Test Bank for Introduction to Managerial Accounting 7th Edition by Brewer by TBtutors

Type:

Test Bank

Resource:

Introduction to Managerial Accounting

Edition:

7th Edition

Author(s):

Peter Brewer Ray Garrison Eric Noreen

TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 1) Managers carry out three major activities: planning, implementation, and control. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-02 Strategy Topic : 01-03 Planning Topic : 01-04 Implementation Topic : 01-05 Control Source : Chapter 01 Test Bank > TB 01-01 Managers carry out three major activities: p...

2) The theory of constraint (TOC) framework focuses on effectively managing constraints as

the key to success. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-24 The Theory of Constraints Source : Chapter 01 Test Bank > TB 01-02 The theory of constraint (TOC) framework foc...

3) Managerial Accounting reports are prepared for external users while Financial Accounting

reports are prepared for internal users. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-06 Financial and Managerial Accounting Topic : 01-07 For the Managers Source : Chapter 01 Test Bank > TB 01-03 Managerial Accounting reports are prepared f...

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4) Merchandising firms largely refer to retail and wholesale outlets that buy goods from

suppliers and resell them to customers. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-01 The Management Cycle and the Need for Managerial Accounting Information Source : Chapter 01 Test Bank > TB 01-04 Merchandising firms largely refer to retail ...

5) Merchandising and manufacturing firms generate revenue by selling products. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-01 The Management Cycle and the Need for Managerial Accounting Information Source : Chapter 01 Test Bank > TB 01-05 Merchandising and manufacturing firms genera...

6) Service firms do not sell any products but generate revenues by offering one or more types of

services. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-01 The Management Cycle and the Need for Managerial Accounting Information Source : Chapter 01 Test Bank > TB 01-06 Service firms do not sell any products but g...

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7) Managers assign tasks to employees, arbitrate disputes, answer questions, solve on the spot

problems, and make many decisions that affect customers and employees, which in turn, will likely influence future financial and nonfinancial performance. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-04 Implementation Source : Chapter 01 Test Bank > TB 01-07 Managers assign tasks to employees, arbitrat...

8) Planning involves selecting a course of action and specifying how the action will be

implemented. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-03 Planning Source : Chapter 01 Test Bank > TB 01-08 Planning involves selecting a course of acti...

9) Control involves the process of instituting procedures and then obtaining feedback to ensure

that all parts of the organization are functioning effectively and moving toward overall company goals. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-05 Control Source : Chapter 01 Test Bank > TB 01-09 Control involves the process of instituting ...

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10) Strategy pertains to the general direction in which an organization plans to move to achieve

its goals and objectives. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-02 Strategy Source : Chapter 01 Test Bank > TB 01-10 Strategy pertains to the general direction i...

11) Management accountants are not required to follow the generally accepted accounting

principles that are used for external financial reporting when preparing reports for internal users. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-06 Financial and Managerial Accounting Topic : 01-12 Regulation Source : Chapter 01 Test Bank > TB 01-11 Management accountants are not required to f...

12) Management accounting information is primarily concerned with reports on the organization

while financial accounting focuses more on the individual segments of the organization. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-11 Focus on Segments of an Organization Source : Chapter 01 Test Bank > TB 01-12 Management accounting information is primari...

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13) The Code of Ethics for Professional Accountants established by the International Federation

of Accountants governs only the activities of accountants in public practice. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-03 Understand the importance of professional responsibility. Topic : 01-27 Ethical Responsibility and Corporate Governance Topic : 01-28 Professional Ethics Source : Chapter 01 Test Bank > TB 01-13 The Code of Ethics for Professional Accounta...

14) Performance reports provide formal feedback to assist in determining whether operations and

performance are on track. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-05 Control Source : Chapter 01 Test Bank > TB 01-14 Performance reports provide formal feedback ...

15) Planning includes identifying alternatives and then selecting the one that does the best job of

furthering the organization's objectives. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-03 Planning Source : Chapter 01 Test Bank > TB 01-15 Planning includes identifying alternatives a...

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16) Reduction in tariffs, quotas, and other barriers to free trade; improvements in global

transportation system; and increasing sophistication in international trade markets, are several factors that have led to an increase in worldwide competition in many industries. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-16 Globalization Source : Chapter 01 Test Bank > TB 01-16 Reduction in tariffs, quotas, and other barr...

17) One major implication of globalization for many organizations is that they must find new

ways of conducting business. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-16 Globalization Source : Chapter 01 Test Bank > TB 01-17 One major implication of globalization for m...

18) The main idea underlying the lean business model is the elimination of waste. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-17 The Lean Business Model Source : Chapter 01 Test Bank > TB 01-18 The main idea underlying the lean business m...

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19) Companies that use the just-in-time (JIT) approach purchase materials and produce units only

as needed to meet actual customer demand. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-19 The JIT Approach Source : Chapter 01 Test Bank > TB 01-19 Companies that use the just-in-time (JIT) ap...

20) Among other things, companies using the just-in-time (JIT) approach, produce only in

response to a customer order meaning that workers will not be idle whenever demand falls below the company's production capacity. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-19 The JIT Approach Source : Chapter 01 Test Bank > TB 01-20 Among other things, companies using the just...

21) Defects can be tolerated in a just-in-time (JIT) system. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-19 The JIT Approach Topic : 01-20 Zero Defects and JIT Source : Chapter 01 Test Bank > TB 01-21 Defects can be tolerated in a just-in-time (...

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22) There are two major characteristics of total quality management. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-21 Total Quality Management Source : Chapter 01 Test Bank > TB 01-22 There are two major characteristics of total...

23) Many Canadian organizations have successfully implemented quality management principles

and have received recognition from Excellence Canada. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-21 Total Quality Management Source : Chapter 01 Test Bank > TB 01-23 Many Canadian organizations have successfull...

24) Process reengineering diagrams a business process in detail, questions it, and then completely

redesigns it to eliminate unnecessary steps, reduce opportunities for errors, and reduce costs. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-23 Process Reengineering Source : Chapter 01 Test Bank > TB 01-24 Process reengineering diagrams a business pr...

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25) Process reengineering is usually strongly accepted by all employees within an organization. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-23 Process Reengineering Source : Chapter 01 Test Bank > TB 01-25 Process reengineering is usually strongly ac...

26) Effective corporate governance enhances stakeholders' confidence that an organization is

being managed in their best interests rather than solely in the interests of top management and certain key individuals. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-03 Understand the importance of professional responsibility. Topic : 01-29 Corporate Governance Source : Chapter 01 Test Bank > TB 01-26 Effective corporate governance enhances stak...

27) Codes of ethics almost always provide employees with very specific and detailed instructions

about what they can do and not do. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 01-03 Understand the importance of professional responsibility. Topic : 01-27 Ethical Responsibility and Corporate Governance Topic : 01-28 Professional Ethics Source : Chapter 01 Test Bank > TB 01-27 Codes of ethics almost always provide employ...

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28) The PDCA Cycle is a system of continuous improvement in which a planning committee

selects from a list of alternatives for improvement and moves to fully implement immediately the chosen improvement. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-22 The Plan-Do-Check-Act Cycle Source : Chapter 01 Test Bank > TB 01-28 The PDCA Cycle is a system of continuous imp...

29) The control phase includes preparing budgets for the upcoming period. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-05 Control Source : Chapter 01 Test Bank > TB 01-29 The control phase includes preparing budgets...

30) The planning phase includes preparing budgets for the upcoming period. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-03 Planning Source : Chapter 01 Test Bank > TB 01-30 The planning phase includes preparing budget...

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31) The control phase includes analyzing actual results, comparing to the budget and identifying

why differences occurred. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-05 Control Source : Chapter 01 Test Bank > TB 01-31 The control phase includes analyzing actual ...

32) The implementation phase includes analyzing actual results, comparing to the budget and

identifying why differences occurred. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-04 Implementation Source : Chapter 01 Test Bank > TB 01-32 The implementation phase includes analyzing ...

33) Merchandising firms buy and sell finished goods whereas manufacturing firms make their

products and then sell them to retailers. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-01 The Management Cycle and the Need for Managerial Accounting Information Source : Chapter 01 Test Bank > TB 01-33 Merchandising firms buy and sell finished go...

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MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 34) Financial accounting is primarily concerned with: A) reporting to external investors and creditors. B) long term decision making. C) feasibility analysis. D) reporting exclusively to internal users. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-06 Financial and Managerial Accounting Topic : 01-07 For the Managers Source : Chapter 01 Test Bank > TB 01-34 Financial accounting is primarily concerned ...

35) Managerial accounting emphasizes the future in addition to historical reports, whereas

financial accounting: A) emphasizes a future perspective. B) emphasizes individual organizational units. C) emphasizes timeliness. D) emphasizes a historical perspective. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-06 Financial and Managerial Accounting Topic : 01-10 Emphasis on Timeliness Source : Chapter 01 Test Bank > TB 01-35 Managerial accounting emphasizes the future ...

