Managerial KCC - Test 1

what types of companies can benefit from managerial accounting

manufacturers retailers service providers

one key difference appears when comparing the income statements of a manufacturing company to a merchandising company, what is that difference?

manufacturing companies use cost of goods manufactured and merchandising companies use cost of goods purchased

indicate which of the following statements is not correct

manufacturing costs are assigned the same way in a job order and in a process cost system

work in process inventory is debited for all of the following except

manufacturing overhead incurred

equivalent units are computed for

materials and conversion costs

in a manufacturing company, the cost of factory labor consists of all of the following except

net earnings of factory workers

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)

predetermined overhead rate

Mandela manufacturing thinks that the best activity base for its manufacturing overhead is machine hours. the estimate of annual overhead costs is $540,000. the company used $1000 hours of processing for job A15 during the period and incurred actual overhead costs of $580,000. the budgeted machine hours for the year totaled 20,000. What amount of manufacturing overhead should be applied to job A15

predetermined overhead rate = 540000/20000 = 27 1000 x 27 = 27000

a process cost system would be used for all of the following except

printing of wedding invitations

product costs include each of the following except

selling and administrative expenses

which of the following items is not a characteristic of a process cost system?

the products produced are heterogeneous in nature

which one of the following is a characteristic that job-order cost systems and process cost have in common?

they both use perpetual inventory systems

which one of the following transactions causes the manufacturing overhead account to be debited in a job order cost accounting system

used indirect materials

what is the cost of goods manufactured for march? raw materials acquired for cash. $82500 cost of direct materials used in production. 81900 cost to ship products to customers. 1000 direct labor costs incurred. 41000 total manufacturing overhead incurred. 25000 raw materials inventory, beginning. 3600 raw materials inventory, ending. 3600 work in process inventory, beginning. 12000 work in process inventory, ending. 14200

work process inventory beginning + (direct materials used in production +direct labor costs incurred + manufacturing overhead incurred) - work in process inventory, ending 12000 + (81900+41000+25000) - 14200 = 145700

why do companies, using job order costing to estimate manufacturing overhead costs, allocate them to individual jobs and products

it enables the company to determine the approximate cost of each job as it gets completed

a company is more likely to use a job costing system if

it manufactures products with unique characteristics

which of the following statements is true about managerial accounting

it provides more detailed information than financial accounting does

in recent years, as production has become more automated, there has been a significant trend towards use of _____________ as the activity base in assigning overhead

machine hours

pharmco incurred the following costs while manufacturing its product: $120,000 materials used in production $60,000 factory depreciation $12,000 property tax on the administrative offices $95,000 labor costs of assembly-line workers $8,000 factory supplies used $13,000 advertising expense $20,000 property tax on factory $23,000 delivery expense $53,000 salaries on staff $17,000 sales commission the total product costs for Pharmco are:

12000 + 95000 + 60000 + 8000 + 20000 = 303000

Barry's BBQ incurred the following costs: $1400 for ribs 45 hours of labor to cook the ribs at $10 per hour $50 for sauces and seasonings $300 for advertising signs for the ribs $150 to clean the grill after cooking $100 administrative costs how much are the total product costs?

1400 + (45*10) + 50 + 150 = 2050

the mixing department's output during the period consists of 20,000 units completed and transferred out, and 5,000 units in ending work in process 60% complete as to conversion and material costs. Beginning inventory is 1000 units, 40% complete as to materials and conversion costs. Assuming the weighted average method, the equivalent units of production are

20,000 + (5000 * 60%) = 23000

Campbell's manufactures chicken noodle soup, in which every can is virtually identical. there is no need to calculate the cost of each can. Which of the following companies would most likely use process costing for the product listed that it produces?

Campbell's - chicken noodle soup

which of the following managerial accounting techniques attempts to allocate manufacturing overhead in a more meaningful fashion?

activity-based costing

a process cost system would be used by all of the following except

advertising company

Dartmouth company has two process departments, matching and assembly, that produce products. at what point can the company add manufacturing overhead costs to the products?

as the production takes place in each of the two process departments

ford company has two process departments, cutting and shaping, that produce products. at what point can direct materials be added to product costs?

at the point the materials are used in production during either the cutting or shaping departments

in computing equivalent units using the weighted-average method, ________ is not part of the equivalent units of production formula

beginning work in process

which one of the following occurs in a process cost system

costs are accumulated in a production cost report

manufacturing overhead includes all of the following except

direct materials