ACC Exam 3

Period costs are a. found on the balance sheet b. not involved in the production process c. classified as direct labor, direct material, or factory overhead d. found on the job order cost sheets

not involved in the production process

Which of the following is the correct flow of manufacturing costs? a. raw materials, work in process, finished goods, cost of goods sold b. work in process, finished goods, raw materials, cost of goods sold c. raw materials, finished goods, cost of goods sold, work in process d. cost of goods sold, raw materials, work in process, finished goods

raw materials, work in process, finished goods, cost of goods sold

On the statement of cash flows, the cash flows from investing activities section would include a. payments for retirement of bonds payable b. receipts from the sale of investments c. payments for dividends d. receipts from the issuance of common stock

receipts from the sale of investments

The purpose of an audit is to a. render an opinion on the fairness of the statements b. determine whether or not a company complies with corporate social responsibility c. determine whether or not a company is a good credit risk d. determine whether or not a company is a good investment

render an opinion on the fairness of the statements

In a common-sized income statement, 100% is the a. gross profit b. sales c. net income d. net cost of goods sold

sales

The Assembly Department's factory overhead rate is a. $10.50 per direct labor hour b. $19.50 per direct labor hour c. $3.75 per machine hour d. $4.38 per machine hour

$10.50 per direct labor hour

Accounts receivable from sales to customers amounted to $40,000 and $32,000 at the beginning and end of the year, respectively. Income reported on the income statement for the year was $110,000. Exclusive of the effect of other adjustments, the net cash flows from operating activities to be reported on the statement of cash flows using the indirect method is

$118,000

Based on the data for Harding Company, what is the amount of working capital? a. $238,000 b. $168,000 c. $203,000 d. $128,000

$128,000

The single plantwide factory overhead rate for Adirondack Marketing Inc. is a. $14.77 per dlh b. $ 6.25 per dlh c. $0.07 per dlh d. $25.00 per dlh

$14.77 per dlh

Based on the data for Harding Company, what is the quick ratio, rounded to one decimal point? a. 0.9 b. 1.7 c. 2.7 d. 2.6

1.7

The four steps necessary to complete a cost of production report in a process cost system are​ The correct ordering of the steps is a. 4, 2, 3, 1 b. 2, 4, 3, 1 c. 2, 3, 4, 1 d. 2, 3, 1, 4

2, 4, 3, 1

If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a a. credit balance and be underapplied b. credit balance and be overapplied c. debit balance and be overapplied d. debit balance and be underapplied

debit balance and be underapplied

Equivalent production units are generally determined for a. direct materials only b. direct materials and conversion costs c. direct materials and direct labor costs d. conversion costs only

direct materials and conversion costs

Another term for factory overhead is a. supervisory cost b. surplus c. factory burden d. period cost

factory burden

Which of the following would not be on the statement of cash flows? a. cash flows from operating activities b. cash flows from financing activities c. cash flows from investing activities d. cash flows from contingent activities

cash flows from contingent activities

Which of the following measures would not help managers to control and improve operations? a. commissions paid per time period b. cost trends of a product c. yield trends d. units produced per time period

commissions paid per time period

A balance sheet that displays only component percentages is a a. common-sized balance sheet b. comparative balance sheet c. condensed balance sheet d. trend balance sheet

common-sized balance sheet

Which of the following terms refers to the cost of changing direct materials into a finished manufactured product? a. direct labor cost b. period cost c. conversion cost d. factory overhead cost

conversion cost

Job order costing and process costing are a. pricing systems b. cost flow systems c. inventory tracking systems d. cost accounting systems

cost accounting systems

Which of the following is an example of direct materials cost for an automobile manufacturer? a. cost of oil lubricants for factory machinery b. salary of production supervisor c. cost of interior upholstery d. cost of wages of assembly worker

cost of interior upholstery

Which of the following should be deducted from net income in calculating net cash flow from operating activities using the indirect method? a. a loss on the sale of equipment b. depreciation expense c. dividends declared and paid d. gain on sale of land