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36) In order to eliminate waste, companies must adopt and implement one or more management

practices that focus on different aspects of the lean business model such as: A) Just-in-Time. B) maintaining inventories large enough to shield against all unanticipated disruptions. C) Activity-Based Costing. D) multi-dimensional performance measurement systems. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-17 The Lean Business Model Source : Chapter 01 Test Bank > TB 01-36 In order to eliminate waste, companies must ...

37) Companies using the just-in-time (JIT) approach hope to achieve: A) the hiring of specialized workers to increase production. B) gains in production flexibility. C) reduction of costs associated with setup by producing in large batches. D) reduced defect rates, resulting in less waste and greater customer satisfaction. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-19 The JIT Approach Topic : 01-20 Zero Defects and JIT Source : Chapter 01 Test Bank > TB 01-37 Companies using the just-in-time (JIT) appro...

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38) Which of the following is NOT a benefit of a just-in-time (JIT) system? A) Funds that have been tied up in inventories can be used elsewhere. B) Areas previously used to store inventories are made available for other more

productive uses. C) The time required to fill an order is reduced, resulting in quicker response to customers and consequentially greater potential sales. D) Production workers are always busy. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-19 The JIT Approach Source : Chapter 01 Test Bank > TB 01-38 Which of the following is NOT a benefit of a...

39) Which of the following is a benefit of a just-in-time (JIT) system? A) Funds that have been tied up in inventories can be used elsewhere. B) Scrap costs are reduced. C) Fewer field warranty visits are required. D) Production workers are always busy. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-19 The JIT Approach Source : Chapter 01 Test Bank > TB 01-39 Which of the following is a benefit of a jus...

40) In using total quality management (TQM), the key focus is: A) employee focus. B) management focus. C) customer focus. D) executive focus. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-21 Total Quality Management Source : Chapter 01 Test Bank > TB 01-40 In using total quality management (TQM), the...

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41) What is the professional designation for most professional accountants in Canada? A) Chartered Professional Accountants B) Chartered Management Accountants C) Chartered Certified Accountants D) Certified Public Accountants Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-03 Understand the importance of professional responsibility. Topic : 01-28 Professional Ethics Source : Chapter 01 Test Bank > TB 01-41 What is the professional designation for most...

42) Corporate governance: A) is a department within Canada Revenue with a mandate to ensure all corporations file

annual tax returns. B) if effective, should enhance stakeholders' confidence that the organization is being managed in their best interests. C) ensures the personal interests of top management are fully achieved. D) is only important to non-publicly traded companies. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-03 Understand the importance of professional responsibility. Topic : 01-29 Corporate Governance Source : Chapter 01 Test Bank > TB 01-42 Corporate governance:

43) Benchmarking begins with: A) completely redesigning a business process to improve it. B) determining the constraints within a given manufacturing process. C) studying organizations that are the best at a task. D) a determination to only build products to meet specific customer orders. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-21 Total Quality Management Source : Chapter 01 Test Bank > TB 01-43 Benchmarking begins with:

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44) Activities that do not add value to a product or service that customers are willing to pay for

are: A) normal business activities. B) non-value-added activities. C) part of the overhead costs of a business. D) a constraint. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-23 Process Reengineering Source : Chapter 01 Test Bank > TB 01-44 Activities that do not add value to a produc...

45) A manufacturing business which operates five days per week has four different departments

involved in producing each unit of its product. Maximum daily production capacities of each are: Department A – 120 units; Department B – 100 units; Department C – 80 units, and Department D – 140 units. Maximum weekly output of completed units is? A) 400 B) 475 C) 550 D) 675 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-24 The Theory of Constraints Source : Chapter 01 Test Bank > TB 01-45 A manufacturing business which operates five...

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46) The management cycle proceeds in what order? A) Control, implementation, planning B) Planning, implementation, control C) Implementation, planning, control D) Implementation, control, planning Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-03 Planning Topic : 01-04 Implementation Topic : 01-05 Control Source : Chapter 01 Test Bank > TB 01-46 The management cycle proceeds in what order?

47) Which of the following statements isNOT true? A) Managerial accounting has a strong orientation towards the future B) Financial accounting, due to the requirements of regulation, is mandatory for

businesses. C) Financial accounting and managerial accounting are independent of each other. D) Financial accounting presents a historical perspective of business activities. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-14 Are Financial and Managerial Accounting Independent? Source : Chapter 01 Test Bank > TB 01-49 Which of the following statements is...

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48) Managerial accounting is regulated by: A) GAAP. B) No prescribed standards are followed. C) ASPE. D) IFRS Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-06 Financial and Managerial Accounting Topic : 01-12 Regulation Source : Chapter 01 Test Bank > TB 01-50 Managerial accounting is regulated by:

49) A manufacturing company has implemented just in time (JIT) into their process. JIT is part

of: A) the lean business model. B) process re-engineering. C) total quality management D) the theory of constraints. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-17 The Lean Business Model Source : Chapter 01 Test Bank > TB 01-51 A manufacturing company has implemented just...

50) The implementation phase includes all these activities EXCEPT: A) making Short-term and Long-term decisions. B) selecting a course of action. C) assign tasks to employees D) solve on-the-spot problems Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-04 Implementation Source : Chapter 01 Test Bank > TB 01-52 The implementation phase includes all these ...

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51) Which of the following would be an implementation activity? A) Hiring replacement employees. B) Developing a new budget C) Variance analysis D) Developing the strategic plan Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-04 Implementation Source : Chapter 01 Test Bank > TB 01-53 Which of the following would be an implement...

52) The planning phase includes all these activities EXCEPT: A) organizing and allocating resources. B) selecting a course of action. C) identifying alternatives D) preparing budgets. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-03 Planning Source : Chapter 01 Test Bank > TB 01-54 The planning phase includes all these activi...

53) A cost report which focuses on a 10% reduction of costs in the upcoming period is an

example of: A) a company's vision B) a company's mission C) a company's strategy D) a company's objectives. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-02 Strategy Source : Chapter 01 Test Bank > TB 01-55 A cost report which focuses on a 10% reducti...

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54) Which of the following is not an implication of globalization? A) New strategies B) New managerial and operational practices C) Hiring a new CEO from a foreign country D) Sophisticated managerial accounting systems Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-03 Planning Source : Chapter 01 Test Bank > TB 01-56 Which of the following is not an implication of...

55) In the Plan-Do-Check-Act Cycle, which of the following is NOT a part of the ‘plan’ phase? A) Collect data B) Evaluate data collected C) Analyze the data D) Develop a plan for improvement Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-03 Planning Source : Chapter 01 Test Bank > TB 01-57 In the Plan-Do-Check-Act Cycle, which of the...

56) Under the Corruption of Foreign Public Officials Act, which of the following is NOT

prohibited? A) Offering gifts B) Offering payments C) Negotiating in good faith D) Offering benefits to foreign officials Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-03 Planning Source : Chapter 01 Test Bank > TB 01-58 Under the Corruption of Foreign Public Officials...

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57) Which of the following is NOT a concept related to Managerial Accounting? A) Strategic Cost Management (SCM) B) Balanced Scorecard (BSC) C) Percentage of Completion method for revenue recognition D) Activity Based Budgeting (ABB) Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-03 Planning Source : Chapter 01 Test Bank > TB 01-59 Which of the following is NOT a concept related...

58) Process re-engineering does NOT involve which one of the following? A) Tweaking an existing process B) Focus on simplification C) Elimination of wasted effort D) Elimination of non-value-added activities Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-03 Planning Source : Chapter 01 Test Bank > TB 01-60 Process re-engineering does NOT involve...

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SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 59) List four major potential benefits of successfully implementing a just-in-time (JIT) system in a manufacturing company.

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-19 The JIT Approach Topic : 01-18 Just-in-Time Source : Chapter 01 Test Bank > TB 01-61 List four major potential benefits of succes...

60) List seven key differences between Managerial Accounting and Financial Accounting.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-06 Financial and Managerial Accounting Topic : 01-07 For the Managers Topic : 01-12 Regulation Topic : 01-11 Focus on Segments of an Organization Topic : 01-10 Emphasis on Timeliness Topic : 01-14 Are Financial and Managerial Accounting Independent? Topic : 01-08 Emphasis on the Future Topic : 01-09 Relevance and Flexibility of Data Topic : 01-13 Managerial Accounting-Not Mandatory Source : Chapter 01 Test Bank > TB 01-62 List seven key differences between Manageria...

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61) Describe factors that have led to an increase in worldwide competitiveness as part of the

globalization on business.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-16 Globalization Source : Chapter 01 Test Bank > TB 01-63 Describe factors that have led to an increas...

62) Explain the lean business model and its corresponding management practices and potential

benefits.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-17 The Lean Business Model Source : Chapter 01 Test Bank > TB 01-64 Explain the lean business model and its corr...

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63) Explain the importance of ethical responsibility and explain the need for ethical codes of

conduct.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 01-03 Understand the importance of professional responsibility. Topic : 01-27 Ethical Responsibility and Corporate Governance Topic : 01-28 Professional Ethics Source : Chapter 01 Test Bank > TB 01-65 Explain the importance of ethical responsibi...

64) List four management practices (programs of continuous improvement) that may be used to

achieve the objectives of the lean business model.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-17 The Lean Business Model Source : Chapter 01 Test Bank > TB 01-66 List four management practices (programs of ...

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65) Determine if the following is an emphasis of managerial (M) or Financial (F) accounting:

1. Estimating the amount of materials needed for next month's production. 2. Information in reports focuses on objectivity and verifiability. 3. Reports follow GAAP or IFRS. 4. Precise information that is more readily available is included in reports. 5. The focus and reporting emphasize segments of an organization. 6. Organizations may follow their own guidelines for reports generated.

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66) Classify the following activities as planning (P), implementation (I), or control (C).

1. Estimating the number of units that will be sold in the upcoming quarter. 2. Assigning production line workers to stations in the production plant. 3. Choosing between manual labor or purchasing a machine that will automate the production process. 4. Preparing a performance report which compares actual sales to budgeted sales for the last month. 5. Solving a bottleneck issue in the production plant by moving one production line worker from station 2 to station 5 on the production line. 6. Negotiating discounts with suppliers for materials needed in the production process.

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 01-01 Understand the basics of managerial accounting. Topic : 01-03 Planning Topic : 01-04 Implementation Topic : 01-05 Control Source : Chapter 01 Test Bank > TB 01-68 Classify the following activities as plannin...

SECTION BREAK. Answer all the part questions. 67) A manufacturing business has four different departments involved in producing each unit of its product. Maximum daily production capacities of each are: Department A – 60 units; Department B - 125 units; Department C - 100 units, and Department D - 115 units.

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67.1)

Which department would be considered first in looking at ways to improve output capacity? A) A B) B C) C D) D

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Easy Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-24 The Theory of Constraints Source : Chapter 01 Test Bank > TB 01-47 Which department would be considered first in...

67.2)

Alternative A - increase Department B's output to 210 units per day. Alternative B - increase Department C's output to 115 units per day. Alternative C - increase both Department A's and Department C's outputs to 125 units per day. Alternative D - increase Department D's output to 200 units per day. Assuming the costs of each alternative are similar and that only one can be chosen, which alternative would yield the best results for the business? A) A B) B C) C D) D

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 01-02 Understand the role of globalization and the lean business model in influe Topic : 01-24 The Theory of Constraints Source : Chapter 01 Test Bank > TB 01-48 Alternative A - increase Department B's output to...

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Answer Key Test name: Chapter 01 Test Bank 1) TRUE 2) TRUE 3) FALSE 4) TRUE 5) TRUE 6) TRUE 7) TRUE 8) TRUE 9) TRUE 10) TRUE 11) TRUE 12) FALSE 13) FALSE 14) TRUE 15) TRUE 16) TRUE 17) TRUE 18) TRUE 19) TRUE 20) FALSE 21) FALSE 22) TRUE 23) TRUE 24) TRUE 25) FALSE 26) TRUE 27) FALSE 28) FALSE 29) FALSE 30) TRUE 31) TRUE 32) FALSE 33) TRUE 34) A 35) D 36) A 37) D

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38) D 39) A 40) C 41) A

Chartered Professional Accountants 42) B 43) C 44) B 45) A

Each Department is interrelated. The Bottle neck department is Department – which can produce a maximum of 80 Units. So, the maximum production can be 5 x 80 = 400 units. 46) B 47) C

Financial accounting and managerial accounting are independent of each other 48) B

No prescribed standards are followed. 49) A 50) B 51) A 52) A 53) A 54) C

Hiring a new CEO from a foreign country 55) B

Evaluate data collected 56) C

Negotiating in good faith 57) C

Percentage of Completion method for revenue recognition 58) A

Tweaking an existing process

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59) Short Answer

1. substantial reduction in inventory ordering and warehousing costs. 2. reduction in waste due to inventory obsolescence and pilferage. 3. a commitment to zero defects. 4. a reduction in time to complete a product. 60) Short Answer

1. managerial accounting reports are prepared primarily for managers inside the organization, whereas financial accounting reports are typically prepared for the use of external parties, such as shareholders, creditors and regulatory bodies. 2. managerial accounting is not a mandatory requirement for businesses while financial accounting is. 3. managerial accounting is not regulated by prescribed standards or formats while financial accounting must follow prescribed accounting standards. 4. managerial accounting usually focuses on the parts or segments of an organization while financial accounting is primarily concerned with reporting the activities of the organization. 5. managerial accounting usually has a strong future orientation while financial accounting has a historical perspective. 6. managerial accounting emphasizes obtaining data relevant to decision making while financial accounting emphasizes the verifiability of data. 7. managerial accounting requires information to be available on a timely basis while financial accounting, with its historical perspective, focuses on precision. 61) Short Answer

Reduction of tariffs, quotas, and other barriers to free trade; improvements in global transportation systems; and increasing sophistication in international trade markets. These factors help to reduce the costs of conducting international trade and make it possible for foreign companies to compete on a more equal footing with domestic firms. 62) Short Answer

Many businesses in order to remain competitive in the global marketplace, have adopted the lean business model which focuses on the elimination of waste. This consists of implementing management practices, such as just-in-time and total quality management, which if properly implemented can enhance quality, increase efficiencies, eliminate delays and reduce costs. 63) Short Answer

Unethical behaviour is often the result of top executives focusing exclusively on short-term profits at any cost. As businesses interact more and more, being ethically responsible is extremely important. Many organizations have implemented ethical codes of conduct to guide behaviour.

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64) Short Answer

1. just-in time. 2. total quality management. 3. process reengineering. 4. theory of constraints. 65) Short Answer

1. M 2. F 3. F 4. F 5. M 6. M 66) Short Answer

1. P 2. I 3. P 4. C 5. I 6. I 67) Section Break 67.1) A

Department - A 67.2)

C Option C Under option C, departments A, B, C both produce the same (125) units. The combined output of 490 units is the highest amongst all four alternatives.

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TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 68) All costs incurred in a merchandising firm are period costs. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Source : Chapter 02 Test Bank > TB 02-01 All costs incurred in a merchandising firm a...

69) Depreciation is always considered a product cost for external financial reporting purposes in

a manufacturing firm. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-19 Product Costs Source : Chapter 02 Test Bank > TB 02-02 Depreciation is always considered a product ...

70) Advertising costs are considered product costs for external financial reports since they are

incurred in order to promote specific products. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Source : Chapter 02 Test Bank > TB 02-03 Advertising costs are considered product cos...

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71) Property taxes and insurance premiums paid on a factory building are examples of

manufacturing overhead. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank > TB 02-04 Property taxes and insurance premiums paid o...

72) Manufacturing overhead combined with direct materials is known as conversion cost. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank > TB 02-05 Manufacturing overhead combined with direct ...

73) If the ending inventory of finished goods is overstated, net income will be overstated. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-05 Prepare financial reports. Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-22 The Balance Sheet Topic : 02-23 The Income Statement Source : Chapter 02 Test Bank > TB 02-06 If the ending inventory of finished goods is...

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74) If the ending inventory of finished goods is understated, net income will be overstated. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-05 Prepare financial reports. Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-22 The Balance Sheet Topic : 02-23 The Income Statement Source : Chapter 02 Test Bank > TB 02-07 If the ending inventory of finished goods is...

75) In a manufacturing company, goods available for sale equals the sum of the cost of goods

manufactured and the beginning finished goods inventory. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-08 In a manufacturing company, goods available ...

76) Variable costs are costs whose per unit costs vary as the activity level rises and falls. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Source : Chapter 02 Test Bank > TB 02-09 Variable costs are costs whose per unit cost...

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77) Variable costs are costs whose per unit costs don't vary as the activity level rises and falls. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Source : Chapter 02 Test Bank > TB 02-10 Variable costs are costs whose per unit cost...

78) On a per unit basis, a fixed cost varies inversely with the level of activity. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-11 On a per unit basis, a fixed cost varies inv...

79) All the following would typically be considered indirect costs of manufacturing a Boeing 747

to be delivered to Singapore Airlines: electricity to run production equipment, the factory manager's salary, and the cost of the General Electric jet engines installed on the aircraft. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-07 Indirect Cost Source : Chapter 02 Test Bank > TB 02-12 All the following would typically be conside...

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80) All the following costs should be considered direct costs of providing delivery room services

to a particular mother and her baby: the costs of drugs administered in the operating room, the attending physician's fees, and a portion of the liability insurance carried by the hospital to cover the delivery room. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank > TB 02-13 All the following costs should be considered...

81) All the following costs should be considered direct costs of providing delivery room services:

the costs of drugs administered in the operating room, the attending physician's fees, and a portion of the liability insurance carried by the hospital to cover the delivery room. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank > TB 02-14 All the following costs should be considered...

82) The following costs should be considered by a law firm to be indirect costs of defending a

particular client in court: rent on the law firm's offices, the law firm's receptionist's wages, the costs of heating the law firm's offices, and the depreciation on the personal computer in the office of the attorney who has been assigned the client. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-07 Indirect Cost Source : Chapter 02 Test Bank > TB 02-15 The following costs should be considered by ...

