ACCT 2302 Midterm problem

Which of the following items is not a characteristic of a lean​ company? a. Machines are arranged by function. b. Machine setup times are reduced. c. Production is in small batches. d. Employees are trained to operate more than one machine.

a.

Which of the following would be considered a discretionary fixed​ cost? a. Advertising b. Depreciation c. Property taxes and insurance d. Employees wages

a.

Rustic Living Furniture Company manufactures furniture at its central Kentucky factory. Some of its costs from the past year​ include: Wages paid to factory maintenance workers: $60,600 Fabric used to upholster furniture: $80,400 Wages paid to assembly - line workers: $100,900 Lumber used to build product: $15,000 Sales commissions: $7,400 Insurance costs for factory: $21,700 Freight-in (on raw materials): $3,000 Utilities in factory: $12,700 Factory supervisor salary: $60,400 Depreciation on factory equipment: $18,900 Utilities in sales office: $26,400 Costs of delivery to customers: $8,100 Depreciation on sales office: $1,300 Lubricants used in factory equipment: $200 Conversion costs for Rustic Living Furniture Company totaled: a. $275,400 b. $370,600 c. $176,500 d. $199,300

a. (100,900 + 18,900 + 60,400 + 200 + 21,700 + 60,600 + 12,700) = 275,400

Poland's Paints allocates overhead based on machine hours. Selected data for the most recent year follow: Estimated manufacturing overhead cost: ​$238,000 Actual manufacturing overhead cost: ​$244,000 Estimated machine hours: ​20,000 Actual machine hours: ​22,500 The estimates were made as of the beginning of the​ year, while the actual results were for the entire year. The predetermined manufacturing overhead rate per machine hour is closest to: a. ​$10.58. b. ​$10.84. c. ​$11.90. d. ​$12.20.

a. (238,000/20,000) = 11.90

Selected financial information for Brookeville Manufacturing is presented in the following table​ (000s omitted). Sales revenue: $4,500 Purchases of direct materials: $500 Direct labor: $490 Manufacturing overhead: $720 Operating expenses: $700 Beginning raw materials inventory: $300 Ending raw materials inventory: $190 Beginning work in progress inventory: $400 Ending work in progress inventory: $420 Beginning finished goods inventory: $340 Ending finished goods inventory: $260 What is the cost of direct materials used? a. $610 b. $800 c. $490 d. $500

a. 300 + 500 = 800 - 190 = 610

Selected financial information for Brookeville Manufacturing is presented in the following table​ (000s omitted). Sales revenue: $4,400 Purchases of direct materials: $400 Direct labor: $520 Manufacturing overhead: $650 Operating expenses: $670 Beginning raw materials inventory: $270 Ending raw materials inventory: $250 Beginning work in progress inventory: $370 Ending work in progress inventory: $480 Beginning finished goods inventory: $320 Ending finished goods inventory: $280 What is the cost of goods sold? a. $1,500 b. $1,440 c. $1,010 d. $1,510

a. 320 + (400 + 520 + 650 + 370 - 480) - 280 = 1,500

Selected financial information for Brookeville Manufacturing is presented in the following table​ (000s omitted). Sales revenue: $4,900 Purchases of direct materials: $490 Direct labor: $510 Manufacturing overhead: $620 Operating expenses: $720 Beginning raw materials inventory: $230 Ending raw materials inventory: $280 Beginning work in progress inventory: $330 Ending work in progress inventory: $480 Beginning finished goods inventory: $260 Ending finished goods inventory: $230 What is the operating income? a. $2,730 b. $4,180 c. $2,720 d. $4,900

a. 4,900 - (260 + (490 + 510 + 620 + 330 - 480) - 230 ) - 720 = 2,730

The use of which of the following costing systems is most likely to reduce cost distortion to a​ minimum? a. Departmental overhead allocation rates b. Activity−based costing c. Plantwide overhead rate d. Traditional costing system

b.

