acounting 101 B midterm review

Smith Company reports the following information: ​ Cost of goods manufactured $68,250 Direct materials used 27,000 Direct labor incurred 25,000 Work in process inventory, January 1 11,000 ​ Factory overhead is 75% of the cost of direct labor. Work in process inventory on December 31 is a. $16,250 b. $8,500 c. $18,750 d. $13,500

$13,500

Cost of materials used $45,000 Direct labor costs 48,000Factory overhead 39,000 Work in process, beginning 28,000Work in process, ending 18,000Finished goods, beginning 28,000Finished goods, ending 18,000 ​ What is cost of goods sold? a. $152,000 b. $142,000 c. $10,000 d. $128,000

$152,000

Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead for the year was $1,375,000. Determine the over- or underapplied amount for the year. a. $17,500 overapplied b. $17,500 underapplied c. $118,250 overapplied d. $118,250 underapplied

$17,500 underapplied

Work in process, beginning $14,000 Work in process, ending 20,000 Direct labor costs 4,000 Cost of goods manufactured 8,000 Factory overhead 8,000 ​ Direct materials used is a. $2,000 b. $4,000 c. $8,000 d. $14,000

$2,000

Thomlin Company forecasts that total overhead for the current year will be $15,500,000 with 250,000 total machine hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. The predetermined overhead rate based on machine hours is a. $48 per machine hour b. $62 per machine hour c. $45 per machine hour d. $50 per machine hour

$62 per machine hour

Sanders Inc. has applied $567,988 of overhead to jobs. Actual overhead at the end of the year is $575,000. The adjustment for over- or underapplied overhead is a. $7,012 overapplied, increase Cost of Goods Sold b. $7,012 underapplied, increase Cost of Goods Sold c. $7,012 overapplied, decrease Cost of Goods Sold d. $7,012 underapplied, decrease Cost of Goods Sold

$7,012 underapplied, increase Cost of Goods Sold

A firm operated at 80% of capacity for the past year, during which fixed costs were $330,000, variable costs were 70% of sales, and sales were $1,000,000. Operating income (loss) was a. $140,000 b. $(30,000) c. $370,000 d. $670,000

(30,000)

Graham Company wants to reduce activity costs by $0.30 per unit. The setup activity for a batch of 100 units of Part RR110 currently costs $80 per setup. A process engineer proposes reengineering the setup activity so that it takes 60% of the original cost per setup. By how much will this reduce activity costs per unit? Will more cost savings need to be found? a. $0.53; no b. $0.48; no c. $0.32; no d. $0.22; yes

0.32; no

The manufacturing costs of Calico Industries for three months of the year are provided below. ​Total Cost Production (units) April $120,000 280,000 May 74,000 165,000 June 90,900 230,000 ​ Using the high-low method, the variable cost per unit and the total fixed costs are a. $0.78 per unit and $4,000 b. $0.40 per unit and $8,000 c. $4.00 per unit and $800 d. $7.80 per unit and $4,000

0.40 per unit and $8,000

Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year. Below is a list of all the jobs for the quarter: ​ Balance Job 356 $ 450 Job 357 1,235 Job 358 378 Job 359 689 Job 360 456 ​ Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job. 10. What is the gross profit for Adams Company at the end of the first quarter? a. $1,685 b. $2,685 c. $1,000 d. $685

1,000

Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year. Below is a list of all the jobs for the quarter: ​ Balance Job 356 $ 450 Job 357 1,235 Job 358 378 Job 359 689 Job 360 456 ​ Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job.What is the ending balance of Cost of Goods Sold for Adams Company at the end of the first quarter? a. $456 b. $2,685 c. $1,685 d. $685

1,685

If fixed costs are $750,000 and variable costs are 60% of sales, the break-even point in sales dollars is a. $1,250,000 b. $450,000 c. $1,875,000 d. $300,000

1,875,000

If fixed costs are $1,200,000, the unit selling price is $240, and the unit variable costs are $110, the amount of sales (units) required to realize an operating income of $200,000 is a. 9,231 units b. 12,000 units c. 10,769 units d. 5,833 units

10,769 units

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Information about July's activities is as follows: ​ On July 1: Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000 During July: Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520 On July 31: Ending inventories 1,600 units, 40% complete ​ 16. Using the FIFO method, the cost per equivalent unit for materials used during July was a. $10.78 b. $10.33 c. $9.78 d. $10.65

10.33

If a desk lamp requires 1 hour of fabrication and 2 hours of assembly, the amount of factory overhead that Kaumajet Factory will allocate to each unit of desk lamp using the multiple production department factory overhead rate method with an allocation base of direct labor hours is a. $11.10 b. $4.91 c. $5.00 d. $7.20

11.10

Xander Studios holds a sculpting class for which it charges students $250. The costs consist of the following: ​ Variable costs per student: Sculpting supplies $ 100 Enrollment costs 50 Fixed costs for the course: Instructor's salary $1,000 Rental cost of the classroom 500 ​ The break-even number of students is a. 2 b. 11 c. 12 d. 20

