accunting quiz 4 2

At Eady Corporation, maintenance is a variable overhead cost that is based on machine-hours. The performance report for July showed that actual maintenance costs totaled $11,720 and that the associated rate variance was $380 unfavorable. If 6,300 machine-hours were actually worked during July, the standard maintenance cost per machine-hour was:

$1.80 per machine-hour

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year: Cost of clay used in production$ 65,000Wages paid to the workers who paint the figurines$ 81,000Wages paid to the sales manager's secretary$ 33,000Cost of junk mail advertising$ 50,000 What is the total of the direct costs above?

$146,000

Koczela Incorporated has provided the following data for the month of May: Inventories: BeginningEndingWork in process$27,000$22,000Finished goods$56,000$60,000 Additional information: Direct materials$67,000Direct labor cost$97,000Manufacturing overhead cost incurred$73,000Manufacturing overhead cost applied to Work in Process$71,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The cost of goods manufactured for May is:

$240,000

Derst Incorporated sells a particular textbook for $28. Variable expenses are $22 per book. At the current volume of 54,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total:

$324,000

Awtis Corporation has a margin of safety percentage of 25% based on its actual sales. The break-even point is $224,400 and the variable expenses are 45% of sales. Given this information, the actual profit is:

$41,140

Paceheco Corporation uses the weighted-average method in its process costing system. The Molding Department is the second department in its production process. The data below summarize the department's operations in January. UnitsPercent Complete with Respect to ConversionBeginning work in process inventory5,70070%Transferred in from the prior department during January59,600 Completed and transferred to the next department during January57,400 Ending work in process inventory7,90040% The accounting records indicate that the conversion cost that had been assigned to beginning work in process inventory was $35,158 and a total of $559,854 in conversion costs were incurred in the department during January. The cost per equivalent unit for conversion costs for January in the Molding Department is closest to: Multiple Choice

$9.825

Bertie Corporation has two divisions: Retail Division and Wholesale Division. The following data are for the most recent operating period: Total CompanyRetail DivisionWholesale DivisionSales$ 486,500$ 300,000$ 186,500Variable expenses$ 137,275$ 72,000$ 65,275Traceable fixed expenses$ 232,400$ 173,600$ 58,800 The common fixed expenses of the company are $70,600. The Wholesale Division's break-even sales is closest to:

$90,462

A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $3,330 and is paid at the beginning of the first year. Ninety percent of the premium applies to manufacturing operations and ten percent applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first year of coverage? ProductPeriodA)$ 111$ 999B)$ 1,110$ 0C)$ 0$ 1,110D)$ 999$ 111

Choice D

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?

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

The Jabba Corporation manufactures the "Snack Buster" which consists of a wooden snack chip bowl with an attached porcelain dip bowl. Which of the following would be relevant in Jabba's decision to make the dip bowls or buy them from an outside supplier? Fixed overhead cost that can be eliminated if the bowls are purchased from the outside supplierThe variable selling cost of the Snack BusterA)YesYesB)YesNoC)NoYesD)NoNo

Fixed overhead cost that can be eliminated if the bowls are purchased from the outside supplier - YesThe variable selling cost of the Snack Buster - No

Which of the following statements is not correct concerning multiple overhead rate systems?

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.

As the level of activity increases, how will a mixed cost in total and per unit behave?In TotalPer UnitA)IncreaseDecreaseB)IncreaseIncreaseC)IncreaseNo effectD)DecreaseIncreaseE)DecreaseNo effect

IncreaseDecrease

Guerra Electronics manufactures a variety of electronic gadgets for use in the home. Which of the following would probably be the most accurate measure of activity to use for allocating the costs of inspecting the finished products at Guerra?

Inspection time

Refer to the T-account below: Prepaid InsuranceDebitCreditBalance30,000(8)9,000 Entry (8) could represent which of the following?

Insurance cost incurred on the factory which is added to the Manufacturing Overhead account.

Which of the following statements about using a plantwide overhead rate based on direct labor is correct?

It is often overly simplistic and incorrect to assume that direct labor-hours is a company's only manufacturing overhead cost driver.

Keyser Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price$173Units in beginning inventory1,450Units produced9,350Units sold9,450Units in ending inventory1,350 Variable costs per unit: Direct materials$39Direct labor$56Variable manufacturing overhead$20Variable selling and administrative expense$30Fixed costs: Fixed manufacturing overhead$74,800Fixed selling and administrative expense$167,200 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. What is the net operating income for the month under variable costing?

Keyser Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Assigning manufacturing overhead to a specific job is complicated by all of the below except:

Manufacturing overhead is incurred only to support some jobs.

In its first year of operations, Bronfren Corporation produced 800,000 sets and sold 780,000 sets of artificial tan lines. What would have happened to net operating income in this first year under the following costing methods if Bronfren had produced 20,000 fewer sets? (Assume that Bronfren has both variable and fixed production costs.) Variable costingAbsorption costingA)No effectIncreaseB)DecreaseIncreaseC)DecreaseDecreaseD)No effectDecrease

No effectDecrease

All of the following statements are correct when referring to process costing except:

Process costing would be appropriate for a jeweler who makes custom jewelry to order.

The general model for calculating a quantity variance is:

Standard price × (Actual quantity of inputs used − Standard quantity allowed for output).

Which of the following statements is NOT correct concerning the Manufacturing Overhead Budget?

The Manufacturing Overhead Budget shows only the variable portion of manufacturing overhead.

Machining a part for a product is an example of a:

Unit-level activity.

Mark is an engineer who has designed a telecommunications device. He is convinced that there is a big potential market for the device. Accordingly, he has decided to quit his present job and start a company to manufacture and market the device. The cost of the raw materials that will be used in manufacturing the computer board is:

a period cost

Direct costs:

can be easily traced to a particular cost object.

In a job-order costing system, which of the following events would trigger recording data on a job cost sheet?

none of the choices

If a company increases its selling price by $2 per unit due to an increase in its variable labor cost of $2 per unit, the break-even point in units will:

not change.

The internal rate of return method assumes that a project's cash flows are reinvested at the:

simple rate of return.

Malcolm Company uses a weighted-average process costing system. All materials at Malcolm are added at the beginning of the production process. The equivalent units for materials at Malcolm would be the sum of:

units in beginning work in process and the units started.

Assuming that direct labor is a variable cost, the primary difference between the absorption and variable costing is that:

variable costing treats only direct materials, direct labor, and the variable portion of manufacturing overhead as product costs while absorption costing treats direct materials, direct labor, the variable portion of manufacturing overhead, and an allocated portion of fixed manufacturing overhead as product costs.