Which of the following cost of quality categories represent the cost incurred to​ "rework a defective​ product" before the product is shipped to a​ consumer? a. Appraisal costs b. Internal failure costs c. Prevention costs d. External failure costs

b.

Which of the following is an example of a cost item that should be classified as an external failure​ cost? a. Cost to redesign product b. Warranty claims c. Tooling changes d. Cost of a lost unit

b.

Which of the following role is directly responsible for all financial functions in an​ organization? a. Treasurer b. CFO c. COO d. CEO

b.

Which of the following would not be considered a direct cost of a​ mattress? a. Steel b. Glue c. Fabric d. Lumber

b.

With respect to variable costs per​ unit, which of the following statements is true​? a. They will decrease as production decreases within the relevant range. b. They will remain the same as production levels change within the relevant range. c. They will increase as production decreases within the relevant range. d. They will decrease as production increases within the relevant range.

b.

Rustic Living Furniture Company manufactures furniture at its central Kentucky factory. Some of its costs from the past year​ include: Wages paid to factory maintenance workers: $60,300 Fabric used to upholster furniture: $80,000 Wages paid to assembly - line workers: $100,400 Lumber used to build product: $15,300 Sales commissions: $7,900 Insurance costs for factory: $21,100 Freight-in (on raw materials): $3,600 Utilities in factory: $12,500 Factory supervisor salary: $60,800 Depreciation on factory equipment: $18,500 Utilities in sales office: $26,600 Costs of delivery to customers: $8,100 Depreciation on sales office: $1,700 Lubricants used in factory equipment: $500 Period costs for Rustic Living Furniture Company totaled: a. $17,700 b. $44,300 c. $67,200 d. $36,400

b. (1,700 + 7,900 + 8,100 + 26,600) = 44,300

Rustic Living Furniture Company manufactures furniture at its central Kentucky factory. Some of its costs from the past year​ include: Wages paid to factory maintenance workers: $60,600 Fabric used to upholster furniture: $80,400 Wages paid to assembly - line workers: $100,000 Lumber used to build product: $15,700 Sales commissions: $7,700 Insurance costs for factory: $21,000 Freight-in (on raw materials): $3,800 Utilities in factory: $12,800 Factory supervisor salary: $60,300 Depreciation on factory equipment: $18,300 Utilities in sales office: $26,700 Costs of delivery to customers: $8,300 Depreciation on sales office: $1,600 Lubricants used in factory equipment: $700 Manufacturing overhead costs for Rustic Living Furniture Company totaled: a. $152,000 b. $173,700 c. $80,200 d. $221,800

b. (18,300 + 60,300 + 700 + 21,000 + 60,600 + 12,800) = 173,700

Winner's Sporting Equipment manufactures sporting goods. Selected costs from the past year include: Plastics used to make products: $151,300 Heating and lighting costs for factory: $65,100 Factory janitor wages: $67,300 Costs of shipping to customers: $12,000 Lubricants used in factory equipment: $2,600 Lighting costs for sales office: $20,000 Depreciation on factory equipment: $23,800 Office supplies for sales office: $6,800 Insurance costs for factory: $13,800 Maintenance worker wages: $99,600 Freight-in (on plastics): $8,200 Aluminum used to make products: $175,800 Assembly - line worker wages: $142,400 Salaries of salespeople: $74,000 Product costs for​ Winner's Sporting Equipment totaled: a. $727,900 b. $749,900 c. $618,100 d. $742,300

b. (23,800 + 67,300 + 2,600 + 13,800 + 99,600 + 151,300 + 8,200 + 142,400 + 175,800 + 65,100) = 749,900

A factory​ janitor's wages would be classified as​ ________ when determining the cost of a manufactured product. a. A period cost b. A direct cost c. An indirect cost d. None of the above

c.