12

The following information is taken from the financial records of Gunner Manufacturing: ​ ​ Cost of materials used $45,000 Direct labor costs 48,000 Factory overhead 39,000 Work in process, beginning 18,000 Work in process, ending 28,000 ​ ​ What is the cost of goods manufactured? a. $178,000 b. $132,000 c. $122,000 d. $142,000

122,000

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Information about July's activities is as follows: ​ On July 1: Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000 During July: Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520 On July 31: Ending inventories 1,600 units, 40% complete ​ 11. Using the FIFO method, the number of units started and completed in July was a. 14,250 b. 15,000 c. 13,400 d. 15,740

13,400

Penny, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Information about July's activities is as follows: ​ On July 1: Beginning inventories 850 units, 60% complete Direct materials cost $5,000 Conversion costs $4,000 During July: Number of units started 15,000 Direct materials added $155,000 Conversion costs added $83,520 On July 31: Ending inventories 1,600 units, 40% complete ​ 14. Using the FIFO method, the number of equivalent units for conversion costs was a. 14,400 b. 14,380 c. 14,550 d. 15,850

14,380

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are provided below. ActivityCost Activity Base Procurement $ 370,000 Number of purchase orders Scheduling 250,000 Number of production orders Materials handling 500,000 Number of moves Product development 730,000 Number of engineering changes Production 1,500,000 Machine hours ​ Number ofPurchaseOrders Number of Production Orders ​ NumberofMoves ​ Number of EngineeringChanges ​ MachineHours ​ NumberofUnits Disk drives 4,000 300 1,400 10 2,000 2,000 Tape drives 4,000 150 800 10 8,000 4,000 Wire drives 12,000 800 4,000 25 10,000 2,500 ​ 1. The activity rate for the product development cost pool is a. $73,000 per engineering change b. $8,588 per engineering change c. $30,417 per engineering change d. $16,222 per engineering change

16,222 per engineering change

Assuming that all direct materials are placed in process at the beginning of production, the total cost of the departmental work in process inventory at the end of the period is a. $90,000 b. $283,140 c. $199,500 d. $16,438

16,438

At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. Assume that the company uses the FIFO process cost method. Round cost per unit figures to the nearest cent when calculating total costs. ​ The total costs that will be transferred into Finished Goods for units started and completed were a. $161,775 b. $156,960 c. $162,855 d. $161,505

161,775

The following budget data are available for Sharp Company: Estimated direct labor hours 12,000 Estimated direct labor dollars $90,000 Estimated factory overhead costs $180,000 Actual direct labor hours 11,500 Actual direct labor dollars $92,000 Actual factory overhead costs $181,000 ​ If factory overhead is applied based on direct labor hours, the amount of overhead to be applied is a. $180,000 b. $181,000 c. $172,500 d. $184,000

172,500

jensen Company reports the following: Direct materials used: $345,000 Direct labor incurred: 250,000 Factory overhead incurred: 400,000Operating expenses: 175,000 Jensens Company's period costs area A$250,000 b. $400,000 c. $345,000 d. $175,000

175000

If fixed costs are $450,000, the unit selling price is $75, and the unit variable costs are $50, the old and new break-even sales (units), respectively, if the unit selling price increases by $10 are a. 6,000 units and 5,294 units b. 18,000 units and 6,000 units c. 18,000 units and 12,857 units d. 9,000 units and 15,000 units

18,000 units and 12,857 units

Given the following information, determine the activity rate for setups. Activity Total Activity-Base Usage Budgeted Activity Cost Setups 10,000 $180,000 Inspections 24,000 $120,000 Assembly (dlh) 80,000 $400,000 a. $58.00 b. $18.00 c. $0.75 d. $5.09

18.00

Blackwelder Factory produces two similar products: small table lamps and desk lamps. The total factory overhead budget is $640,000 with 400,000 estimated direct labor hours. It is further estimated that small table lamp production will require 275,000 direct labor hours, and desk lamp production will need 125,000 direct labor hours. ​ 13. Using a single plantwide factory overhead rate with an allocation base of direct labor hours, the factory overhead that Blackwelder Factory will allocate to desk lamp production if actual direct labor hours for the period for desk lamps is 118,000 would be a. $118,000 b. $200,000 c. $188,800 d. $125,000

188,800

The following budget data are available for Sharp Company: Estimated direct labor hours 12,000 Estimated direct labor dollars $90,000 Estimated factory overhead costs $179,000 Actual direct labor hours 11,500 Actual direct labor dollars $92,000 Actual factory overhead costs $180,000 ​ If factory overhead is to be applied based on direct labor dollars, the predetermined overhead rate is a. 199% b. 196% c. $14.92 d. $15.65

199%

If fixed costs are $850,000 and variable costs are 60% of sales, the break-even point (dollars) is a. $2,125,000 b. $340,000 c. $3,400,000 d. $1,416,666

2,125,000

Kaden Company's fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24. The break-even sales (units) is a. 2,400 units b. 1,950 units c. 1,114 units d. 2,600 units

