SB EXAM

Costs incurred to get the final product to the customer are known as ________ or selling expenses.

marketing

An allocation base is a(n) ______.

measure of activity used to assign overhead costs to products and services

A journal entry that debits Work in Process inventory and credits Manufacturing Overhead is recording ______.

the application of manufacturing overhead costs

In deciding whether a cost is fixed or variable, think about whether the ______ cost will change.

total

What level of activity is performed each time a single item is produced?

unit

True or false: A particular cost may be direct or indirect depending on the cost object.

True

True or false: Job cost sheets serve as a subsidiary ledger to the overall Work in Process Inventory account.

True

True or false: Service industries use cost information to determine the profitability of different types of clients.

True

True or false: The Manufacturing Overhead account is a temporary account used to accumulate actual and applied overhead costs.

True

A total of $10,000 in manufacturing overhead was applied to Job #40. The journal entry to record this is debit ______.

Work in process Inventory $10,000 and credit Manufacturing Overhead $10,000

A cost driver is ______.

a measure that explains or influences the amount of manufacturing overhead cost incurred

A predetermined overhead rate is calculated by dividing the ______ total manufacturing overhead by the ______ total cost driver.

estimated; estimated

Overhead is overapplied if ______.

actual overhead is less than applied overhead

Predetermined overhead rates are ______.

based on some secondary allocation measure

When calculating a predetermined overhead rate, the ideal allocation base should be a(n)

cost driver

Actual manufacturing overhead costs are accumulated on the ______ side of the Manufacturing Overhead account and applied costs are shown on the ______ side.

debit, credit

The first step in assigning manufacturing overhead costs using a predetermined overhead rate is to ______.

determine the cost driver

A(n) _______ cost does not change in total and a(n) _______ cost does not change per unit.

fixed variable

A(n) ________ cost does not change in total and a(n) ________ cost does not change per unit.

fixed variable

A predetermined overhead rate of $20 per direct labor hours means that ______.

for each direct labor hour, $20 is added to cover indirect costs

A blend of process and job order costing is called _______ costing.

operations

Inventoriable costs is another term for ________ costs

product

Period costs are expensed in the period in which ____.

they occur

Carlisle, Inc. had Sales revenue of $500,000, Unadjusted cost of goods sold of $395,000, Underapplied manufacturing overhead of $5,000, and Selling and administrative expenses of $50,000. Calculate gross profit.

$100,000 Reason: Gross profit = $500,000 - ($395,000 + $5,000) = $100,000.

A company had Gross profit of $100,000, Cost of goods sold of $70,000, and Selling and administrative expenses of $45,000. Calculate the Net operating income (loss).

$55,000 Reason: Net operating income = Gross profit - Selling & administrative expenses: $100,000 - $45,000 = $55,000.

Which of the following are marketing or selling expenses? - Sales commissions - Sales salaries - Advertising - Administrative salaries

- Sales commissions - Sales salaries - Advertising

Examples of indirect labor costs include ______. - restaurant kitchen managers - factory security guards - factory supervisors - restaurant cooks

- restaurant kitchen managers - factory security guards - factory supervisors

When is the predetermined overhead rate calculated?

Before the period begins

True or False: A predetermined overhead rate of $50 per direct labor hour means that the total cost of direct labor and indirect cost equals $50 per hour.

False

True or false: At the end of the accounting period, a balance in the Manufacturing Overhead account always means that overhead was underapplied.

False

Which of the following expenses are associated with running the overall business?

General & administrative

Which of the following statements is true? a. Managers need more detailed information than financial reports can capture. b. Financial accounting reports are prepared as needed. c. Managerial accounting reports provide information for the company as a whole. d. It is important that managerial accounting reports be objective and reliable.

Managers need more detailed information than financial reports can capture.

The journal entry to record $20,000 in depreciation on factory equipment is debit ______.

Manufacturing Overhead $20,000 and credit Accumulated Depreciation $20,000

The journal entry to record expired prepaid factory insurance debits ______.

Manufacturing Overhead and credits Prepaid Insurance

Which of the following statements is true? - Nonmanufacturing firms are increasing as a proportion of the marketplace. - Managerial accountants focus much of their efforts on preparing reports of costs incurred to produce physical products. - The focus of managerial accounting is the same, regardless of type of organization

Nonmanufacturing firms are increasing as a proportion of the marketplace.

Which of the following are most likely fixed costs? - Property taxes - Rent - Administrative salaries - Utilities

Property taxes Rent Administrative salaries

Which of the following are most likely fixed costs? Rent Property taxes Administrative salaries Utilities

Rent Property taxes Administrative salaries

General and administrative expenses include ______.

general management salaries and legal department

Salaries of managers and maintenance personnel are examples of ______ labor costs.

indirect

Ending Work in Process Inventory represents the cost of goods ______.

not yet completed

An integrated management information system that encompasses the entire organization is called a(n) ______ system. enterprise resource planning total quality management activity-based costing activity-based management

nterprise resource planning

A foregone benefit from choosing one path over another is a(n) _______ _______.

opportunity cost

Gemini had Sales of $50,000, Unadjusted Cost of goods sold of $23,000, Overapplied Manufacturing Overhead of $3,000, and Selling and administrative expenses of $25,000. Calculate gross profit.

