Accounting 526 Midterm
Which of the following is an example of a variable cost? a.Cost of direct materials b.Factory rent c.Property tax d.Depreciation on machinery
.Cost of direct materials
the formula used to calculate applied overhead under normal costing.
Applied Overhead = Predetermined Overhead Rate × Actual Activity Level
Accountants who hold a certificate that allows them to conduct expert work to determine intentional errors and mistakes made in the financial statements are called:
Certified Fraud Examiners.
A company has $2,900 of overapplied overhead for a period. Identify the journal entry made to adjust the overapplied overhead at the end of the period.
Debit Overhead Control for $2,900; Credit Cost of Goods Sold for $2,900
the journal entry to record application of overhead to jobs, under the job-order costing system.
Debit Work in Process; Credit Overhead Control
Which of the following stages are a part of activity-based costing? I.Trace costs to activities II.Overhead costs are assigned to cost objects III.Trace costs to cost objects IV.Overhead costs are assigned to a plant or department
I & III
the formula to calculate prime cost?
Prime Cost = Direct Materials + Direct Labor
Which of the following is a certification designed to meet the specific needs of managerial accountants?
The Certificate in Management Accounting
Wages paid to a factory supervisor are treated as:
a product cost but not as a direct labor cost.
Beta Corporation is planning operations for the coming year. Beta uses normal costing and applies overhead on the basis of direct labor hours. The estimated overhead cost amounts to $10,000,000, estimated direct labor hours are 100,000, estimated direct labor cost amounts to $3,100,000, and estimated direct materials cost is $24,000,000. What is Beta's predetermined overhead rate? a.$100 per direct labor hour b.$42 per direct labor hour c.$70 per direct labor hour d.$31 per direct labor hour
a.$100 per direct labor hour 10,000,000/100,000=100
Impact Corporation reported $440,000 of revenue for the year. Selling expenses amounted to $53,000, and administrative expenses were $78,000. Cost of goods sold was 44% of revenue. Impact's gross margin is: a.$246,400. b.$309,000. c.$193,600. d.$362,000.
a.$246,400. 440,000*.44=193,600 440,000-193,000=246,400
During the year, Coral Inc. sold equipment with a book value of $19,900 for $15,400 (original purchase cost of $24,600). Identify a true statement about the gain or loss on the sale of equipment. a.$4,500 loss on sale of equipment is reported under cash flow from investing activities. b.$4,500 gain on sale of equipment is reported under cash flow from investing activities. c.$9,200 gain on sale of equipment is reported under cash flow from financing activities. d.$9,200 loss on sale of equipment is reported under cash flow from investing activities.
a.$4,500 loss on sale of equipment is reported under cash flow from investing activities. 19,900-15,400=4,500
Ace Manufacturing identifies the following activities and drivers for its operations: Activity Activity Driver Driver Quantity Moving Materials. Number of moves. 100 Machining. Machine hours. 10,000 Ace estimates Moving Materials and Machining will cost $700,000 and $4,000,000 respectively. Ace's activity rates are: a.$7,000 per move and $400 per machine hour. b.$7 per move and $40 per machine hour. c.$70 per move and $4 per machine hour. d.$700 per move and $4,000 per machine hour
a.$7,000 per move and $400 per machine hour. Moving Materials $7,000 ($700,000 / 100) and Machining $400 ($4,000,000 / 10,000)
Which of the following is added to net income while calculating operating cash flows using the indirect method? a.A decrease in inventory b.A dividend payment c.A gain on sale of machinery d.A decrease in bills payable
a.A decrease in inventory
Which of the following will be included in operating cash flows under the direct method? a.Cash paid to suppliers b.Adjustment for foreign exchange fluctuations c.Depreciation d.A gain on sale of equipment
a.Cash paid to suppliers
Which of the following will be included in operating cash flows under the direct method? a.Cash paid to suppliers b.Depreciation c.A gain on sale of equipment d.Adjustment for foreign exchange fluctuations
a.Cash paid to suppliers
A company has $3,300 of overapplied overhead for a period. Identify the journal entry made to adjust the overapplied overhead at the end of the period. a.Debit Overhead Control for $3,300; Credit Cost of Goods Sold for $3,300 b.Debit Overhead Control for $3,300; Credit Work in Process for $3,300 c.Debit Cost of Goods Sold for $3,300; Credit Overhead Control for $3,300 d.Debit Work in Process for $3,300; Credit Overhead Control for $3,300
a.Debit Overhead Control for $3,300; Credit Cost of Goods Sold for $3,300
Which of the following is true of the direct method of support department cost allocation? a.It assigns support department costs only to the producing departments. b.It assigns support department costs in a step-down fashion of allocation. c.It allocates support department costs by following a predetermined ranking procedure. d.It recognizes the interaction between support departments.
