Question 1

An indirect cost can be easily traced to a cost object.

Accepted Answer

A) True 
 B)False

Question 2

Parker Company manufactures tables.If raw material used was $80,000 and Raw Material Inventory at the beginning and end of the period,respectively,was $17,000 and $21,000,what was amount of raw material was purchased?

Accepted Answer

A) $76,000 
B) $118,000 
C) $84,000 
D) $101,000

Question 3

The Lakeview Corporation had the following account balances:

Raw Material	Manufacturing Overhead	?	385,000	?
Bal. 1/1	30,000
	420,000
Bal. 12/31	60,000

Work in Process	Factory Wages Payable
Bal. 1/1 Direct material	70,000 320,000	810,000	179,000	Bal.1/1	10,000 175,000
Direct labor	11,000
Overhead	400,000			Bal. 12/31	6,000
Bal. 12/31	?

Finished Goods	Cost of Goods Sold	?	?
Bal. 1/1	40,000
	?

Bal. 12/31	130,000

Required: a.What was the cost of raw material put into production during the year? b.How much of the material from question 1 consisted of indirect material? c.How much of the factory labor cost for the year consisted of indirect labor? d.What was the cost of goods manufactured for the year? e.What was the cost of goods sold for the year (before considering under- or overapplied overhead)? f.If overhead is applied to production on the basis of direct material, what rate was in effect during the year? g.Was manufacturing overhead under- or overapplied? By how much? h.Compute the ending balance in the Work in Process Inventory account. Assume that this balance consists entirely of goods started during the year. If $32,000 of this balance is direct material cost, how much of it is direct labor cost? Manufacturing overhead cost?

Accepted Answer

The answer of The Lakeview Corporation had the following account...

Question 4

A cost that shifts upward or downward when activity changes by a certain interval is referred to as a step cost.

Accepted Answer

A) True 
 B)False

Question 5

Wyman Enterprises
Inventories:  March 1   March 31 Raw material $18,000 $15,000  Work in process 9,000 6,000    Finished goods  27,000 36,000   Additional information for March:     Raw material purchased $42,000   Direct labor payroll  $30,000     Direct labor rate per hour  $ 7.50     Overhead rate per direct labor hour $ 10.00 
Refer to Wyman Enterprises.For March,Cost of Goods Manufactured was

Accepted Answer

A) $118,000. 
B) $115,000. 
C) $112,000. 
D) $109,000.

Question 6

Richards Company
The following information has been taken from the cost records of Richards Company for the past year:
Raw material used in production                                                $326
Total manufacturing costs charged to production during            686
the year (includes direct material, direct labor, and
 overhead equal to 60% of direct labor cost)
Cost of goods available for sale                                                  826
Selling and Administrative expenses                                           25
Inventories
BeginingEnding    Raw material  75 $85   Work in process80 30 Finished goods90110
Refer to Richards Company.Direct labor cost charged to production during the year was

Accepted Answer

A) $135. 
B) $216. 
C) $225. 
D) $360.

Question 7

The formula to compute cost of goods manufactured is

Accepted Answer

A) beginning Work in Process Inventory plus purchases of raw material minus ending Work in Process Inventory. 
B) beginning Work in Process Inventory plus direct labor plus direct material used plus overhead incurred minus ending Work in Process Inventory. 
C) direct material used plus direct labor plus overhead incurred. 
D) direct material used plus direct labor plus overhead incurred plus beginning Work in Process Inventory.

Question 8

Hunnicutt Company is a construction company that builds greenhouses on special request.What is the proper classification of the cost of the cement building slab used?
Direct           Fixed

Accepted Answer

A) no no 
B) no yes 
C) yes yes 
D) yes no

Question 9

The following information is for the Bayway Manufacturing Company for November.

Raw Material	Manufacturing Overhead	?	385,000	?
Bal. 1/1	30,000
	420,000
Bal. 12/31	60,000

Direct Labor (21,000 DLH @ $13)
Raw Material Purchases	$120,000	Insurance-Office	2,570
Indirect Labor	11,200	Office Supplies Expense	900
Factory Supplies Used	350	Insurance-Factory	1,770
Other Expenses:		Depr. Office Equipment	3,500
Depr.-Factory Equipment	17,300	Repair/Maintenance-Factory	7,400

Prepare in good form a Statement of Cost of Goods Manufactured and Statement of Cost of Goods Sold.

Accepted Answer

The answer of The following information is for the Bayway...

Question 10

List and explain three types of quality costs.

Accepted Answer

The answer of List and explain three types of quality...

