Question 1

Product costs that transfer out of finished goods are called:

Accepted Answer

A)  work-in-process. 
B)  cost of goods manufactured. 
C)  cost of goods sold. 
D)  period costs. 
A)  work-in-process. 
B)  cost of goods manufactured. 
C)  cost of goods sold. 
D)  period costs.

Question 2

Pearce Manufacturing Inc.incurred the following costs in February:
 $\begin{array}{lrll}
\text { Direct labour } & \$ 40000 & \text { Advertising costs } & \$ 1000 \
\text { Indirect labour } & 15000 & \text { Factory rent } & 4000 \
\text { Administrative salaries } & 8000 & \text { Factory depreciation } &2000\
\text { Raw materials purchased } & 10000 & \text { Administrative rent }&3000 \
\text { Indirect materials used } & 4000 & \text { Administrative depreciation } & 1000
\end{array}$
 
In addition,the following information is also available:
 $\begin{array}{c}
\begin{array}{l}
\
 \text { Raw materials }\
 \text { Work-in-process }\
 \text { Finished goods}\
\
 \text { Number of units produced}\
 \text { Number of units sold}\
 \text {   (sales price of $ \$ 25 $ per unit) }\
\end{array}
\begin{array}{rr}
\underline{\text { Beginning} } &\underline{ \text { Ending }}\
\$ 2000 & \$ 4000 \
25000 & 18000 \
4000 & 12000 \
\
& 10000 \text { units } \
\
& 9000 \text { units }
\end{array}
\end{array}$

Required:
 A. Calculate total period costs.
B. Calculate raw materials used.
C. Calculate cost of goods manufactured.
D. Calculate the product cost per unit.
E. Calculate cost of goods sold.
F. Calculate net income. (ignore taxes)

Accepted Answer

A. Total period costs @#LAT-DLM& d00 @#LAT-DLM&
B.

Question 3

A 'manufacturing cell' is defined as:

Accepted Answer

A)  grouping of all the machinery and equipment that are needed to make a product being available in one area of the factory. 
B)  restructuring of the factory so that the companies are able to manufacture products quickly. 
C)  an area in the warehouse where similar raw materials are grouped together. 
D)  grouping of all the factories that are engaged in manufacturing similar products. 
A)  grouping of all the machinery and equipment that are needed to make a product being available in one area of the factory. 
B)  restructuring of the factory so that the companies are able to manufacture products quickly. 
C)  an area in the warehouse where similar raw materials are grouped together. 
D)  grouping of all the factories that are engaged in manufacturing similar products.

Question 4

Which of the following is a product cost?

Accepted Answer

A)  Insurance on factory machinery 
B)  Insurance on delivery trucks 
C)  Lease expense on office computer 
D)  Advertising costs 
A)  Insurance on factory machinery 
B)  Insurance on delivery trucks 
C)  Lease expense on office computer 
D)  Advertising costs

Question 5

Which of the following is an advantage of lean production and just-in-time (JIT)manufacturing systems?

Accepted Answer

A)  Deliver the product to the customer on time,even if the workers go on a strike. 
B)  Improved product quality and reduced processing time. 
C)  Reduced reliance on highly skilled employees 
D)  Increased reliance on few suppliers. 
A)  Deliver the product to the customer on time,even if the workers go on a strike. 
B)  Improved product quality and reduced processing time. 
C)  Reduced reliance on highly skilled employees 
D)  Increased reliance on few suppliers.

Question 6

Franklin Street Manufacturing has the following cost information available for 2009:
$\begin{array}{lr}
\text { Direct materials used } & \$ 10000 \
\text { Direct labour costs } & 25000 \
\text { Factory overhead } & 20000 \
\text { Marketing expenses } & 4000 \
\text { Administrative expenses } & 6000
\end{array}$

20 000 units were produced during the year out of which 19 000 units were sold for $10 each.
-What is net income for 2009?

