acc 202
Which of the following will be categorized as a manufacturing overhead cost? A. administration charges of showroom B. cost of direct materials used C. wages paid to assembly line workers D. depreciation on factory plan and equipment (Chapter 17)
Depreciation on factory plant and equipment
Which of the following will be debited to the Manufacturing Overhead account of a watch manufacture? A. cost of printing brochures B. office telephone costs C. salaries paid to accountants D. factory electricity costs (Chapter 17)
Factory electricity costs
Dezire Travel Services provided the following information: Direct labor rate: $80 per hour Predetermined overhead allocation rate for indirect costs: $18 per direct labor hour If Dezire earns $1,600 for a job requiring 10 hours of direct labor, then Dezire will make a profit of$800. True / False (Chapter 17)
False
Financial statements prepared for investors and creditors often include forward-looking information because they make decisions based on a company's future's prospects True / False (Chapter 16)
False
In a manufacturing company, advertising and manufacturing costs are included in manufacturing overhead True / False (Chapter 16)
False
Managerial accounting is used in manufacturing and merchandising companies, but not in service companies True / False (Chapter 16)
False
Manufactuing overhead is allocated by debiting the Finished Goods Inventory account True / False (Chapter 17)
False
Manufacturing overhead costs are allocated to the Work-in-Process Inventory account by a debit to the Manufacturing Overhead account True / False (Chapter 17)
False
Overallocated manufacturing overhead is adjusted by debiting the Cost of Goods Sold Account True / False (Chapter 17)
False
The cost of goods manufactured includes selling expenses, administrative expenses, and manufacturing overhead True / False (Chapter 16)
False
The three categories of period costs are direct materials, direct labor, and manufacturing overhead True / False (Chapter 16)
False
The wages of manufacturing plant janitors are considered to be non-manufacturing overhead costs as these costs are not directly related to the manufacturing process True / False (Chapter 16)
False
Unlike manufacturing companies, service companies use an allocation base for allocating both direct and indirect costs True / False (Chapter 17)
False
Unlike merchandising companies, income statements of service companies include cost of goods sold as a line item. True / False (Chapter 16)
False
Work-in-Process Inventory is debited when indirect labor costs are incurred in a job order costing system. True / False (Chapter 17)
False
Goods that are produced by a manufacturing company and are ready to sell are recorded in the _____________ account. A. Manufacturing Overhead B. Raw Manufacturing Inventory C. Work-in-Process Inventory D. Finished Goods Inventory (Chapter 16)
Finished Goods Inventory
The Works-in-Process Inventory account includes the ______________. A. goods that are damaged during production B. goods that partially completed C. goods that have been sold in the market D. goods that are ready to be sold (Chapter 16)
Goods that are partially completed
Which of the following describes a system in which suppliers deliver materials at the time they are needed and finished units are completed when customer orders need to be filled? A. Total Quality Management (TQM) B. Supply Chain Management (SCM) C. Enterprise Resource Planning (ERP) D. Just-in-Time (JIT) Management (Chapter 16)
Just-in-Time (JIT) Management
The journal entry to issue indirect materials to production should include a debit to the ______________. A. Manufacturing Overhead account B. Raw Materials Inventory account C. Finished Goods Inventory account D. Work-in-Process Inventory account (Chapter 17)
Manufacturing Overhead account
For decision-making purposes, ______________ costs are often divided into prime costs and conversion costs. A. Period costs B. Fixed costs C. Product costs D. Sunk costs (Chapter 16)
Product Costs
Which of the following will be categorized as a manufacturing overhead cost? A. administration charges of showroom B. cost of direct materials used C. wages paid to assembly line workers D. depreciation on factory plant and equipment (Chapter 17)
depreciation on factory plan and equipment
South State, Inc. used $153,000 of direct materials and incurred $63,000 of direct labor costs during the year. Indirect labor amounted to $270,000, while indirect materials used totaled $53,000. Other operating costs pertaining to the factory included utilities of $135,500; maintenance of $70,260; repairs of $53,400; depreciation of $133,000; and property taxes of $74,640. There was no beginning or ending finished goods inventory, but Work-in-Process inventory began the year with a $5,000balance and ended the year with a $7,400 balance. How much is the cost of goods manufactured? (Chapter 16)
$1,003,400
