Question 1

Which of the following is not a product cost?

Accepted Answer

A)  direct materials. 
B)  sales and administrative expenses. 
C)  direct labor. 
D)  factory overhead. 
A)  direct materials. 
B)  sales and administrative expenses. 
C)  direct labor. 
D)  factory overhead.

Question 2

A manufacturing business converts materials into finished products through the use of machinery and labor.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a characteristic of the just-in-time philosophy?

Accepted Answer

A)  Increases inventory to protect against process problems 
B)  Tolerates defects 
C)  Emphasizes push manufacturing 
D)  Emphasizes product-oriented layout 
A)  Increases inventory to protect against process problems 
B)  Tolerates defects 
C)  Emphasizes push manufacturing 
D)  Emphasizes product-oriented layout

Question 4

In response to materials requisition, materials are transferred from the storeroom to the factory.

Accepted Answer

A) True 
 B)False

Question 5

If the cost of direct materials is not a significant portion of the total product cost, it may be classified as:

Accepted Answer

A)  direct labor costs. 
B)  selling and administrative costs. 
C)  miscellaneous costs. 
D)  factory overhead costs. 
A)  direct labor costs. 
B)  selling and administrative costs. 
C)  miscellaneous costs. 
D)  factory overhead costs.

Question 6

For Peterson Company, total overhead applied was $35,000,000 at the end of the year. Actual overhead was $35,800,000. Closing over/under applied overhead into cost of goods sold would cause net income to:

Accepted Answer

A)  increase by $800,000. 
B)  decrease by $800,000. 
C)  stay the same. 
D)  decrease by $200,000. 
A)  increase by $800,000. 
B)  decrease by $800,000. 
C)  stay the same. 
D)  decrease by $200,000.

Question 7

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the Materials account to:

Accepted Answer

A)  Work-in-Process and Cost of Goods Sold. 
B)  Work-in-Process and Factory Overhead. 
C)  Finished Goods and Cost of Goods Sold. 
D)  Work-in-Process and Finished Goods. 
A)  Work-in-Process and Cost of Goods Sold. 
B)  Work-in-Process and Factory Overhead. 
C)  Finished Goods and Cost of Goods Sold. 
D)  Work-in-Process and Finished Goods.

Question 8

The following information is available for the first month of operations of Deer Inc., a manufacturer of sports apparel:
 $\begin{array}{ll}
\$ 1,500,000 & \text { Sales } \
410,000 & \text { Gross profit } \
125,000 & \text { Indirect labor } \
30,000 & \text { Indirect materials } \
415,000 & \text { Other factory overhead } \
700,000 & \text { Materials purchased } \
1,600,000 & \text { Total manufacturing costs for the period } \
35,000 & \text { Materials inventory, end of period }
\end{array}$ Using the given information, determine the following:
a. Cost of goods sold
b. Direct materials cost
c. Direct labor cost

Accepted Answer

a. $1,090,000 ($1,500,000 - $4

Question 9

Conversion cost is the combination of direct labor cost and factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following techniques is used by just-in-time manufacturing?

Accepted Answer

A)  It provides specialized training so that employees only do one task and work individually to improve efficiencies in the department. 
B)  It organizes the plant in such a way as to reduce product movement from station to station. 
C)  It encourages management to make all operating decisions regarding the manufacturing process rather than the line employees in order to streamline the process. 
D)  It emphasizes push manufacturing. 
A)  It provides specialized training so that employees only do one task and work individually to improve efficiencies in the department. 
B)  It organizes the plant in such a way as to reduce product movement from station to station. 
C)  It encourages management to make all operating decisions regarding the manufacturing process rather than the line employees in order to streamline the process. 
D)  It emphasizes push manufacturing.

Question 11

The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 12

The summary of the time tickets at the end of each month is the basis for recording the direct and indirect labor costs incurred in production.

Accepted Answer

A) True 
 B)False

Question 13

In a job order cost system, materials and supply costs for a service business are normally included as part of overhead cost.

Accepted Answer

A) True 
 B)False

Question 14

For a construction contractor, the wages of carpenters would be classified as direct labor cost.

Accepted Answer

A) True 
 B)False

Question 15

Applying of factory overhead costs to jobs would decrease:

Accepted Answer

A)  Factory Overhead. 
B)  Wages Payable. 
C)  Work-in-Process. 
D)  Cost of Goods Sold. 
A)  Factory Overhead. 
B)  Wages Payable. 
C)  Work-in-Process. 
D)  Cost of Goods Sold.

