Question 1

In a service firm, overhead is generally assigned to services on an activity measure such as:

Accepted Answer

A)  Machine hours 
B)  Billable hours 
C)  Overhead hours 
D)  Supplies used 
A)  Machine hours 
B)  Billable hours 
C)  Overhead hours 
D)  Supplies used

Question 2

Which of the following costs would NOT be classified as a product cost?

Accepted Answer

A)  Cost of raw materials 
B)  Cost of labor for factory employees 
C)  Salary of the Vice President of Manufacturing 
D)  Salary of the Vice President of Finance 
A)  Cost of raw materials 
B)  Cost of labor for factory employees 
C)  Salary of the Vice President of Manufacturing 
D)  Salary of the Vice President of Finance

Question 3

If direct labor time is charged to the wrong job number, that job will:

Accepted Answer

A)  Appear more profitable than it should 
B)  Appear less profitable than it should 
C)  Report the correct profitability 
D)  None of these are correct 
A)  Appear more profitable than it should 
B)  Appear less profitable than it should 
C)  Report the correct profitability 
D)  None of these are correct

Question 4

Rex Company's manufacturing overhead was overapplied by $10,000 in July. Estimated overhead was $755,000, and actual overhead was $752,000. The amount of overhead applied for May was:

Accepted Answer

A)  $742,000 
B)  $745,000 
C)  $762,000 
D)  $765,000 
A)  $742,000 
B)  $745,000 
C)  $762,000 
D)  $765,000

Question 5

Work-in-Process Inventory is debited when:

Accepted Answer

A)  Manufacturing overhead is applied 
B)  Indirect materials are used in production 
C)  Production is completed 
D)  All of these occur 
A)  Manufacturing overhead is applied 
B)  Indirect materials are used in production 
C)  Production is completed 
D)  All of these occur

Question 6

The last department in a production process shows the following information at the end of the period:   How many units have been transferred to finished goods during the period?

Accepted Answer

A)  400 
B)  1,800 
C)  2,000 
D)  2,400 
A)  400 
B)  1,800 
C)  2,000 
D)  2,400

Question 7

Work-in-Process Inventory for Wendall Productions has a balance of $2,600 at the end of the accounting period. The cost summaries for the uncompleted jobs showed direct materials of $1,200 and direct labor of $800. Wendall applies manufacturing overhead on the basis of direct labor cost. The company's predetermined overhead rate is:

Accepted Answer

A)  $0.50 per direct labor dollar 
B)  $0.65 per direct labor dollar 
C)  $0.75 per direct labor dollar 
D)  $1.00 per direct labor dollar 
A)  $0.50 per direct labor dollar 
B)  $0.65 per direct labor dollar 
C)  $0.75 per direct labor dollar 
D)  $1.00 per direct labor dollar

Question 8

Seven Peaks Inc. produces German sausage. The company uses process costing. All raw materials are added at the beginning of the mixing process. The following information relates to July operations and the work-in-process inventory account for Seven Peaks' final processing department:

Accepted Answer

The answer of Seven Peaks Inc. produces German sausage. The...

Question 9

Information on a production cost report is used to transfer costs and units of output from one manufacturing center to another in a(n):

Accepted Answer

A)  Process costing system 
B)  Job order costing system 
C)  Activity-based costing system 
D)  None of these are correct 
A)  Process costing system 
B)  Job order costing system 
C)  Activity-based costing system 
D)  None of these are correct

Question 10

The amount of manufacturing overhead predicted for the next period is known as:

Accepted Answer

A)  Overapplied manufacturing overhead 
B)  Actual manufacturing overhead 
C)  Estimated manufacturing overhead 
D)  Underapplied manufacturing overhead 
A)  Overapplied manufacturing overhead 
B)  Actual manufacturing overhead 
C)  Estimated manufacturing overhead 
D)  Underapplied manufacturing overhead

Question 11

Department 1 of a two-department production process shows:   How many units were transferred to Department 2?

Accepted Answer

A)  80,000 
B)  120,000 
C)  180,000 
D)  200,000 
A)  80,000 
B)  120,000 
C)  180,000 
D)  200,000

Question 12

California Company uses a predetermined overhead rate of $3.50 per machine hour based on an estimate of 50,000 machine hours for the year. The estimated manufacturing overhead cost for the period for The Club is:

Accepted Answer

A)  $15,000 
B)  $80,000 
C)  $120,000 
D)  $175,000 
A)  $15,000 
B)  $80,000 
C)  $120,000 
D)  $175,000

Question 13

In process cost accounting:

Accepted Answer

A)  A materials requisition must identify the job on which the material will be used 
B)  One work-in-process account is maintained for all the processes, similar to a job costing system 
C)  A work-in-process account is maintained for each process 
D)  A work-in-process account is maintained for each product 
A)  A materials requisition must identify the job on which the material will be used 
B)  One work-in-process account is maintained for all the processes, similar to a job costing system 
C)  A work-in-process account is maintained for each process 
D)  A work-in-process account is maintained for each product

Question 14

The following information is taken from the records of Minnesota Company for the year ended January 31, 2012:   The amount of beginning work-in-process inventory is:

Accepted Answer

A)  $0 
B)  $16,000 
C)  $24,000 
D)  $64,000 
A)  $0 
B)  $16,000 
C)  $24,000 
D)  $64,000

Question 15

For June 2012, Mitsumi Exports' beginning work-in-process inventory is $1,000, ending work-in-process inventory is $3,000, and cost of goods manufactured is $34,000. What are the total manufacturing costs for June?