a.It assigns support department costs only to the producing departments.
Which of the following is true of the treatment of depreciation expense in preparing a statement of cash flows? a.It is added back to net income to produce operating cash flow. b.It is shown as part of cash outflow for investing activities. c.It is added back to net income to arrive at financing cash flows. d.It is deducted from investing cash flows as it involves an outlay of cash.
a.It is added back to net income to produce operating cash flow.
Which of the following is a reason for the occurrence of overhead variances? a.Nonuniform production and nonuniform actual overhead costs b.Only nonuniform production costs c.Only nonuniform actual overhead costs d.Nonuniform production and nonuniform direct materials cost
a.Nonuniform production and nonuniform actual overhead costs
The financial statements of Orchid Enterprises shows a decrease in wages payable by $4,000 for the current year. Which of the following can be inferred by the users of the financial statement? a.The cash outflow was more than the wage expense recognized in the income statement by $4,000. b.The cash outflow is equal to the expense recognized on the income statement. c.The wage expense recognized in the income statement was more than the cash outflow by $4,000. d.There was no cash outflow during the current year but only a decrease in liabilities by $4,000.
a.The cash outflow was more than the wage expense recognized in the income statement by $4,000.
Identify the account balance that decreases when a completed job is transferred to Finished Goods. a.Work in Process b.Raw Materials c.Finished Goods d.Accounts Payable
a.Work in Process
To produce a cash flow income statement, the direct method calculates operating cash flows by: a.adjusting each line of the income statement. b.adjusting net income for changes in all the current assets. c.adjusting net income for noncash items. d.adjusting the income statement for changes only in current liabilities.
a.adjusting each line of the income statement.
The indirect method for calculating operating cash flows computes cash flows by: a.adjusting net income for items that do not affect cash flows. b.adjusting an income statement for changes only in current liabilities. c.adjusting each line of an income statement. d.adjusting net income for items that affect cash flows.
a.adjusting net income for items that do not affect cash flows.
The proportion of each activity used by a product is called: a.consumption ratio. b.product ratio. c.facility rate. d.overhead rate.
a.consumption ratio.
The whale curve of cumulative customer profitability: a.identifies customers to the far right of the curve who severely decrease the firm's profitability and should be terminated. b.takes the shape of a "U" when the firm is profitable. c.depicts cumulative costs compared against cumulative customers. d.depicts activity-based costing compared against revenues of the firm.
a.identifies customers to the far right of the curve who severely decrease the firm's profitability and should be terminated.
An important difference between activity-based costing and traditional costing is that under activity-based costing, _____. a.multiple overhead rates are calculated b.a plantwide overhead rate is used c.unit costs are less accurate d.activities are not considered in determining product cost
a.multiple overhead rates are calculated
The sequential method of allocation of service costs: a.performs cost allocations in a step-down fashion. b.ignores support department interactions. c.fully accounts for support department interactions. d.ranks the support departments in order of the amount of service rendered, from the least to the greatest.
a.performs cost allocations in a step-down fashion.
The cost of research and development activities is classified as:
administrative cost.
The ending inventories of materials, work-in-process, and finished goods appear:
as current assets on the balance sheet.
A materials requisition form is used to:
assign the cost of direct materials to a job.