2,600 units

Department F had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. Of the $12,500, $8,000 was for material and $4,500 was for conversion costs, 14,000 units of direct materials were added during the period at a cost of $28,700, 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. ​ 15. If the weighted average method is used, the materials cost per unit (rounded to the nearest cent) would be a. $2.04 b. $1.59 c. $1.91 d. $2.00

2.04

The materials cost per equivalent unit (to the nearest cent) for April is a. $2.60 b. $2.81 c. $3.02 d. $2.26

2.81

Using the direct method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced. It allocates Cafeteria Department costs based on the number of employees served. It has the following information about its two service departments and two production departments, Cutting and Assembly: Square Feet Number ofEmployees Janitorial Department 100 20 Cafeteria Department 10,000 10 Cutting Department 2,000 60 Assembly Department 8,000 20 The percentage (proportional) usage of the Janitorial Department by the Cutting Department is a. 20% b. 80% c. 10% d. 9.9%

20%

If fixed costs are $400,000 and the unit contribution margin is $20, the amount of units that must be sold in order to have a zero profit is a. 25,000 units b. 10,000 units c. 400,000 units d. 20,000 units

20,000 units

Jacob Inc. has fixed costs of $240,000, the unit selling price is $32, and the unit variable costs are $20. The old and new break-even sales (units), respectively, if the unit selling price increases by $4 is a. 7,500 units and 6,667 units b. 20,000 units and 30,000 units c. 20,000 units and 15,000 units d. 12,000 units and 15,000 units

20,000 units and 15,000 units

Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the period; 3,000 units were 20% completed at the end of the period, and the following manufacturing costs debited to the departmental work in process account during the period: Work in process, beginning of period $40,000 Costs added during period: Direct materials (10,400 units at $8) 83,200 Direct labor 63,000 Factory overhead 25,000 ​ 19. All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory costing is used. The total cost of the units started and completed during the period (round unit cost calculations to four decimal places) is a. $211,200 b. $120,060 c. $190,275 d. $20,934

20,934

Panamint Systems Corporation is estimating activity costs associated with producing disk drives, tapes drives, and wire drives. The indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are provided below. ActivityCost Activity Base Procurement $ 370,000 Number of purchase orders Scheduling 250,000 Number of production orders Materials handling 500,000 Number of moves Product development 730,000 Number of engineering changes Production 1,500,000 Machine hours ​ Number ofPurchaseOrders Number of Production Orders ​ NumberofMoves ​ Number of EngineeringChanges ​ MachineHours ​ NumberofUnits Disk drives 4,000 300 1,400 10 2,000 2,000 Tape drives 4,000 150 800 10 8,000 4,000 Wire drives 12,000 800 4,000 25 10,000 2,500 ​ 8. The activity rate for the scheduling activity cost pool is a. $200.00 per production order b. $20.00 per production order c. $29.41 per production order d. $10.42 per production order

200.00 per production order

Bonnington Company manufactures small table lamps and desk lamps. The following shows the activities per product: Units Setups Inspections Assembly (dlh) Small table lamps 4,000 4,000 15,000 6,000 Desk lamps 8,000 16,000 7,000 20,000 ​ Using the following information prepared by Bonnington Company, the total factory overhead to be allocated to small table lamps is Activity Total Activity-Base Usage Budgeted Activity Cost Setups 20,000 $ 80,000 Inspections 22,000 132,000 Assembly (dlh) 26,000 416,000 a. $314,000 b. $209,333 c. $202,000 d. $104,000

202,000

If fixed costs are $500,000 and the unit contribution margin is $20, the break-even point in units if fixed costs are reduced by $80,000 is a. 25,000 units b. 29,000 units c. 4,000 units d. 21,000 units

21,000 units

Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. ​ Overhead Direct LaborHours (dlh) Product A B Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh Finishing Dept. 72,000 10,000 4 16 Totals $320,000 20,000 dlh 20 dlh 20 dlh ​ 4. The overhead from both production departments allocated to each unit of Product B if Blue Ridge Marketing Inc. uses the multiple production department factory overhead rate method is ​ a. $425.60 per unit b. $115.20 per unit c. $214.40 per unit d. $320.00 per unit

214.40 per unit

. 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 a. $233,000 b. $225,600 c. $288,800 d. $240,400

225,600

Adirondack Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plantwide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. ​ Overhead TotalDirectLabor Hours DLH per Product A B Painting Dept. $250,000 10,000 16 4 Finishing Dept. 75,000 12,000 4 16 Totals $325,000 22,000 20 20 ​ 16. Using a single plantwide rate, the factory overhead allocated per unit of Product A in the Painting Department is a. $236.32 per unit b. $325.00 per unit c. $147.70 per unit d. $161.00 per unit