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83) A cost that differs from one month to another is known as a differential cost. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-09 Differential Cost and Revenue Source : Chapter 02 Test Bank > TB 02-16 A cost that differs from one month to anothe...

84) Opportunity costs are always recorded as expenses in the accounts of an organization. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-10 Opportunity Cost Source : Chapter 02 Test Bank > TB 02-17 Opportunity costs are always recorded as exp...

85) Sunk costs are irrelevant in making decisions. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-11 Sunk Cost Source : Chapter 02 Test Bank > TB 02-18 Sunk costs are irrelevant in making decision...

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86) The inventory accounts reported on the balance sheet of a manufacturing company will differ

from those of a merchandising company. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-05 Prepare financial reports. Topic : 02-22 The Balance Sheet Source : Chapter 02 Test Bank > TB 02-19 The inventory accounts reported on the balan...

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 87) Labour costs relating to janitors and supervisors in a manufacturing facility are examples of: A) Direct labour B) Indirect labour Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-13 Manufacturing Costs Source : Chapter 02 Test Bank > TB 02-20 Labour costs relating to janitors and super...

88) The cost of fire insurance for a manufacturing plant is generally considered to be a: A) product cost. B) period cost. C) variable cost. D) fixed cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-18 Product Costs Versus Period Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-21 The cost of fire insurance for a manufacturi...

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89) The cost of rent for a manufacturing equipment used in a manufacturing plant is generally

considered to be a: Prime cost

Product cost

Yes

A) choice a. B) choice b. C) choice c. D) choice d. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-19 Product Costs Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank > TB 02-22 The cost of rent for a...

90) Each of the following would be a conversion cost except: A) Cost of labour physically and conveniently traceable to a product B) Cost of utilities used in a manufacturing plant. C) Depreciation of a machine used in manufacturing. D) Cost of material physically and conveniently traceable to a product Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Source : Chapter 02 Test Bank > TB 02-23 Each of the following would be a conver...

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91) For a manufacturing company, which of the following is an example of a period rather than a

product cost? A) Depreciation of factory equipment. B) Wages of salespersons. C) Wages of machine operators. D) Insurance on factory equipment. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Source : Chapter 02 Test Bank > TB 02-24 For a manufacturing company, which of the fo...

92) Which of the following would be considered a product cost for external financial reporting

purposes? A) Cost of a warehouse used to store finished goods. B) Cost of guided public tours through the company's facilities. C) Cost of travel necessary to sell the manufactured product. D) Cost of sand spread on the factory floor to absorb oil from manufacturing machines. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-19 Product Costs Source : Chapter 02 Test Bank > TB 02-25 Which of the following would be considered a...

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93) Which of the following would NOT be treated as a product cost for external financial

reporting purposes? A) Depreciation on a factory building. B) Salaries of factory workers. C) Indirect labour in the factory. D) Advertising expenses. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-19 Product Costs Source : Chapter 02 Test Bank > TB 02-26 Which of the following would NOT be treated ...

94) Transportation costs incurred by a manufacturing company to ship its raw materials from the

supplier to its manufacturing facility would be classified as which of the following? A) Product cost. B) Manufacturing overhead. C) Period cost. D) Administrative cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Source : Chapter 02 Test Bank > TB 02-27 Transportation costs incurred by a manufac...

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95) Costs incurred to maintain an app to provide rewards to customers upon purchase would be

classified as which of the following? A) Product cost. B) Manufacturing overhead. C) Period cost. D) Administrative cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Source : Chapter 02 Test Bank > TB 02-28 Costs incurred to maintain an app to prov...

96) The salary of the president of a manufacturing company would be classified as which of the

following? A) Product cost. B) Period cost. C) Manufacturing overhead. D) Direct labour. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Source : Chapter 02 Test Bank > TB 02-29 The salary of the president of a manufacturi...

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97) Micro Computer Company has set up a web page for customer inquiries regarding computer

hardware produced by the company. The cost of this web page would be classified as which of the following? A) Product cost. B) Manufacturing overhead. C) Direct labour. D) Period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Source : Chapter 02 Test Bank > TB 02-30 Micro Computer Company has set up a web page...

98) The wages of factory personnel engaged in manufacturing of the products would usually be: Direct labour

Manufacturing overhead

Yes

A) choice a. B) choice b. C) choice c. D) choice d. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank > TB 02-31 The wages of factory maintenance..

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99) Direct materials are a part of: Conversion cost

Manufacturing cost

Prime cost

Yes

A) choice a. B) choice b. C) choice c. D) choice d. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Topic : 02-13 Manufacturing Costs Topic : 02-14 Direct Materials Source : Chapter 02 Test Bank > TB 02-32 Direct materials are a part of:

100)

Manufacturing overhead consists of: A) all manufacturing costs. B) all manufacturing costs, except direct materials and direct labour. C) indirect materials but not indirect labour. D) indirect labour but not indirect materials.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank > TB 02-33 Manufacturing overhead consists of:

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101)

Which of the following should NOT be included as part of manufacturing overhead at a company that makes office furniture? A) Sheet steel in a file cabinet made by the company. B) Manufacturing equipment depreciation. C) Idle time for direct labour. D) Taxes on a factory building.

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank > TB 02-34 Which of the following should NOT be include...

102)

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103)

Rossiter Company failed to record a credit sale at the end of the year, although the reduction in finished goods inventories was correctly recorded when the goods were shipped to the customer. Which one of the following statements is correct? A) Accounts receivable was not affected, inventory was not affected, sales were understated, and cost of goods sold was understated. B) Accounts receivable was understated, inventory was overstated, sales were understated, and cost of goods sold was overstated. C) Accounts receivable was not affected, inventory was understated, sales were understated, and cost of goods sold was understated. D) Accounts receivable was understated, inventory was not affected, sales were understated, and cost of goods sold was not affected.

Question Details Accessibility : Keyboard Navigation Bloom's : Analyze Difficulty : Hard Learning Objective : 02-05 Prepare financial reports. Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-22 The Balance Sheet Topic : 02-23 The Income Statement Source : Chapter 02 Test Bank > TB 02-36 Rossiter Company failed to record a credit s...

104)

If the cost of goods sold is lower than the cost of goods manufactured, then: A) Work in process inventory has decreased during the period. B) Finished goods inventory has increased during the period. C) Total manufacturing costs must be greater than cost of goods manufactured. D) Finished goods inventory has decreased during the period.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-25 Product Costs—A Closer Look Topic : 02-26 An Example of Cost Flows Source : Chapter 02 Test Bank > TB 02-37 If the cost of goods sold is low...

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105)

Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs are 50% of total unit costs. If 10,500 units are manufactured next month and cost behaviour patterns remain unchanged the? A) total variable cost will remain unchanged. B) fixed costs will increase in total. C) variable cost per unit will increase. D) total cost per unit will decrease.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Source : Chapter 02 Test Bank > TB 02-38 Last month, when 10,000 units of a product w...

106)

Variable cost: A) increases on a per unit basis as the number of units produced increases. B) remains constant on a per unit basis as the number of units produced increases. C) remains the same in total as production increases. D) decreases on a per unit basis as the number of units produced increases.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Source : Chapter 02 Test Bank > TB 02-39 Variable cost:

107)

Within the relevant range, the difference between variable costs and fixed costs is: A) variable costs per unit fluctuate and fixed costs per unit remain constant. B) variable costs per unit are constant and fixed costs per unit fluctuate. C) both total variable costs and total fixed costs are constant. D) both total variable costs and total fixed costs fluctuate.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-40 Within the relevant range, the difference be...

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108)

Which of the following statements regarding fixed costs is incorrect? A) Expressing fixed costs on a per unit basis usually is the best approach for decisionmaking. B) Fixed costs expressed on a per unit basis will react inversely with changes in activity. C) Assumptions by accountants regarding the behaviour of fixed costs rest heavily on the concept of the relevant range. D) Fixed costs frequently represent long-term investments in property, plant, and equipment.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-41 Which of the following statements regarding ...

109)

Last month, when 11,000 units of a product were manufactured, the cost per unit was $ 50. At this level of activity, variable costs are 40% of total unit costs. If 12,000 units are manufactured next month and cost behaviour patterns remain unchanged, the total cost of goods manufactured will be? A) $ 570,000. B) $600,000. C) $ 770,000. D) $630,000.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-42 Last month, when 11,000 units of a product were manufactur...

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110)

Which of the following statements is true? A) An indirect cost can be easily traced to an individual cost object. B) An indirect cost is one incurred to support several cost objects. C) A direct cost cannot be easily and economically traced to a cost object. D) The determination of a cost object is nor relevant to the traceability of costs.

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-07 Indirect Cost Source : Chapter 02 Test Bank > TB 02-43 Which of the following statements is true?