Accepted Answer

A)  $127 750 
B)  $137 750 
C)  $125 000 
D)  $128 250 
A)  $127 750 
B)  $137 750 
C)  $125 000 
D)  $128 250

Question 7

Which of the following types of organisations is most likely to have a raw materials inventory account?

Accepted Answer

A)  A retailer 
B)  A manufacturer 
C)  A service provider 
D)  A government unit 
A)  A retailer 
B)  A manufacturer 
C)  A service provider 
D)  A government unit

Question 8

Nate’s Novelties, Inc. has the following information available for July:
$\begin{array}{c}
\begin{array}{l}
 \text {Raw materials inventory }\
 \text {Work-in-process inventory}\
 \text { Finished goods inventory}\
\
 \text {Raw materials purchased}\
 \text {Direct labour costs}\
 \text { Overhead costs}\
\end{array}
\begin{array}{rr}
\$ 12000 & \$ 9000 \
35000 & 20000 \
20000 & 44000 \
& \
& \$ 25000 \
& 55000 \
& 35000
\end{array}
\end{array}$
 
-Cost of goods sold for July is:

Accepted Answer

A)  $106 000 
B)  $157 000 
C)  $129 000 
D)  $109 000 
A)  $106 000 
B)  $157 000 
C)  $129 000 
D)  $109 000

Question 9

Hillsborough Street Manufacturing Inc. incurred the following costs in 2009:
$$\begin{array} { l r } 
\text { Direct materials used } & \$ 37000 \
\text { Direct labour costs } & 45000 \
\text { Factory rent and utilities } & 18000 \
\text { Factory equipment depreciation } & 10000 \
\text { Marketing expenses } & 3000 \
\text { Administrative expenses } & 9000
\end{array}$$
50 000 units were produced during the year out of which 40 000 units were sold for $10 each. There was no beginning or ending raw materials or work-in-process inventory.
-What is net income for the year?

Accepted Answer

A)  $278 000 
B)  $312 000 
C)  $378 000 
D)  $300 000 
A)  $278 000 
B)  $312 000 
C)  $378 000 
D)  $300 000

Question 10

Which of the following statements is true about manufacturing companies over the past 20 years?

Accepted Answer

A)  The grouping of machines into 'manufacturing cells' has increased. 
B)  Carrying large amounts of inventory is often less costly than carrying small amounts of inventory. 
C)  They have moved from a 'pull' approach to more of a 'push' approach. 
D)  The basic production process has changed very little over the past 20 years. 
A)  The grouping of machines into 'manufacturing cells' has increased. 
B)  Carrying large amounts of inventory is often less costly than carrying small amounts of inventory. 
C)  They have moved from a 'pull' approach to more of a 'push' approach. 
D)  The basic production process has changed very little over the past 20 years.

Question 11

Which of the following is a disadvantage of lean production and just-in-time (JIT)manufacturing systems?

Accepted Answer

A)  Increased customer delivery time 
B)  Increased product defects 
C)  Decreased flexibility of manufacturing facilities 
D)  Increased reliance on fewer suppliers 
A)  Increased customer delivery time 
B)  Increased product defects 
C)  Decreased flexibility of manufacturing facilities 
D)  Increased reliance on fewer suppliers

Question 12

Johnson Manufacturing has the following selected information available for the year:
$\begin{array}{lr}
  \text { Direct material purchased } &\$40000\
 \text { Direct material used } &45000\
 \text { Direct labour incurred } &75000\
 \text {Manufacturing overhead incurred  } &50000\
 \text {  Cost of goods manufactured} &100000\
\end{array}$

In addition,the cost of the finished goods inventory increased by $10 000 from the beginning to the end of the year.Cost of goods sold for the year is:

Accepted Answer

A)  $ 80 000 
B)  $170 000 
C)  $ 90 000 
D)  $110 000 
A)  $ 80 000 
B)  $170 000 
C)  $ 90 000 
D)  $110 000

Question 13

Which of the following is not an example of manufacturing overhead costs?