236.32 per unit

Using the direct method, Pone Hill Company allocates Janitorial Department costs based on square footage serviced. It allocates Cafeteria Department costs based on the number of employees served. It has the following information about its two service departments and two production departments, Cutting and Assembly: Square Feet Number ofEmployees Janitorial Department 100 20 Cafeteria Department 10,000 10 Cutting Department 2,000 60 Assembly Department 8,000 20 The percentage (proportional) usage of the Cafeteria Department by the Assembly Department is a. 75% b. 22.2% c. 25% d. 18.2%

25%

Reynold's Company has a product with fixed costs of $350,000, a unit selling price of $29, and unit variable costs of $20. The break-even sales (units) if the variable costs are decreased by $4 is a. 26,923 units b. 12,069 units c. 21,875 units d. 38,889 units

26,923 units

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

If a desk lamp requires 1 hour of fabrication and 2 hours of assembly, the total amount of factory overhead that Kaumajet Factory will allocate to desk lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours if 26,000 units are produced is a. $540,000 b. $187,200 c. $475,000 d. $288,600

288,600

Department A had 5,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 34,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. ​ 17. The number of equivalent units of production for conversion costs for the period was a. 29,600 b. 32,000 c. 32,400 d. 34,000

29,600

Selected accounts with a credit amount omitted are as follows: Work in Process Apr. 1 Balance 7,000 Apr. 30 Goods finished X 30 Direct materials 78,400 30 Direct labor 195,000 30 Factory overhead 136,500 ​ Finished Goods Apr. 1 Balance 42,000 30 Goods finished 387,000 ​ What was the balance of Work in Process as of April 30? a. $8,100 b. $35,000 c. $29,900 d. $22,900

29,900

The debits to Work in Process—Assembly Department for May, together with data concerning production, are as follows: May 1, work in process: Materials cost, 3,000 units $ 8,000 Conversion costs, 3,000 units, 66.7% completed 6,000 Materials added during May, 10,000 units 30,000 Conversion costs during May 31,000 Goods finished during May, 11,500 units 0 May 31 work in process, 1,500 units, 50% completed 0 ​ All direct materials are placed in process at the beginning of the process and the first-in, first-out method is used to cost inventories. The materials cost per equivalent unit for May is a. $3.00 b. $3.80 c. $2.92 d. $2.31

3.00

Harley Company has sales of $500,000, variable costs are 75% of sales, and operating income is $40,000. Harley's operating leverage is a. 0.0 b. 1.2 c. 1.3 d. 3.1

3.1

The debits to Work in Process—Assembly Department for April, together with data concerning production, are as follows: April 1, work in process: Materials cost, 3,000 units $ 7,500 Conversion costs, 3,000 units, 80% completed 6,000 Materials added during April, 10,000 units 29,000 Conversion costs during April 35,000 Goods finished during April, 11,500 units — April 30, work in process, 1,500 units, 60% completed — ​ All direct materials are placed in process at the beginning of the process, and the weighted average method is used to cost inventories. ​ 7. The conversion cost per equivalent unit (to the nearest cent) for April is a. $2.70 b. $2.53 c. $3.31 d. $5.60

3.31

If fixed costs are $300,000, the unit selling price is $31, and the unit variable costs are $22, the break-even sales (units) if fixed costs are reduced by $30,000 is a. 30,000 units b. 8,710 units c. 12,273 units d. 20,000 units

30,000 units

Using a single plantwide factory overhead rate with an allocation base of direct labor hours, the factory overhead that Challenger Factory will allocate to regular widget production if budgeted production of regular widgets for the period is 75,000 units and actual production of regular widgets for the period is 72,000 units would be a. $168,750 b. $324,000 c. $162,000 d. $337,500

324,000

Department A had 5,000 units in work in process that were 60% completed as to labor and overhead at the beginning of the period, 34,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 2,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories. ​ 1. The number of equivalent units of production for material costs for the period was a. 34,000 b. 29,800 c. 29,000 d. 32,000

34,000

When Isaiah Company has fixed costs of $120,000 and the contribution margin is $30, the break-even point is a. 16,000 units b. 8,000 units c. 6,000 units d. 4,000 units

4,000 units

The following production data were taken from the records of the Finishing Department for June: Inventory in process, June 1, 30% completed 4,000 units Completed units during June 65,000 units Ending inventory, 60% completed 7,000 units ​ 8. The number of conversion equivalent units of production in the June 30 Finishing Department inventory, assuming that the first-in, first-out method is used to cost inventories, is a. 68,000 units b. 70,400 units c. 66,200 units d. 4,200 units

4,200 units

Lee Company's sales are $525,000, variable costs are 53% of sales, and operating income is $19,000. The contribution margin ratio is a. 47.0% b. 26.5% c. 9.5% d. 53.0%

47.0%

Botosan Factory has budgeted factory overhead for the year at $13,500,000, and budgeted direct labor hours for the year are 10,000,000. If the actual direct labor hours for the month of May are 350,000, the overhead allocated for May is a. $675,000 b. $470,630 c. $472,500 d. $236,250