Accepted Answer

A)  $31,000 
B)  $32,000 
C)  $35,000 
D)  $36,000 
A)  $31,000 
B)  $32,000 
C)  $35,000 
D)  $36,000

Question 16

Which entry traces direct materials, direct labor and manufacturing overhead costs onto the income statement:

Accepted Answer

A)  Finished Goods xxx Work in Process xxx 
B)  Raw Materials xxx Accounts Payable xxx 
C)  Costs of Goods Sold xxx Finished Goods xxx 
D)  Work in Process xxx Raw Materials xxx 
A)  Finished Goods xxx Work in Process xxx 
B)  Raw Materials xxx Accounts Payable xxx 
C)  Costs of Goods Sold xxx Finished Goods xxx 
D)  Work in Process xxx Raw Materials xxx

Question 17

When materials are requisitioned from raw materials inventory, the journal entry includes:

Accepted Answer

A)  A debit to Work-in-Process Inventory or Manufacturing Overhead 
B)  A debit to Work-in-Process Inventory only 
C)  A debit to Raw Materials Inventory 
D)  A debit to Manufacturing Overhead only 
A)  A debit to Work-in-Process Inventory or Manufacturing Overhead 
B)  A debit to Work-in-Process Inventory only 
C)  A debit to Raw Materials Inventory 
D)  A debit to Manufacturing Overhead only

Question 18

What type of transaction is represented in the following entry?

Accepted Answer

A)  Materials were purchased 
B)  Direct materials were requisitioned for the production department 
C)  Direct labor costs were incurred 
D)  Indirect materials were requisitioned for the production department 
A)  Materials were purchased 
B)  Direct materials were requisitioned for the production department 
C)  Direct labor costs were incurred 
D)  Indirect materials were requisitioned for the production department

Question 19

Exhibit 16-3 Garret Manufacturing Company's accounting records reflect the following inventories:
  
-During 2012, $75,000 of raw materials were purchased, direct labor costs amounted to $90,000, and manufacturing overhead incurred was $120,000.
Refer to Exhibit 16-3. Garret Manufacturing Company's cost of goods sold for the year 2012 is:

Accepted Answer

A)  $201,000 
B)  $219,000 
C)  $231,000 
D)  $279,000 
A)  $201,000 
B)  $219,000 
C)  $231,000 
D)  $279,000

Question 20

The formula for the predetermined overhead rate is:

Accepted Answer

A)  Applied overhead ¸ actual overhead 
B)  Estimated overhead ¸ estimated activity level 
C)  Actual overhead ¸ estimated overhead 
D)  Actual overhead ¸ actual activity level 
A)  Applied overhead ¸ actual overhead 
B)  Estimated overhead ¸ estimated activity level 
C)  Actual overhead ¸ estimated overhead 
D)  Actual overhead ¸ actual activity level

Exam 16: Cost Flows and Business Organizations

In a service firm, overhead is generally assigned to services on an activity measure such as:

Which of the following costs would NOT be classified as a product cost?

If direct labor time is charged to the wrong job number, that job will:

Rex Company's manufacturing overhead was overapplied by $10,000 in July. Estimated overhead was $755,000, and actual overhead was $752,000. The amount of overhead applied for May was:

Work-in-Process Inventory is debited when:

The last department in a production process shows the following information at the end of the period: How many units have been transferred to finished goods during the period?

Seven Peaks Inc. produces German sausage. The company uses process costing. All raw materials are added at the beginning of the mixing process. The following information relates to July operations and the work-in-process inventory account for Seven Peaks' final processing department:

Information on a production cost report is used to transfer costs and units of output from one manufacturing center to another in a(n):

The amount of manufacturing overhead predicted for the next period is known as:

Department 1 of a two-department production process shows: How many units were transferred to Department 2?

California Company uses a predetermined overhead rate of $3.50 per machine hour based on an estimate of 50,000 machine hours for the year. The estimated manufacturing overhead cost for the period for The Club is:

In process cost accounting:

The following information is taken from the records of Minnesota Company for the year ended January 31, 2012: The amount of beginning work-in-process inventory is:

For June 2012, Mitsumi Exports' beginning work-in-process inventory is $1,000, ending work-in-process inventory is $3,000, and cost of goods manufactured is $34,000. What are the total manufacturing costs for June?

Which entry traces direct materials, direct labor and manufacturing overhead costs onto the income statement:

When materials are requisitioned from raw materials inventory, the journal entry includes:

What type of transaction is represented in the following entry?

The formula for the predetermined overhead rate is:

Accounting Information: Users and Uses

Financial Statements: An Overview

The Accounting Cycle: The Mechanics of Accounting

Completing the Accounting Cycle

Internal Controls: Ensuring the Integrity of Financial Information

Receivables: Selling a Product or a Service

Inventory and the Cost of Sales

Completing the Operating Cycle

Investments: Property, Plant, and Equipment and Intangible Assets

Financing: Long-Term Liabilities

Financing: Equity

Investments: Debt and Equity Securities

Statement of Cash Flows

Analyzing Financial Statements

Management Accounting and Cost Concepts

Activity-Based Costing

Budgeting and Control

Controlling Cost and Profit

Inventory Management and Variable and Absorption Costing

Cost Behavior and Decisions Using C-V-P Analysis

Relevant Information and Decisions

Capital Investment Decisions

New Measures of Performance

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