Malibu Corporation provided the following information for the year: Beginning Balance—Work-in-Process Inventory $26,000 Ending Balance—Work-in-Process Inventory 55,000 Beginning Balance—Raw Materials Inventory 81,000 Ending Balance—Raw Materials Inventory 59,000 Purchases—Raw Materials 360,000 Direct Labor 471,000 Indirect Labor 19,000 Depreciation on Factory Plant and Equipment 24,000 Plant Utilities and Insurance 268,000 What was the amount of the cost of goods manufactured for the year? (Chapter 16)
$1,135,000
Viva, Inc. has provided the following information for the year: Cost of Goods Manufactured $1,261,000 Beginning Balance—Finished Goods Inventory 99,000 Ending Balance—Finished Goods Inventory 85,000 How much is the cost of goods sold? (Chapter 16)
$1,275,000
Evanston Manufacturing, Inc. reported the following information for the year: Number of Units Produced 152,000 Number of Units Sold 62,000 Cost of Goods Manufactured $268,000 Cost of Goods Sold 52,900 Sales Revenue 130,000 Gross Profit 72,940 Operating Expense 727,000 What was the unit product cost? (Round your answer to the nearest cent.) (Chapter 16)
$1.76
A.S. Design Corporation reports the following cost information for March: Cost of Goods Manufactured $75,000 Finished Goods Inventory, March 1 4,000 Finished Goods Inventory, March 31 2,650 Work-in-Process Inventory, March 1 9,670 Work-in-Process Inventory, March 31 1,000 Direct Labor 36,000 Direct Materials Used 16,900 What is the amount of manufacturing overhead incurred by the company in March? (Chapter 16)
$13,430
Fire Cat, Inc. selected cost data for the year are shown below: Cost of Goods Manufactured $145,500 Work-in-Process Inventory, Jan. 1 19,500 Work-in-Process Inventory, Dec. 31 22,000 Direct Materials Used 18,600 What is the total of manufacturing costs incurred by Fire Cat, Inc. during the year? (Chapter 16)
$148,000
Neptune Accounting Services expects its accountants to work for 24,000 direct labor hours per year. The company's estimated total indirect costs are $225,000. The direct labor rate is $70 per hour. The company uses direct labor hours as the allocation base for indirect costs. If Neptune performs a job requiring 30 hours of direct labor, what is the total job cost? (Round any intermediate calculations to the nearest cent, and your final answer to the nearest dollar.) (Chapter 17)
$2,381
Crystal, Inc. is a merchandiser of stone ornaments. The company sold 8,000 units during the year. The company has provided the following information: Sales Revenue $593,000 Purchases (excluding Freight In) 304,000 Selling and Administrative Expenses 68,000 Freight In 14,000 Beginning Merchandise Inventory 46,000 Ending Merchandise Inventory 42,000 What is the operating income for the year? (Round your answer to the nearest whole dollar.) (Chapter 16)
$203,000
Damsel, Inc. is a large manufacturer of auto tires. Damsel has provided the following information: Sales Revenue $55,000 Beginning Finished Goods Inventory 15,500 Cost of Goods Sold 37,500 Cost of Goods Manufactured 44,500 Calculate the amount of ending Finished Goods Inventory reported on Damsel's balance sheet. (Chapter 16)
$22,500
Robbinsdale, Inc. is a merchandiser of stone ornaments. The company sold 8,000 units during the year. The company has provided the following information: Sales Revenue $559,000 Purchases (excluding freight in) 303,000 Selling and Administrative Expenses 67,000 Freight In 14,000 Beginning Merchandise Inventory 46,000 Ending Merchandise Inventory 43,000 What is the cost of goods available for sale for the year? (Chapter 16)
$363,000
Barricades Corporation provided the following information for the year: Beginning Balance—Work-in-Process Inventory $27,000 Ending Balance—Work-in-Process Inventory 56,000 Beginning Balance—Raw Materials Inventory 83,000 Ending Balance—Raw Materials Inventory 60,000 Purchases—Raw Materials 360,000 Direct Labor 471,000 Indirect Labor 18,000 Depreciation on Factory Plant and Equipment 25,000 Plant Utilities and Insurance 271,000 What was the amount of direct materials used in production during the year? (Chapter 16)
$383,000
Given the following information, determine the cost of goods manufactured. Direct Labor Incurred $62,000 Manufacturing Overhead Incurred 177,000 Direct Materials Used 151,000 Finished Goods Inventory, Jan. 1 197,000 Finished Goods Inventory, Dec. 31 99,000 Work-in-Process Inventory, Jan. 1 221,000 Work-in-Process Inventory, Dec. 31 108,000 (Chapter 16)
$503,000
Arabica Manufacturing uses a predetermined overhead allocation rate based on the number of machine hours. At the beginning of the year, it estimated total manufacturing overhead costs to be$1,050,000, total number of direct labor hours to be 4,000, and total number of machine hours to be20,000 hours. What was the predetermined overhead allocation rate? (Round your answer to the nearest cent.) (Chapter 17)
$52.50 per machine hour
The accounts of Delphinia Dreams, Inc. showed the following balances at the beginning of October: Account Debit Raw Materials Inventory $31,000 Work-in-Process Inventory 44,000 Finished Goods Inventory 54,000 Manufacturing Overhead 20,000 During the month, direct materials amounting to $21,000 and indirect materials amounting to$6,000 were issued to production. What is the ending balance in the Work-in-Process Inventory account following these two transactions? (Chapter 17)