111)

An opportunity cost is: A) the difference in total costs which results from selecting one alternative instead of another. B) the potential benefit forgone by selecting one alternative instead of another. C) a cost which may be saved by not adopting an alternative. D) a cost which may be shifted to the future with little or no effect on current operations.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-10 Opportunity Cost Source : Chapter 02 Test Bank > TB 02-44 An opportunity cost is:

112)

The term differential revenue refers to: A) A difference in the revenue between any two alternatives. B) The potential benefit forgone by selecting one alternative instead of another. C) A cost which does not entail any dollar outlay but which is relevant to the decisionmaking process. D) A cost which continues to be incurred even though there is no activity.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-09 Differential Cost and Revenue Source : Chapter 02 Test Bank > TB 02-45 The term differential revenue refers to:

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113)

Which of the following costs is often important in decision making, but is omitted from conventional accounting records? A) Fixed cost. B) Sunk cost. C) Opportunity cost. D) Indirect cost.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-01 Understand cost classification by behaviour. Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-04 Fixed Cost Topic : 02-09 Differential Cost and Revenue Topic : 02-10 Opportunity Cost Topic : 02-11 Sunk Cost Source : Chapter 02 Test Bank > TB 02-46 Which of the following costs is often import...

114)

When a decision is made among several alternatives, the potential benefit that is lost by choosing one alternative over another is the: A) realized cost. B) opportunity cost. C) conversion cost. D) accrued cost.

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115)

Conversion cost consists of which of the following? A) Manufacturing overhead cost. B) Direct materials and direct labour costs. C) Direct labour cost. D) Direct labour and manufacturing overhead costs.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank > TB 02-48 Conversion cost consists of which of the fol...

116)

Prime cost consists of direct materials combined with: A) direct labour. B) manufacturing overhead. C) indirect materials. D) cost of goods manufactured.

117)

Which one of the following costs should NOT be considered a direct cost of serving a customer who orders a customized personal computer by phone directly from the manufacturer? A) The cost of the hard disk drive installed in the computer. B) The cost of shipping the computer to the customer. C) The cost of leasing a machine on a monthly basis that automatically tests hard disk drives before they are installed in computers. D) The cost of packaging the computer for shipment.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank > TB 02-50 Which one of the following costs should NOT ...

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118)

The sequence of major activities that every organization carries out to fulfill its mission is known as: A) the manufacturing process. B) product planning and development. C) the value chain. D) marketing.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-12 Cost Classification by Function Source : Chapter 02 Test Bank > TB 02-51 The sequence of major activities that every ...

119)

Which of the following major activities of a business will result in product costs? A) Marketing. B) Customer support. C) General administrative. D) Manufacturing.

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Source : Chapter 02 Test Bank > TB 02-52 Which of the following major activities of a...

120)

Which one of the following costs should NOT be considered an indirect cost of serving a customer at a Dairy Queen fast food outlet? A) The cost of the hamburger patty in the burger they ordered. B) The wages of the employee who takes the customer's order. C) The cost of heating and lighting the kitchen. D) The salary of the outlet's manager.

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121)

Sunshine Company’s costs for the month of August were as follows: direct materials, $ 30,000; direct labour, $ 35,000; sales salaries, $14,000; indirect labour, $10,000; indirect materials, $15,000; general corporate administrative cost, $12,000; taxes on manufacturing facility, $ 5,000; and rent on factory, $ 20,000. The beginning work in process inventory was $ 15,000 and the ending work in process inventory was $ 10,000. What was the cost of goods manufactured for the month? A) $105,000. B) $ 115,000. C) $ 120,000. D) $ 125,000

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-54 Sunshine Company’s costs for the month of...

122)

Brown Company's costs for the month of August were as follows: direct materials, $27,000; direct labour, $34,000; sales salaries, $14,000; indirect labour, $10,000; indirect materials, $15,000; general corporate administrative cost, $12,000; taxes on manufacturing facility, $2,000; and rent on factory, $17,000. The beginning work in process inventory was $16,000 and the ending work in process inventory was $9,000. What was the total manufacturing costs for the month? A) $105,000. B) $112,000. C) $132,000. D) $138,000.

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123)

A manufacturing company prepays its insurance coverage for a four-year period. The premium for the four years is $ 4,000 and is paid at the beginning of the first year. 70% percent of the premium applies to manufacturing operations and 30% applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first year of coverage? Product

Period

$4,000

$2,800

$1,200

$3,000

$1,000

$700

$300

A) choice a. B) choice b. C) choice c. D) choice d. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-18 Product Costs Versus Period Costs Source : Chapter 02 Test Bank > TB 02-56 A manufacturing company prepays...

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124)

Using the following data, calculate the beginning work in process inventory.

Cost of goods sold

$70

Direct labour

$ 25

Direct materials

$ 10

Cost of goods manufactured

$ 90

Work in process ending

$ 20

Finished goods ending

$ 25

Manufacturing overhead

$30

The beginning work in process inventory is: A) $ 25. B) $ 35. C) $ 45. D) $55. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-57 Using the following data, calculate...

125)

During the month of May, Bennett Manufacturing Company purchased $43,000 of raw materials. Total manufacturing overhead was $27,000 and the total manufacturing costs were $106,000. Assuming a beginning inventory of raw materials of $8,000 and an ending inventory of raw materials of $6,000, direct labour was: A) $34,000. B) $36,000. C) $38,000. D) $45,000.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-58 During the month of May, Bennett Manufacturi...

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126)

Using the following data for January, calculate the cost of goods manufactured:

Direct materials

$35,000

Direct labour

$30,000

Manufacturing overhead

$20,000

Beginning work in process inventory

$15,000

Ending work in process inventory

$10,000

The cost of goods manufactured was: A) $78,000. B) $79,000. C) $80,000. D) $90,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-59 Using the following data for January...

127)

During the month of June, Reardon Company incurred $17,000 of direct labour, $8,500 of manufacturing overhead and purchased $15,000 of raw materials. Between the beginning and the end of the month, the raw materials inventory increased by $2,000, the finished goods inventory increased by $1,500, and the work in process inventory decreased by $3,000. The cost of goods manufactured would be: A) $38,500. B) $40,500. C) $41,500. D) $43,500.

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128)

Moonlight Company reported the following data for the year just ended:

Raw materials used in production

900,000

Direct labour

600,000

Total overhead costs

$1,200,0000

Ending work in process inventory

$400,000

Cost of goods manufactured

$2,900,000

The beginning work in process inventory was: A) $100,000. B) $300,000. C) $600,000. D) $1,300,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-61 Moonlight Company reported the...

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129)

Moonlight Company reported the following data for the year just ended:

Raw materials used in production

$900,000

Direct labour

$600,000

Total overhead costs

$1,200,000

Beginning work in process inventory

(Use the beginning WIP calculated in 2-61

Cost of goods manufactured

$ 2,900,000

The ending work in process inventory was: A) $100,000. B) $300,000. C) $400,000. D) $1,300,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-62 Moonlight Company reported...

130)

Williams Company's direct labour cost is 25% of its conversion cost. If the manufacturing overhead cost for the last period was $45,000 and the direct materials cost was $25,000, the direct labour cost was: A) $15,000. B) $20,000. C) $33,333. D) $60,000.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-16 Manufacturing Overhead Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-63 Williams Company's direct labour...

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131)

The Lyons Company's cost of goods manufactured was $120,000 when its sales were $360,000 and its gross margin was $220,000. If the ending inventory of finished goods was $30,000, the beginning inventory of finished goods must have been: A) $20,000. B) $50,000. C) $110,000. D) $150,000.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-64 The Lyons Company's cost of goods...

132)

The gross margin for Cushing Company for the first quarter of last year was $400,000 when sales were $800,000. The beginning inventory of finished goods was $80,000 and the ending inventory of finished goods was $ 120,000. The cost of goods manufactured for the first quarter would have been: A) $350,000. B) $ 400,000 C) $ 440,000. D) $485,000.

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133)

Last month a manufacturing company had the following operating results:

Beginning finished goods inventory

$74,000

Ending finished goods inventory

$73,000

Sales

$464,000

Gross margin

$52,000

What was the cost of goods manufactured for the month? A) $411,000. B) $412,000. C) $413,000. D) $463,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-66 Last month a manufacturing...

134)

The following information was provided by Wilson Company for the year just ended:

Beginning finished goods inventory

$150,750

Ending finished goods inventory

$140,475

Sales

$475,000

Gross margin

$150,000

The cost of goods manufactured for the year was: A) $314,725. B) $325,000. C) $333,275. D) $334,275. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-67 The following information was provided...

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135)

The following information was provided by Grand Company for the year just ended:

Beginning finished goods inventory

$130,425

Ending finished goods inventory

$125,770

Sales

$500,000

Gross margin

$100,000

The cost of goods manufactured for the year was: A) $95,345. B) $104,655. C) $395,345. D) $404,655. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-68 The following information was provided...

136)

Delta Merchandising, Inc. has provided the following information for the year just ended:

Net sales

$150,000

Beginning inventory

$30,000

Purchases

$110,00

Gross margin

$40,000

The ending inventory for the company at year end was: A) $ 20,000 B) $ 25,000 C) $ 30,000 D) $35,000 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-69 Delta Merchandising, Inc. has...

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137)

The beginning balance of the Raw Materials inventory account for May was $27,500. The ending balance for May was $28,750 and $128,900 of raw materials were used during the month. The materials purchased during the month cost: A) $127,650. B) $130,150. C) $131,300. D) $157,650.

