Acctg 404 Exam #2
What is the cost of direct labor if the conversion costs are $330,000 and manufacturing overhead is $275,000?
$55,000
A process costing system is most likely used by which of the following?
a paper manufacturing company
Which is not a step in activity-based costing?
compute a cost rate per production
What is the conversion cost to manufacture insulated travel cups if the costs are: direct materials, $17,000; direct labor, $33,000; and manufacturing overhead, $70,000?
$103,000
A company anticipates the cost to heat the building will be $21,000. Product A takes up 500 square feet of space, while Product B takes up 200 square feet. The activity rate per product using activity-based costing would be which of the following?
$30/square foot
Which of the following product situations is better suited to job order costing than to process costing?
The costs are easily traced to a specific product.
Which of the following production characteristics is better suited for process costing and not job order costing?
Costs are accumulated by department.
A job order costing system is most likely used by which of the following?
an accounting firm specializing in tax returns
Assigning indirect costs to departments is completed by
applying the costs to manufacturing overhead
The costs to be accounted for consist of which of the following?
costs in the beginning inventory and costs added during the period
What entry will increase work in process
debit
Which of the following is a prime cost?
direct labor
Which of the following is a conversion cost?
factory depreciation expenses
Which of the following is a reason a company would implement activity-based costing?
They want to improve the data on which decisions are made.
The activity base for service industries is most likely to be
direct labor hours
Under absorption costing, a unit of product includes which costs?
direct material, direct labor, and manufacturing overhead
During production, to what are the costs in job order costing applied?
each individual product
Which is the correct formula for computing the overhead rate?
estimated overhead for the activity/estimated use of the cost driver for the activity
Which is not a step in analyzing the cost driver for manufacturing overhead?
identify non-value-added costs
What is the proper order of tasks in an ABC system?
identify the cost drivers, identify the cost pools, calculate the overhead application rate for each cost pool, assign the costs to the products
In a job order cost system, raw materials purchased are debited to which account?
raw materials inventory
Companies implement ABC because they want to improve the data on which decisions are made
true
Which document lists the total direct labor used in a specific job?
job cost sheet
During production, costs in a process accounting system are accumulated to each individual department
true
Activity based costing is preferable in a system
with multiple, diverse products
In a job order cost system, overhead applied is debited to which account?
work in process inventory
In a process costing system, which account shows the overhead assigned to the department?
work in process inventory
The initial processing department had a beginning inventory of 750 units and an ending inventory of 1,350 units, and it started 9,500 units into production. How many were transferred out to the next department?
8,900
Activity based costing systems provide the same data as traditional cost systems
false
Absorption costing is also referred to as:
full costing
Which document shows the cost of direct materials, direct labor, and overhead applied for each specific job?
job cost sheet
Product costs under variable costing are typically
lower than under absorption costing
In a job order cost system, indirect labor incurred is debited to which account?
manufacturing overhead
In a job order costing system, which account shows the overhead used by the company?
manufacturing overhead
In a process cost system, factory depreciation expense incurred is debited to
manufacturing overhead
Which document lists the inventory that will be removed from the raw materials inventory?
materials requisition form
Active Frame, Inc., manufactures clear and tinted sport glasses. The manufacturing of clear glasses takes 45,000 direct labor hours and involves 1,700 parts and 115 inspections. The manufacturing of tinted glasses takes 115,000 direct labor hours and involves 1,400 parts and 450 inspections. The traditional method applies $560,000 of overhead on the basis of direct labor hours. What is the amount of overhead per direct labor hour applied to the clear glass products?
$157,500
Which is not needed to compute equivalent units of production?
the material cost per unit
Under variable costing, a unit of product includes which costs?
direct material, direct labor, and variable manufacturing overhead