472,500

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. 5 c. 4 d. 2

5

Department M had 600 units 60% completed in process at the beginning of June, 6,000 units completed during June, and 700 units 30% completed at the end of June. Using the first-in, first-out method of inventory costing, the number of equivalent units of production for conversion costs for the period is a. 7,300 units b. 5,640 units c. 6,700 units d. 5,850 units

5,850 units

Connor Company has fixed costs of $400,000, the unit selling price is $25, and the unit variable costs are $15. The break-even sales (units) if the variable costs are increased by $2 is a. 50,000 units b. 30,770 units c. 40,000 units d. 26,667 units

50,000 units

Kaumajet Factory produces two products: table lamps and desk lamps. It has two separate departments: Fabrication and Assembly. The factory overhead budget for the Fabrication Department is $550,000, using 500,000 direct labor hours. The factory overhead budget for the Assembly Department is $400,000, using 80,000 direct labor hours. 12. If a table lamp requires 2 hours of fabrication and 1 hour of assembly, the total amount of factory overhead that Kaumajet Factory will allocate to table lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours if 75,000 units are produced is a. $368,250 b. $540,000 c. $832,500 d. $475,000

540,000

McBride's Dairy has 200 gallons of heavy cream and 600 gallons of skimmed milk and has incurred $1,000 of joint costs at the split-off point. It can sell each product at the split-off point or process it further in relatively similar processes, so management has decided that the most appropriate method for allocating joint costs is the market value at split-off point. One gallon of cream sells for $15, while one gallon of milk sells for $4. How much of the joint cost is allocated to cream? Round percentage calculations to the nearest whole percent. a. $1,000 b. $560 c. $440 d. $0

560

All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory costing is used. The total cost of 3,600 units of beginning inventory which were completed during the period (round unit cost calculations to four decimal places) is a. $62,206 b. $16,163 c. $40,000 d. $19,275

62,206

Aleutian Company produces two products: Rings and Dings. They are manufactured in two departments: Fabrication and Assembly. Data for the products and departments are listed below. Product ​ Number of Units Direct Labor Hoursper Unit Machine Hoursper Unit Rings 1,000 4 6 Dings 2,000 3 9 All of the machine hours take place in the Fabrication Department, which has estimated total factory overhead of $90,000. All of the labor hours take place in the Assembly Department, which has estimated total factory overhead of $105,000.Aleutian Company uses the multiple production department factory overhead rate method. The Fabrication Department uses machine hours as an allocation base, and the Assembly Department uses direct labor hours. 11. The total factory overhead allocated per unit of Rings is a. $65.25 b. $23.25 c. $44.10 d. $64.50

64.50

Pinnacle Corp. budgeted $700,000 of overhead cost for the current year. Actual overhead costs for the year were $650,000. Pinnacle's plantwide allocation base, machine hours, was budgeted at 100,000 hours. Actual machine hours were 80,000. A total of 100,000 units was budgeted to be produced and 98,000 units were actually produced. Pinnacle's plantwide factory overhead rate for the current year is a. $8.13 per machine hour b. $7.00 per machine hour c. $6.50 per machine hour d. $8.75 per machine hour

7.00 per machine hour

The cost of services for a haircut is a. $4.00 b. $7.50 c. $3.50 d. $11.50

7.50

Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per product and the total overhead information: Units ​ Setups ​ Inspections ​ Assembly (dlh) Small table lamps 3,000 8,000 9,000 16,000 Desk lamps 6,000 16,000 15,000 12,000 ​ Activity Total Activity-Base Usage Budgeted Activity Cost Setups 24,000 $ 60,000 Inspections 24,000 120,000 Assembly (dlh) 28,000 280,000 ​ 9. The total factory overhead to be allocated to each unit of small table lamps is a. $75.00 b. $39.17 c. $38.33 d. $17.50

75.00

Variable costs as a percentage of sales for Lemon Inc. are 80%, current sales are $600,000, and fixed costs are $130,000. How much will operating income change if sales increase by $40,000? a. $8,000 increase b. $8,000 decrease c. $30,000 decrease d. $30,000 increase

8,000 increase

The activity rate for the materials handling cost pool is a. $58.82 per move b. $50.00 per move c. $20.83 per move d. $80.65 per move

80.65 per move

McBride's Dairy has 200 gallons of cream and 600 gallons of skimmed milk and has incurred $1,000 of joint costs at the split-off point. It also incorporates a processing time weight factor of 1 for the cream and 3 for the skimmed milk. The amount of this cost that will be allocated to skimmed milk using the weighted average method is a. $1,000 b. $900 c. $100 d. $750

900

An example of a period cost is a. advertising expense b. indirect materials c. depreciation on factory equipment d. property taxes on plant facilities

Advertising expense

Journalizing the entry to record jobs shipped and customers billed would include a debit to a. Accounts Payable b. Cash c. Finished Goods d. Cost of Goods Sold

Cost of Goods Sold

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had production costs of $375,000. The journal entry to record the transfer of costs from finished goods to cost of goods sold is a. Finished Goods 540,000 Cost of Goods Sold 540,000 b. Finished Goods 375,000 Cost of Goods Sold 375,000 c. Cost of Goods Sold 375,000 Finished Goods 375,000 d. Cost of Goods Sold 540,000 Finished Goods 540,000