Calculate the change in cash from the following information: Cash balance on December 31, 20X1$96,000 Cash balance on December 31, 20X2$216,000 Cash inflow from operating activities$135,000 Cash outflow due to operating activities$75,000 Cash inflow from financing activities$115,000 a.$180,000 b.$120,000 c.$190,000 d.$60,000
b.$120,000 216,000-96,000=120,000
Steven Co. has two products: A and B. The following is information about the assembly activity in its factory: Estimated Cost. Estimated Activity A. B. Total Assembly $15,000. 490. 260. 750 The activity rate for the Assembly Department is closest to: a.$62.90. b.$20.00. c.$55.81. d.$25.06.
b.$20.00. $15,000 / 750 = $20.00
Wisteria Corp. has an overhead rate of $8 per machine hour. In the month of March, the company used 10,000 hours of machine time. The actual overhead cost for the month is $99,000. If Wisteria follows normal costing, determine the overhead applied to the month's production. a.$19,000 b.$80,000 c.$179,000 d.$99,000
b.$80,000 $8 × 10,000 = $80,000
Which of the following cost reduction techniques focuses on nonvalue-added activities as a measure to reduce costs? a.Activity selection b.Activity elimination c.Activity sharing d.Activity reduction
b.Activity elimination
Which of the following is an adjustment to be made to net income to arrive at the operating cash flow while following the indirect approach? a.Subtract from net income any increase in long-term liabilities. b.Eliminate income that belongs to the investing or financing section. c.Add to net income any decreases in current liabilities. d.Add to net income any increases in non-cash current assets.
b.Eliminate income that belongs to the investing or financing section.
Which of the following is true of cost of goods sold? a.It represents the total conversion cost of the goods manufactured. b.It is an expense that appears on the income statement. c.It includes all selling and administrative expenses. d.The balance in this account is transferred to finished goods inventory.
b.It is an expense that appears on the income statement.
Which of the following is true of activity-based costing? a.It applies only before the production section of the value chain. b.It is used by organizations that manufacture only one product. c.It is used to determine only the downstream costs of customers. d.It uses a single, plantwide rate to assign overhead costs to the products.
b.It is used by organizations that manufacture only one product.
Which of the following is an example of a customer-driven activity? a.Expediting products b.Order picking c.Reworking products d.Warranty work
b.Order picking
The financial statements of Beige Inc. shows a beginning balance of accounts receivable of $5,000 and a closing balance of accounts receivable of $8,000. Which of the following can be inferred from this observation? a.The difference between the opening and closing balance of accounts receivable is received in cash. b.Revenues were recognized on the income statement, but cash was not collected. c.Neither were revenues recognized on the income statement, nor was cash collected. d.Total revenues and total cash inflow are equal.
b.Revenues were recognized on the income statement, but cash was not collected.
Identify a true statement about the controller of an organization. a.The controller has only indirect responsibility for an organization's basic objectives. b.The controller participates in the decision-making activity of managerial accounting. c.The controller has full authority over the managers in the production areas of an organization. d.The controller is a member of the middle-level management.
b.The controller participates in the decision-making activity of managerial accounting.
Which of the following details is provided by a materials requisition form? a.Beginning balance of material b.Unit cost of material c.Name of supplier of material d.Closing balance of material
b.Unit cost of material
If a company chooses the direct method of presenting cash flows, it must also present: a.a separate schedule for profits and losses. b.cash flows by the indirect method in a separate schedule. c.the sources of cash in a separate schedule. d.the sources of income in a separate schedule.
b.cash flows by the indirect method in a separate schedule.
The direct method computes the operating cash flows as the difference between: a.income recognized and cash received. b.cash receipts and cash payments. c.investing cash flows and financing cash flows. d.opening cash balance and closing cash balance.
b.cash receipts and cash payments.
Activity attributes are: a.financial and nonfinancial information items that describe a set of activities. b.financial and nonfinancial information items that describe individual activities. c.only nonfinancial information items that describe a set of activities. d.only nonfinancial information items that describe individual activities.
b.financial and nonfinancial information items that describe individual activities.
