Acc 2223 chapter 18, 19, 20
In the manufacture of 10,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,000. What is the total conversion cost?
$158,000 (105000+53000)
The cost of goods sold for Michaels Manufacturing in the current year was $233,000. The January 1 finished goods inventory balance was $31,600, and the December 31 finished goods inventory balance was $24,200. Cost of goods manufactured during the period was
$225,600 (233000-31600+24200)
A company manufactured 50,000 units of a product at a cost of $450,000. It sold 45,000 units at $15 each. The gross profit is
$270,000
Compute conversion costs given the following data: direct materials, $347,500; direct labor, $196,300; factory overhead, $187,900; and selling expenses, $45,290.
$384,200 ($196,300+$187,900)
Compute the yield as a percentage rounded to two digits after the decimal, assuming 110 pounds of tea entered the Packaging Department and 103 pounds of tea were packaged.
93.64%
Finished goods inventory is reported on the
Balance sheet as a current asset
Which of the following accounts will not be found on the statement of cost of goods manufactured ?
Cost of goods sold
Which of the following will not be found on the balance sheet of a manufacturing company?
Cost of goods sold
Which of the following is an example of direct labor cost for a cell phone manufacturer?
Cost of wages of assembly worker
The journal entry to apply overhead for the month would include a _____.
Credit to factory overhead
Which of the following items would not be classified as part of factory overhead?
Direct labor used
The portion of whole units that were completed with respect to either materials or conversion costs within a given accounting period is the definition of
Equivalent units
The _____inventory cost method that assumes the inventory purchased first is sold first.
FIFO
The recording of the application of factory overhead costs to jobs would include a credit to
Factory overhead
Recording jobs shipped and customers billed would include a credit to
Finished Goods
The journal entry to record the transfer from work in process to finished goods would include a debit to
Finished goods
Which of the following is not a characteristic of a job order cost system?
It accumulates cost for each department within the factory.
A job order cost accounting system accumulates and records product costs by _____.
Jobs
Which of the following is true of preparing managerial accounting reports?
Managerial accounting reports may be prepared at fixed intervals or on an as-needed basis.
Who are the individuals charged with the responsibility for directing the day-to-day operations of a business?
Managers
In lean manufacturing, processing functions are combined into work centers, sometimes called ________.
Manufacturing cell
Which of the following most likely uses a process cost system?
Oil refinery
Which of the following is not true regarding direct materials for a bakery?
Paper cupcake liners, that become part of the product, must be accounted for as direct materials.
What term is used to describe the process of developing the organization's objectives and translating those into courses of action?
Planning
Which of the following is not a prime cost?
Plant janitors wages
Insurance expense incurred on a factory building would be treated as a
Product cost
Rent expense on a factory building would be treated as a
Product cost
Which of the following is a period cost?
Salary of telephone receptionist in the sales office
Materials must have which two qualities in order to be classified as direct materials?
They must be an integral part of the finished product and a significant portion of the total product cost.
Which of the following costs incurred by a tool manufacturer would not be included in conversion costs? a. machine operator's wages b. factory supervisor's salary c. factory maintenance personnel supplies d. raw steel
d. raw steel
The journal entry for the flow of direct labor costs into production in a job order cost accounting system is to
debit Work in Process, credit Wages Payable
The journal entry to recognize depreciation on machinery would include a
debit to factory overhead
The first step in preparing a cost of production report is to _____.
determine the units to be assigned costs
The cost of a manufactured product generally consists of which of the following costs?
direct labor cost, direct materials cost, and factory overhead cost
When preparing the cost of production report using the FIFO method, equivalent production units are generally determined for
direct materials and conversion costs
Which of the following is the formula to compute the predetermined factory overhead rate?
estimated total factory overhead costs divided by estimated activity base
Managers use managerial accounting information for all of the following except to
evaluate the company's stock performance
A __________ cost system provides product costs for each quantity of product that is manufactured.
job order
Which of the following are the two main types of cost accounting systems for manufacturing operations?
job order cost and process cost systems
A management approach that focuses on reducing time and cost and eliminating poor quality is known as ________.
just-in-time processing
Which of the following would use a process cost system?
lumber mill
Period costs include
operating costs that are shown on the income statement in the period in which they are incurred
Costs on the income statement for both a merchandiser and a manufacturer would be
operating expenses
Which of the following are basic phases of the management process?
planning and controlling
Which of the following is most associated with financial accounting?
prepared in accordance with GAAP
The two main types of cost accounting systems for manufacturing businesses are the __________ cost system and the __________ cost system.
process; job order
Process and job order cost systems are similar in that each system
records and summarizes product costs. classifies product costs as direct materials, direct labor, and factory overhead. allocates factory overhead costs to products.
Period costs are classified as either
selling expenses or administrative expenses
The finished goods account is the controlling account for the
stock ledger
The amount of time spent by an employee on an individual job is recorded on
time tickets
Service businesses such as hotels, taxi services, and newspapers cannot practically apply a job order cost accounting system.
True
The number of units in production during a period, whether completed or not, is known as _____.
Whole units
The journal entry to record the direct labor costs for the month would include a debit to _____.
Work in process
The quantity of the material output divided by the quantity of the material input gives you the _____.
Yield
An example of a period cost is
advertising expense
The last step in preparing a cost of production report is to _____.
allocate costs to units transferred out and partially completed units
Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs?
assembly laborers wages
In order to be useful to managers, managerial accounting reports should possess all of the following characteristics except
be prepared in accordance with generally accepted accounting principles
Process and job order cost systems are similar in all of the following ways except
both use job cost sheets
Which of the following is not included in conversion costs? a. factory overhead b. direct materials c. indirect labor d. direct labor
c. indirect labor
A job order cost system can be used by managers for _____.
cost evaluation control decision making
A report prepared periodically for each processing department summarizing the product costs incurred by the department and the allocation of those costs between completed and partially completed units is termed a
cost of production report
The journal entry to record the direct materials used for the month would include a _____.
credit to materials