Accepted Answer

A)  Fringe benefits paid to assembly-line workers 
B)  Depreciation of factory machinery 
C)  Overtime pay to factory supervisors 
D)  Insurance on factory machinery 
A)  Fringe benefits paid to assembly-line workers 
B)  Depreciation of factory machinery 
C)  Overtime pay to factory supervisors 
D)  Insurance on factory machinery

Question 14

Lean production is focused on eliminating waste associated with all of the following except:

Accepted Answer

A)  moving products farther than required. 
B)  down time caused by people waiting for work to do. 
C)  providing excessive customer service. 
D)  over-processing a product. 
A)  moving products farther than required. 
B)  down time caused by people waiting for work to do. 
C)  providing excessive customer service. 
D)  over-processing a product.

Question 15

Manufacturing costs typically consist of:

Accepted Answer

A)  direct materials,direct labour,and administrative costs. 
B)  production and shipping costs. 
C)  direct materials,direct labour,and manufacturing overhead. 
D)  manufacturing overhead and selling costs. 
A)  direct materials,direct labour,and administrative costs. 
B)  production and shipping costs. 
C)  direct materials,direct labour,and manufacturing overhead. 
D)  manufacturing overhead and selling costs.

Question 16

Product costs that transfer into finished goods inventory are called:

Accepted Answer

A)  cost of goods manufactured. 
B)  cost of goods sold. 
C)  period costs. 
D)  raw materials used. 
A)  cost of goods manufactured. 
B)  cost of goods sold. 
C)  period costs. 
D)  raw materials used.

Question 17

A traditional manufacturing environment does not have which of the following?

Accepted Answer

A)  An automated production process 
B)  Trained employees 
C)  Extremely low levels of work-in-process inventory 
D)  Product cost information available 
A)  An automated production process 
B)  Trained employees 
C)  Extremely low levels of work-in-process inventory 
D)  Product cost information available

Question 18

Hudson Inc. has the following information available for September:
$\begin{array}{c}
\begin{array}{l}
\
 \text { Raw materials }\
 \text { Work-in-process }\
 \text { Finished goods}\
\
 \text { Raw materials purchased}\
 \text { Direct labour costs}\
 \text { Manufacturing overhead costs}\
 \text { Administrative costs}\
 \text { Marketing costs}\

\end{array}
\begin{array}{rr}
\underline{\text { Beginning} } &\underline{ \text { Ending }}\
8000 & \$ 5000 \
30000 & 40000 \
7000 & 3000 \
\
& 25000 \
& 70000 \
& 30000 \
& 12000 \
& 6000

\end{array}
\end{array}$

-Sales revenue for September totalled $400 000.Net income for September is:

Accepted Answer

A)  $257 000 
B)  $260 000 
C)  $264 000 
D)  $278 000 
A)  $257 000 
B)  $260 000 
C)  $264 000 
D)  $278 000

Question 19

Jones Manufacturing Inc. incurred the following costs in November:
$$\begin{array} { l r l r } 
\text { Direct labour } & \$ 50000 & \text { Advertising costs } & \$ 33000 \
\text { Indirect labour } & 20000 & \text { Factory rent } & 10000 \
\text { Administrative salaries } & 25000 & \text { Factory depreciation } & 6000 \
\text { Direct materials purchased } & 23000 & \text { Administrative rent } & 5000 \
\text { Indirect materials used } & 4000 & \text { Administrative depreciation } & 7000
\end{array}$$
In addition, the following information is also available:
$\begin{array}{c}
\begin{array}{l}
\
 \text { Raw materials }\
 \text { Work-in-process }\
 \text { Finished goods}\
\
 \text { Number of units produced }\
 \text {Number of units sold}\
 \text {  (sales price of $ \$ 25 $ per unit)}\
\end{array}
\begin{array}{rr}
\underline{\text { Beginning} } &\underline{ \text { Ending }}\
\$ 5000 & \$ 8000 \
60000 & 55000 \
17250 & 9200 \
& \
& 20000 \text { units } \
\
& 21400 \text { units }
\end{array}
\end{array}$

-Net income for November is: (ignore taxes)

Accepted Answer

A)  $371 950 
B)  $411 950 
C)  $369 150 
D)  $382 000 
A)  $371 950 
B)  $411 950 
C)  $369 150 
D)  $382 000

Question 20

Which of the following decreases the work-in-process account?