Activity-based customer costing: a.is not useful for companies with only one product. b.has customers as cost objects. c.is not useful for companies with a JIT (just-in-time) structure. d.has a single driver for all customers.
b.has customers as cost objects
The purpose of interviewing managers or representatives of functional work areas is to: a.identify customers. b.identify activities. c.determine the cost associated with activities. d.determine the number of direct labor hours.
b.identify activities.
Following is the financial information of Avocado Company for the year ended December 31, 20X2. Compute operating cash flows using the direct method. Cash sales$92,000 Credit sales 150,000 Accounts receivable on December 31, 20X1 300,000 Accounts receivable on December 31, 20X22 58,000 Reported profit for the year 20X2 77,000 a.$242,000 b.$119,000 c.$134,000 d.$169,000
c.$134,000 300,000-258,000=42,000 92,000+42,000=134,000
The following information relates to Langley Inc. for the month of May: Beginning raw materials inventory$16,000 Purchases of raw materials during May$7,300 Ending raw materials inventory$5,000 Determine the amount of raw materials used in production during May. a.$3,700 b.$13,700 c.$18,300 d.$28,300
c.$18,300 $16,000 + $7,300 - $5,000 = $18,300.
Aquamarine Company produces precision parts for 16 major buyers. Of the 20 customers, one accounts for 40% of the sales, with the remaining 15 accounting for the rest. The 15 smaller customers purchase parts in equal quantities. Data concerning Aquamarine's customer activity follow: Large Customer Smaller Customers Units purchased. 200,000 200,000 Orders placed. 4. 120 # of sales calls. 20. 230 Manufacturing costs. $6,000,000. $6,000,000 Order filling costs allocated*. $ 310,000. $ 310,000 Sales force costs allocated*. $ 150,000. $ 150,000 *Allocated based on sales volume Customer-driven costs are assigned to customers based on units sold, which is a unit-level driver. Compute the cost associated with the large customer. a.$876,000 b.$24,000 c.$44,000 d.$600,000
c.$44,000 310,00+310,000=620,000 4+120=124 620,000*4=2,480,000/124=20,000 150,000+150,000=300,000 20+230=250 300,000*20=6,000,000/250=24,000 20,000+24,000=44,000
Beta Information Systems designs and installs accounting software. Last month, Beta had software licensing costs of $11,000, software technicians' costs of $44,000, and research and development costs of $69,000. Selling expenses totaled $7,800, and administrative expenses amounted to $9,000. Sales totaled $190,000. Determine the operating profit of Beta Information Systems. a.$57,000 b.$66,000 c.$49,200 d.$58,200
c.$49,200 $190,000 - $11,000 - $44,000 - $69,000 - $7,800 - $9,000 = $49,200
Wave Crest Cosmetics produces cosmetic products for 11 major buyers. One customer accounts for ½ of the sales, the other 10 customers account for the remaining sales. The 10 smaller customers place orders of about equal size. The large customer purchases 1,000,000 units per year by placing 3 orders per year, and the 10 smaller customers order 1,000,000 units in total by placing 500 orders per year. Order filling costs total $1,156,900 per year. How much would be assigned to the large customer as ordering costs using activity-based customer costs? a.$1,150,000 b.$578,450 c.$6,900 d.$6,400
c.$6,900 Total ordering filling cost = $1,156,900 / 503 orders = $2,300 per order $2,300 x 3 = $6,900
Super Co. manufactured 10,000 units and reported the following information for December: Direct materials$36,000 Direct labor25,000 Manufacturing overhead35,000 Beginning work in process inventory28,000 Ending work in process inventory29,000 The prime cost per unit is: a.$6.00. b.$3.60. c.$6.10. d.$3.50.
c.$6.10. 36,000+25,000=61,000 61,000/10,000=6.1
Theta Inc. uses normal costing and applies overhead based on direct material costs. The predetermined overhead rate for the current year is 200% of direct material costs. During the year, $3,600,000 of direct material costs and $3,800,000 of direct labor costs were incurred. Theta's applied overhead is: a.$1,900,000. b.$1,800,000. c.$7,200,000. d.$7,400,000.
