ACCT 2210 EXAM 1

What is the predetermined overhead rate for the Packaging Department?

$10.51 per DLH

Audio Corporation purchased $20,000 of DVDs during the current year. The company had DVD inventory of $15,000 at the beginning of the year. An end of the year audit revealed that the company had DVD inventory of $10,000. The amount that would be reported as cost of goods sold in the income statement for the current year is ________.

$25,000

What is the estimated total manufacturing overhead in the Assembly Department?

$595,200

The ________ requires that the costs incurred to generate a particular revenue should be recognized as expenses in the same period that the revenue is recognized. materiality concept consistency concept matching principle going concern assumption

matching principle

If a firm increases its activity level, ________. costs will remain the same all costs will rise some costs will change, other costs will remain the same

some costs will change, other costs will remain the same

Which of the following is always an irrelevant cost? differential cost sunk cost opportunity cost

sunk cost

Wilson Products uses a plantwide predetermined overhead rate of $10 per direct labor-hour. Direct material and direct labor associated with Job X23 are $4,000 and $1,200, respectively. If Job X23 used 100 direct labor-hours, what is the total cost assigned to this job?

$6,200

The traditional income statement uses which of the following cost categories? Variable expenses and fixed expenses. Cost of goods sold and fixed expenses. Operating expenses and selling and administrative expenses. Cost of goods sold and selling and administrative expenses

Cost of goods sold and selling and administrative expenses

Manufacturing costs include all of the following categories except ________. administrative costs direct labor direct materials manufacturing overhead

administrative costs

The adjustment for overapplied overhead ________. decreases cost of goods sold and decreases net operating income. decreases cost of goods sold and increases net operating income. increases cost of goods sold and decreases net operating income. increases cost of goods sold and increases net operating income.

decreases cost of goods sold and increases net operating income.

____________ is sometimes called "touch labor" direct labor indirect labor overhead labor

direct labor

Materials that become an integral part of the finished product and whose costs can be conveniently traced to the finished product are called ________. raw materials direct materials indirect materials

direct materials

Items such as indirect materials, indirect labor, maintenance and repairs on production equipment, depreciation, and insurance on manufacturing facilities are included in ________. nonmanufacturing costs manufacturing overhead direct costs

manufacturing overhead

Differential costs are always ________. irrelevant in making business decisions relevant in making business decisions a sunk cost

relevant in making business decisions

Wilson Products uses a plantwide predetermined overhead rate of $10 per direct labor-hour. Direct material and direct labor associated with Job X23 are $4,000 and $1,200, respectively. If Job X23 used 100 direct labor-hours to produce 50 audio controllers, what is this job's unit product cost (per audio controller)?

$124

Cyber Devices manufactures PCTV products that enable people to watch television content on their computers. It sells its product to retailers for $50. A tuner component that goes into each of these devices costs $5 to acquire. The total variable cost at an activity level of 1,000 units equals ________.

$5,000

Which of the following is true of the contribution approach? It is mainly used for external reporting purposes. It separates costs into fixed and variable categories. It is not useful for merchandising companies. It calculates gross margin by deducting cost of goods sold from sales.

It separates costs into fixed and variable categories.

What is the term used when a company applies less overhead to production than it actually incurs? Misapplied Overapplied Unadjusted Underapplied

Underapplied

In the cost formula (Y = a + bX) that is used to estimate the total manufacturing overhead cost for a given period, the letter "a" refers to the estimated ________. total manufacturing overhead cost total fixed manufacturing overhead cost variable manufacturing overhead cost per unit of the allocation base total amount of the allocation base

total fixed manufacturing overhead cost

A fixed cost is a cost which ________. varies in total with changes in the level of activity remains constant per unit with changes in the level of activity varies inversely in total with changes in the level of activity remains constant in total with changes in the level of activity

remains constant in total with changes in the level of activity

Davidson Company has sales of $100,000, variable cost of goods sold of $40,000, variable selling expenses of $15,000, variable administrative expenses of $5,000, fixed selling expenses of $7,000, and fixed administrative expenses of $9,000. What is Davidson's contribution margin?

$40,000

Which of the following statements about opportunity costs is not correct? An opportunity cost is the potential benefit that is given up when one alternative is selected over another. An opportunity cost cannot be changed by any decision made now or in the future. Opportunity costs are not usually found in accounting records. Opportunity costs are costs that must be explicitly considered in every decision a manager makes.

An opportunity cost cannot be changed by any decision made now or in the future.

The management of Blue Ocean Company estimates that 50,000 machine-hours will be required to support the production planned for the year. It also estimates $300,000 of total fixed manufacturing overhead cost for the coming year and $4 of variable manufacturing overhead cost per machine-hour. What is the predetermined overhead rate? $6.00 per machine hour. $8.00 per machine hour. $10.00 per machine hour. $12.50 per machine hour.

$10.00 per machine hour.

A normal cost system applies overhead to jobs ________. by multiplying a predetermined overhead rate by the estimated amount of the allocation base incurred by the job by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job using the actual amount of overhead caused by each job using the normal amount of overhead caused by each job

by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job

Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager's salary would be a(n) _________ of the branch.

direct cost

In a small manufacturing facility, one welder is needed for every 200 hours of machine-hours or fewer in a month. The welder is paid a monthly salary of $2,500. If the total monthly requirement is 1,300 machine-hours, the total salaried employee expense is ________.

$17,500

Spartan Corporation estimates that it will incur $200,000 of total manufacturing overhead cost at an estimated activity level of 10,000 direct labor-hours. What is the amount of manufacturing overhead that would be applied to a job that required 200 direct labor-hours?

$4,000

The direct materials required to manufacture each unit of product are listed on a ________. bill of materials materials requisition form materials ticket job order cost sheet

bill of materials

A ___________ is a cost that is incurred to support a number of cost objects but cannot be traced to them individually.

common cost

Adventure Holiday sells thousands of tour packages each month through its various branches. A branch manager's salary would be a(n) _________ of selling a tour package.

indirect cost

Companies can improve job cost accuracy by using ________. a plantwide overhead rate direct-labor hours to apply overhead multiple predetermined overhead rates number of units in the job to apply overhead

multiple predetermined overhead rates

Property taxes associated with a company's administrative facility are considered ________. nonmanufacturing costs manufacturing overhead costs selling costs

nonmanufacturing costs

How should the wages of a sheet metal worker in a fabrication plant be classified? product cost period cost nonmanufacturing cost administrative cost

product cost

When all of a company's job cost sheets are viewed collectively they form what is known as a ________. general ledger inventory job-order costing system subsidiary ledger

subsidiary ledger

In the equation, Y = a + bX, X represents ________. the total mixed cost the level of activity the total fixed cost the variable cost per unit of activity

the level of activity