gain on sale of land

For which of the following businesses would the job order cost system be appropriate? a. oil refinery b. lumber mill c. hospital d. canned soup processor

hospital

A plant manager's salary is a(n) a. period cost b. indirect cost c. direct cost d. direct cost and an indirect cost

indirect cost

Financing activities include a. acquiring long-lived assets b. acquiring investments c. issuing debt d. lending money

issuing debt

A widely used activity base for developing factory overhead rates in highly automated settings is a. machine hours b. direct labor dollars c. direct labor hours d. direct materials

machine hours

One reason that a common-sized statement is a useful tool in financial analysis is that it enables the user to a. judge the relative potential of two companies of similar size in different industries b. determine which companies in a single industry are of the same size c. determine which companies in a single industry are of the same value d. make a better comparison of two companies of different sizes in the same industry

make a better comparison of two companies of different sizes in the same industry

The primary goal of managerial accounting is to provide information to a. investors b. external auditors c. management d. creditors

management

For which of the following businesses would the process cost system be appropriate? a. custom cabinet maker b. catering firm c. landscaper d. paper mill

paper mill

Which of the following represents the factory overhead applied to a product? a. actual factory overhead rate times estimated activity base b. predetermined factory overhead rate times actual activity base c. predetermined factory overhead rate times estimated activity base d. actual factory overhead rate times actual activity base

predetermined factory overhead rate times actual activity base

The cost system best suited to industries that manufacture a large number of identical units of commodities on a continuous basis is a. job order b. departmental c. process d. first-in, first-out

process

Rent expense on a factory building would be treated as a(n) a. period cost b. product cost c. indirect cost d. direct materials cost

product cost

Which of the following is a cost pool used with the activity-based costing method? a. total selling and administrative expenses b. direct materials dollars c. total factory overhead d. production setups

production setups

Which of the following types of transactions would be reported as a cash flow from investing activity on the statement of cash flows? a. purchase of treasury stock b. issuance of bonds payable c. issuance of common stock d. purchase of long-term assets

purchase of long-term assets

In a vertical analysis, the base for cost of goods sold is a. total selling expenses b. total expenses c. sales d. gross profit

sales

For which of the following businesses would a process cost system be appropriate? a. dressmaker b. custom furniture manufacturer c. shampoo manufacturer d. boat repair service

shampoo manufacturer

Which of the following is not one of the four basic financial statements? a. income statement b. balance sheet c. statement of cash flows d. statement of changes in financial position

statement of changes in financial position

Which of the following would most likely use a job order costing system? a. paper mill b. swimming pool installer c. oil refinery d. company that manufactures chlorine for swimming pools

swimming pool installer

Depreciation on factory equipment would be reported in the statement of cash flows prepared by the indirect method in a. the cash flows from investing activities section b. the cash flows from operating activities section c. a separate schedule d. the cash flows from financing activities section

the cash flows from operating activities section

Which of the following is not a use of the cost of production report? a. to help managers improve operations b. to help managers isolate problems c. to help managers control operations d. to project production

to project production

In a common-sized balance sheet, 100% is a. total assets b. total property, plant, and equipment c. total liabilities d. total current assets

total assets

Which of the following is part of factory overhead cost? a. direct materials used b. sales commissions c. depreciation of sales person's vehicle d. depreciation of factory equipment and machines

depreciation of factory equipment and machines

Which of the following would most likely use a process cost system? a. lumber mill b. graduation photographer c. custom home builder d. custom helicopter manufacturer

lumber mill

Which of the following manufacturing costs is an indirect cost of producing a product? a. hourly wages of an assembly worker b. oil lubricants used for factory machinery c. commissions for sales personnel d. memory chips for a microcomputer manufacturer

oil lubricants used for factory machinery

Period costs include a. current liabilities on the balance sheet b. operating costs that are shown on the income statement in the period in which they are incurred c. operating costs that are shown on the income statement when products are sold d. current assets on the balance sheet

operating costs that are shown on the income statement in the period in which they are incurred

The order of presentation of activities on the statement of cash flows is a. operating, investing, and financing b. operating, financing, and investing c. financing, operating, and investing d. financing, investing, and operating

operating, investing, and financing

The price-earnings ratio on common stock is calculated as a. earnings per share of common stock, divided by market price per share of common stock. b. dividends per share of common stock, divided by earnings per share on common stock. c. market price per share of common stock, divided by earnings per share on common stock. d. market price per share of common stock, divided by dividends per share of common stock.

market price per share of common stock, divided by earnings per share on common stock.