c.$7,200,000. 200% of $3,600,000 = $7,200,000
Which of the following is an example of a producing department in a furniture manufacturing company? a.Housekeeping Department b.Maintenance department c.Assembly department d.Personnel department
c.Assembly department
Which of the following journal entries is made at the time of sale of finished goods? a.Debit Cost of Goods Sold; Credit Sales Revenue b.Debit Finished Goods; Credit Cost of Goods Sold c.Debit Cost of Goods Sold; Credit Finished Goods d.Debit Work in Process; Credit Cost of Goods Sold
c.Debit Cost of Goods Sold; Credit Finished Goods
Identify the journal entry that is made to adjust underapplied overhead? a.Debit Overhead Control; Credit Sales Revenue b.Debit Overhead Control; Credit Cost of Goods Sold c.Debit Cost of Goods Sold; Credit Overhead Control d.Debit Sales Revenue; Credit Overhead Control
c.Debit Cost of Goods Sold; Credit Overhead Control
Identify the journal entry made to record the purchase of raw materials on account. a.Debit Raw Materials; Credit Accounts Receivable b.Debit Accounts Payable; Credit Raw materials c.Debit Raw Materials; Credit Accounts Payable d.Debit Supplies; Credit Accounts Receivable
c.Debit Raw Materials; Credit Accounts Payable
Identify the journal entry to record application of overhead to jobs, under the job-order costing system. a.Debit Work in Process; Credit Actual Overhead b.Debit Actual Overhead; Credit Work in Process c.Debit Work in Process; Credit Overhead Control d.Debit Overhead Control; Credit Work in Process
c.Debit Work in Process; Credit Overhead Control
Which of the following costs are a part of the manufacturing cost flows? a.Office salaries b.Advertising costs c.Direct materials cost d.Sales commission
c.Direct materials cost
Which of the following is a financing activity in the statement of cash flows? a.Purchase of equipment b.Sale of goods on credit c.Issuance of capital stock d.Purchase of inventory
c.Issuance of capital stock
Which of the following statements is true of cash flow from operating activities? a.It includes cash flow from the acquisition or sale of long-term assets. b.It includes cash flow from the cash raised from creditors and owners. c.It includes cash flow from the collection of sales revenues. d.It includes cash flow from the dividends paid on the funds provided by stockholders.
c.It includes cash flow from the collection of sales revenues.
Which of the following is an example of a supplier-driven activity? a.Order entry b.Making sales calls c.Reworking products d.Order picking
c.Reworking products
Which of the following methods of support department cost allocation recognizes all the interaction among the support departments? a.The direct method b.The sequential method c.The reciprocal method d.The proportional method
c.The reciprocal method
Which of the following is the formula to compute unit cost under the job-order costing system? a.Process Costs ÷ Total Job Costs b.Total Job Costs + Process Costs ÷ Output c.Total Job Costs ÷ Output d.Process Costs - Total Job Costs ÷ Output
c.Total Job Costs ÷ Output
In the direct method of cash flow computation, each item on an accrual income statement is adjusted to reflect: a.investing cash flows. b.nonrecurring cash flows. c.operating cash flows. d.financing cash flows.
c.operating cash flows.
The indirect method and the direct method are the two approaches for calculating: a.financing cash flows. b.retiring cash flows. c.operating cash flows. d.investing cash flows.
c.operating cash flows.
In the activity-based costing hierarchy, costs that vary with output volume are categorized as: a.batch-level costs. b.product-sustaining costs. c.unit-level costs. d.facility-sustaining costs.
c.unit-level costs.