$65,000
On January 1, Feldstein Manufacturing had a beginning balance in Work-in-Process Inventory of$81,100 and a beginning balance in Finished Goods Inventory of $22,000. During the year, Feldstein incurred manufacturing costs of $351,000. During the year, the following transactions occurred: Job A-12 was completed for a total cost of $121,100 and was sold for $126,700. Job A-13 was completed for a total cost of $201,800 and was sold for $211,000. Job A-15 was completed for a total cost $60,000 but was not sold as of year-end. What was the balance in Finished Goods Inventory at the end of the year? (Chapter 17)
$82,000 debit balance
Arturo Manufacturing, Inc. provided the following information for the year: Beginning Balance—Work-in-Process Inventory $150,000 Ending Balance—Work-in-Process Inventory 62,500 Beginning Balance—Raw Materials Inventory 269,000 Ending Balance—Raw Materials Inventory 53,700 Purchases—Raw Materials 133,000 Direct Labor 74,380 Indirect Materials 52,350 Indirect Labor 132,500 Depreciation on Factory Plant and Equipment 72,160 Plant Utilities and Insurance 70,980 How much is the cost of goods manufactured? A. $750,670 B. $900,670 C. $766,010 D. $838,170 (Chapter 16)
$838,170
Doric Agricultural Corporation uses a predetermined overhead allocation rate based on the direct labor cost. The manufacturing overhead cost allocated during the year is $300,000. The details of production and costs incurred during the year are as follows: Actual direct materials cost $812,000 Actual direct labor cost $170,000 Actual overhead costs incurred $264,000 Total direct labor hours 5,580 hours What is the predetermined overhead allocation rate applied by the corporation? (Round your answer to two decimal places.) (Chapter 17)
176.47%
Which of the following is the correct order of the four steps of tracking product costs? A. Allocate-->adjust--->accumulate-->assign B. Adjust-->allocate-->accumulate-->assign C. Assign-->accumulate-->allocate-->adjust D. Accumulate-->assign-->allocate-->adjust (Chapter 17)
Accumulate-->Assign-->Allocate-->Adjust
Which of the following correctly describes the accounting for administrative expenses of a manufacturing company? A. Administrative expenses are period costs and are expensed as incurred B. Administrative expenses are period costs and are expensed when the manufactured product is sold C. Administrative expenses are product costs and are expensed when the manufactured product is sold D. Administrative expenses are product costs and are expensed as incurred (Chapter 16)
Administrative expenses are period costs and are expensed as incurred
Which of the following is true about ERP systems? A. Because ERP systems are software based, they have given way to a more service-based economy B. Because ERP systems track costs more efficiently, process costing systems are becoming more prevalent C. Because ERP systems track costs more efficiently, the benefit from the cost information outweighs the cost of obtaining the information D. Because ERP systems have the ability to trace all production costs to individual units, all product costs can now be classified as either direct materials or direct labor (Chapter 17)
Because ERP systems track costs more efficiently, process costing systems are becoming more prevalent
Which of the following formulas represents cost of goods sold for a merchandising business? A. Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold B. Beginning Merchandise Inventory - Ending Merchandise Inventory = Cost of Goods Sold C. Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold D. Ending Merchandise Inventory + Purchases and Freight In - Beginning Merchandise Inventory = Cost of Goods Sold (Chapter 16)
Beginning Merchandise Inventory + Purchases and Freight In - Ending Merchandise Inventory = Cost of Goods Sold
Seria, Inc. has received a bulk order from an overseas client. As a result, the reported earnings of this year are expected to be significantly higher than the estimates of financial analysts. Joshua, an accountant at Seria, tells this to one of his friends. Which of the IMA standards has Joshua violated? A. Nontechnical B. Confidentiality C. Objectivity D. Competence (Chapter 16)
Confidentiality
Which of the following is one of the key standards of ethical practice published by the Institute of Management Accountants (IMA)? A. environmental sensitivity B. confidentiality C. technicality D. objectivity (Chapter 16)
Confidentiality
Anything for which managers want a separate measurement of cost is called a _____________. A. profit object B. conversion cost C. cost object D. responsibility center (Chapter 16)
Cost Object
Anything for which managers want a separate measurement of costs is called a ______________. A. profit object B. conversion costs C. cost object D. responsibility (Chapter 16)
Cost object
Which of the following would appear as a line on the income statements of both a merchandiser and a manufacture? A. Cost of Goods Manufactured B. Direct Materials C. Cost of Goods Sold D. Direct Labor (Chapter 16)