Accepted Answer

A)  Raw materials used 
B)  Cost of goods manufactured 
C)  Direct labour 
D)  Manufacturing overhead 
A)  Raw materials used 
B)  Cost of goods manufactured 
C)  Direct labour 
D)  Manufacturing overhead

Product costs that transfer out of finished goods are called:

A 'manufacturing cell' is defined as:

Which of the following is a product cost?

Which of the following is an advantage of lean production and just-in-time (JIT)manufacturing systems?

Which of the following types of organisations is most likely to have a raw materials inventory account?

Nate’s Novelties, Inc. has the following information available for July: Raw materials inventory Work-in-process inventory Finished goods inventory Raw materials purchased Direct labour costs Overhead costs \ 12000 \ 9000 35000 20000 20000 44000 \ 25000 55000 35000 -Cost of goods sold for July is:

Which of the following statements is true about manufacturing companies over the past 20 years?

Which of the following is a disadvantage of lean production and just-in-time (JIT)manufacturing systems?

Which of the following is not an example of manufacturing overhead costs?

Lean production is focused on eliminating waste associated with all of the following except:

Manufacturing costs typically consist of:

Product costs that transfer into finished goods inventory are called:

A traditional manufacturing environment does not have which of the following?

Which of the following decreases the work-in-process account?

Introduction to Managerial Accounting

Cost Behaviour

Job Costing and Overhead Costing Systems

Process Costing Systems

Service and Operations Costing

Departmental Overhead Costing

Activity-Based Costing

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investmentdecisions

Fixed and Rolling Budgets for Planning and Decision Making

Management Accounting for Cost Control and Performance Evaluation Flexible Budgets and Variance Analysis

Decentralisation and Modern Performance Management Systems the Balanced Scorecard

Accounting for Sustainability Social Reporting,environmental Reporting and Management Accounting

Filters

Exam 2: Product Costing: Manufacturing Processes, cost Terminology and Cost Flows

Product costs that transfer out of finished goods are called:

A 'manufacturing cell' is defined as:

Which of the following is a product cost?

Which of the following is an advantage of lean production and just-in-time (JIT)manufacturing systems?

Which of the following types of organisations is most likely to have a raw materials inventory account?

Which of the following statements is true about manufacturing companies over the past 20 years?

Which of the following is a disadvantage of lean production and just-in-time (JIT)manufacturing systems?

Which of the following is not an example of manufacturing overhead costs?

Lean production is focused on eliminating waste associated with all of the following except:

Manufacturing costs typically consist of:

Product costs that transfer into finished goods inventory are called:

A traditional manufacturing environment does not have which of the following?

Which of the following decreases the work-in-process account?

Introduction to Managerial Accounting

Cost Behaviour

Job Costing and Overhead Costing Systems

Process Costing Systems

Service and Operations Costing

Departmental Overhead Costing

Activity-Based Costing

Cost-Volume-Profit Analysis

Relevant Costs and Product Planning Decisions

Long-Term Capital Investmentdecisions

Fixed and Rolling Budgets for Planning and Decision Making

Management Accounting for Cost Control and Performance Evaluation Flexible Budgets and Variance Analysis

Decentralisation and Modern Performance Management Systems the Balanced Scorecard

Accounting for Sustainability Social Reporting,environmental Reporting and Management Accounting

Filters