138)

Gabel Inc. is a merchandising company. Last month the company's merchandise purchases totaled $63,000. The company's beginning merchandise inventory was $13,000 and its ending merchandise inventory was $15,000. What was the company's cost of goods sold for the month? A) $61,000. B) $63,000. C) $65,000. D) $91,000.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Easy Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-71 Gabel Inc. is a merchandising company. Last ...

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139)

Haack Inc. is a merchandising company. Last month the company's cost of goods sold was $84,000. The company's beginning merchandise inventory was $20,000 and its ending merchandise inventory was $18,000. What was the total amount of the company's merchandise purchases for the month? A) $82,000. B) $84,000. C) $86,000. D) $122,000.

140)

During January, the cost of goods manufactured was $ 90,000. The beginning finished goods inventory was $ 20,000 and the ending finished goods inventory was $ 30,000. What was the cost of goods sold for the month? A) $ 80,000 B) $ 95,000 C) $ 97,000. D) $ 100,000

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141)

An accounting course is taught in two classes per week for one hour and fifty minutes each. The classes are held in a building with 36 classrooms that are used for a variety of courses. The building has an advanced monitoring system which allows electricity costs to be determined for each classroom and for each course. If the cost object is the accounting course, which of the following is an indirect cost? A) The course Instructor's salary for teaching the course (he only teaches this one course). B) The cost of the preparation of the exam papers for this course. C) The salary of the building's custodian. D) The electricity cost for the course.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-07 Indirect Cost Source : Chapter 02 Test Bank > TB 02-74 An accounting course is taught in two classe...

142)

An accounting course is taught in two classes per week for one hour and fifty minutes each. The classes are held in a building with 36 classrooms that are used for a variety of courses. There are 15 other courses taught in the Accounting Department at this university. If the cost object is the accounting course, which of the following is a direct cost? A) The course Instructor's salary for teaching the course (he only teaches this one course). B) The property taxes on the land and classroom building. C) The salary of the building's custodian. D) The Accounting Department's secretary salary.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank > TB 02-75 An accounting course is taught in two classe...

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143)

The following information was provided by Jimbob Co. for the year just ended:

Cost of goods manufactured

$500,000

Ending finished goods inventory

$100,000

Sales

$800,000

Gross margin

$200,000

What was beginning finished goods inventory? A) $100,000. B) $ 250,000 C) $300,000. D) $400,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-76 The following information was...

144)

Assume that cost of goods sold for Boardman Company for January was $140,000. What was the cost of goods manufactured for the month? A) $135,000 B) $139,000 C) $140,000 D) $145,000

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-103 Assume that cost of good...

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145)

At a sales volume of 30,000 units, CD Company's total fixed costs are $ 80,000 and total variable costs are $60,000. (Do not round intermediate calculations) If CD Company were to sell 45,000 units, the total expected cost would be? A) $124,000. B) $144,625. C) $146,000. D) $ 170,000

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-104 At a sales volume of 32,000 units, CD Compan...

146)

At a sales volume of 32,000 units, CD Company's total fixed costs are $64,000 and total variable costs are $60,000. (Do not round intermediate calculations) If CD Company were to sell 50,000 units, the total expected cost per unit would be (Do not round intermediate calculations. Round the final answer to two decimal places): A) $2.48. B) $3.16. C) $3.20. D) $3.88.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-105 At a sales volume of 32,000 units, CD Compan...

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147)

Jim-bob Company has two business alternatives - A & B with different total annual costs as set out below: Total annual costs:

Advertising

$32,000

$31,000

Other marketing costs

$18,000

$12,000

Other expenses

$30,000

$35,000

Additionally, if alternative B is chosen the business will have to use some space for its own purposes that are currently being rented to an outside business for $5,000 per year. What are the total differential costs between the two alternatives? A) $2,000. B) $3,000. C) $5,000. D) $7,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-09 Differential Cost and Revenue Source : Chapter 02 Test Bank > TB 02-106 Jim-bob Company has two busin...

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148)

The following costs were incurred in May:

Direct materials Direct labour Manufacturing overhead Selling expenses Administrative expenses

$39,200 $33,400 $25,100 $23,600 $40,600

Conversion costs during the month totaled: A) $58,500 B) $64,300 C) $161,900 D) $72,600 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-1 (Algo) The following costs were...

149)

Abburi Company's manufacturing overhead is 35% of its total conversion costs. If direct labour is $126,100 and if direct materials are $27,500, the manufacturing overhead is: A) $67,900 B) $234,186 C) $14,808 D) $82,708

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-2 (Algo) Abburi Company's manufacturing...

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150)

During the month of May, direct labour cost totaled $13,400 and direct labour cost was 40% of prime cost. If total manufacturing costs during May were $73,000, the manufacturing overhead was: A) $20,100 B) $33,500 C) $59,600 D) $39,500

151)

In May direct labour was 20% of conversion cost. If the manufacturing overhead for the month was $153,600 and the direct materials cost was $25,600, the direct labour cost was: A) $614,400 B) $38,400 C) $102,400 D) $6,400

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152)

The following costs were incurred in May:

Direct materials Direct labour Manufacturing overhead Selling expenses Administrative expenses

$43,700 $29,600 $22,600 $17,000 $31,100

Prime costs during the month totaled: A) $95,900 B) $144,000 C) $73,300 D) $52,200 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-5 (Algo) The following costs were...

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153)

Perteet Corporation's relevant range of activity is 6,600 units to 13,000 units. When it produces and sells 9,800 units, its average costs per unit are as follows:

Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense

Average Cost per Unit $7.30 $3.70 $1.80 $3.10 $0.70 $0.40 $0.50 $0.55

If 7,400 units are produced, the total amount of manufacturing overhead cost is closest to: A) $31,360 B) $54,060 C) $43,700 D) $24,320 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-6 (Algo) Perteet Corporation's relevant range...

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154)

A manufacturing company prepays its insurance coverage for a three-year period. The premium for the three years is $5,190 and is paid at the beginning of the first year. Ninety percent of the premium applies to manufacturing operations and ten percent applies to selling and administrative activities. What amounts should be considered product and period costs respectively for the first year of coverage? Product A) B) C) D)

$ 173 $ 1,730 $ 0 $ 1,557

Period $ 1,557 $ 0 $ 1,730 $ 173

A) Choice A B) Choice B C) Choice C D) Choice D Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-13 Manufacturing Costs Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-7 (Algo) A manufacturing company prepays...

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155)

At an activity level of 9,500 machine-hours in a month, Falks Corporation’s total variable production engineering cost is $779,950 and its total fixed production engineering cost is $200,970. What would be the total production engineering cost per machine-hour, both fixed and variable, at an activity level of 9,900 machine-hours in a month? Assume that this level of activity is within the relevant range. (Round intermediate calculations to 2 decimal places.) A) $99.08 B) $103.25 C) $102.40 D) $99.40

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-8 (Algo) At an activity level of...

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156)

Schonhardt Corporation's relevant range of activity is 3,800 units to 9,000 units. When it produces and sells 6,400 units, its average costs per unit are as follows: Average Cost per Unit Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense

$ 7.35 $ 3.70 $ 1.40 $ 3.50 $ 1.00 $ 0.70 $ 0.80 $ 0.70

If 8,000 units are produced, the total amount of fixed manufacturing cost incurred is closest to: A) $32,640 B) $28,800 C) $25,600 D) $22,400 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Learning Objective : 02-04 Understand cost classification by function. Topic : 02-04 Fixed Cost Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-9 (Algo) Schonhardt Corporation's relevant...

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157)

Bellucci Corporation has provided the following information: Cost per Unit Direct materials

$ 6.75

Direct labour

$ 3.60

Variable manufacturing overhead

$ 1.25

Fixed manufacturing overhead

$ 106,200

Sales commissions

$ 1.20

Variable administrative expense

$ 0.55

Fixed selling and administrative expense

Cost per Period

$ 38,250

The incremental manufacturing cost that the company will incur if it increases production from 9,000 to 9,001 units is closest to (assume that the increase is within the relevant range): A) $25.20 B) $11.60 C) $29.40 D) $23.40 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-10 (Algo) Bellucci Corporation has provided...

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158)

Fiori Corporation's relevant range of activity is 2,800 units to 6,000 units. When it produces and sells 4,400 units, its average costs per unit are as follows:

Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense

Average Cost per Unit $ 6.65 $ 3.00 $ 1.70 $ 2.50 $ 1.00 $ 0.90 $ 1.30 $ 0.80

The incremental manufacturing cost that the company will incur if it increases production from 5,000 to 5,001 units is closest to: A) $17.85 B) $11.35 C) $13.85 D) $14.85 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-11 (Algo) Fiori Corporation's relevant range...

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159)

Haack Incorporated is a merchandising company. Last month the company's cost of goods sold was $65,500. The company's beginning merchandise inventory was $19,400 and its ending merchandise inventory was $26,600. What was the total amount of the company's merchandise purchases for the month? A) $65,500 B) $58,300 C) $72,700 D) $111,500

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-05 Prepare financial reports. Topic : 02-23 The Income Statement Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-12 (Algo) Haack Incorporated is a merchandising company...