Question 11

Which of the following costs would be considered overhead in the production of chocolate chip cookies?

Accepted Answer

A) flour 
B) chocolate chips 
C) sugar 
D) oven electricity

Question 12

Wyman Enterprises
Inventories:  March 1   March 31 Raw material $18,000 $15,000  Work in process 9,000 6,000    Finished goods  27,000 36,000   Additional information for March:     Raw material purchased $42,000   Direct labor payroll  $30,000     Direct labor rate per hour  $ 7.50     Overhead rate per direct labor hour $ 10.00 
Refer to Wyman Enterprises.For March,prime cost incurred was

Accepted Answer

A) $75,000. 
B) $69,000. 
C) $45,000. 
D) $39,000.

Question 13

A cost object is anything for which management wants to collect or accumulate costs.

Accepted Answer

A) True 
 B)False

Question 14

The portion of an asset's value on the balance sheet is referred to as an expired cost.

Accepted Answer

A) True 
 B)False

Question 15

Given the following information for Simpson Corporation,prepare the necessary journal entries,assuming that the Raw Material Inventory account contains both direct and indirect material.
a.	Purchased raw material on account $28,500.
b.	Put material into production: $15,000 of direct material and $3,000 of indirect material.
c.	Accrued payroll of $90,000, of which 70 percent was direct and the remainder was indirect.
d.	Incurred and paid other overhead items of $36,000.
e.	Transferred items costing $86,500 to finished goods.
f.	Sold goods costing $71,300 on account for $124,700.

Accepted Answer

The answer of Given the following information for Simpson Corporation,prepare...

Question 16

A specific product cannot be a cost object.

Accepted Answer

A) True 
 B)False

Question 17

Period costs include
distribution costs          outside processing costs        sales commissions

Accepted Answer

A) yes no yes 
B) no yes yes 
C) no no no 
D) yes yes yes

Question 18

Stayton Enterprises
Inventories:  April 1   April 30 Raw material $20,000 $17,000  Work in process 12,000 8,000    Finished goods  30,000 39,000   Additional information for March:     Raw material purchased $45,000   Direct labor payroll  $36,000     Direct labor rate per hour  $ 8.00     Overhead rate per direct labor hour $ 10.00 
Refer to Stayton Enterprises.For April,prime cost incurred was

Accepted Answer

A) $78,000. 
B) $84,000 
C) $51,000. 
D) $45,000.

Question 19

In an actual cost system,overhead is assigned to Work in Process Inventory with a credit entry to the account.

Accepted Answer

A) True 
 B)False

Question 20

A cost that shifts upward or downward when activity changes by a certain interval is referred to as a ____________________ cost.

Accepted Answer

The answer of A cost that shifts upward or downward...

Inventories:	March 1	March 31
Raw material	$18,000	$15,000
Work in process	9,000	6,000
Finished goods	27,000	36,000
Additional information for March:
Raw material purchased	$42,000
Direct labor payroll	$30,000
Direct labor rate per hour	$ 7.50
Overhead rate per direct labor hour	$ 10.00

Inventories	Begining	Ending
Raw material	$17,400	$13,200
Work in process	31,150	28,975
Finished goods	19,200	25,500

Inventories:	April 1	April 30
Raw material	$20,000	$17,000
Work in process	12,000	8,000
Finished goods	30,000	39,000
Additional information for March:
Raw material purchased	$45,000
Direct labor payroll	$36,000
Direct labor rate per hour	$ 8.00
Overhead rate per direct labor hour	$ 10.00

Exam 2: Cost Terminology and Cost Behaviors

An indirect cost can be easily traced to a cost object.

Parker Company manufactures tables.If raw material used was $80,000 and Raw Material Inventory at the beginning and end of the period,respectively,was $17,000 and $21,000,what was amount of raw material was purchased?

A cost that shifts upward or downward when activity changes by a certain interval is referred to as a step cost.

The formula to compute cost of goods manufactured is

Hunnicutt Company is a construction company that builds greenhouses on special request.What is the proper classification of the cost of the cement building slab used? Direct Fixed

List and explain three types of quality costs.

Which of the following costs would be considered overhead in the production of chocolate chip cookies?

A cost object is anything for which management wants to collect or accumulate costs.

The portion of an asset's value on the balance sheet is referred to as an expired cost.

A specific product cannot be a cost object.

Period costs include distribution costs outside processing costs sales commissions

In an actual cost system,overhead is assigned to Work in Process Inventory with a credit entry to the account.

A cost that shifts upward or downward when activity changes by a certain interval is referred to as a ____________________ cost.