$30,000 Reason: Because manufacturing overhead is overapplied, it reduces cost of goods sold to $20,000 ($23,000 - $3,000). Thus gross profit is $50,000 - $20,000 or $30,000.

A company's calculated predetermined overhead rate is $90 per direct labor hour. If a job requires 4 direct labor hours, ______.

$360 is assigned to the job to cover indirect costs

Murphy Manufacturing estimated $100,000 in manufacturing overhead and 5,000 direct labor hours for 2016. Actual overhead for the year was $120,000 and 7,500 actual direct labor-hours were used. How much overhead was applied to a job completed during 2016 that used 200 direct labor-hours?

$4,000 - (The predetermined overhead rate = $100,000/5,000 direct labor-hours = 20 per direct labor-hour. The overhead applied to the job = $20 per direct labor-hours x 200 direct labor-hours = $4,000.)

Which of the following statements are true? - A particular cost is either direct or indirect, regardless of the cost object. - A direct cost is sometimes referred to as an opportunity cost. - A regional sales manager's salary would be a direct cost of the regional office in which the sales manager works. - Occupancy costs can be either direct or indirect.

- A regional sales manager's salary would be a direct cost of the regional office in which the sales manager works. - Occupancy costs can be either direct or indirect.

Which of the following statements are true? - Nonmanufacturing costs are period costs. - Period costs are also called inventoriable costs. - The wages of assembly-line workers are period costs. - Period costs are expensed in the same period in which they are incurred.

- Nonmanufacturing costs are period costs. - Period costs are expensed in the same period in which they are incurred.

Which of the following apply to managerial accounting? - Reports at the decision making level - Emphasizes the future - Mandatory for external reports - Information reported for whole company - Objective and reliable - Reports are prepared as needed

- Reports at the decision making level - Emphasizes the future - Reports are prepared as needed

Select all that apply: - The number of employees working in manufacturing has remained relatively constant over the past 40 years - Over 50% of our nation's gross domestic product comes from manufacturing activities. - The U.S. economy is moving more towards the service industry - Today, about 60% of people employed in America work in nonmanufacturing fields

- The number of employees working in manufacturing has remained relatively constant over the past 40 years. - The U.S. economy is moving more towards the service industry

Which of the following statements are true? - The triple bottom line is a component of sustainability accounting. - Most public companies now issue corporate social responsibility (CSR) reports. - Most managers today are driven primarily by economic results. - The sole focus of most business strategies is achieving financial results.

- The triple bottom line is a component of sustainability accounting. - Most public companies now issue corporate social responsibility (CSR) reports. - Most managers today are driven primarily by economic results.

Fixed costs ______. - become progressively larger per unit as the level of activity increases - remain constant in total - remain constant on a per unit basis - become progressively smaller per unit as the level of activity increases

- remain constant in total - become progressively smaller per unit as the level of activity increases

Which of the following companies would be most likely to use operations costing? An automobile manufacturer A law firm A dog food manufacturer A custom home builder

An automobile manufacturer

True or false: Activity-based costing is appropriate for every company.

False

At the end of the reporting period, any differences between actual and applied manufacturing overhead may be ______.

adjusted directly to Cost of Goods Sold (COGS) adjusted to Work in Process, Finished Goods, and COGS

The first step in assigning manufacturing overhead is to determine the _______ ______or cost driver.

allocation base

The process of discovering and communicating meaningful patterns and insights from data to find more intelligent ways of operating a business is known as

analytics

Opportunity costs ______. are out-of-pocket costs are the costs of not doing something should be considered in decision making are uncommon in decision making

are the costs of not doing something should be considered in decision making

The basic formula for process costing is ______.

average unit cost = total manufacturing cost ÷ total units produced

To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the ______. Multiple choice question.

estimated total cost driver

Which of the following is NOT one of the three common types of analytics?

informative

Product costs are also called _______ costs.

inventoriable or manufacturing

Managerial accounting information ______.

is important for both profit making and nonprofit organizations

Process costing ______. uses job cost sheets is used for homogeneous products is used for mass production accumulates costs by customer

is used for homogeneous products is used for mass production

The costs incurred for each unique product, project, or service are recorded on a document called a(n) ________ _______ sheet.

job cost

To compute the per-unit manufacturing cost, add _________ ________ to direct materials and direct labor.

manufacturing overhead

Which account is credited when manufacturing overhead is applied?

manufacturing overhead

Nonprofit organizations ______.

must make decisions that use managerial accounting information

The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the ______ the job.

overhead applied to

The formula for applying overhead to a specific job is ______.

predetermined overhead rate × the actual cost driver usage for the specific job

Fixed costs ______. - become progressively larger per unit as the level of activity increases - remain constant in total - remain constant on a per unit basis - become progressively smaller per unit as the level of activity increases

remain constant in total become progressively smaller per unit as the level of activity increases

Which of the following is NOT part of the manufacturing cost per unit?

sales commission

Today most public companies issue corporate _______ _______ reports that provide sustainability-related information

social responsibility

Job order costing requires a good record-keeping system that uses ________ documents that trace direct costs to specific jobs.

source