ACC 220

total direct manufacturing cost

- Direct Materials + Direct Labor = Direct Manufacturing Cost per unit - Direct Manufacturing Cost per unit*Number units produced=Total Direct Manufacturing Cost

Which of the following would usually be found on a job cost sheet under a normal cost system?

Actual direct material: Yes, Actual manufacturing overhead cost: No

Underapplied (overapplied) manufacturing overhead

Actual manufacturing overhead - Manufacturing overhead applied

Fixed administrative expense

Administrative-Variable adminstrative expenses*Sales

Which of the following is NOT a period cost? A.Depreciation of factory maintenance equipment. B.Cost of a seminar concerning tax law updates that was attended by the company's controller. C.Insurance on a company showroom where customers can view new products. D.Salary of a clerk who handles customer billing.

Depreciation of factory maintenance equipment.

The costs of direct materials are classified as:

Manufacturing cost, prime cost and not conversion cost

Which of the following would most likely NOT be included as manufacturing overhead in a furniture factory? A.The factory utilities of the department in which production takes place. B.The workman's compensation insurance of the supervisor who oversees production. C.The cost of the glue in a chair. D.The amount paid to the individual who stains a chair.

The amount paid to the individual who stains a chair.

Total Indirect Manufacturing Cost

Total Variable MOH (Fixed manufacturing overhead*units produced) + Fixed MOH

Average fixed maintenance cost

Total fixed maintenance cost/Total activity

Total Manufacturing Overhead

Total variable manufacturing overhead cost (Variable MOH*Units produced)+Total fixed manufacturing overhead cost

True or False: Actual overhead costs are not assigned to jobs in a job costing system.

True

In a job-order costing system, manufacturing overhead applied is recorded as a debit to: A) Raw Materials inventory. B) Finished Goods inventory. C) Work in Process inventory. D) Cost of Goods Sold.

Work in Process inventory

The salary paid to the president of a company would be classified on the income statement as a(n): A) administrative expense. B) direct labor cost. C) manufacturing overhead cost. D) selling expense.

administrative expense.

Period costs include

administrative wages + sales commissions + Depreciation of administrative equipment + Advertising

Cost of Goods Sold

beginning inventory + purchases - ending inventory

Net Operating Income

contribution margin - fixed expenses

Product costs that have become expenses can be found in: A.period costs. B.selling expenses. C.cost of goods sold. D.administrative expenses.

cost of goods sold.

The relative proportion of variable, fixed, and mixed costs in a company is known as the company's:

cost structure.

During July at Loeb Corporation, $83,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,000. The journal entry to record the requisition from the storeroom would include a: A) debit to Work in Process of $79,000 B) debit to Work in Process of $83,000 C) credit to Manufacturing Overhead of $4,000 D) debit to Raw Materials of $83,000

debit to Work in Process of $79,000

Fixed costs expressed on a per unit basis: A) increase with increases in activity. B) decrease with increases in activity. C) are not affected by activity. D) should be ignored in making decisions since they cannot change.

decrease with increases in activity.

product costs include

direct materials+utilities+Factory+Indirect Labor+Depreciation of production equipmet+Direct labor

Total cost

fixed cost + (variable cost per unit*units)

Overapplied manufacturing overhead would result if: A) the plant was operated at less than normal capacity. B) manufacturing overhead costs incurred were less than estimated manufacturing overhead costs. C) manufacturing overhead costs incurred were less than manufacturing overhead costs charged to production. D) manufacturing overhead costs incurred were greater than manufacturing overhead costs charged to production.

manufacturing overhead costs incurred were less than manufacturing overhead costs charged to production.

Materials used in a factory that are not an integral part of the final product, such as cleaning supplies, should be classified as: A) direct materials. B) a period cost. C) administrative expense. D) manufacturing overhead.

manufacturing overhead.

Overhead applied

predetermined overhead rate x amount of the allocation base incurred by the job

cost per unit

total cost/total units

variable cost per unit

total variable cost/number of units

For an automobile manufacturer, the cost of a driver's side air bag purchased from a supplier and installed in every automobile would best be described as a:

variable cost.

Within the relevant range, variable costs can be expected to: A.vary in total in direct proportion to changes in the activity level. B.remain constant in total as the activity level changes. C.increase on a per unit basis as the activity level increases. D.increase on a per unit basis as the activity level decreases.

vary in total in direct proportion to changes in the activity level.

In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the cost of goods manufactured is computed according to which of the following equations? A) Cost of goods manufactured = Total manufacturing costs + Ending work in process inventory - Beginning work in process inventory B) Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory C) Cost of goods manufactured = Total manufacturing costs + Beginning finished goods inventory - Ending finished goods inventory D) Cost of goods manufactured = Total manufacturing costs + Ending finished goods inventory - Beginning finished goods inventory

Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory

Rotonga Manufacturing Company leases a vehicle to deliver its finished products to customers. Which of the following terms correctly describes the monthly lease payments made on the delivery vehicle?

Direct Cost: No Fixed Cost: Yes

Manufacturing Overhead Applied

Estimated total fixed manufacturing overhead/Estimated activity level=Predetermined overhead rate/Actual activity level

Predetermined overhead rate

Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate

True or False: Applied overhead is calculated by multiplying the predetermined overhead rate (POHR) x the estimated units of the allocation based incurred by the job

False

Assembly Department overhead cost

Fixed manufacturing overhead cost+(Variable overhead cost per direct labor-hour*Total direct labor-hours in the department)

When closing overapplied manufacturing overhead to Cost of Goods Sold, which of the following would be true?

Gross margin will increase.

Which of the following statements is NOT correct concerning multiple overhead rate systems? A.A multiple overhead rate system is usually more accurate than a system based on a single plantwide overhead rate. B.A multiple overhead rate system is more complex than a system based on a single plantwide overhead rate. C.A company may choose to create a separate overhead rate for each of its production departments. D.In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on machine-hours rather than on direct labor-hours.

In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on machine-hours rather than on direct labor-hours.

Actual Manufacturing Overhead Incurred

Indirect labor cost+Other manufacturing overhead costs incurred

Assigning manufacturing overhead to a specific job is complicated by all of the below except: A.Manufacturing overhead is an indirect cost that is either impossible or difficult to trace to a particular job. B.The average cost of actual fixed manufacturing overhead expenses will vary depending on how many units are produced in a period. C.Manufacturing overhead consists of both variable and fixed costs. D.Manufacturing overhead is incurred only to support some jobs.

Manufacturing overhead is incurred only to support some jobs.

Assigning manufacturing overhead to a specific job is complicated by all of the below except: A) Manufacturing overhead is an indirect cost that is either impossible or difficult to trace to a particular job. B) Manufacturing overhead is incurred only to support some jobs. C) Manufacturing overhead consists of both variable and fixed costs. D) The average cost of actual fixed manufacturing overhead expenses will vary depending on how many units are produced in a period.

Manufacturing overhead is incurred only to support some jobs.

In a job-order costing system that is based on machine-hours, which of the following formulas is correct? A) Predetermined overhead rate = Actual manufacturing overhead ÷ Actual machine-hours B) Predetermined overhead rate = Actual manufacturing overhead ÷ Estimated machine-hours C) Predetermined overhead rate = Estimated manufacturing overhead ÷ Estimated machine-hours D) Predetermined overhead rate = Estimated manufacturing overhead ÷ Actual machine-hours

Predetermined overhead rate = Estimated manufacturing overhead ÷ Estimated machine-hours

Manufacturing Overhead

Salary of production supervisor+Indirect materials+Rent on factory equipment

Total Manufacturing Overhead

Salary of production supervisor+Indirect materials+Rent on factory equipment

Unit sales

Sales/Price of item

fixed selling expense

Selling-Variable selling expense*Unit sales

Which of the following statements is true? I. Overhead can be applied slowly as a job is worked on. II. Overhead can be applied when the job is completed. III. Overhead should be applied to any job not completed at year-end in order to properly value the work in process inventory. A) Only statement I is true. B) Only statement II is true. C) Both statements I and II are true. D) Statements I, II, and III are all true.

Statements I, II, and III are all true.