A(n) ________ is an estimated manufacturing overhead rate computed during the year. a. Actual manufacturing overhead rate b. Cost driver c. Predetermined manufacturing overhead rate d. Cost allocation

c.

Beginning WIP Inventory is 700 ​units; completed and transferred out were 4,400 ​units, and ending WIP Inventory is 500 units. What is the number of units​ started? a. 4,400 b. 4,900 c. 4,200 d. 3,900

c.

Here are selected basic data for Wilson​ Company: Estimated manufacturing overhead: $243,750 Factory utilities: $30,200 Estimated labor hours: 35,000 Indirect labor: $22,400 Actual direct labor hours: 36,000 Sales commissions: $53,700 Estimated direct labor cost: $325,000 Factory rent: $47,700 Actual direct labor cost: $320,000 Factory property taxes: $28,100 Factory depreciation: $65,400 Indirect materials: $33,000 If the company allocates overhead based on direct labor​ cost, what are the total actual manufacturing overhead​ costs? a. ​$280,500 b. $171,400 c. ​$226,800 d. $258,100

c.

Which of the following items could be found in work in process inventory at a candy bar​ manufacturer? a. Candy bars made but not coated in chocolate b. Candy bars completed but not yet sold c. Sugar products to make candy bars d. Cocoa products to make candy bars

a.

A job costing system can be used by which types of​ companies? a. ​Service, manufacturing, and merchandising businesses b. Service and merchandising businesses c. Manufacturing and merchandising businesses d. Service and manufacturing businesses

a.

A manufacturing company has what three categories of inventory? a. Work in process, raw​ materials, finished goods b. Work in​ process, raw​ materials, cost of goods sold c. Direct​ materials, direct​ labor, conversion costs d. Indirect​ labor, period​ costs, direct costs

a.

A transfer of​ $30,000 from the assembly department to the packaging department would require the entry of a: a. Credit to WIP inventory−assembly. b. Debit to WIP inventory−assembly. c. Credit to raw materials inventory. d. Debit to finished goods inventory.

a.

Before the year​ began, Coia Manufacturing estimated that manufacturing overhead for the year would be​ $200,000 and that​ 25,000 direct labor hours would be worked. Actual results for the year included the​ following: Actual manufacturing overhead cost: ​$182,000 Actual direct labor hours: 20,000 If the company allocates manufacturing overhead based on direct labor​ hours, the manufacturing overhead for the year would have been: a. ​$22,000 underallocated. b. ​$22,000 overallocated. c. ​$18,000 underallocated. d. $18,000 overallocated.

a.

Creating budgets are part of which primary management​ responsibility? a. Planning b. Managerial accounting c. Directing d. Controlling

a.

In the basic flow of inventory through a manufacturing​ system, which of the following accounts occurs first in a job costing​ system? a. Raw materials inventory b. The cost of goods sold c. Work in process inventory d. Finished goods inventory

a.

Nadal Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent​ year: Actual direct labor hours: 232,000 Estimated direct labor hours: 250,000 Actual manufacturing overhead costs: $350,000 Estimated manufacturing overhead costs: $400,000 Actual direct labor cost: $465,000 Estimated direct labor cost: ​$500,000 If Nadal Company uses direct labor hours as the allocation​ base, what would the journal entry for allocated manufacturing overhead for the​ year? a. Debit Work in Process​ $371,200 and credit Manufacturing overhead ​$371,200. b. Debit Manufacturing overhead ​$371,200 and credit Work in Process​ $371,200 c. Debit Manufacturing overhead ​$350,000 and credit Work in Process ​$350,000 d. Debit Work in Process ​$350,000 and credit Manufacturing overhead ​$350,000.

a.

Overseeing the day-to−day operations of a company is an example of which of the following management​ functions? a. Directing b. Planning c. Analyzing d. Controlling

a.

The Sarbanes−Oxley Act was enacted: a. To prevent accounting scandals like Enron. b. To restore trust in ALL companies. c. To hire better qualified managerial accountants. d. None of the above

a.

The benefits of adopting​ ABC/ABM are higher for companies in competitive markets because: a. ABM can pinpoint opportunities for cost savings. b. Accounting/information system expertise is inexpensive to develop. c. Accurate product cost information is not as relevant for price setting. d. Companies in competitive markets have low indirect costs.

a.

The management accountant at Technology Innovators determined​ $500,000 is the​ organization's earning goal to accommodate the organizational plan during the first quarter during a new year. The accountant realizes that to achieve the new earning​ goal, the operations manager needs to increase the price of technology parts charged to a consumer to​ $250.00 per unit. The manager is scheduling a new staff meeting to determine if they need to increase the marketing efforts at the​ firm, or if they need to design a new part that uses materials that are less expensive to produce. Which of the following management responsibilities is the managerial accountant using in this​ example? a. Planning b. Designing c. Implementing d. Controlling e. Directing

a.

The primary goal of managerial accounting is to provide information to: a. Internal decision−makers. b. Creditors. c. Shareholders. d. Both shareholders and creditors.

a.

Total fixed costs for Taylor Incorporated are​ $240,000. Total​ costs, including both fixed and​ variable, are​ $500,000 if​ 125,000 units are produced. The variable cost per unit is: a. ​$2.08/unit. b. ​$4.00/unit. c. ​$5.92/unit. d. ​$1.92/unit.

a.

Which of the following is not an example of an indirect cost incurred in manufacturing​ automobiles? a. The cost of the automobile engines b. Machinery depreciation in the factory c. Plant utilities d. Plant supervisor salary

a.

Which of the following is not one of the​ IMA's overarching ethical​ principles? a. Creativity b. Honesty c. Fairness d. Responsibility

a.

Selected financial information for Brookeville Manufacturing is presented in the following table​ (000s omitted). Sales revenue: $4,100 Purchases of direct materials: $430 Direct labor: $520 Manufacturing overhead: $680 Operating expenses: $750 Beginning raw materials inventory: $250 Ending raw materials inventory: $260 Beginning work in progress inventory: $410 Ending work in progress inventory: $460 Beginning finished goods inventory: $250 Ending finished goods inventory: $300 What is the cost of goods manufactured? a. $1,580 b. $1,620 c. $1,670 d. $1,370

a. 430 + 520 + 680 = 1,630 + 410 = 2,040 - 460 = 1,580

A requirement of SOX is that publicly traded companies must have which of the following assessed​ annually? a. Financial reporting system b. Internal control system and financial reporting system c. Internal control system d. There is no annual assessment required under SOX.

b.

Collectively, all costs such as​ distribution, marketing, and design are part of: a. Fixed costs. b. The value chain. c. Manufacturing costs. d. Downstream activities.

b.

Color Wheel has 2,600 gallons of paint in WIP​ Inventory, with 71​% of materials already added. The paint is 53​% through the process. Assuming all conversion costs are added evenly throughout the​ process, what are the equivalent units for conversion​ costs? a. 468 b. 1,378 c. 1,846 d. 0

b.

Doggie Pals produces​ 100,000 dog collars each month that give off a fresh scent to keep your dog smelling clean between baths. Total manufacturing costs are​ $200,000. Of this​ amount, $150,000 are variable costs. What are the total production costs when​ 125,000 collars are​ produced? (Assume both production levels are in the same relevant​ range.) a. ​$187,500 b. ​$237,500 c. ​$250,000 d. ​$387,500

b.

For most​ businesses, annual straight line depreciation expense on the​ company's building is what type of​ cost? a. Mixed b. Fixed c. Variable d. Step

b.

For which of the following do we prepare calculations for equivalent​ units? a. Both direct labor and direct materials b. Both direct materials and conversion costs c. Both direct labor and Manufacturing Overhead d. Neither direct materials nor conversion costs

b.

Here are selected data for Wilson​ Company: Estimated manufacturing overhead:​ $243,750 Factory utilities: $30,200 Estimated labor hours: 35,000 Indirect labor: $22,400 Actual direct labor hours: 36,000 Sales commissions: $53,700 Estimated direct labor cost: $325,000 Factory rent: $47,700 Actual direct labor cost: $320,000 Factory property taxes:$28,100 Factory depreciation: $65,400 Indirect materials: $33,000 If the company allocates overhead based on direct labor​ cost, what is the predetermined manufacturing overhead​ rate? a. ​102% of direct labor cost b. ​75% of direct labor cost c. ​76% of direct labor cost d. ​133% of direct labor cost

b.

If manufacturing overhead has been under allocated during the period, then which of the following is​ true? a. The jobs produced during the period have been overcosted. b. The jobs produced during the period have been undercosted. c. The jobs produced during the period have been costed correctly. d. None of the above

b.

Jasper Carts manufactures custom carts for a variety of uses. For the period they had beginning Work in Process of​ $20,000, and for all jobs they had direct materials requisitioned of​ $101,000, direct labor of​ $220,000, and applied manufacturing overhead of​ $360,000. The following data have been recorded for Job​ 651, which is the only job not completed. Direct materials used cost​ $7,200. There were 175 direct labor hours worked on this job at a direct labor wage rate of​ $22 per hour. There were 82 machine hours used on this job. The predetermined overhead rate is​ $30 per machine hour used. What is the balance in Ending Work in​ Process? a. $681,000 b. ​$13,510 c. ​$11,050 d. ​$20,000

b.

Kramer Company manufactures coffee tables and uses an activityminus−based costing system to allocate all manufacturing conversion costs. Each coffee tables consists of 20 separate parts totaling $240 in direct​ materials, and requires 5.0 hours of machine time to produce. Additional information​ follows: Activity: Materials handling Machining Assembling Packaging Allocation base: Number of parts Machine hours Number of parts Number of finished units Cost allocation rate: $2.00 per part $2.75 per machine hour $1.00 per part $3.00 per finished unit What is the cost of machining per coffee​ table? a. ​$15.00 b. ​$13.75 c. ​$55.00 d. ​$21.00

b.

Manufacturing overhead has an overallocated balance of​ $7,500; raw materials inventory balance is​ $62,000; work in process inventory is​ $34,000; finished goods inventory is​ $25,000, and cost of goods sold is​ $135,000. After adjusting for the overallocated manufacturing​ overhead, what is the cost of goods sold? a. ​$135,000 b. ​$127,500 c. ​$7,500 d. ​$142,500

b.

Nadal Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year: Actual direct labor hours: 232,000 Estimated direct labor hours: 250,000 Actual manufacturing overhead costs: ​$350,000 Estimated manufacturing overhead costs: ​$400,000 Actual direct labor cost: ​$465,000 Estimated direct labor cost: ​$500,000 If Nadal Company uses direct labor hours as the allocation​ base, what would the journal entry to close over or under-applied manufacturing overhead for the​ year? a. Debit Cost of Goods Sold ​$50,000 and credit Manufacturing overhead ​$50,000. b. Debit Manufacturing overhead ​$21,200 and credit Cost of Goods Sold ​$21,200 c. Debit Manufacturing overhead ​$50,000 and credit Cost of Goods Sold​ $50,000 d. Debit Cost of Goods Sold ​$21,200 and credit Manufacturing overhead ​$21,200.

b.

Perfect Pigments has​ 3,500 gallons of paint in WIP​ Inventory, with​ 80% of materials already added. What are equivalent units in ending WIP Inventory for​ materials? For conversion costs the paint is​ 50% through the process. a. ​1,050 b. ​2,800 c. 0 d. ​1,750

b.