The income statement for Snow City Company for the year ended December 31, 20X1 is as follows: Revenues$535,000 Less: Cost of goods sold 320,000 Less: Depreciation expense 66,000 Less: Loss on sale of equipment 25,000 Net income$124,000 Consider the information given below and compute operating cash flows for Snow City Company using the indirect method. Decrease in inventory$14,500 Increase in accounts payable$19,500 Increase in accounts receivable$24,500 a.$138,500 b.$224,500 c.$190,000 d.$195,500
d.$195,500 124,000+66,000=190,000 190,000+14,500=204,500 204,500+19,500=224,000 224,000-24,500=199,500
The following costs were incurred by ABC Company in January: Direct materials$104,000 Direct labor79,000 Manufacturing overhead65,000 Selling expense25,000 Administrative salaries7,000 Determine ABC's total product cost. a.$280,000 b.$266,000 c.$298,000 d.$248,000
d.$248,000 $104,000 + $79,000 + $65,000 = $248,000
Consider the following information for Rhombus Company: Cash receipts from customers$452,000 Cash paid to suppliers 229,000 Cash paid to employees 115,000 Gain on sale of equipment 50,000 Depreciation for the year 19,000 Income tax paid 79,000 Calculate cash from operating activities using the direct method. a.$39,000 b.$79,000 c.$58,000 d.$29,000
d.$29,000 452,000-229,000-115,000=108,000-79,000=29,000
Alpha Company manufactures computers. On July 1, Alpha had $76,000 of materials in inventory. During the month of July, the company purchased $330,000 of materials. On July 31, materials inventory equaled $47,000. Determine the cost of direct materials used in production for the month of July. a.$406,000 b.$301,000 c.$283,000 d.$359,000
d.$359,000 $76,000 + $330,000 - $47,000 = $359,000
Omega Solvers Inc. has $149,000 of cash and $254,000 of marketable securities as per its beginning balance sheet. Which of the following is its total cash at the beginning of the year? a.$254,000 b.$149,000 c.$105,000 d.$403,000
d.$403,000 149,000+254,000=403,000
The following information is related to Alpha Company: Estimated manufacturing overhead costs for the year $249,000 Actual manufacturing overhead costs for the year $198,000 Estimated direct labor hours for the year 49,000 Actual direct labor hours for the year 35,000 Alpha uses normal costing and applies overhead on the basis of direct labor hours.The predetermined overhead rate of Alpha Company is: a.$7.1 per hour. b.$4.0 per hour. c.$8.8 per hour. d.$5.1 per hour.
d.$5.1 per hour. $249,000 ÷ 49,000 hours = $5.1 per hour
Following is the financial information of Merry Company for the year ended December 31, 20X1. Compute net cash from financing activities. Net Income for the year $198,000 Payment of dividends 48,000 Issuance of share capital 98,000 Purchase of equipment1 49,000 a.$149,000 b.$198,000 c.$98,000 d.$52,000
d.$52,000 198,000-48,000-98,000=52,000
During May, the cost of goods manufactured was $60,000. The beginning finished goods inventory for the month was $22,000, and the ending finished goods inventory was $28,000. What was the cost of goods sold for May? a.$110,000 b.$64,000 c.$32,000 d.$54,000
d.$54,000 28,000-22,000=6,000 60,000-6,000=54,000
During May, the cost of goods manufactured was $62,000. The beginning finished goods inventory for the month was $25,000, and the ending finished goods inventory was $30,000. What was the cost of goods sold for May? a.$66,000 b.$117,000 c.$32,000 d.$57,000
d.$57,000 62,000-30,000+25,000=57,000
Which of the following is deducted from net income while calculating operating cash flows using the indirect method? a.An increase in accounts payable b.A loss on sale of equipment c.A decrease in accounts receivable d.A gain on sale of machinery
d.A gain on sale of machinery
Which of the following certifications do managerial accountants obtain? a.The Certificate in Management Accounting b.The Certificate in Public Accounting c.The Certificate in Internal Auditing d.All of these answer choices are correct.
d.All of these answer choices are correct.
Which of the following is a financing activity in the statement of cash flows? a.Purchase of inventory b.Sale of goods on credit c.Purchase of equipment d.Issuance of capital stock
d.Issuance of capital stock
Which of the following statements is true of a noncash exchange? a.It involves the exchange of highly liquid investments. b.It involves a separate disclosure in the investing section of a statement of cash flows. c.It is the exchange of current items on the balance sheet without affecting cash. d.It is the exchange of noncurrent items on the balance sheet without affecting cash.
d.It is the exchange of noncurrent items on the balance sheet without affecting cash.
