accounting chapter 13 review part 1
Using the following information, calculate the cost of goods manufactured. Beginning work in process inventory = $44,000, Ending work in process inventory = $41,000, Raw materials used = $74,000, Direct labor incurred = $56,000, Manufacturing overhead applied = $83,000. Cost of goods manufactured = $_____
$216000
ABC Company uses a predetermined overhead rate of $10 per direct labor hour. Actual manufacturing overhead incurred during October amounted to $35,000 when ABC worked 3,200 direct labor hours. At the end of October, the Manufacturing overhead account has a balance of $____ that is (underapplied/overapplied).
$3000 under-applied
Which are cost elements reported on the statement of cost of goods manufactured? Manufacturing overhead Direct labor Raw materials Administrative expense Selling expense Income tax expense
//Manufacturing overhead ///Direct labor ///Raw materials
What is incurred when an organization acquires the resources used to fund the activities in its value chain? A cost A tax A benefit An asset
A cost
Which of the following are elements of a product's cost for a manufacturing firm? Multiple select question. Distribution effort Accounting effort Sales effort Human production effort Ingredients Production machine support
Accounting effort Human production effort Production machine support
Which of the following costs would be classified as a period cost? Factory maintenance costs Plant electricity Advertising expense for the product Product machining labor
Advertising expense for the product
What is the primary focus of cost accounting? External cost reporting Tax preparation and management Internal cost reporting Cost accumulation and assignment
Cost accumulation and assignment
What is the primary focus of cost accounting? Internal cost reporting Tax preparation and management Cost accumulation and assignment
Cost accumulation and assignment
The process of attributing an appropriate amount of cost in the cost pool to each cost object is known as
Cost assignment
The process of using cost information to assess and manage the activities of an organization is known as
Cost management
Any sub-part (reference point) of an organization for which managers are interested in having cost measurement information is known as a(n)
Cost object
Which are correct statements about lean accounting. Multiple select question The development of lean accounting reflects the requirement for managers to have increasingly relevant cost data. Lean accounting and traditional accounting are synonymous with each other. Lean accounting focuses on product or process cost accumulation by element of the value chain. Lean accounting is a system designed to report the financial data on a cost per unit basis.
The development of lean accounting reflects the requirement for managers to have increasingly relevant cost data. Lean accounting focuses on product or process cost accumulation by element of the value chain.
True or false: Determining a product's cost is necessary to value the units, purchased or manufactured, of that product either as cost of goods sold or as ending inventory for any units unsold.
True
An organization's Blank is the sequence of functions and related activities that adds value for the customer over the life of a product or service.
Value chain
An organization's _____ is the sequence of functions and related activities that adds value for the customer over the life of a product or service.
Value chain
Which inventory account is close to zero at the end of an accounting period for firms with very short production processes? Work in Process Cost of Goods Sold Finished Goods Raw Materials
Work in Process
Which of the following activities is not included in the organization's value chain? Customer service Research and development Production Accounting
accounting
Which of the following are associated with the cost assignment classification? Multiple select questions. Fixed cost Direct cost Indirect cost Product cost
direct cost indirect cost
Product cost —->____ Period cost —->_____
manufacturing cost non manufacturing cost
Which of the following are associated with the cost behavior classification? Multiple select questions. Product cost Mixed cost Variable cost Committed cost
mixed variable variable cost
Costs accounted for initially as inventory when produced and later as expense when sold are: product costs period costs direct costs indirect costs
product costs
Which of the following are associated with the cost behavior classification? Multiple select questions. Variable cost Mixed cost Committed cost Product cost
variable cost mixed cost
Indirect costs describe costs that: have variable cost behavior are traceable to a cost object are not traceable to a cost object have fixed cost behavior
are not traceable to a cost object
A predetermined overhead rate is used to: keep track of actual overhead costs. assign direct costs to units produced. assign indirect costs to units produced. assign selling expenses to units produced.
assign indirect costs to units produced.
The collecting and recording of organizational transactions in the accounting information system is the process of Blank ______. identifying cost objects cost assignment cost pooling cost accumulation
cost accumulation
Drilling down to varying levels of an organization for the purpose of observing separate and specific cost measurement information is a process for describing: cost accumulation cost assignment cost pooling cost objects
cost objects
The product cost accounting system used when discrete products are manufactured is known as a (job/process) costing system.