Cost of Goods Sold
In which of the following ways is the management of a company accountable to its communities? A. repaying principal and interest to the suppliers B. providing a capital return on the shareholders' investment C. ensuring the company's environmental impact is not harmful to its community D. making timely interest payments to creditors and dividend payments to investors (Chapter 16)
Ensuring the company's environmental impact is not harmful to its community
Which of the following would be considered a product cost for a manufacturing company? A. salary of the sales manager B. salary of the CEO C. salary of the production manager D. salaries of the accounting staff (Chapter 16)
Salary of the production manager
Which of the following statements is true of the flow of products and periods costs for a manufacture? A. The cost of the finished goods that the manufacturer sells becomes its Cost of Goods Sold on the income statement. B. When the manufacturing process is completed, the costs are transferred to the Work-in-Process Inventory account. C. All product costs that have been paid are expensed and reported on the income statement at the end of the accounting period. D. Period costs remain in inventory accounts on the balance sheet until the product is sold. (Chapter 16)
The cost of the finished goods that the manufacturer sells becomes its Cost of Goods Sold on the income statement
The predetermined overhead allocation rate is calculated by dividing _____________. A. the actual overhead costs by actual amount of the cost driver or allocation base B. the estimated amount of cost dost driver by actual total overhead costs C. the estimated overhead costs by total estimated quantity of the overhead allocation base D. the total estimated overhead costs by total number of days in a year (Chapter 17)
The estimated overhead costs by total estimated quantity of the overhead allocation base
Which of the following is true of product costs? A. they are first recorded in an inventory account B. for external reporting reporting, GAAP requires that they expensed before the products are sold C. they are expensed in the period they paid D. For merchandising companies, product costs do not include freight costs (Chapter 16)
They are first recorded in an inventory account
Accounting forms, building contractors, and healthcare providers use process costing True / False (Chapter 17)
True
Factory rent, as well as factory property taxes and insurance, are included in manufacturing overhead. True / False (Chapter 16)
True
For a service company, such as an accounting firm, each client is considered a job True / False (Chapter 17)
True
In a manufacturing company, advertising and marketing costs are examples of period costs True / False (Chapter 16)
True
In a manufacturing plant, indirect material costs such as lubricants and cleaning fluids are product costs True / False (Chapter 16)
True
Job order costing is well suited for the service industry True / False (Chapter 17)
True
Manufacturing overhead is allocated by debiting the Work-in-Process Inventory account and crediting the Manufacturing Overhead account True / False (Chapter 17)
True
Goods that have been started in the manufacturing process but are not yet complete are included in the ____________. A. Finished Goods Inventory Account B. Raw Materials Inventory Account C. Cost of Goods Sold Account D. Work-in-Process Inventory Account (Chapter 16)
Work-in-Process Inventory Account
The journal entry to record $1,600 of direct labor and $200 of indirect labor incurred will include debit(s) to the ________. A. Finished Goods Inventory account for $1,800 B. Manufacturing Overhead account for $1,800 C. Work-in-Process Inventory account for $1,600 and Finished Goods Inventory account for$200 D. Work-in-Process Inventory account for $1,600 and Manufacturing Overhead account for$200 (Chapter 17)
Work-in-Process Inventory account for $1,600 and Manufacturing Overhead account for$200
The journal entry to record direct labor costs actually incurred involves a debit to the ______________. A. Work-in-Process Inventory account B. Manufacturing Overhead account C. Wages Payable account D. Raw Materials Inventory account (Chapter 17)
Work-on-Process Inventory account
Which of the following businesses is most likely to use a process costing system? A. a candy manufacturer B. a legal service provider C. an audit service provider D. a baker producing cakes to order (Chapter 17)
a candy manufacturer
Manufacturing Overhead is a temporary account used to _____________ indirect production costs during the accounting period A. assign B. accumulate C. allocate D. approximate (Chapter 17)
accumulate
The predetermined overhead allocation rate is the rate used to ________________. A. trace manufacturing and non manufacturing costs to jobs B. assign direct material costs to jobs C. allocate actual manufacturing overhead costs incurred during a period D. allocate estimated manufacturing overhead costs to jobs (Chapter 17)
allocate estimated manufacturing overhead costs to jobs