Poland's Paints allocates overhead based on machine hours. Selected data for the most recent year follow: Estimated manufacturing overhead cost: ​$238,000 Actual manufacturing overhead cost: ​$244,000 Estimated machine hours: ​20,000 Actual machine hours: ​22,500 The estimates were made as of the beginning of the​ year, while the actual results were for the entire year. The amount of manufacturing overhead allocated for the year based on machine hours would have been: a. ​$238,000. b. ​$267,750. c. ​$244,000. d. ​$241,000.

b.

Here are selected data for Wilson​ Company: Estimated manufacturing overhead: $243,750 Factory utilities: $30,200 Estimated labor hours: 35,000 Indirect labor: $22,400 Actual direct labor hours: 36,000 Sales commissions: $53,700 Estimated direct labor cost: $325,000 Factory rent: $47,700 Actual direct labor cost: $320,000 Factory property taxes: $28,100 Factory depreciation: $65,400 Indirect materials: $33,000 If the company allocates manufacturing overhead based on direct labor​ cost, what are the allocated manufacturing overhead​ costs? a. ​$243,750 b. $226,800 c. ​$240,000 d. ​$426,667

c.

How do variable costs per unit​ behave? a. They decrease as production decreases. b. They increase as production decreases. c. They remain the same throughout production levels within the relevant range. d. They decrease as production increases.

c.

James Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two​ departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $65 per machine​ hour, while the Sanding Department uses a departmental overhead rate of $20 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two​ departments: Assembly department: - direct labor hours used: 8 - machine hours used: 8 Sanding department - direct labor hours used: 6 - machine hours used: 6 The cost for direct labor is $20 per direct labor hour and the cost of the direct materials used by Job 603 is $1,200. How much manufacturing overhead would be allocated to Job 603 using the departmental overhead​ rates? a. $540 b. $280 c. $640 d. $710

c.

Process costing would likely be used by which of the​ following? a. DBA Management Consultants b. PIP Printing c. PepsiCo d. Clear Channel Advertising

c.

The individuals at the International Fireplace Shoppe perform the following​ duties: Individual E Roles and Responsibilities: - Role is required by the SEC - Ensure internal controls and risk management policies function properly - Reports to audit committee - Reports to CFO or CEO for administrative matters Individual F Roles and Responsibilities: - Oversees internal audit function - Oversees annual audit of financial statements by independent CPAs - Does not manage internal audit functions on a daily basis - Periodic meetings Identify individual E and individual F at International Fireplace Shoppe: a. ​Secretary; receptionist b. Treasurer; controller c. Internal audit​ function; audit committee d. ​CEO; CFO e. Management​ accountant; financial accountant

c.

To ensure a profit in the current​ year, the manager ships out pre−ordered merchandise the last week of​ December, instead of in mid−January as the customer instructed. This early shipment could be a violation of which ethical​ standard? a. Confidentiality b. Competence c. Integrity d. All of the above

c.

Using account​ analysis, what type of cost are utilities if you are charged​ $45 for the first 400 kilowatt​ hours, $100 for 401−600 kilowatt​ hours, and​ $165 + or − for 601−900 kilowatt​ hours? a. Mixed b. Variable c. Step d. Fixed

c.

Which of the following costs is an example of a fixed​ cost? a. Sales commissions b. Direct materials c. Salary of plant manager d. Delivery costs

c.

Which of the following industries would be most likely to use a job costing​ system? a. Food and beverage b. Pharmaceuticals c. Commercial building construction d. Chemicals

c.

Which of the following is a result of cost​ distortion? a. Over costing of all products b. Under costing of all products c. Over costing of some products and under costing of other products d. Accurate costing of all products

c.

Which of the following​ condition(s) favors using departmental overhead rates in place of a plantwide overhead​ rate? a. Different departments incur different amounts and types of manufacturing overhead. b. Different jobs or products use the departments to a different extent. c. Both of the above. d. Neither of the above.

c.

Which one of the following financial reports is required to be audited by an outside​ entity? a. Annual financial budgets b. Monthly financial statements c. Annual financial statements d. All of the above

c.