job
The ingredients of a product that are put into the production process to make the finished product are known as: manufacturing overhead indirect costs raw materials factory supplies
raw materials
Using the following information, calculate the cost of raw materials used. Beginning raw materials inventory = $20,000, Ending raw materials inventory = $22,000, Raw materials purchased = $84,000. Cost of raw materials used $____
$82000
The process of collecting and recording transaction data through the accounting information system is known as
Cost accumulation
Which of the following process steps occurs first for managers to observe costs for different organizational reference points? Cost assignment Cost accumulation Identifying cost objects Cost pooling
Cost accumulation
Which of the following process steps occurs first for managers to observe costs for different organizational reference points? Cost pooling Cost accumulation Cost assignment Identifying cost objects
Cost accumulation
The total amount of cost accumulated by the accounting information system is logically categorized by different cost objects, which is referred to as a(n)
Cost pool
The term used for the human effort provided by workers who are directly involved in the production of a finished product and to describe an element of the product's costs is known as
Direct labor
Which of the following are the inventory accounts involved in a manufacturing cost accounting system? Multiple select questions. Finished goods Manufacturing overhead Cost of goods sold Work-in-process Raw materials Direct labor
Finished goods Work-in-process Raw materials
Which of the following are associated with the cost assignment classification? Multiple select questions. Indirect cost Fixed cost Product cost
Indirect cost
For a manufacturing firm____ costs are inventoried and treated as assets until inventory is sold while ____costs are recorded as expense in the accounting period incurred.
Product period
Identify the following examples of product cost that would be classified as manufacturing overhead. Multiple select questions. Production manager's salary Depreciation expense for factory building Factory maintenance Electricity for factory machines Product ingredients Production labor wages
Production manager's salary Depreciation expense for factory building Factory maintenance Electricity for factory machines
Which of the following manufacturing environments would use a job order costing system? Oil and gas refining Coal mining Textbook printing Corn processing
Textbook printing
ABC Company uses machine hours to apply manufacturing overhead to units produced. If ABC estimates that it will generate 560,000 machine hours and incur $6,720,000 in manufacturing overhead costs during the year, its predetermined overhead application rate will be $___ per ___ hour.
$12 Machine
Given the following information, calculate the product cost per unit. Direct materials = $28,000 Direct labor = $42,000. Overhead application rate = $15 per direct labor hour. Direct labor hours = 5,200. Units products = 7,400. Product cost per unit = $____ Round your answer to a whole dollar.
$20
ABC Company uses a predetermined overhead rate of $10 per direct labor hour. Actual manufacturing overhead incurred during October amounted to $35,000 when ABC worked 3,200 direct labor hours. At the end of October, the Manufacturing overhead account has a balance of $_____ that is (underapplied/overapplied).
$3000 underapplied
Using the following information, calculate the cost of goods sold. Beginning finished goods inventory = $124,000, Ending finished goods inventory = $132,000, Cost of goods manufactured = $366,000. Cost of goods sold = $_____
$358000
If ABC Company determines its cost per unit for July's production is $28.75 and it produced 12,600 units, ABC's total manufacturing costs (direct materials, direct labor, and manufacturing overhead) incurred in July is $
$362250
The following accounting information is available for Synergy Inc. for the month of May: Beginning inventory $121,190. Cost of goods manufactured 493,855. Ending inventory 63,800. Calculate the amount of cost of goods sold for Synergy Inc. for the month of May. $557,655 $184,990 $551,245 $678,845
$551,245
ABC Company incurred $124,000 of manufacturing overhead in March and applied $120,000 to March production. If ABC produced 16,000 units during March, its predetermined overhead rate being used for the year is $___ per unit.
$7.50
ABC Company uses machine hours to apply manufacturing overhead to units produced at the rate of $12 per machine hour. If ABC generates 6,500 machine hours, manufacturing overhead applied to units produced is $
$78000
ABC Company estimates total manufacturing overhead costs for the year to be $1,200,000 and expects to work 150,000 direct labor hours. ABC's predetermined overhead application rate to be used for product costing during the year would be $___ per direct labor hour.
$8
ABC Company incurred the following product costs to manufacture 1,000 finished units in May. Direct materials: $2,600. Direct labor: $3,800. Manufacturing overhead: $2,200. The cost of each unit produced in May is $
$8.60
The inventory account applicable to goods available for sale to customers is known as: Manufacturing overhead Raw materials inventory Finished goods inventory Work in process inventory
Finished goods inventory
The inventory account applicable to goods available for sale to customers is known as: Raw materials inventory Manufacturing overhead Work in process inventory Finished goods inventory
Finished goods inventory
When a manufactured item is sold, where is its cost transferred in accounting terms? From Work in Process Inventory to Raw Materials Inventory From Raw Materials Inventory to Finished Goods Inventory From the income statement to cost of goods sold From the balance sheet to the income statement
From the balance sheet to the income statement
Cost accounting plays a significant role in which aspects of financial accounting? Multiple select question. Internal reporting Income measurement Inventory valuation Contribution margin
Income measurement Inventory valuation
Which are true statements about cost accounting? It is a subset of both financial and managerial accounting. It reports the cost of goods manufactured and sold, as well as the cost of goods manufactured and not sold. It only serves the needs of financial accounting. It does not play any role in the income measurement aspect of financial accounting
It is a subset of both financial and managerial accounting. It reports the cost of goods manufactured and sold, as well as the cost of goods manufactured and not sold.