Question 16

An activity-based costing system allocates factory overhead rates to products or services using:

Accepted Answer

A)  a single plantwide overhead rate. 
B)  the cost of activities based on an activity rate times the number of activity-based usage quantities. 
C)  an allocation of budgeted revenues produced by a product or service. 
D)  an end-of-year allocation of costs to products or services. 
A)  a single plantwide overhead rate. 
B)  the cost of activities based on an activity rate times the number of activity-based usage quantities. 
C)  an allocation of budgeted revenues produced by a product or service. 
D)  an end-of-year allocation of costs to products or services.

Question 17

Which of the following would be a period costs for a textbooks printing company?

Accepted Answer

A)  Wages of a press operator 
B)  Utility costs of the factory 
C)  Advertising expenses 
D)  Paper costs 
A)  Wages of a press operator 
B)  Utility costs of the factory 
C)  Advertising expenses 
D)  Paper costs

Question 18

The cost of wages paid to employees directly involved in the manufacturing process of converting materials into finished product is classified as:

Accepted Answer

A)  factory overhead cost. 
B)  direct labor cost. 
C)  wages expense. 
D)  direct materials cost. 
A)  factory overhead cost. 
B)  direct labor cost. 
C)  wages expense. 
D)  direct materials cost.

Question 19

Use the correct number to designate each item below:
1) direct materials
2) selling and administrative expenses
3) factory overhead
4) direct labor

Accepted Answer

The answer of Use the correct number to designate each...

Question 20

If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as factory overhead cost.

Accepted Answer

A) True 
 B)False

Which of the following is not a product cost?

A manufacturing business converts materials into finished products through the use of machinery and labor.

Which of the following is a characteristic of the just-in-time philosophy?

In response to materials requisition, materials are transferred from the storeroom to the factory.

If the cost of direct materials is not a significant portion of the total product cost, it may be classified as:

For Peterson Company, total overhead applied was $35,000,000 at the end of the year. Actual overhead was $35,800,000. Closing over/under applied overhead into cost of goods sold would cause net income to:

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the Materials account to:

Conversion cost is the combination of direct labor cost and factory overhead cost.

Which of the following techniques is used by just-in-time manufacturing?

The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost.

The summary of the time tickets at the end of each month is the basis for recording the direct and indirect labor costs incurred in production.

In a job order cost system, materials and supply costs for a service business are normally included as part of overhead cost.

For a construction contractor, the wages of carpenters would be classified as direct labor cost.

Applying of factory overhead costs to jobs would decrease:

An activity-based costing system allocates factory overhead rates to products or services using:

Which of the following would be a period costs for a textbooks printing company?

The cost of wages paid to employees directly involved in the manufacturing process of converting materials into finished product is classified as:

Use the correct number to designate each item below: 1) direct materials 2) selling and administrative expenses 3) factory overhead 4) direct labor

If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as factory overhead cost.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

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Exam 10: Accounting Systems for Manufacturing Businesses

Which of the following is not a product cost?

A manufacturing business converts materials into finished products through the use of machinery and labor.

Which of the following is a characteristic of the just-in-time philosophy?

In response to materials requisition, materials are transferred from the storeroom to the factory.

If the cost of direct materials is not a significant portion of the total product cost, it may be classified as:

For Peterson Company, total overhead applied was $35,000,000 at the end of the year. Actual overhead was $35,800,000. Closing over/under applied overhead into cost of goods sold would cause net income to:

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the Materials account to:

Conversion cost is the combination of direct labor cost and factory overhead cost.

Which of the following techniques is used by just-in-time manufacturing?

The cost of a manufactured product generally consists of direct materials cost, direct labor cost, and factory overhead cost.

The summary of the time tickets at the end of each month is the basis for recording the direct and indirect labor costs incurred in production.

In a job order cost system, materials and supply costs for a service business are normally included as part of overhead cost.

For a construction contractor, the wages of carpenters would be classified as direct labor cost.

Applying of factory overhead costs to jobs would decrease:

An activity-based costing system allocates factory overhead rates to products or services using:

Which of the following would be a period costs for a textbooks printing company?

The cost of wages paid to employees directly involved in the manufacturing process of converting materials into finished product is classified as:

Use the correct number to designate each item below: 1) direct materials 2) selling and administrative expenses 3) factory overhead 4) direct labor

If the cost of employee wages is not a significant portion of the total product cost, the wages are classified as factory overhead cost.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters