ACCT 2302 Exam 1

Robin Company has the following balances for the current month: Direct materials used $19,500 Direct labor$14,750 Sales salaries$12,300 *Indirect labor$3,400 *Production manager's salary$5,700 Marketing costs$8,670 *Factory lease$5,200 What is Robin's total manufacturing overhead?

$14,300

Manufacturing overhead was estimated to be $213,150 for the year along with 20,300 direct labor hours. Actual manufacturing overhead was $230,000, and actual direct labor hours were 19,500. The amount credited to the Manufacturing Overhead account would be:

$204,750. [(213,150/20,300)x19,500]

Frost, Inc. is a service firm that uses process costing. The firm worked on a total of 1,550 cases this month, 750 of which were completed during the period. The remaining cases were 40% complete. The firm incurred $224,000 in direct labor and manufacturing overhead costs during the period, and had $6,050 in direct labor and manufacturing costs in beginning inventory. Using the weighted average method, what was the cost per equivalent unit?

$215.00 equivalent units 1,100 1550-750= 800 800+(750x0.4) = 1,100 (224,000+6,050)/1,100 = ~$209

McGown Corp. has the following information: Beginning Inventory (1/1) Ending Inventory (12/31) Raw Materials Inventory $22,600 $36,000 Work in Process Inventory $19,800 $22,700 Finished Goods Inventory $33,600 $20,600 Additional information for the year is as follows: Raw materials purchases$101,400 Direct labor$80,200 Manufacturing overhead applied$88,400 Indirect materials$0 Compute the cost of goods manufactured.

$253,700 Direct Materials 22,600+101,400-36,000 = 88,000 Add: Direct Labor 80,200 Add: Manufacturing Overhead 88,400 Add: Beginning WIP 19,800 Less: Ending WIP 22,700

Given the following, compute the conversion cost per equivalent unit using the weighted-average method. Conversion costs in beginning inventory $5,000. Conversion costs added in the current period $40,000. A total of 1,000 units were completed and transferred out during the period. The 500 units in ending inventory are 50% complete.

$36 ($5,000 + $40,000) / (1,000 + 500 × 50%) = $36

Rathburn, Inc. is a service firm that uses process costing. The firm worked on a total of 1,500 cases this month, 1,400 of which were completed during the period. The remaining cases were 30% complete. The firm incurred $366,600 in direct labor and manufacturing overhead costs during the period, and had $5,200 in direct labor and manufacturing costs in beginning inventory. Using the weighted average method, what was the total cost of cases completed during the period?

$364,000 1,400 + [(1,500-1,400)x.3] = 1,430 (total units) 366,600+5,200 = 371,800 (total cost) 371,800/1430 = 260 (cost per case) 1,400 x 260 = $364,000

Manufacturing overhead was estimated to be $356,400 for the year along with 29,700 direct labor hours. Actual manufacturing overhead was $556,875 and actual direct labor hours were 30,600. The amount of manufacturing overhead applied to production would be:

$367,200. [(356,400/29,700)x30,600]

Manufacturing overhead was estimated to be $499,200 for the year along with 20,800 direct labor hours. Actual manufacturing overhead was $420,800, and actual labor hours were 21,700. The amount debited to the Manufacturing Overhead account would be:

$420,800.

Robin Company has the following balances for the current month: *Direct materials used $20,000 *Direct labor $17,900 Sales salaries $12,750 *Indirect labor $2,000 *Production manager's salary $5,700 Marketing costs $7,900 *Factory lease $3,900 What is Robin's total manufacturing cost?

$49,500

Sawyer Company had the following information for the year: Direct materials used $194,100 Direct labor incurred (7,600 hours) $248,900 Actual manufacturing overhead incurred $320,000 Sawyer Company used a predetermined overhead rate using estimated overhead of $365,500 and 8,500 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods Inventory balance of $9,500. What was adjusted cost of goods sold?

$753,500 Direct Materials Used $194,100 Add: Direct Labor incurred $248,900 Add: Manufacturing Overhead Applied [($365,500/8,500 hours) x 7,600 hours] $326,800 Total Manufacturing Costs $769,800 Add: Work-in-process beginning Less: Work-in-process ending MAKES NO SENSE

McGown Corp. has the following information: Beginning Inventory (1/1) Ending Inventory (12/31) Raw Materials Inventory $27,000 $36,600 Work in Process Inventory $23,800 $20,000 Finished Goods Inventory $34,300 $28,300 Additional information for the year is as follows: Raw materials purchases $104,700 Direct labor $84,100 Manufacturing overhead applied $87,300 Indirect materials $0 Compute the direct materials used in production.

$95,100 B+P-E=T 27,000+104,700-104700= 95,100

Hager Co. uses process costing to account for the production of bottled energy drinks. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 15,300 units for materials and 12,750 units for conversion costs. Beginning inventory consisted of $18,000 in materials and $15,000 in conversion costs. April costs were $47,000 for materials and $51,000 for conversion costs. Ending inventory still in process was 5,100 units (100% complete for materials, 50% for conversion). The value of units completed and transferred out using the weighted average method would be closest to: (Round your intermediate calculations to four decimal places.)

$96,133.98

Braden Corp. uses a process costing system. Beginning inventory for January consisted of 1,700 units that were 63% completed. 10,800 units were started into the process during January. During January, 10,700 units were completed. How many units were in ending inventory on January 31?

1,800 1,700+10,800-10,700

The first step in preparing a weighted-average production report is ______.

1. reconcile the number of physical units 2. Convert physical units into equivalent units. 3. Calculate cost per equivalent unit. 4. Reconcile the total cost of Work in Process Inventory. 5. Prepare the report.

Bosco Corp. uses a process costing system. Beginning inventory for January consisted of 1,020 units that were 62% completed. During January, 11,200 units were completed. On January 31, the inventory consisted of 540 units that were 70% completed. How many units were started during January?

10,720 11,200-540 = 10,660 ^closest option

Given 100 units in beginning inventory, 1,500 units started, and 200 units in ending inventory, the number of units completed equals ______.

100 + 1,500 - 200 = 1,400

Frost, Inc. is a service firm that uses process costing. The firm worked on a total of 8,400 cases this month, 4,200 of which were completed during the period. The remaining cases were 40% complete. The firm incurred $265,000 in direct labor and manufacturing overhead costs during the period, and had $8,200 in direct labor and manufacturing costs in beginning inventory. Using the weighted average method, what was the total number of equivalent units?

5,880 8,400-4,200=4,200 4,200+(4,200x0.4)= 5,880

Given $40,000 of current costs, $3,000 of costs in beginning inventory, and 500 equivalent units, the cost per equivalent unit using the weighted-average method is $

86 (40,000 + 3,000)/500

Manufacturing Firms

A company that purchases raw materials and converts them into finished products.

Relevant Cost or Benefit (definition)

A cost or benefit that differs between alternatives

Job Cost Sheet

A detailed record of costs incurred to complete a specific job.

materials requisition form

A form that lists the quantity of direct materials to be used in a job.

Allocation Base

A measure that causes or influences the incurrence of a cost.

Which of the following statements is true regarding process costing?

A separate production report is prepared for each major process.

Direct Labor Time Ticket

A source document that shows how a worker spent time each week.

Actual Manufacturing Overhead

Actual amount of indirect manufacturing costs incurred during the period.

Job Order Costing

An accounting system used by companies that offer customized or unique products or services.

Process Costing

An accounting system used by companies to make standardized or homogeneous products or services.

Which of the following statements is true about the use of managerial accounting information in nonprofit organizations?

Because managers of nonprofit organizations need timely and relevant information to make decisions, managerial accounting is vital to these organizations.

When is the predetermined overhead rate calculated?

Before the period begins

Cost of Goods Manufactured Report

Beginning Raw Materials Inventory Plus: Raw Material Purchases Less: Indirect Material Used Less: Ending Raw Materials Inventory = Direct Materials Used in Production +Direct Labor +Applied Manufacturing Overhead =Total Current Manufacturing Costs Plus: Beginning Work in Process Inventory Less: Ending Work in Process Inventory =Cost of Goods Manufactured

Which of the following relationships is correct?

Beginning units in inventory + units started = units completed + ending units in inventory

To earn summer money, Joe could mow lawns in his neighborhood, or he could work at a local grocery store. Which of the following is an out-of-pocket cost of mowing lawns?

Cash paid for gas to run the lawnmower.

Which of the following statements are true?

Classifying a cost as product or period can impact reported profitability. The distinction between product and period costs has more to do with financial accounting than managerial accounting.

Pretend you are a junior managerial accountant. Your supervisor has no knowledge of sustainability accounting. All of the following statements would be convincing arguments to advocate for the importance of sustainability accounting, except one. Which one?

Companies are only accountable to shareholders and shareholders care about sustainability.

When customers purchase products, the manufacturing costs associated with the products are transferred to ______.

Cost of Goods Sold

What two accounts are involved when underapplied or overapplied overhead is disposed of?

Cost of goods sold and manufacturing overhead.

Raw Materials Inventory

Cost of materials purchased from suppliers that have not yet been used in production.

work in process inventory

Cost of units or jobs that are incomplete at any given point in time.

Which of the following statements are true?

Costs are treated differently in different situations. There are many different ways to categorize costs.

nonmanufacturing costs

Costs associated with the running of the business and the selling of the product

Indirect Costs

Costs not easily traceable to producing a product, job or service.

Finished Goods

Costs of all units completed and ready for sale at any given point in time.

indirect costs

Costs that cannot be reasonably traced or are not worth the effort to trace to a cost object

differential cost

Costs that change between alternatives

variable costs

Costs that remain the same per unit of activity

Which of the following would be used to transfer the cost of completed goods during the period to the Finished Goods account?

Credit to Work in Process Inventory.

Which of the following is not used in the calculation of cost per equivalent unit?

Current nonmanufacturing costs

Record the sales revenue earned on account.

Debit Accounts Receivable Credit Sales Revenue

Record the transfer of finished goods inventory account to cost of goods sold.

Debit Cost of Goods Sold Credit Finished Goods Inventory

Record the transfer of work in process inventory to finished goods inventory.

Debit Finished Goods Inventory Credit Work in Process Inentory

Record the purchase of raw materials on account.

Debit Raw Materials Inventory Credit Accounts Payable

Record the actual other costs incurred and paid.

Debit Selling and Administrative expenses (Selling expense + Administrative expenses) Debit Manufacturing Overhead (Factory utilities + Factory rent + Factory depreciation) Credit Misc. Accounts

Record Lamonda Corp's payroll costs due but not paid.

Debit Work in Process Inventory Debit Manufacturing Overhead Credit Salaries/Wages payable

Record the Requisition of raw materials.

Debit Work in Process Inventory Debit Manufacturing Overhead Credit Raw Materials Inventory

Record the application of manufacturing overhead to production.

Debit Work in Process Inventory (found in part c) Credit Manufacturing Overhead

Books on Wheels Controlling

Deciding which new markets to expand into based on the first year's sales results. Deciding to spend more advertising dollars in regions where sales were slower than expected.

Controlling

Deciding which new markets to expand into based on the first year's sales results. Deciding to spend more advertising dollars in regions where sales were slower than expected.

The journal entry to record depreciation on office equipment debits ______.

Depreciation Expense and credits Accumulated Depreciation

Which of the following is a characteristic of a manufacturing environment that would use job order costing?

Differentiated products

Conversion Cost

Direct Labor + Manufacturing Overhead

Total Manufacturing Cost

Direct Material + Direct Labor + Manufacturing Overhead

Prime Cost

Direct Materials + Direct Labor

Under the weighted average method of process costing, the cost per equivalent unit is calculated for which of the following categories?

Direct materials and conversion costs

Manufacturing Costs

Direct materials plus direct labor plus manufacturing overhead

Encourage good character.

Establish a hotline for employees to report questionable acts. Legislate whistle-blower protections.

Predetermined Overhead Rate

Estimated manufacturing overhead divided by estimated cost driver.

Cost of Manufaturing Overhead

Factory Rent Thread Utilities for Factory Cutting room supervisor's Salary Buttons Factory Insurance Depreciation on Sewing Machines

A major difference between job order costing and process costing is the treatment of nonmanufacturing costs.

False

A materials requisition form is used to authorize the purchase of direct materials.

False

Financial accounting information is generally used exclusively by internal parties such as managers.

False

Job-order costing can only be used in manufacturing firms.

False

The cost of each individual unit is tracked to products under both job order and process costing.

False

The process costing production report can be prepared using either the weighted-average method or the last-in, first-out (LIFO) method.

False

The process costing production report is used to determine how much manufacturing cost to transfer out of Finished Goods Inventory and into Cost of Goods Sold.

False

When a job is completed, its costs are transferred into ______.

Finished Goods

Cost of goods completed is transferred from Work in Process Inventory to ______.

Finished Goods Inventory

Once production is completed, total manufacturing costs are transferred to ______.

Finished Goods Inventory

Which of the following represents the cost of jobs completed but not yet sold?

Finished Goods Inventory

When production is completed in the last processing department, the units are transferred to the _____ Inventory account.

Finished goods

Which of the following products would be more suitable for process costing than job order costing?

Gasoline Sunscreen Breakfast cereal

Books On Wheels Implementing

Hiring workers for the manufacturing facility. Overseeing the production and shipment of The Campus Cart. Implementing a bonus system to reward employees for meeting sales and production goals.

Implementing

Hiring workers for the manufacturing facility. Overseeing the production and shipment of The Campus Cart. Implementing a bonus system to reward employees for meeting sales and production goals.

Books On Wheels Planning

Identifying five college campuses to serve as test markets. Setting the goal of $1 million in annual sales by the year 2018. Preparing one-, three-, and five-year budgets that detail the necessary resources and costs that will be incurred to meet the projected sales forecasts.

Planning

Identifying five college campuses to serve as test markets. Setting the goal of $1 million in annual sales by the year 2018. Preparing one-, three-, and five-year budgets that detail the necessary resources and costs that will be incurred to meet the projected sales forecasts.

Which of the following functions of management involves arranging for the necessary resources to carry out the plan?

Implementing

Which of the following functions of management involves providing motivation to achieve results?

Implementing

Counteract incentives for fraud.

Increase maximum fines to $5 million

Applied Manufacturing Overhead

Indirect manufacturing costs that have been assigned to a specific unit or job using a predetermined overhead rate.

relevant costs

Information that is useful for decision making

Managerial Accounting

Is future oriented. Has reports that may be created daily or even in real time Is used mostly by managers within the company. Is relied on for making decisions. Must be accurate to help decision makers.

Financial accounting

Is used primarily by external parties. Is historical in nature. Has reports that can be obtained through the company website or requested from the company CFO for publicly traded companies. Is reported in aggregate for the company as a whole. Is relied on for making decisions. Must be accurate to help decision makers.

Which of the following is NOT true about how the Sarbanes-Oxley Act counteracts incentives for committing fraud?

It removes legal protection from whistleblowers.

Which of the following is a requirement under the Sarbanes-Oxley Act?

Management must conduct a review of the company's internal control system.

What is the primary difference between managerial and financial accounting?

Managerial accounting provides information for internal use and financial accounting provides information to external users.

For a toy maker, rent, utilities, and insurance are all part of _____

Manufacturing Overhead

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

Manufacturing Overhead and credits Prepaid Insurance

Which of the following would be used to record the property taxes on a factory building?

Manufacturing Overhead would be debited.

Which of the following would be used to record the usage of indirect manufacturing resources?

Manufacturing Overhead would be debited.

What document specifies the type and quantity of direct materials used on a specific job?

Materials requisition form

Direct Materials

Materials that can be directly and conveniently traced to a specific unit or job.

Indirect Materials

Materials that cannot be directly or conveniently traced to a specific unit or job.

Which of the following is NOT one of the three categories of businesses?

Nonprofit organization

For a firm that uses the weighted average method of process costing, which of the following must be true?

Physical units must be greater than or equal to equivalent units.

The first step _____ in is to establish goals or objectives and tactics to achieve them.

Planning

Which of the following functions of management involves setting short and long-term objectives and the tactics to achieve them?

Planning

Cost of Direct Material

Premium Quality Cotton Material (Cost directly associated with Material used in production)

Which of the following statements are true regarding process costing production reports?

Production reports provide information accountants need to record manufacturing costs into the accounting system. Managers can use production reports to monitor and control production costs. Production reports are used to determine how much cost to transfer from one process to the next.

The journal entry to record the purchase of materials debits ______.

Raw Materials Inventory

When materials are purchased they are first recorded in the ______ account.

Raw Materials Inventory

A company purchases $40,000 of direct materials and $30,000 of indirect materials on account. The journal entry to record this transaction is debit ______.

Raw Materials Inventory $70,000 and credit Accounts Payable $70,000

Which of the following statements are true?

Raw materials inventory represents the cost of materials not yet used in production. When materials are purchased they are recorded in the Raw materials inventory account.

Reduce opportunities for error and fraud.

Require management to report on effectiveness of internal controls. Require external auditors' report on effectiveness of internal controls.

Income Statement

Sales Revenue Less: Cost of Goods Sold Beginning Finished Goods Inventory Plus: Costs of Goods Manufactured =Cost of Goods Available for Sale Less: Ending Finished Goods Inventory =Cost of Goods Sold =Gross Profit Less: Operating (Period) Expenses =Net Income from Operations

Which of the following is not a manufacturing cost category?

Selling & administrative costs

Hotels and airlines are examples of _____ companies.

Service

Which of the following statements is true?

Some firms operate as more than one type of organization: manufacturer, merchandiser and/or service company.

Which of the following might you find in a job description for a managerial accountant in a manufacturing company?

The Managerial Accountant will conduct internal analysis on the health of the company, suggest variances to emphasize in evaluations, and review unusual results.

underapplied overhead

The amount of actual overhead is greater than the applied overhead.

overapplied overhead

The amount of actual overhead is less than the applied overhead.

opportunity cost

The cost of not doing something

Which of the following are similarities between job order costing and process costing?

The purpose is to assign direct materials, direct labor, and manufacturing overhead to products. The same basic inventory accounts are used for both costing systems. The flow of costs through the inventory accounts is basically the same for both costing systems. Job order costing accumulates costs by job or unit. Process costing accumulates costs by major process.

Which of the following statements are true?

There are many different ways to categorize costs. Costs are treated differently in different situations.

Pretend you are the president of the Managerial Accounting Club and you are responsible for executing the club's most important event: A recruiting event for members and local firms. How might you use the Plan-Implement-Control cycle?

To plan, I would prepare a preliminary list of goals and plans and then hold a kick-off meeting with the club's membership to present and revise the plan.

Cost of Goods Sold

Total manufacturing cost of jobs or units sold during the period.

Cost of Goods Manufactured

Total production cost assigned to goods that were produced during the period.

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

True

If there is a debit balance in the Manufacturing Overhead account at the end of the period, overhead was underapplied.

True

The most common method for disposing of the balance in Manufacturing Overhead is to make a direct adjustment to Cost of Goods Sold.

True

True or false: The equivalent units of production computed under the weighted-average method does not take into account the percentage completed of the beginning inventory.

True

When job order costing is used, costs are accumulated on a job cost sheet.

True

True or false: When using process costing, direct labor costs are often combined with manufacturing overhead into a single cost category.

True With process costing it is often not easy or worth the effort to trace direct labor to products, so direct labor may be combined with manufacturing overhead into a single category called conversion costs.

Which of the following statements are true?

Under the weighted-average method, beginning inventory costs are treated just like costs added during the current period. Costs that move from one process to another are called transferred-in costs.

Every unit that passes through the production process must have been counted in which category of physical units at some point?

Units started

Cost of Direct Labor

Wages Paid to Seamstresses Wages Paid to cutters (Cost directly associated with Labor in production)

What determines the difference between a product cost and a period cost?

When the cost will be matched against revenue on the income statement.

When a job is completed, its costs are transferred out of ______.

Work in Process

When direct materials are used in production, which of the following accounts is debited?

Work in Process Inventory

Which of the following accounts will be treated differently by a process costing system as compared to a job order costing system?

Work in Process Inventory

When a job is completed, which account is credited?

Work in process Inventory

sunk cost

a cost that has already been committed and cannot be recovered

When using process costing, ______.

a separate production report is prepared for each process

The Cost of Goods Manufactured Report includes all of the following except:

actual manufacturing overhead.

A journal entry debiting Salaries expense and crediting Salaries and wages payable could record ______.

administrative salaries

A direct labor time ticket includes the ______.

amount of time spent on each job job numbers of jobs worked on

A cost object is:

an item for which managers are trying to determine the cost.