Which are correct statements about lean accounting? Multiple select questions. Lean accounting and traditional accounting are synonymous with each other. Lean accounting focuses on product or process cost accumulation by element of the value chain. Lean accounting is a system designed to report the financial data on a cost per unit basis. The development of lean accounting reflects the requirement for managers to have increasingly relevant cost data.
Lean accounting focuses on product or process cost accumulation by element of the value chain. The development of lean accounting reflects the requirement for managers to have increasingly relevant cost data.
The machine support and other manufacturing costs, except raw materials and direct labor, incurred as part of a product's costs is known as
Manufacturing overhead
Select all that apply Which of the following are associated with the cost behavior classification? Multiple select questions. Mixed cost Variable cost Committed cost Product cost
Mixed cost Variable cost
Synergy Corp. manufactures LED light bulbs. It applies manufacturing overhead to production on the basis of direct labor hours. A predetermined overhead application rate of $15 per direct labor hour was used for the current fiscal year. Actual manufacturing overhead incurred by Synergy during the year amounted to $100,000 against 9,100 hours, which was the expected number of direct labor hours to be used during the year. Calculate the amount of over- or underapplied overhead during the year. Underapplied overhead of $136,500 Overapplied overhead of $136,500 Underapplied overhead of $36,500 Overapplied overhead of $36,500
Overapplied overhead of $36,500
Which is a true statement representing the difference between product costs and period costs? Products costs include selling and general expenses, whereas period costs include raw materials and manufacturing overhead. Products costs are manufacturing costs, whereas period costs are nonmanufacturing costs. Products costs are non inventoriable costs, whereas period costs are inventoriable costs. Product costs include administrative expenses, whereas period costs include direct labor.
Products costs are manufacturing costs, whereas period costs are nonmanufacturing costs.
The inventory account applicable to product ingredients ready for the production process is known as: Multiple choice question. Work in process inventory Raw materials inventory Finished goods inventory Manufacturing overhead
Raw materials inventory
Which are correct statements about lean accounting? Multiple select question. The development of lean accounting reflects the requirement for managers to have increasingly relevant cost data. Lean accounting is a system designed to report the financial data on a cost per unit basis. Lean accounting focuses on product or process cost accumulation by element of the value chain. Lean accounting and traditional accounting are synonymous with each other.
The development of lean accounting reflects the requirement for managers to have increasingly relevant cost data. Lean accounting focuses on product or process cost accumulation by element of the value chain. Lean accounting and traditional accounting are synonymous with each other.
Which type of firms are likely to have the highest Work in Process Inventory balances at the end of an accounting period? Those that produce products in small batches Those with just-in-time manufacturing processes Those that deal mainly in intellectual property Those with long-duration manufacturing processes
Those with long-duration manufacturing processes
The inventory account used for the costs of items that are in production and being manufactured is known as: Work in process inventory Finished goods inventory Raw materials inventory Cost of goods manufactured
Work in process inventory
Indirect costs describe costs that: are not traceable to a cost object have variable cost behavior are traceable to a cost object have fixed cost behavior
are not traceable to a cost object
Direct costs describe costs that: have variable cost behavior are traceable to a cost object have fixed cost behavior are not traceable to a cost object
are traceable to a cost object
Product costs are accounted for as (assets/expenses) and recorded on the (balance sheet/income statement).
assets balance sheet
The organizational process of attributing an appropriate amount of cost incurred to each cost object is known as Blank ______. cost assignment cost pooling identifying cost objects cost accumulation
cost assignment
Drilling down to varying levels of an organization for the purpose of observing separate and specific cost measurement information is a process for describing: cost accumulation cost pooling cost objects cost assignment
cost objects
Drilling down to varying levels of an organization for the purpose of observing separate and specific cost measurement information is a process for describing: cost objects cost pooling cost assignment cost accumulation
cost objects
The total amount of cost accumulated by the accounting information system is logically categorized in different ways, such as by production jobs, which is referred to as Blank ______. identifying cost objects cost accumulation cost pooling cost assignment
cost pooling
Overapplied overhead represents a (debit/credit) balance in the Manufacturing overhead account that results from applied overhead in excess of actual overhead costs.