Activity-based costing can be beneficial in allocating selling and administrative expenses to various products for managerial decision making. Which of the following would be the best allocation base for help desk costs? a. number of products sold b. number of sales employees c. number of calls d. square footage of the help desk office

number of calls

Which of the following costs incurred by a tool manufacturer would not be included in conversion costs? a. raw steel b. machine operator's wages c. factory maintenance personnel supplies d. factory supervisor's salary

raw steel

On the statement of cash flows, the cash flows from financing activities section would include a. receipts from the issuance of common stock b. receipts from the sale of investments c. receipts from a note receivable d. payments for the acquisition of investments

receipts from the issuance of common stock

At the end of the fiscal year, the balance in Factory Overhead is small. The balance will be a. transferred to Work in Process b. transferred to Finished Goods c. transferred to Cost of Goods Sold d. allocated between Work in Process and Finished Goods

transferred to Cost of Goods Sold

The current ratio is a. calculated by dividing current liabilities by current assets b. a solvency measure that indicates the margin of safety for bondholders c. used to evaluate a company's liquidity and short-term debt paying ability d. calculated by subtracting current liabilities from current assets

used to evaluate a company's liquidity and short-term debt paying ability

Percentage analyses, ratios, turnovers, and other measures of financial position and operating results are a. useful analytical measures b. a substitute for sound judgment c. unnecessary for analysis if industry information is available d. enough information for analysis; industry information is not needed

useful analytical measures

Which of the following is the principal reason for preparing managerial accounting reports? a. clarity b. usefulness to management c. cost of preparation d. GAAP

usefulness to management

The two categories of cost comprising conversion costs are a. direct labor and direct materials b. direct labor and factory overhead c. factory overhead and direct materials d. direct labor and indirect labor

direct labor and factory overhead

Which of the following is not included in conversion costs? a. direct materials b. indirect labor c. factory overhead d. direct labor

direct materials

The three categories of manufacturing costs comprising the total cost of work in process are direct labor, direct materials, and a. selling expenses b. accounting salaries expense c. factory overhead d. direct expenses

factory overhead

Factory overhead includes a. indirect materials and direct materials b. direct materials and direct labor c. factory rent and direct labor d. indirect labor and indirect materials

indirect labor and indirect materials

Which of the following are the two main types of cost accounting systems for manufacturing operations? a. job order cost and process cost systems b. process cost and replacement cost systems c. job order and general accounting systems d. process cost and general accounting systems

job order cost and process cost systems

Which of the following would be most likely to use process costing? a. law firm b. lawn fertilizer manufacturer c. custom furniture manufacturer d. auto body repair shop

lawn fertilizer manufacturer

Which of the following is not a characteristic of a process cost system? a. Manufacturing costs are grouped by departments or by process. b. The system may use several work in process accounts. c. The system provides useful product cost information for decision making. d. The system measures costs for each completed job.

The system measures costs for each completed job.