On the job cost sheet and work in process accounts, the ______ manufacturing overhead is recorded.

applied

Labor costs ______.

are recorded in basically the same way as material costs may be direct or indirect

Applied manufacturing overhead costs are credited to the Manufacturing Overhead account ______.

as the costs are applied to jobs

Service firms:

assign indirect costs to individual clients or accounts based on an allocation base such as billable hours.

The basic formula for process costing is ______.

average unit cost = total manufacturing cost/total units produced

Predetermined overhead rates are ______.

based on some secondary allocation measure

Because service firms tend to be labor-intensive, the primary driver used to assign cost is

billable hours

The most common driver used to assign costs in a service firm is ______.

billable hours

To reconcile the total cost of Work in Process Inventory, account for:

both beginning Work in Process Inventory and any costs that were added during the current period.

A production report presents ______.

both costs to be accounted for and costs accounted for.

A production report includes ______.

both unit and cost information

Which of the following is not an activity that managers perform on a regular, routine basis?

budgeting

Cost objects ______.

can be products, customers, or jobs

A direct cost is one that:

can be traced to a specific cost object.

Which of the following changes introduced by the Sarbanes-Oxley Act is NOT one intended to reduce opportunities for error and fraud?

code of ethics

Job-order costing would most likely be used in a(n) ______.

construction company

Managers keep track of how they are doing and determine if adjustments are needed during the _____ phase.

controlling

When making a decision, ______.

cost control is a critical concern for most organizations

Any item a manager wants to know the cost of is called a(n)

cost object

The total cost transferred out of Work in Process inventory into Finished Goods inventory is ______.

cost of goods manufactured

When products are sold, manufacturing costs are transferred to ______.

cost of goods sold

fixed costs

costs that remain constant as output changes

When overhead is overapplied, a ______ entry is required to dispose of the balance in the Manufacturing Overhead account

debit

Underapplied or overapplied overhead is the ______.

difference between overhead applied to jobs and actual overhead

A relevant cost ______.

differs between alternatives pertains to the future

In an automobile manufacturing plant, assembly-line workers' wages are _____ costs.

direct labor

Labor costs that can be easily and conveniently traced to specific products are ______ costs.

direct labor

Conversion costs include ______.

direct labor manufacturing overhead

Categories of manufacturing costs include ______.

direct labor manufacturing overhead direct materials

Manufacturing costs include ______.

direct labor manufacturing overhead direct materials

The document used to record the time workers spend on each job and task is a ______.

direct labor time ticket

For a juice maker, grapes would be considered a(n)

direct material

When using process costing, major material inputs used in production that can be traced to the product are ______.

direct materials

When materials are requisitioned into production, ______.

direct materials are recorded in Work in Process direct materials are recorded on the job cost sheet

In order to track the cost of partially completed units, they must be converted into a(n) _____ number of fully completed units.

equivalent

Equivalent units of production under the weighted-average method equal ______.

equivalent units in ending work in process plus units transferred out

Physical units multiplied by the percentage of completion yields:

equivalent units.

The standards of conduct for judging right from wrong is referred to as

ethics

The standards of conduct for judging right from wrong is referred to as _____

ethics

Virtually all accounting and business problems have clear right or wrong answers.

false

Intended users of ______ accounting information include investors and regulators; business owners and employees are included in the intended users of ______ accounting.

financial; managerial

Cost of goods _____ is the total cost of jobs completed during the period.

finished

When a job is completed, which account is debited?

finished goods inventory

Reconciling the total cost of Work in Process Inventory is the ______ step in preparing a production report using the weighted-average method.

fourth

The Sarbanes-Oxley (SOX) Act ______.

has many implications for managers was primarily aimed at renewing investor confidence

Companies with strong ethical cultures ______.

have higher productivity than those without such cultures have higher levels of customer satisfaction

If cost data will be used for decision making, it is important to consider ______.

how costs will behave or change

Decisions such as deciding how many employees to hire, salary schedules, and training policies are made during the ______ phase of the management process.

implementation

Decisions made during the _____ phase are sometimes called operational decisions.

implementing

The key difference between the weighted-average method and the FIFO method is how they deal with units and costs ______.

in beginning Work in Process Inventory

The Sarbanes Oxley Act ______.

includes rules that should help employees make ethical decisions

When disposed of, underapplied manufacturing overhead will:

increase Cost of Goods Sold.

A(n) _____ cost will not influence a decision.

irrelevant

The total cost of Work in Process Inventory ______.

is divided between ending inventory and costs transferred to the next process or Finished Goods includes beginning Work in Process plus current costs

Process costing ______.

is used for mass production is used for homogeneous products

Which of the following is not a method that can be used to prepare process costing production reports?

last-in, first-out (LIFO) method

When using process costing, costs are accumulated by ______.

major process

Managerial accounting, as compared to financial accounting, is primarily intended to facilitate:

making decisions with timely, relevant information.

Direct materials and direct labor are both ______ costs.

manufacturing

Levi Strauss and Ford Motors are examples of _____ firms.

manufacturing

Actual manufacturing overhead consists of all ______.

manufacturing costs other than direct labor and direct materials

All costs other than direct materials and direct labor that are incurred to produce a product are called indirect costs or

manufacturing overhead

Factory labor charges that cannot be easily traced to a job are treated as ______.

manufacturing overhead

Both process costing and job order costing assign ______ costs to products.

manufacturing overhead direct materials direct labor

When classifying costs, ______ costs relate to making a product and _____ costs relate to delivering and selling a product.

manufacturing; nonmanufacturing

Cost transferred from Work in Process (WIP) Inventory to Finished Goods (FG) Inventory ______.

may be called cost of goods manufactured remain in FG Inventory until goods are sold may be called cost of goods completed

Controlling involves

measuring actual results

A department store is part of the ______ companies category of business.

merchandising

Wholesalers and retailers are both types of ______ companies.

merchandising

An equivalent unit is calculated by:

multiplying the number of physical units by the percentage of completion.

When computing equivalent units using the weighted-average method, ______.

only partially completed units in ending inventory are part of the calculation

The distinction between manufacturing and nonmanufacturing costs applies ______.

only to companies that make a physical product

The Sarbanes-Oxley (SOX) Act focuses on three factors that affect the accounting reporting environment:______ ,______ , and ______.

opportunity, incentives, character

Cost of goods manufactured is the amount of cost transferred:

out of Work in Process Inventory and into Finished Goods Inventory.

The difference between overhead applied to jobs and actual overhead is ______.

overapplied or underapplied overhead

An equivalent unit is a measure used to convert _____ completed units into the equivalent of a full unit.

partial

Nonmanufacturing costs incurred during a period are treated as ______.

period expenses

The future-oriented part of the management cycle is

planning

The continuous, ongoing cycle of management functions include ______.

planning, implementing, and controlling

The difference between _____ costs and _____ costs determines how and when the cost will be matched up against revenue on the income statement.

product; period

The foundation of a process costing system is the

production report

The foundation of a process costing system is the ______.

production report

The production report ______.

provides information to record manufacturing costs in the accounting system

All materials that will be used in future production are first recorded in the _____Inventory account.

raw materials

Materials requisition forms are used to ______.

record the cost of raw materials in the accounting system control the flow of materials from inventory into production

Variable costs ______.

remain constant per unit and vary in total

A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record ______.

rent expense on factory equipment factory utilities expense

Total Period Cost

selling expenses + administrative expenses

You are to receive five gold coins from your great uncle as an incentive to study hard. The coins were originally purchased in 1982. Your great uncle will deliver the coins the week after finals (assuming your grades are "acceptable"). The amount your great uncle paid for the coins is a(n):

sunk cost.

Nonmanufacturing costs increase ______.

the Selling, General & Administrative expense accounts

An opportunity cost is:

the foregone benefit of the path not taken.

When actual manufacturing overhead costs are incurred, ______.

the manufacturing overhead cost is debited Manufacturing overhead is credited when overhead is applied. Work in process is debited for applied, not actual overhead.

Costs that are moved from one production process to another are called ______-______ costs.

transferred in

The manufacturing cost that is transferred from one production process to another (for example, from production to packaging) is called the:

transferred-in cost.

people, profit, planet

triple bottom line

Cost control is a critical concern for most organizations.

true

The difference between (units in beginning inventory + units started) and units completed is ______.

units in ending inventory

Data received from social media is an example of:

variety

Data that is received as events are occurring is an example of:

velocity

The major difference between job order and process costing is ______.

whether the products produced are similar or different