Acc 2223 chapter 18, 19, 20

In the manufacture of 10,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,000. What is the total conversion cost?

$158,000 (105000+53000)

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

$225,600 (233000-31600+24200)

A company manufactured 50,000 units of a product at a cost of $450,000. It sold 45,000 units at $15 each. The gross profit is

$270,000

Compute conversion costs given the following data: direct materials, $347,500; direct labor, $196,300; factory overhead, $187,900; and selling expenses, $45,290.

$384,200 ($196,300+$187,900)

Compute the yield as a percentage rounded to two digits after the decimal, assuming 110 pounds of tea entered the Packaging Department and 103 pounds of tea were packaged.

93.64%

Finished goods inventory is reported on the

Balance sheet as a current asset

Which of the following accounts will not be found on the statement of cost of goods manufactured ?

Cost of goods sold

Which of the following will not be found on the balance sheet of a manufacturing company?

Cost of goods sold

Which of the following is an example of direct labor cost for a cell phone manufacturer?

Cost of wages of assembly worker

The journal entry to apply overhead for the month would include a _____.

Credit to factory overhead

Which of the following items would not be classified as part of factory overhead?

Direct labor used

The portion of whole units that were completed with respect to either materials or conversion costs within a given accounting period is the definition of

Equivalent units

The _____inventory cost method that assumes the inventory purchased first is sold first.

FIFO

The recording of the application of factory overhead costs to jobs would include a credit to

Factory overhead

Recording jobs shipped and customers billed would include a credit to

Finished Goods

The journal entry to record the transfer from work in process to finished goods would include a debit to

Finished goods

Which of the following is not a characteristic of a job order cost system?

It accumulates cost for each department within the factory.

A job order cost accounting system accumulates and records product costs by _____.

Jobs

Which of the following is true of preparing managerial accounting reports?

Managerial accounting reports may be prepared at fixed intervals or on an as-needed basis.

Who are the individuals charged with the responsibility for directing the day-to-day operations of a business?

Managers

In lean manufacturing, processing functions are combined into work centers, sometimes called ________.

Manufacturing cell

Which of the following most likely uses a process cost system?

Oil refinery

Which of the following is not true regarding direct materials for a bakery?

Paper cupcake liners, that become part of the product, must be accounted for as direct materials.

What term is used to describe the process of developing the organization's objectives and translating those into courses of action?

Planning

Which of the following is not a prime cost?

Plant janitors wages

Insurance expense incurred on a factory building would be treated as a

Product cost

Rent expense on a factory building would be treated as a

Product cost

Which of the following is a period cost?

Salary of telephone receptionist in the sales office

Materials must have which two qualities in order to be classified as direct materials?

They must be an integral part of the finished product and a significant portion of the total product cost.

Which of the following costs incurred by a tool manufacturer would not be included in conversion costs? a. machine operator's wages b. factory supervisor's salary c. factory maintenance personnel supplies d. raw steel

d. raw steel

The journal entry for the flow of direct labor costs into production in a job order cost accounting system is to

debit Work in Process, credit Wages Payable

The journal entry to recognize depreciation on machinery would include a

debit to factory overhead

The first step in preparing a cost of production report is to _____.

determine the units to be assigned costs

The cost of a manufactured product generally consists of which of the following costs?

direct labor cost, direct materials cost, and factory overhead cost

When preparing the cost of production report using the FIFO method, equivalent production units are generally determined for

direct materials and conversion costs

Which of the following is the formula to compute the predetermined factory overhead rate?

estimated total factory overhead costs divided by estimated activity base

Managers use managerial accounting information for all of the following except to

evaluate the company's stock performance

A __________ cost system provides product costs for each quantity of product that is manufactured.

job order

Which of the following are the two main types of cost accounting systems for manufacturing operations?

job order cost and process cost systems

A management approach that focuses on reducing time and cost and eliminating poor quality is known as ________.

just-in-time processing

Which of the following would use a process cost system?

lumber mill

Period costs include

operating costs that are shown on the income statement in the period in which they are incurred

Costs on the income statement for both a merchandiser and a manufacturer would be

operating expenses

Which of the following are basic phases of the management process?

planning and controlling

Which of the following is most associated with financial accounting?

prepared in accordance with GAAP

The two main types of cost accounting systems for manufacturing businesses are the __________ cost system and the __________ cost system.

process; job order

Process and job order cost systems are similar in that each system

records and summarizes product costs. classifies product costs as direct materials, direct labor, and factory overhead. allocates factory overhead costs to products.

Period costs are classified as either

selling expenses or administrative expenses

The finished goods account is the controlling account for the

stock ledger

The amount of time spent by an employee on an individual job is recorded on

time tickets

Service businesses such as hotels, taxi services, and newspapers cannot practically apply a job order cost accounting system.

True

The number of units in production during a period, whether completed or not, is known as _____.

Whole units

The journal entry to record the direct labor costs for the month would include a debit to _____.

Work in process

The quantity of the material output divided by the quantity of the material input gives you the _____.

Yield

An example of a period cost is

advertising expense

The last step in preparing a cost of production report is to _____.

allocate costs to units transferred out and partially completed units

Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs?

assembly laborers wages

In order to be useful to managers, managerial accounting reports should possess all of the following characteristics except

be prepared in accordance with generally accepted accounting principles

Process and job order cost systems are similar in all of the following ways except

both use job cost sheets

Which of the following is not included in conversion costs? a. factory overhead b. direct materials c. indirect labor d. direct labor

c. indirect labor

A job order cost system can be used by managers for _____.

cost evaluation control decision making

A report prepared periodically for each processing department summarizing the product costs incurred by the department and the allocation of those costs between completed and partially completed units is termed a

cost of production report

The journal entry to record the direct materials used for the month would include a _____.

credit to materials