Rustic Living Furniture Company manufactures furniture at its central Kentucky factory. Some of its costs from the past year include: Wages paid to factory maintenance workers: $60,700 Fabric used to upholster furniture: $80,200 Wages paid to assembly - line workers: $100,300 Lumber used to build product: $15,300 Sales commissions: $7,400 Insurance costs for factory: $21,900 Freight-in (on raw materials): $3,500 Utilities in factory: $12,300 Factory supervisor salary: $60,100 Depreciation on factory equipment: $18,400 Utilities in sales office: $26,000 Costs of delivery to customers: $8,600 Depreciation on sales office: $1,400 Lubricants used in factory equipment: $400 Prime costs for Rustic Living Furniture Company totaled: a. $195,800 b. $241,600 c. $199,300 d. $95,500

c. (15,300 + 80,200 + 3,500 + 100,300) = 199,300

An internal request to transfer raw materials requires personnel to complete a: a. Bill of materials document. b. Purchase order document. c. Labor time record document. d. Materials requisition document.

d.

Before the year​ began, Coia Manufacturing estimated that manufacturing overhead for the year would be​ $200,000 and that​ 25,000 direct labor hours would be worked. Actual results for the year included the​ following: Actual manufacturing overhead cost: ​$182,000 Actual direct labor hours: 20,000 Unadjusted cost of goods sold: ​600,000 If the company allocates manufacturing overhead based on direct labor​ hours, the adjusted cost of goods sold for the year would have been: a. ​$600,000. b. ​$582,000. c. ​$578,000.. d. ​$622,000

d.

Fun Stuff Manufacturing produces frisbees using a three−step sequential process that includes​ molding, coloring and finishing. When the frisbees and associated costs are transferred from the molding process to the coloring​ process, which account is​ credited? a. WIP inventory−finishing b. WIP inventory−coloring c. Raw materials inventory d. WIP inventory−molding

d.

Which of the following statements is true regarding managerial accounting​ information? a. Managerial accounting information must be prepared in conformity with Generally Accepted Accounting Principles​ (GAAP). b. Managerial accounting information is prepared annually and quarterly. c. Managerial accounting information is audited by CPAs. d. Managerial accounting information emphasizes relevance.

d.

Garrett Company manufactures coffee tables and uses an activityminus−based costing system to allocate all manufacturing conversion costs. Each coffee table consists of 15 separate parts totaling​ $125 in direct​ materials and requires 2.0 hours of machine time to produce. Additional information​ follows: Activity: Materials handling Machining Assembling Packaging Allocation base: Number of parts Machine hours Number of parts Number of finished units Cost allocation rate: $1.75 per part $2.00 per machine hour $0.50 per part $2.75 per finished unit What is the total manufacturing cost per coffee​ table? a. ​$162.75 b. ​$40.50 c. ​$30.00 d. ​$165.50

d.

Here is some basic data for Shannon​ Company: Cost of materials purchases on account: $72,000 Cost of materials requisitioned: 51,000 Direct labor costs incurred: ​79,000 Manufacturing overhead costs incurred: ​87,000 Ending work in process: ​22,000 Cost of goods sold: ​167,000 Beginning raw materials inventory:​ 17,000 Beginning work in process inventory: ​50,000 Beginning finished goods inventory: ​35,000 Predetermined manufacturing overhead rate​ (as % of direct labor​ cost): ​125% The cost of goods manufactured for the year would​ be: a. ​$167,000. b. ​$228,750. c. ​$273,750 d. ​$256,750.

d.

In a​ department, 35,000 units are completed and transferred out and 17,400 remain in ending WIP at 85​% complete. If an equivalent unit costs $9.00 for direct​ materials, what is the value of materials transferred​ out? a. $156,600 b. $158,400 c. $133,110 d. $315,000

d.