Cost of Goods Sold 375,000 Finished Goods 375,000

Journalizing the entry to record jobs shipped and customers billed would include a credit to a. Accounts Payable b. Cash c. Finished Goods d. Cost of Goods Sold

Finished Goods

Which of the following is not a characteristic of useful managerial accounting reports? a. accurate b. GAAP—adhering c. historical and estimated data d. prepared as needed

GAAP—adhering

Which of the following is not true with regard to direct materials for a bakery? a. Flour and sugar would probably be direct materials. b. Eggs would probably be a direct material. c. Oil to lubricate factory machines would not be a direct material. d. Paper cupcake liners, that become part of the product, must be accounted for as direct materials.

Paper cupcake liners, that become part of the product, must be accounted for as direct materials.

You are a manager at McBride's Dairy where whey is a by-product of the production process. Thinking about the utility and usefulness of by-products in a joint production process, you may decide to take several courses of action. Which of the following actions would you not recommend? a. Because whey is a good of low value, it is not worth the effort to develop separate product costs for it. b. The net realizable value method should be used to allocate joint costs to the whey. c. Revenues from the whey should be used to offset the cost of the joint production process. d. The sale of whey should be reported as other revenue on the income statement with no related cost of goods sold.

The net realizable value method should be used to allocate joint costs to the whey.

Which of the following is the main feature of support department costs? a. They are associated with sales commissions. b. They are office supply costs. c. They are direct costs. d. They are indirect costs.

They are indirect costs.

Which of the following describes how support department costs are related to production? a. They are a part of direct labor cost. b. They are a part of direct materials cost. c. They are a part of the both direct labor and direct materials costs. d. They are indirectly related to production.

They are indirectly related to production.

During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. Factory overhead applied to production was $23,000. The journal entry to record the factory overhead applied to production is a. Work in Process 25,000 Factory Overhead 25,000 b. Factory Overhead 23,000 Work in Process 23,000 c. Work in Process 23,000 Factory Overhead 23,000 d. Factory Overhead 25,000 Accounts Payable 25,000

Work in Process 23,000 Factory Overhead 23,000

The journal entry to record the transfer of 1,600 units of Part No. 1177, with a value of $2.50 each, to work in process is a. Materials 4,000 Work in Process 4,000 b. Work in Process 4,000 Factory Overhead 4,000 c. Work in Process 4,000 Materials 4,000 d. Work in Process 4,000 Cash 4,000

Work in Process 4,000 Materials 4,000

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. ​ 2. The journal entry to record the flow of costs into Department 1 during the period for direct materials is a. Work in Process—Department 1 100,000 Materials 100,000 b. Work in Process—Department 1 55,000 Materials 55,000 c. Materials 100,000 Work in Process—Department 1 100,000 d. Materials 55,000 Work in Process—Department 1 55,000

Work in Process—Department 1 100,000 Materials 100,000

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. ​ 9. The journal entry to record the flow of costs from Department 1 into Department 2 is a. Work in Process—Department 2 390,000 Work in Process—Department 1 390,000 b. Work in Process—Department 2 330,000 Work in Process—Department 1 330,000 c. Work in Process—Department 2 215,000 Work in Process—Department 1 215,000 d. Work in Process—Department 2 375,000 Work in Process—Department 1 375,000

Work in Process—Department 2 390,000 Work in Process—Department 1 390,000

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. ​ 22. The journal entry to record the flow of costs into Department 2 for direct labor is a. Work in Process—Department 2 65,000 Wages Payable 65,000 b. Wages Payable 65,000 Work in Process—Department 2 65,000 c. Work in Process—Department 2 125,000 Wages Payable 125,000 d. Work in Process—Department 2 185,000 Wages Payable 185,000

Work in Process—Department 2 65,000 Wages Payable 65,000

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. ​ 25. The journal entry to record the flow of costs into Department 2 for applied overhead is a. Factory Overhead—Department 2 80,000 Work in Process—Department 2 80,000 b. Work in Process—Department 2 230,000 Factory Overhead—Department 2 230,000 c. Work in Process—Department 2 80,000 Factory Overhead—Department 2 80,000 d. Work in Process—Department 2 150,000 Factory Overhead—Department 2 150,000

Work in Process—Department 2 80,000 Factory Overhead—Department 2 80,000

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 3 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 3 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 3 during the period for direct materials is a. Work in Process—Department 3 100,000 Materials 100,000 b. Work in Process—Department 3 125,000 Materials 125,000 c. Work in Process—Department 3 50,000 Materials 50,000 d. Work in Process—Department 3 70,000 Materials 70,000