The predetermined overhead allocation rate is the rate used to ______________________. A. trace manufacturing and non manufacturing costs to jobs B. assign direct materials costs to job C. allocate actual manufacturing overhead costs incurred during a period D. allocate estimated manufacturing overhead costs to jobs (Chapter 17)
allocate estimated manufacturing overhead costs to jobs
Which of the statements is true of costing systems? A. a job order costing system would be used by manufactures B. a construction company would likely use a process costing system C. an accounting firm would likely use a job order costing system D. a process costing system would be used by manufacturers of custom-made perfumes (Chapter 17)
an accounting firm would likely use a job order costing system
The predetermined overhead allocation rate for a given production year is calculated _____________. A. after the completion of each job B. at the end of the production year C.after the preparation of financial statements for the year D. before the accounting period begins (Chapter 17)
before the accounting period begins
The journal entry for adjustment of underallocated manufacturing overhead includes a __________________. A. debit to Work-in-Process Inventory B. credit to Manufacturing Overhead C. credit to Cost of Goods Sold D. credit to Finished Goods Inventory (Chapter 17)
credit to Manufacturing Overhead
At the beginning of the year, Green Street Manufacturing had the following account balances: Work-in-Process Inventory 2,000 | Finished Goods Inventory 8,000 | Manufacturing Overhead 0 | Cost of Goods Sold 0 | Sales Revenue | 0 ------------------------------------------------ The following additional details are provided for the year: Direct materials placed in production $83,000 Direct labor incurred 194,000 Manufacturing overhead incurred 302,000 Manufacturing overhead allocated to production 292,000 Cost of jobs completed and transferred 506,000 Total revenue 757,000 Cost of goods sold 441,000 ----------------------------------------------- After adjusting the balance in Manufacturing Overhead, the ending balance in the Finished Goods Inventory account is a ________. (credit / debit of $______) (Chapter 17)
debit of $73,000
Altima, Inc. finished Job A40 on the last working day of the year. It utilized $370 of direct materials and $3,420 of direct labor. Altima uses a predetermined overhead allocation rate based on a percentage of direct labor costs, which has been fixed at 40%. The entry to record the completion of the job should involve a ________. A. debit to Finished Goods Inventory $5,158 and a credit to Work-in-Process Inventory $5,158 B. debit to Finished Goods Inventory $5,158 and a credit to Materials Inventory $5,158 C. debit to Cost of Goods Sold $5,158 and a credit to Finished Goods Inventory $5,158 D. debit to Work-in-Process Inventory $5,158 and a credit to Finished Goods Inventory$5,158 (Chapter 17)
debit to Finished Goods Inventory $5,158 and a credit to Work-in-Process Inventory $5,158
Which of the following would be considered a product cost for a manufacturing company? A. depreciation on delivery vehicles B. depreciation on manufacturing equipment C. depreciation on administrative building furniture and fixtures D. depreciation on the accounting department's computer equipment (Chapter 16)
depreciation on manufacturing equipment
In which of the following ways is the management of a company accountable to communities? A. repaying principal and interest to the suppliers B. providing a capital return on the shareholders' investments C. ensuring the company's environmental impact is not harmful to its community D. making timely interest payable to creditors and dividend payouts to its investors (Chapter 16)
ensuring the company's environmental impact is not harmful to its comminity`
Manufacturing overhead is also referred to as __________> A. period costs B. indirect manufacturing costs C. prime costs D. direct manufacturing (Chapter 16)
indirect manufacturing costs
Which of the following correctly describes the term cost driver? A. the inflation rate that causes costs to rise B. the primary factor that causes a cost to be incurred C. the total material, labor, and overhead costs of a completed job D. the average inventory costs incurred at any point in time (Chapter 17)
the primary factor that causes a cost to be incurred
Cost accounting systems are used _______________. A. to accumulate product cost information B. to accumulate and assign period costs to products C. by stockholders for decision-making purposes D. by manufacturing companies, not service companies (Chapter 17)
to accumulate product cost information
Which of the following is an objective of managerial accounting? A. to generate a company's financial statements for tax reporting B. to ensure that the reports produced for internal external business purposes are GAAP compliant C. to provide information to shareholders to assist them with their investment decisions D. to provide information to business managers to assist them in controlling their business (Chapter 16)
to provide information to business managers to assist them in controlling their business