Indications that a product cost system needs revision include: a. Employees do not believe the cost numbers are accurate. b. The company uses a single−allocation−base system developed long ago. c. Managers lose bids they expected to win and win bids they expected to lose. d. All of the above.

d.

Job 450 requires​ $9,800 of direct​ materials, $6,400 of direct​ labor, 590 direct labor​ hours, and 400 machine hours. Manufacturing overhead is computed at​ $14 per direct labor hour used and​ $10 per machine hour used. The total cost of Job 450 is: a. $16,200. b. $12,260. c. ​$24,460. d. ​$28,460.

d.

Managerial accountants are required to possess which of the following​ skills? a. Oral and written communication skills b. The ability to work on a team c. Analytical skills d. All of the above

d.

Managerial accountants may be responsible for: a. Communicating results. b. Analyzing data. c. Providing decision support. d. All of the above.

d.

Managerial accounting would use which of the following types of​ information? a. Nonfinancial information b. Financial information c. Forecasts of future earnings d. All of the above

d.

Nadal Corporation manufactures custom molds for use in the extrusion industry. The company allocates manufacturing overhead based on machine hours. Selected data for costs incurred for Job 532 are as follows: Direct materials used: $4,800 Direct labor cost: $36,000 Predetermined manufacturing overhead rate based on machine-hours: $15 Direct labor hours worked: ​3,000 Machine hours used: 220 What is the total manufacturing cost of Job​ 532? a. ​$3,300 b. ​$85,800 c. ​$40,800 d. ​$44,100

d.

On a production cost​ report, the following​ cost(s) would appear: a. Costs added during the period. b. Beginning work in process. c. Total operating costs during the period. d. Both A and B are included on a production cost report.

d.

The SEC is considering the move to adopt IFRS for which types of​ companies? a. All U.S. private companies b. Only foreign companies operating in the U.S. c. All U.S. companies d. All U.S. publicly traded companies

d.

The contribution margin income statement presents​ ________ above the contribution margin line. a. Only variable expenses relating to selling and administrative activities b. All fixed expenses c. Only fixed expenses relating to selling and administrative activities d. All variable expenses

d.

The first step in developing an ABC system is: a. Select an allocation base for each activity. b. Calculate an activity cost allocation rate for each activity. c. Allocate the costs to the cost object using the activity cost allocation rates. d. Identify the primary activities and estimate a total cost pool for each.

d.

What ethical standard would you violate if you take pens home from work for personal​ use? a. Confidentiality b. Competence c. Credibility d. Integrity

d.

What is a system that requires suppliers to deliver materials at the exact time the materials are​ needed? a. ISO b. ERP c. TQM d. JIT

d.

When do inventorial costs become​ expenses? a. When the manufacturing process begins b. When the manufacturing process is completed c. When direct materials are purchased d. None of the above

d.

Where would period costs be found on the financial​ statements? a. Under current liabilities on the balance sheet b. Under current assets on the balance sheet c. As operating expenses on the income statement for a previous period d. As operating expenses on the income statement in the period incurred

d.

Which of the following is a lean​ strategy? a. Maintain a higher level of inventory than a traditional system. b. Group like machines together. c. Lengthen setup times relative to a traditional system. d. Produce in smaller batches than a traditional system.

d.

Which of the following is an example of a period cost when manufacturing​ products? a. Depreciation expense on factory equipment b. Property taxes on the plant c. Indirect materials used in the factory d. Advertising expense

d.

Which of the following is not one of the​ IMA's credibility​ standards? a. To communicate information fairly and objectively b. To disclose deficiencies in internal control c. To disclose all relevant information d. All of the above are part of​ IMA's credibility standard.

d.

Which of the following items could be an example of a cost​ object? a. A manufacturing plant b. An international plant c. The accounting department d. All of the above are examples of potential cost objects.

d.

Which one of the following items is not one of the three primary manager​ responsibilities? a. Planning b. Directing c. Controlling d. Adjusting

d.