Work in Process—Department 3 50,000 Materials 50,000

Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. Department 2 has transferred-in costs of $390,000 for the current period. In addition, work in process at the beginning of the period for Department 2 totaled $75,000, and work in process at the end of the period totaled $90,000. The journal entry to record the flow of costs into Department 3 during the period is a. Work in Process—Department 3 375,000 Work in Process—Department 2 375,000 b. Work in Process—Department 3 570,000 Work in Process—Department 2 570,000 c. Work in Process—Department 3 490,000 Work in Process—Department 2 490,000 d. Work in Process—Department 3 555,000 Work in Process—Department 2 555,000

Work in Process—Department 3 555,000 Work in Process—Department 2 555,000

When multiple production department rates are used to apply overhead to products, a. all manufacturing costs are first directly traced to support and production departments and then support department costs are allocated to production departments b. only fixed overhead costs are first directly traced to support and production departments and then support department costs are allocated to production departments c. all overhead costs are first directly traced to support and production departments and then support department costs are allocated to production departments d. support department costs are allocated to production departments and then all overhead costs are directly traced to support and production departments

all overhead costs are first directly traced to support and production departments and then support department costs are allocated to production departments

Manley Co. manufactures office furniture. During the most productive month of the year, 4,500 desks were manufactured at a total cost of $86,625. In its slowest month, the company made 1,800 desks at a cost of $49,500. Using the high-low method of cost estimation, total fixed costs a. are $61,875 b. are $33,875 c. are $24,750 d. cannot be determined from the data given

are $24,750

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

assembly labor's wages

Finished goods inventory is reported on the a. income statement as a period cost b. balance sheet as a long-term asset c. balance sheet as a current asset d. income statement as revenue

balance sheet as a current asset

. Which of the following costs are not included in finished goods inventory? a. direct labor b. factory overhead c. chief financial officer's salary d. direct materials

chief financial officer's salary

In the income statement of a manufacturing company, what replaces purchases in the cost of goods section of a retail company?

cost of goods manufactured

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

cost of interior upholstery

When a job is completed in a service organization, the job costs are transferred to the a. work in process account b. cost of services account c. finished goods account d. cost of goods sold account

cost of services account

As production increases, the fixed cost per unit a. increases b. decreases c. remains the same d. either increases or decreases, depending on the variable costs

decreases

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

direct labor and factory overhead

Which of the following costs are conversion costs? a. direct labor cost and factory overhead cost b. direct materials cost and direct labor cost c. factory overhead cost d. direct materials cost and factory overhead cost

direct labor cost and factory overhead cost

The cost of a manufactured product generally consists of which of the following costs? a. direct materials cost and factory overhead cost only b. direct labor cost and factory overhead cost only c. direct labor cost, direct materials cost, and factory overhead cost d. direct materials cost and direct labor cost only

direct labor cost, direct materials cost, and factory overhead cost

Common allocation bases are a. direct labor dollars, direct labor hours, and direct material dollars b. direct labor dollars, direct labor hours, and machine hours c. direct labor dollars, direct labor hours, and machine dollars d. machine dollars, direct labor dollars, and direct labor hours

direct labor dollars, direct labor hours, and machine hours

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

direct materials and conversion costs

Which of the following types of inventories does a manufacturing business report on the balance sheet? a. finished goods inventory and work in process inventory only b. direct materials inventory and work in process inventory only c. direct materials inventory, work in process inventory, and finished goods inventory d. direct materials inventory and finished goods inventory only

direct materials inventory, work in process inventory, and finished goods inventory

Which of the following is the easiest but least accurate of the commonly used methods for allocating support department costs to production departments? a. direct method b. sequential method c. reciprocal services method d. activity-based management method

direct method

An example of the split-off point in oil, gasoline, and kerosene production is that point where crude oil is a. drilled b. pumped from the ground c. transported to the refinery d. distilled into gasoline and kerosene

distilled into gasoline and kerosene

Activity rates are determined by a. dividing the actual cost for each activity pool by the actual activity base for that pool b. dividing the cost budgeted for each activity pool by the estimated activity base for that pool c. dividing the actual cost for each activity pool by the estimated activity base for that pool d. dividing the cost budgeted for each activity pool by the actual activity base for that pool

dividing the cost budgeted for each activity pool by the estimated activity base for that pool

24. Indirect labor and indirect materials are classified as a. factory overhead and product costs b. factory overhead and period costs c. operating costs and period costs d. operating costs and product costs

factory overhead and product costs

Costs that remain constant in total dollar amount as the level of activity changes are called ________ costs. a. fixed b. mixed c. product d. variable

fixed

Which of the following types of cost is shown in the cost data below? ​ Cost per Unit Number of Units $6,000 1 3,000 2 2,000 3 1,500 4 ​ a. mixed cost b. variable cost c. fixed cost d. period cost

fixed cost

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

hospital

At the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to a. increase by $1,700,000 b. decrease by $1,700,000 c. increase by $3,400,000 d. decrease by $3,400,000

increase by $1,700,000

Flying Cloud Co. has the following operating data for its manufacturing operations: Unit selling price $ 250 Unit variable cost 100 Total fixed costs 840,000 ​ The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be a. increased by 640 units b. increased by 400 units c. decreased by 640 units d. increased by 800 units

increased by 640 units

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

indirect cost

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

indirect labor and indirect materials

Johnson Lumber Mill produces various grades of cut boards from raw lumber. The costs incurred before the split-off point where the cut boards are separated and processed further are a. investment center costs b. joint costs that cannot be separated c. new costs that can be traced to the various grades of lumber being produced d. new costs that cannot be traced to the various grades of lumber being produced

joint costs that cannot be separated

An example of the split-off point in dairy production is that point where raw milk is a. gathered b. stored to be processed c. pasteurized d. made into butter or cheese

made into butter or cheese

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

management

A cost that has characteristics of both a variable cost and a fixed cost is called a a. variable/fixed cost b. mixed cost c. discretionary cost d. sunk cost

mixed cost

Which of the following activity bases would be the most appropriate for food costs of a hospital? a. number of nurses scheduled to work b. how many MRIs are taken c. number of patients who stay in the hospital d. quantity of prescriptions filled

number of patients who stay in the hospital

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

oil lubricants used for factory machinery

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

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

The income statement for both a merchandiser and a manufacturer would include a. operating expenses b. direct materials c. direct labor incurred d. cost of goods manufactured

operating expenses

Which of the following is not a prime cost? a. plant janitor's wages b. direct labor wages c. machine operator wages d. assembly line wages

plant janitor's wages

Managerial accounting reports are a. prepared according to GAAP b. prepared according to management needs c. prepared periodically only d. related to the entire business entity only

prepared according to management needs

Which of the following is not the type of work done in a support department? a. production work on an assembly line that makes a product b. janitorial services provided for the production facility c. maintenance work done to keep production machines running smoothly d. safety and security services provided to keep the production facility safe

production work on an assembly line that makes a product

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

raw steel

In a job order cost accounting system, when goods that have been ordered are received, the receiving department personnel count the goods, inspect the goods, and complete a a. purchase order b. sales invoice c. receiving report d. purchase requisition

receiving report

The materials requisition is used to a. release materials from the storeroom to the factory b. release finished goods to the shipping department c. record the acquisition of materials from a vendor d. record and electronically transmit materials data in place of a receiving report

release materials from the storeroom to the factory

Using multiple department factory overhead rates instead of a single plantwide factory overhead rate a. results in more accurate product costs b. results in distorted product costs c. is simpler and less expensive to compute than a plantwide rate d. applies overhead costs to all departments equally

results in more accurate product costs

Period costs are classified as either a. selling expenses or production expenses b. administrative expense or production expenses c. selling expenses or administrative expenses d. general expenses or selling expenses

selling expenses or administrative expenses

The point in the production process where joint products become separable is called the a. separation point b. split-off point c. joint cost point d. joint process point

split-off point

As production increases, variable costs per unit a. stay the same b. increase c. decrease d. either increase or decrease, depending on the fixed costs

stay the same

Which of the following is not an example of a cost that varies in total as the number of units produced changes? a. electricity per KWH to operate factory equipment b. direct materials cost c. straight-line depreciation on factory equipment d. wages of assembly worker

straight-line depreciation on factory equipment

Cost of goods manufactured is equal to a. total manufacturing costs plus ending materials inventory less beginning materials inventory b. cost of goods sold plus beginning work in process inventory less ending work in process inventory c. total manufacturing costs plus ending work in process inventory less beginning work in process inventory d. total manufacturing costs plus beginning work in process inventory less ending work in process inventory

total manufacturing costs plus beginning work in process inventory less ending work in process inventory

All of the following can be used as an allocation base for calculating factory overhead rates except a. direct labor dollars b. direct labor hours c. machine hours d. total units produced

total units produced

Which of the following conditions would cause the break-even point to decrease? a. total fixed costs increase b. unit selling price decreases c. unit variable cost decreases d. unit variable cost increases

unit variable cost decreases

WeeBee Company has three assembly labor classifications: S-1, S-2, and S-3. The three classifications are paid $16, $19, and $22 per hour, respectively. The assembly activity for a product uses an S-2 employee who performs that task in 24 minutes. To reduce the activity cost per unit, a product engineer proposes using a higher-rated employee who can perform the assembly in 21 minutes. A manager proposes using a lower-rated employee who can perform the assembly in 30 minutes. Which of the following provides the most cost-effective solution? a. use the S-1 employee b. use the S-2 employee c. use the S-3 employee d. use either the S-1 or S-3 employee

use the S-2 employee

Which of the following methods allocates joint costs based on physical units that are weighted and then multiplied by actual physical units? a. physical units method b. weighted average method c. market value at split-off method d. net realizable value method

weighted average method

For a manufacturing business, products that are in the process of being manufactured are referred to as a. supplies inventory b. work in process inventory c. finished goods inventory d. direct materials inventory

work in process inventory

Goods that are partially completed by a manufacturer are a. merchandise inventory b. work in process inventory c. finished goods inventory d. materials inventory

work in process inventory