Managerial Acct exam 1 kwood

The Mixing Department's output during the period consists of 20000 units completed and transferred out, and 5000 units in ending work in process 60% complete as to materials and conversion costs. Beginning inventory is 1000 units, 40% complete as to materials and conversion costs. Assuming the weighted-average method, the equivalent units of production are 23000. 24000. 22600. 25000

23000

Dartmouth Company has two process departments, machining and assembly, that produce products. At what point can the company add manufacturing overhead costs to the products? In the first process department. When the materials are placed in production in the first process department. As the production takes place in each of the two process departments. When the goods are transferred out of work in process into finished goods

As the production takes place in each of the two process departments

Ford Company has two process departments, cutting and shaping, that produce products. At what point can direct materials be added to product costs? At the point the products are completed and transferred to Finished Goods. At the point the materials are used in production during either the cutting or shaping Departments. At the point the materials are acquired from the supplier. At the point production begins in the cutting department

At the point the materials are used in production during either the cutting or shaping Departments

What is the primary barrier to using activity-based costing in a service company? A large portion of overhead costs are company-wide costs. A large number of cost pools. A limited number of arbitrary allocation decisions. A shortage of potential cost drivers

A large portion of overhead costs are company-wide costs

Which of the following managerial accounting techniques attempts to allocate manufacturing overhead in a more meaningful fashion? Balanced scorecard. Activity-based costing. Total-quality management. Just-in-time inventory.

Activity-Based costing

What types of companies can benefit from managerial accounting? All of these answer choices Service providers Retailers Manufacturers

All of these choices

One key difference appears when comparing the income statements of a manufacturing company to a merchandising company. What is that difference?

Manufacturing companies use cost of goods manufactured and merchandising companies use cost of goods purchased

If a traditional costing system allocates too much overhead to one product, the firm is likely to experience which of the following problems? The firm may lose market share to competitors The product is in danger of becoming obsolete An increase in the number of defective products produced The firm may be underpricing the product

The firm may lose market share to competitors

Which of the following items is not a characteristic of a process cost system? When the finished product emerges, all units have precisely the same amount of materials, labor, and overhead. Once production begins, it continues until the finished product emerges. The products produced are heterogeneous in nature. The focus is on continually producing homogeneous products

The products produced are heterogeneous in nature

Which one of the following is a characteristic that job-order cost systems and process cost systems have in common? The objective is to determine the efficiency of production. Both systems are used for custom made, unique products. Both systems assign costs to specific jobs. They both use perpetual inventory systems.

They both use perpetual inventory systems.

Which one of the following transactions causes the Manufacturing Overhead account to be debited in a job order cost accounting system? Used indirect materials. Purchased raw materials on account. Incurred direct labor. Completed products during the period.

Used indirect materials

When is it appropriate to use direct labor as a basis for assigning overhead costs to products? When there is a low correlation between direct labor and changes in overhead costs. When direct labor constitutes a significant part of total product costs. When the manufacturing process is highly automated. When the manufacturing process is complex

When direct labor constitutes a significant part of total product cost

A process cost system would be used by all of the following except a(n) computer chip company. advertising company. oil company. chemical company

advertising company

In computing equivalent units using the weighted-average method, ___________________ is not part of the equivalent units of production formula. units transferred out beginning work in process ending work in process none of the options are correct

beginning work in process

Manufacturing overhead includes all of the following except: maintenance. indirect labor. direct materials. depreciation.

d

In order to achieve the most accurate costing, the cost driver chosen for a given activity must show a ___________ between the cost driver and the actual consumption of overhead costs. reasonable relationship low degree of correlation moderate connection high degree of correlation

high degree of correlation

Activity-based costing uses direct labor as its primary cost driver. is the initial phase of converting to a just-in-time operating environment. can be used only in a job order costing system. is a two-stage overhead cost allocation system that identifies activity cost pools and cost drivers

is a two-stage overhead cost allocation system that identifies activity cost pools and cost drivers

A company is more likely to use a job costing system if

it manufactures products with unique characteristics

In recent years, as production has become more automated, there has been a significant trend toward use of _______________ as the activity base in assigning overhead. units produced. machine hours. direct labor costs. direct labor hours.

machine hours

What overhead allocation basis is used by many companies with automated manufacturing processes to reduce product cost distortions? direct materials direct labor machine hours units produced

machine hours

Work in Process Inventory is debited for all of the following except factory labor used. manufacturing overhead applied. direct materials used. manufacturing overhead incurred.

manufacturing overhead incurred.

Equivalent units are computed for materials and conversion costs. labor and overhead only. conversion costs only. materials onl

materials and conversion costs

In a manufacturing company, the cost of factory labor consists of all of the following except net earnings of factory workers. gross earnings of factory workers. employer payroll taxes. fringe benefits incurred by the employer

net earnings of factory workers.

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n) previous year's overhead rate. actual overhead rate. predetermined overhead rate. assigned overhead rate.

predetermined overhead rate

A process cost system would be used for all of the following except the printing of wedding invitations. manufacture of cereal. refining of petroleum. production of automobiles.

printing of wedding invitations.

Product costs include each of the following except direct labor. direct materials. manufacturing overhead. selling and administrative expenses

selling and administrative expenses

To assign overhead costs to an individual product, the activity-based overhead rate is multiplied by the number of cost drivers used per product. the number of employees who participate in manufacturing the product. the number of products produced during the period. the number of direct labor hours used during the period

the number of cost drivers used per product

Which of the following companies would most likely use process costing for the product listed that it produces? Lear Jet Company - corporate jets. Campbell's - chicken noodle soup. Taylor Countertops - granite countertops. Mercedes Home Builders - new homes

Campbell's - chicken noodle soup

Which one of the following occurs in a process cost system? One work in process account is used to accumulated costs. Total costs are determined when the finished product is completed. Costs are accumulated in a production cost report. The unit cost is total manufacturing costs incurred divided by the units completed at the end of production

Costs are accumulated in a production cost report

Why do companies, using job order costing to estimate manufacturing overhead costs, allocate them to individual jobs and products? It enables the company to determine the approximate cost of each job as it gets completed. Manufacturing overhead is a period cost, not a job or product cost. It is more accurate to estimate costs. The actual overhead costs are not determinable.

It enables the company to determine the approximate cost of each job as it gets completed.

Which of the following statements is true about managerial accounting? It is primarily for internal users such as stockholders and managers. It provides more detailed information than financial accounting does. It pertains to a business as a whole. It must be prepared using generally accepting accounting principles

It provides more detailed information than financial accounting does.

Indicate which of the following statements is not correct. Manufacturing costs are accumulated the same way in a job order and in a process cost system. Manufacturing costs are assigned the same way in a job order and in a process cost system. Both a job order and a process cost system track the same three manufacturing cost elements - direct materials, direct labor, and manufacturing overhead. A job order cost system uses only one work in process account, whereas a process cost system uses multiple work in process

Manufacturing costs are assigned the same way in a job order and in a process cost system

Theodore Company's overhead rate for machine setups is $115 per setup. A total of 105 setups are estimated for the period. At year-end, it was determined that Products A and B have 60 and 45 setups, respectively. How much is the overhead cost assigned to each product? Not enough information to determine the answer Product A $6,900, Product B $5,175 Product A $6,037.50, Product B $6,037.50 Product A $10,062.50, Product B $2,012.50

Product A $6,900, Product B $5,175