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160)

The following cost data pertain to the operations of Quinonez Department Stores, Incorporated, for the month of September. Corporate headquarters building lease Cosmetics Department sales commissions-Northridge Store Corporate legal office salaries Store manager's salary-Northridge Store Heating-Northridge Store Cosmetics Department cost of sales-Northridge Store Central warehouse lease cost Store security-Northridge Store Cosmetics Department manager's salary-Northridge Store

$ 85,600 $ 5,740 $ 66,500 $ 18,800 $ 17,500 $ 33,000 $ 8,100 $ 16,600 $ 4,620

The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are direct costs of the Cosmetics Department? A) $96,260 B) $43,360 C) $38,740 D) $33,000 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-13 (Algo) The following cost data pertain...

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161)

$ 82,600 $ 5,160 $ 60,100 $ 11,300 $ 13,500 $ 31,300 $ 15,500 $ 20,400 $ 4,240

The Northridge Store is just one of many stores owned and operated by the company. The Cosmetics Department is one of many departments at the Northridge Store. The central warehouse serves all of the company's stores. What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store? A) $158,200 B) $45,200 C) $40,700 D) $82,600 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-14 (Algo) The following cost data pertain...

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162)

Dake Corporation's relevant range of activity is 2,900 units to 7,500 units. When it produces and sells 5,200 units, its average costs per unit are as follows:

Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense

Average Cost per Unit $ 6.50 $ 3.40 $ 1.25 $ 3.50 $ 0.85 $ 0.55 $ 0.65 $ 0.55

For financial reporting purposes, the total amount of product costs incurred to make 5,200 units is closest to: A) $76,180 B) $57,980 C) $81,380 D) $18,200 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-15 (Algo) Dake Corporation's relevant range...

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163)

Dake Corporation's relevant range of activity is 2,800 units to 6,000 units. When it produces and sells 4,400 units, its average costs per unit are as follows:

Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense

Average Cost per Unit $ 6.95 $ 3.00 $ 1.70 $ 2.50 $ 1.00 $ 0.70 $ 0.80 $ 0.70

If 3,400 units are produced, the total amount of direct manufacturing cost incurred is closest to: A) $33,830 B) $39,610 C) $48,110 D) $42,330 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-16 (Algo) Dake Corporation's relevant range...

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164)

Dake Corporation's relevant range of activity is 5,200 units to 6,000 units. When it produces and sells 5,600 units, its average costs per unit are as follows:

Direct materials Direct labour Variable manufacturing overhead Fixed manufacturing overhead Fixed selling expense Fixed administrative expense Sales commissions Variable administrative expense

Average Cost per Unit $ 6.55 $ 3.80 $ 2.15 $ 3.50 $ 1.05 $ 0.75 $ 0.85 $ 0.75

If 4,600 units are produced, the total amount of indirect manufacturing cost incurred is closest to: A) $9,890 B) $19,600 C) $29,490 D) $25,990 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-07 Indirect Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-17 (Algo) Dake Corporation's relevant range...

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165)

Schwiesow Corporation has provided the following information:

Direct materials

Cost per Unit $ 7.35

Direct labour

$ 3.70

Variable manufacturing overhead

$ 1.75

Fixed manufacturing overhead

$ 15,000

Sales commissions

$ 1.00

Variable administrative expense

$ 0.40

Fixed selling and administrative expense

Cost per Period

$ 5,500

If 7,000 units are produced, the total amount of manufacturing overhead cost is closest to: A) $26,250 B) $27,250 C) $25,250 D) $39,150 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-18 (Algo) Schwiesow Corporation has provided...

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166)

Kesterson Corporation has provided the following information:

Direct materials

Cost per Unit $ 7.05

Direct labour

$ 4.00

Variable manufacturing overhead

$ 1.45

Fixed manufacturing overhead

$ 15,000

Sales commissions

$ 1.90

Variable administrative expense

$ 0.90

Fixed selling and administrative expense

Cost per Period

$ 7,200

If 6,000 units are produced, the total amount of indirect manufacturing cost incurred is closest to: A) $8,700 B) $54,360 C) $23,700 D) $15,000 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Topic : 02-07 Indirect Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-19 (Algo) Kesterson Corporation has provided...

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167)

Kesterson Corporation has provided the following information:

Direct materials

Cost per Unit $ 6.95

Direct labour

$ 3.80

Variable manufacturing overhead

$ 1.35

Fixed manufacturing overhead

$ 11,500

Sales commissions

$ 1.70

Variable administrative expense

$ 0.70

Fixed selling and administrative expense

Cost per Period

$ 5,000

The incremental manufacturing cost that the company will incur if it increases production from 5,000 to 5,001 units is closest to: A) $12.10 B) $14.95 C) $17.80 D) $15.80 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Topic : 02-09 Differential Cost and Revenue Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-20 (Algo) Kesterson Corporation has provided...

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168)

Vignana Corporation manufactures and sells hand-painted clay figurines of popular sports heroes. Shown below are some of the costs incurred by Vignana for last year: Cost of clay used in production Wages paid to the workers who paint the figurines Wages paid to the sales manager's secretary Cost of junk mail advertising

$ 74,000 $ 98,000 $ 30,000 $ 47,000

What is the total of the direct costs above? A) $74,000 B) $128,000 C) $172,000 D) $219,000 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-02 Understand cost classification by traceability. Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-21 (Algo) Vignana Corporation manufactures...

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169)

$ 75,000 $ 86,000 $ 38,000 $ 55,000

What is the total of the product costs above? A) $0 B) $93,000 C) $161,000 D) $179,000 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Topic : 02-14 Direct Materials Topic : 02-15 Direct Labour Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-22 (Algo) Vignana Corporation manufactures...

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170)

$ 73,000 $ 85,000 $ 37,000 $ 54,000

What is the total of the conversion costs above? A) $73,000 B) $91,000 C) $85,000 D) $158,000 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-23 (Algo) Vignana Corporation manufactures...

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171)

Pedregon Corporation has provided the following information:

Direct materials

Cost per Unit $ 7.20

Direct labour

$ 4.00

Variable manufacturing overhead

$ 1.45

Fixed manufacturing overhead

Cost per Period

$ 18,500

Sales commissions

$ 0.65

Variable administrative expense

$ 0.75

Fixed selling and administrative expense

$ 7,200

If 5,000 units are sold, the total variable cost is closest to: A) $77,750 B) $95,500 C) $70,250 D) $63,250 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-24 (Algo) Pedregon Corporation has...

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172)

Pedregon Corporation has provided the following information:

Direct materials

Cost per Unit $ 7.25

Direct labour

$ 4.10

Variable manufacturing overhead

$ 1.50

Fixed manufacturing overhead

Cost per Period

$ 20,900

Sales commissions

$ 0.70

Variable administrative expense

$ 0.80

Fixed selling and administrative expense

$ 3,900

If 5,500 units are produced, the total amount of manufacturing overhead cost is closest to: A) $29,150 B) $20,350 C) $22,600 D) $41,250 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-04 Understand cost classification by function. Topic : 02-13 Manufacturing Costs Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-25 (Algo) Pedregon Corporation has...

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173)

Lagle Corporation has provided the following information:

Direct materials

Cost per Unit $ 4.50

Direct labour

$ 3.20

Variable manufacturing overhead

$ 1.20

Fixed manufacturing overhead

$ 9,900

Sales commissions

$ 1.20

Variable administrative expense

$ 0.30

Fixed selling and administrative expense

Cost per Period

$ 3,300

For financial reporting purposes, the total amount of period costs incurred to sell 4,500 units is closest to: A) $10,050 B) $6,750 C) $3,300 D) $9,900 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-26 (Algo) Lagle Corporation has provided the...

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174)

Lagle Corporation has provided the following information:

Direct materials

Cost per Unit $ 4.95

Direct labour

$ 3.30

Variable manufacturing overhead

$ 1.65

Fixed manufacturing overhead

$ 10,500

Sales commissions

$ 1.20

Variable administrative expense

$ 0.40

Fixed selling and administrative expense

Cost per Period

$ 5,000

If 3,500 units are sold, the variable cost per unit sold is closest to: A) $15.70 B) $11.50 C) $9.90 D) $11.55 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-27 (Algo) Lagle Corporation has provided the...

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175)

Lagle Corporation has provided the following information:

Direct materials

Cost per Unit $ 4.50

Direct labour

$ 3.20

Variable manufacturing overhead

$ 1.20

Fixed manufacturing overhead

$ 9,900

Sales commissions

$ 1.20

Variable administrative expense

$ 0.30

Fixed selling and administrative expense

Cost per Period

$ 3,300

If 5,500 units are sold, the total variable cost is closest to: A) $48,950 B) $73,700 C) $57,200 D) $57,475 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-28 (Algo) Lagle Corporation has provided the...

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176)

At a sales volume of 32,000 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $620,800. To the nearest whole dollar, what should be the total sales commissions at a sales volume of 30,100 units? (Assume that this sales volume is within the relevant range.) (Round intermediate calculations to 2 decimal places.) A) $602,370 B) $620,800 C) $583,940 D) $659,987

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-29 (Algo) At a sales volume of...