credit
Cost management involves using cost information to manage the activities of an organization that leads to Blank ______. data collection and performance feedback implementing activity plans revisiting planned activity
data collection and performance feedback
Underapplied overhead represents a (debit/credit) balance in the Manufacturing overhead account that results from actual overhead costs in excess of applied overhead.
debit
Raw materials used in production represent a(n) (increase/decrease) in the Raw Materials Inventory account and represent a(n) (increase/decrease) in the Work in Process Inventory account.
decrease increase
When units of completed production are sold, the resulting cost flow is that the Finished goods inventory account is (increased/decreased) and the Cost of goods sold account is (increased/decreased).
decreased increased
A cost that has an indirect relationship with computers being produced is: Multiple choice question. power supply costs production labor costs motherboard costs electricity costs for packaging equipment
electricity costs for packaging equipment
A cost that has an indirect relationship with computers being produced is: production labor costs power supply costs motherboard costs electricity costs for packaging equipment
electricity costs for packaging equipment
An example of a cost likely to have an indirect relationship with products being manufactured is: production labor costs. raw material costs. electricity costs for packaging equipment. None of the answers are correct.
electricity costs for packaging equipment.
Cost management involves using cost information to manage the activities of an organization that leads to Blank______. data collection and performance feedback implementing activity plans revisiting planned activity
implementing activity plans
When actual manufacturing overhead cost is incurred, it is recorded as a(n) (increase/decrease) in the Manufacturing overhead account, and as manufacturing overhead costs are applied to units in production, it is recorded as a(n) (increase/decrease) in the Manufacturing overhead account.
increase decrease
Which of the following are associated with the cost assignment classification? Multiple select questions. Fixed cost Product cost Indirect cost Direct cost
indirect cost direct cost
A system that focuses on product or process cost accumulation by element of the value chain is known as Blank ______. hybrid accounting lean accounting common-size accounting DuPont accounting
lean accounting
A system that focuses on product or process cost accumulation by element of the value chain is known as Blank ______. DuPont accounting lean accounting hybrid accounting common-size accounting
lean accounting
A system that focuses on product or process cost accumulation by element of the value chain is known as Blank ______. lean accounting DuPont accounting common-size accounting hybrid accounting
lean accounting
The Finished Goods Inventory account is increased for the cost of goods (manufactured/sold) and is decreased for the cost of goods (manufactured/sold).
manufactured sold
A debit balance in the Manufacturing Overhead account at the end of a period indicates that: manufacturing overhead has been accurately applied applied overhead exceeds actual manufacturing overhead manufacturing overhead is overapplied manufacturing overhead is underapplied
manufacturing overhead is underapplied
An example of a worker classified as direct labor in a production plant that prints textbooks would be: plant supervisor sales staff factory maintenance staff printing press operator
printing press operator
The product cost accounting system used when homogeneous products are manufactured in a relatively continuous production flow is known as a (job/process) costing system.
process
An example of a product cost is: a portion of the president's salary advertising expense for the product production line maintenance costs interest expense on a company loan
production line maintenance costs
The ingredients used in a manufacturing firm to produce a finished product and to describe an element of the product's cost are known as
raw materials
A cost that has a direct relationship with products being produced is: raw materials for a specific product salaries of production supervisors depreciation of production equipment salesforce salaries
raw materials for a specific product
A cost that has a direct relationship with products being produced is: raw materials for a specific product salesforce salaries depreciation of production equipment salaries of production supervisors
raw materials for a specific product
A cost that has a direct relationship with products being produced is: salesforce salaries depreciation of production equipment salaries of production supervisors raw materials for a specific product
raw materials for a specific product
Cost accounting Blank ______. need not be flexible enough to provide answers to support the broad array of managerial questions for decision making purposes fails to play any role in the inventory valuation aspects of financial accounting relates primarily to the accumulation and determination of product, process, or services costs focuses only on providing information to stockholders and creditors of an organization
relates primarily to the accumulation and determination of product, process, or services costs
On the Statement of Cost of Goods Manufactured, the sum of raw materials used + direct labor incurred + manufacturing overhead applied is known as: contribution margin total manufacturing costs cost of goods sold cost of goods manufactured
total manufacturing costs
On the Statement of Cost of Goods Manufactured, the sum of raw materials used + direct labor incurred + manufacturing overhead applied is known as: cost of goods sold cost of goods manufactured total manufacturing costs contribution margin
total manufacturing costs
A predetermined overhead application rate is established to apply manufacturing overhead to Blank ______. raw materials finished goods cost of goods sold work in process
work in process