Cash receipts received from the issuance of a mortgage notes payable would be classified as a(n) a. noncash investing and financing activity b. financing activity c. investing activity d. operating activity

financing activity

Compute conversion costs given the following data: direct materials, $347,500; direct labor, $196,300; factory overhead, $187,900; and selling expenses, $45,290. a. $187,900 b. $543,800 c. $384,200 d. $731,700

$384,200

If a company uses a process costing system to account for the costs in its five production departments, how many work in process accounts will it use? a. 6 b. 4 c. 2 d. 5

5

Journalizing the entry to record the application of factory overhead costs to jobs would include a credit to a. Cost of Goods Sold b. Work in Process c. Factory Overhead d. Wages Payable

Factory Overhead

Journalizing the entry to record the indirect labor costs incurred for general factory use would include a debit to a. Wages Expense b. Wages Payable c. Cost of Goods Sold d. Factory Overhead

Factory Overhead

Product costs a. appear on both the income statement and balance sheet b. are expensed as costs are incurred for direct labor, direct materials, and factory overhead c. appear only on the income statement d. appear only on the balance sheet

appear on both the income statement and balance sheet

Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs? a. administrative salaries b. assembly labor's wages c. accounting department costs d. raw lumber

assembly labor's wages

A company had net income of $252,000. Depreciation expense is $26,000. During the year, accounts receivable and inventory increased by $15,000 and $40,000, respectively. Prepaid expenses and accounts payable decreased by $2,000 and $4,000, respectively. There was also a loss on the sale of equipment of $3,000. How much was the net cash flow from operating activities on the statement of cash flows using the indirect method?

$224,000

Using a single plantwide rate, the factory overhead allocated per unit of Product A in the Painting Department is a. $325.00 per unit b. $147.70 per unit c. $236.32 per unit d. $161.00 per unit

$236.32 per unit

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 a. $600,000 b. $750,000 c. $270,000 d. $240,000

$270,000

Cash dividends of $45,000 were declared during the year. Cash dividends payable were $10,000 at the beginning of the year and $15,000 at the end of the year. The amount of cash for the payment of dividends during the year is a. $40,000 b. $55,000 c. $35,000 d. $50,000

$40,000

A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual factory overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year? a. $6,000 underapplied b. $6,000 overapplied c. $54,800 underapplied d. $54,800 overapplied

$54,800 overapplied

A company reports the following: The company's earnings per share on common stock is a. $13.33 b. $35.00 c. $7.50 d. $8.50

$7.50

Based on the following data for the current year, what is the inventory turnover? a. 9.7 b. 3.0 c. 2.7 d. 2.5

2.7

The costs of materials consumed in producing good units in the Production Department of Jacobs Company were $38,000 and $39,125 for June and July, respectively. The number of equivalent units produced in June and July was 4,000 and 4,250, respectively. Which of the following best describes the change in the cost of materials between the two months? a. The cost of materials decreased by $0.29 per unit, indicating an improvement. b. The cost of materials increased by $1,125, indicating an unfavorable change. c. The cost of materials increased by $0.88 per unit, indicating an unfavorable change. d. The cost of materials increased by $0.28 per unit, indicating an unfavorable change

The cost of materials decreased by $0.29 per unit, indicating an improvement.

In horizontal analysis, each item is expressed as a percentage of the a. net income figure b. retained earnings figure c. base year figure d. total assets figure

base year figure

On the statement of cash flows, the cash flows from operating activities section would include a. payments for the acquisition of investments b. cash receipts from sales of merchandise c. receipts from the issuance of common stock d. receipts from the sale of investments

cash receipts from sales of merchandise

Dividend yield on common stock is calculated as... a. dividends per share of common stock, divided by earnings per share. b. dividends on common stock, divided by shares of common stock outstanding. c. dividends per share of common stock, divided by market price per share of common stock. d. net income minus preferred dividends, divided by shares of common stock outstanding.

dividends per share of common stock, divided by market price per share of common stock.

A product cost is a. expensed in the period the product is sold b. expensed in the period in which the product is manufactured c. shown with current liabilities on the balance sheet d. shown with operating expenses on the income statement

expensed in the period the product is sold

If accounts payable have increased during a period, a. expenses on an accrual basis are the same as expenses on a cash basis b. expenses on an accrual basis are greater than expenses on a cash basis c. expenses on an accrual basis are less than expenses on a cash basis d. revenues on an accrual basis are less than revenues on a cash basis

expenses on an accrual basis are greater than expenses on a cash basis