Which of the following items appear on the income statement of a service firm? a.Manufacturing overhead b.Cost of goods sold c.Gross margin d.Operating expenses
d.Operating expenses
Which of the following items appear on the income statement of a service firm? a.Manufacturing overhead b.Gross margin c.Cost of goods sold d.Operating expenses
d.Operating expenses
Which of the following activities results in a use of cash in the statement of cash flows? a.Issuing long-term debt b.Selling long-term assets c.Reporting profitable operations d.Purchasing merchandise
d.Purchasing merchandise
Which of the following best describes driver analysis? a.The analysis of high activity costs under activity-based costing b.The analysis of the inefficient use of activity costs c.The analysis of the activities under activity-based costing d.The analysis of the factors that cause activity costs
d.The analysis of the factors that cause activity costs
Which of the following costs forms a part of prime cost as well as conversion cost? a.Manufacturing overhead b.The cost of direct materials c.The cost of direct materials and direct labor d.The cost of direct labor
d.The cost of direct labor
Which of the following costs forms a part of prime cost as well as conversion cost? a.The cost of direct materials and direct labor b.The cost of direct materials c.Manufacturing overhead d.The cost of direct labor
d.The cost of direct labor
Which of the following is true of the direct and indirect methods of calculating operating cash flows? a.The direct method and the indirect method use different adjustments and different reasoning. b.A company that chooses the indirect method should also present the direct method in a separate schedule. c.The presentation of information is the same for both the direct and the indirect methods, but the results differ. d.The direct method and the indirect method use the same adjustments and same reasoning.
d.The direct method and the indirect method use the same adjustments and same reasoning.
Which of the following statements is true of a worksheet used to compute the statement of cash flows? a.The debit column of the worksheet provides cash outflows. b.The credit column of the worksheet provides cash inflows. c.The worksheet provides no information about the noncash activities. d.The worksheet itself is not the statement of cash flows.
d.The worksheet itself is not the statement of cash flows.
The cost of delivering a product to a customer is an example of: a.a conversion cost. b.manufacturing overhead. c.a prime cost. d.a period cost.
d.a period cost.
Activity drivers can be classified as: a.only non-unit based. b.either unit based or diversity based. c.only unit based. d.either unit based or non-unit based.
d.either unit based or non-unit based.
An example of a cost driver for a machining activity could be the: a.number of products requiring the machine. b.number of machines being used. c.number of units being machined. d.number of machine hours.
d.number of machine hours.
When direct labor cost is incurred, but cash is not paid to the laborers, _____. a.the raw materials account is debited b.the wages payable account is debited c.the overhead control account is debited d.the work-in-process account is debited
d.the work-in-process account is debited
The use of plantwide or departmental rates assumes that a product's consumption of overhead is based on: a.complexity level activity. b.batch level activity. c.facility level activity. d.unit-level activity.
d.unit-level activity.
A job-order cost sheet includes information related to:
direct materials, direct labor, and applied overhead.
Normal costing determines unit cost by adding:
direct materials, direct labor, and estimated overhead.
The predetermined overhead rate equals:
estimated annual overhead divided by estimated annual activity level.
Managers in line positions are the ones who:
implement the policies framed by the top management team.
Manufacturing firms producing unique products require a:
job-order costing system.
Selling and administrative costs are treated as:
period costs.
At the end of a period, all the nonmanufacturing costs flow to the:
period's income statement.
Direct material cost and direct labor cost are a part of:
product costs.
Gross margin is computed as:
sales revenue minus cost of goods sold.
An organizational chart:
shows line and staff positions within an organization.
The cost of goods sold is:
the cost of producing the units that were sold during a time period.
Cost allocation is:
the process of assigning indirect costs to cost objects.
When a job is complete, the costs of the completed job are transferred from:
the work-in-process account to the finished goods account.
If actual overhead is greater than applied overhead, then the variance is called:
underapplied overhead.