true?
Support department cost allocations should be incorporated into a product costing system.
Which of the following is not a characteristic of a process cost system?
The system measures costs for each completed job.
Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 1 during the period for applied overhead isMocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 1 during the period for applied overhead is
Work in Process—Department 1 150,000 Factory Overhead—Department 1 150,000
Question Content Area Everest Co. uses a single plantwide factory overhead rate based on direct labor hours. Overhead costs would be overcharged to which of the following departments?
a labor-intensive department
Question Content Area The direct labor rate variance is the difference between the
actual costs and the actual hours at the standard rate
Under the market value at split-off method, if a product is sold at the split-off point, its
actual sales prices is used
Question Content Area Prime costs are
direct materials and direct labor
Question Content Area Department S had no work in process at the beginning of the period. It added 12,000 units of direct materials during the period at a cost of $84,000; 9,000 units were completed during the period; and 3,000 units were 40% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $50,900 and factory overhead was $8,500. The total conversion costs for the period were
Total Conversion Costs for the Period = $50,900 + $8,500 = $59,400
Jake Entertainment Corporation has three segments with revenue, operating income, and depreciation and amortization information (in millions) as follows: SegmentRevenueOperatingIncomeDepreciationand AmortizationFilm$5,000 $1,500 $525 Theme Park1,000 320 112 Video Game500 175 53 Totals$6,500 $1,995 $690 The segment with the highest EBITDA as a percent of revenue is
Video Game
Which of the following terms is used to describe the process of monitoring operating results and comparing actual results with the expected results?
controlling
Question Content Area Using the direct method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced. It allocates Cafeteria Department costs based on the number of employees served. It has the following information about its two service departments and two production departments, Cutting and Assembly: __________________________________________________sq. ft.______________# of employees._ janitorial dept. 100 20 cafeteria dept. 10000 10 cutting dept. 2000 60 assembly dept. 8000 20 The percentage (proportional) usage of the Cafeteria Department by the Assembly Department is
25% (Based on square footage and ignoring the support departments (under the direct method), the proportional usage of the Cafeteria Department costs by the Assembly Department is 25%, or 20 ÷ (60 + 20).)))
Question Content Area The following production data were taken from the records of the Finishing Department for June: Inventory in process, June 1 (34% completed)5,900unitsCompleted units during June60,600unitsEnding inventory (60% complete)3,800units The number of materials equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories and materials were added at the beginning of the process, is
Equivalent units = Number of units of direct materials in ending inventory = 3,800 units
Question Content Area Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year. Below is a list of all the jobs for the quarter: BalanceJob 356$450 Job 3571,235 Job 358378 Job 359689 Job 360456 Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job. What is the ending balance of Work in Process for Adams Company at the end of the first quarter?
Only Job 360 is still incomplete and hence will be considered Work in Process. Therefore, the ending balance of Work in Process for Adams Company at the end of the first quarter is $456.
Question Content Area Roget Factory has budgeted factory overhead for the year at $4,782,900. It plans to produce 2,000,000 units of product. Budgeted direct labor hours are 447,000, and budgeted machine hours are 750,000. Using a single plantwide factory overhead rate based on direct labor hours, the factory overhead rate for the year is
Single Plantwide Factory Overhead Rate = Total Budgeted Factory Overhead ÷ Total Budgeted Plantwide Allocation Base = $4,782,900 ÷ 447,000 direct labor hours = $10.70 per direct labor hour
Question Content Area Botosan Factory has budgeted factory overhead for the year at $419,968, and budgeted direct labor hours for the year are 328,100. If the actual direct labor hours for the month of May are 298,600, the overhead allocated for May is
Single Plantwide Factory Overhead Rate = Total Budgeted Factory Overhead ÷ Total Budgeted Plantwide Allocation Base = $419,968 ÷ 328,100 dlh = $1.28 per direct labor hourOverhead allocated for May = Single Plantwide Factory Overhead Rate × Actual Direct Labor Hours for the Period = $1.28 × 298,600 dlh = $382,208
Which of the following must be true in order for materials to be classified as direct materials?
They must be an integral part of the finished product and be a significant portion of the total product cost.
Which of the following would be included in the cost of a product manufactured according to variable costing?
direct materials
Blackwelder Factory produces two similar products: small table lamps and desk lamps. The total factory overhead budget is $648,000 with 495,000 estimated direct labor hours. It is further estimated that small table lamp production will require 271,000 direct labor hours, and desk lamp production will need 125,000 direct labor hours. Using a single plantwide factory overhead rate with an allocation base of direct labor hours, the factory overhead that Blackwelder Factory will allocate to desk lamp production if actual direct labor hours for the period for desk lamps is 201,000 would be
Single Plantwide Factory Overhead Rate = Total Budgeted Plant Overhead ÷ Total Budgeted Plantwide Allocation Base = $648,000 ÷ 495,000 dlh = $1.31 per direct labor hourOverhead Allocated to Desk Lamps = Single Plantwide Factory Overhead Rate × Actual Direct Labor Hours for the Period for Desk Lamp Production = $1.31 × 201,000 dlh = $263,310
Which of the following is the formula to compute the predetermined factory overhead rate?Which of the following is the formula to compute the predetermined factory overhead rate?
estimated total factory overhead costs divided by estimated activity base