177)

At a sales volume of 32,000 units, Choice Corporation's sales commissions (a cost that is variable with respect to sales volume) total $620,800. To the nearest whole cent, what should be the average sales commission per unit at a sales volume of 41,000 units? (Assume that this sales volume is within the relevant range.) A) $19.40 B) $16.14 C) $20.62 D) $15.14

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-03 Variable Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-30 (Algo) At a sales volume of...

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178)

Erkkila Incorporated reports that at an activity level of 6,000 machine-hours in a month, its total variable inspection cost is $425,330 and its total fixed inspection cost is $162,477. What would be the average fixed inspection cost per unit at an activity level of 6,300 machine-hours in a month? Assume that this level of activity is within the relevant range. A) $97.97 B) $27.08 C) $45.10 D) $25.79

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-31 (Algo) Erkkila Incorporated reports that at an...

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179)

An income statement for Sam's Bookstore for the first quarter of the year is presented below: Sam's Bookstore Income Statement For Quarter Ended March 31 Sales

$ 1,000,000

Cost of goods sold

665,000

Gross margin

335,000

Selling and administrative expenses Selling Administrative Net operating income

$ 107,000 118,000

225,000 $ 110,000

On average, a book sells for $50. Variable selling expenses are $4 per book with the remaining selling expenses being fixed. The variable administrative expenses are 3% of sales with the remainder being fixed. The cost formula for selling and administrative expenses with "X" equal to the number of books sold is: A) Y = $140,000 + $4.00X B) Y = $140,000 + $5.50X C) Y = $115,000 + $5.50X D) Y = $115,000 + $7.00X Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Topic : 02-23 The Income Statement Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-32 (Algo) An income statement for Sam's Bookstore for...

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180)

Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $534,000 or a new model 220 machine costing $422,000 to replace a machine that was purchased 5 years ago for $473,000. The old machine was used to make product I43L until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 220 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product I43L. Management also considered, but rejected, the alternative of simply dropping product I43L. If that were done, instead of investing $422,000 in the new machine, the money could be invested in a project that would return a total of $469,000. In making the decision to buy the model 220 machine rather than the model 370 machine, the sunk cost was: A) $473,000 B) $422,000 C) $534,000 D) $469,000

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-11 Sunk Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-33 (Algo) Management of Plascencia Corporation is considering...

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181)

Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $511,000 or a new model 220 machine costing $471,000 to replace a machine that was purchased 7 years ago for $503,000. The old machine was used to make product I43L until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 220 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product I43L. Management also considered, but rejected, the alternative of simply dropping product I43L. If that were done, instead of investing $471,000 in the new machine, the money could be invested in a project that would return a total of $8,000. In making the decision to buy the model 220 machine rather than the model 370 machine, the differential cost was: A) $40,000 B) $32,000 C) $8,000 D) $24,000

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-09 Differential Cost and Revenue Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-34 (Algo) Management of Plascencia Corporation is considering...

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182)

Management of Plascencia Corporation is considering whether to purchase a new model 370 machine costing $525,000 or a new model 220 machine costing $423,000 to replace a machine that was purchased 8 years ago for $488,000. The old machine was used to make product I43L until it broke down last week. Unfortunately, the old machine cannot be repaired. Management has decided to buy the new model 220 machine. It has less capacity than the new model 370 machine, but its capacity is sufficient to continue making product I43L. Management also considered, but rejected, the alternative of simply dropping product I43L. If that were done, instead of investing $423,000 in the new machine, the money could be invested in a project that would return a total of $450,000. In making the decision to invest in the model 220 machine, the opportunity cost was: A) $488,000 B) $423,000 C) $525,000 D) $450,000

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-10 Opportunity Cost Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-35 (Algo) Management of Plascencia Corporation is considering...

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100

183)

Bolka Corporation, a merchandising company, reported the following results for October:

Sales Cost of goods sold (all variable) Total variable selling expense Total fixed selling expense Total variable administrative expense Total fixed administrative expense

$ 419,000 $ 175,500 $ 23,600 $ 17,200 $ 15,400 $ 31,400

The gross margin for October is: A) $204,500 B) $243,500 C) $155,900 D) $370,400 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 02-05 Prepare financial reports. Topic : 02-23 The Income Statement Source : Chapter 02 Test Bank - Algorithmic > TB MC Qu. 2-36 (Algo) Bolka Corporation, a merchandising...

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101

SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 184) Stony Electronics Corporation manufactures a Wifi speaker designed for mounting on the wall of the bathroom. The following list represents some of the different types of costs incurred in the manufacture of these Wifi speakers: 1) The plant manager's salary. 2) The cost of heating the plant. 3) The cost of heating executive offices. 4) The cost of printed circuit boards used in the Wifi speakers. 5) Salaries and commissions of company salespersons. 6) Depreciation on office equipment used in the executive offices. 7) Depreciation on production equipment used in the plant. 8) Wages of janitorial personnel who clean the plant. 9) The cost of insurance on the plant building. 10) The cost of electricity to light the plant. 11) The cost of electricity to power plant equipment. 12) The cost of maintaining and repairing equipment in the plant. 13) The cost of printing promotional materials for trade shows. 14) The cost of solder used in assembling the Wifi speakers. 15) The cost of telephone service for the executive offices. Required: Classify each of the items above as product (inventoriable) cost or period (non-inventoriable) costs for the purpose of preparing external financial statements.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Source : Chapter 02 Test Bank > TB 02-129 Stony Electronics Corporation manufactures a...

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102

185)

Bill Pope has developed a new device that is so exciting he is considering quitting his job in order to produce and market it on a large-scale basis. Bill will rent a garage for $300 per month for production purposes. Utilities will cost $40 per month. Bill has already taken an industrial design course at the local community college to help prepare for this venture. The course cost $300. Bill will rent production equipment at a monthly cost of $800. He estimates the material cost per unit will be $5, and the labour cost will be $3. He will hire workers and spend his time promoting the product. To do this he will quit his job, which pays $3,000 per month. Advertising and promotion will cost $900 per month. Required: Complete the chart below by placing an "X" under each heading that helps to identify the cost involved. There can be "Xs" placed under more than one heading for a single cost, e.g., a cost might be a sunk cost, an overhead cost and a product cost; there would be an "X" placed under each of these headings opposite the cost. Opportunity Variable Manuf. Cost Sunk Cost Fixed Overhead Cost Cost

Product Selling Differential Cost Cost Cost*

General rent Utilities Cost of the industrial design course Equipment rented Material cost Labour cost Present salary Advertising

* Between the alternatives of going into business to make the device or not going into business to make the device.

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103

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-03 Understand cost classification by relevance. Topic : 02-18 Product Costs Versus Period Costs Topic : 02-09 Differential Cost and Revenue Topic : 02-10 Opportunity Cost Topic : 02-11 Sunk Cost Source : Chapter 02 Test Bank > TB 02-130 Bill Pope has developed a new device...

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104

186)

Logan Products, a small manufacturer, has submitted the items below concerning last year's operations. The president's secretary, trying to be helpful, has alphabetized the list. Administrative salaries

$2,400

Advertising expense

1,200

Depreciation—factory building

800

Depreciation—factory equipment

1,600

Depreciation—office equipment

180

Direct labour cost

21,900

Raw materials inventory, beginning

2,100

Raw materials inventory, ending

3,200

Finished goods inventory, beginning

46,980

Finished goods inventory, ending

44,410

General liability insurance expense

240

Indirect labour cost

11,800

Insurance on factory

1,400

Purchases of raw materials

14,600

Repairs and maintenance of factory

900

Sales salaries

2,000

Taxes on factory

450

Travel and entertainment expense

1,410

Work in process inventory, beginning

1,670

Work in process inventory, ending

1,110

Required: a. Prepare a schedule of Cost of Goods Manufactured in good form for the year. b. Determine the Cost of Goods Sold for the year.

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105

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106

187)

Laco Company acquired its factory building about 20 years ago. For several years, the company has rented out a small, unused part of the building. The renter's lease will expire soon. Rather than renewing the lease, Laco Company is considering using the space itself to manufacture a new product. Under this option, the unused space will continue to be depreciated on a straight-line basis, as in past years. Direct materials and direct labour cost for the new product would be $50 per unit. In order to have a place to store finished units of the new product, the company would have to rent a small warehouse nearby. The rental cost would be $2,000 per month. It would cost the company an additional $4,000 each month to advertise the new product. A new production supervisor would be hired to oversee production of the new product who would be paid $3,000 per month. The company would pay a sales commission of $10 for each unit of product that is sold. Required: Complete the chart below by placing an "X" under each column heading that helps to identify the costs listed to the left. There can be "X's" placed under more than one heading for a single cost. For example, a cost might be a product cost, an opportunity cost, and a sunk cost; there would be an "X" placed under each of these headings on the answer sheet opposite the cost. Opportunity Cost

Sunk Cost

Variable Cost

Fixed Cost

Product Selling Cost & Admin. Cost

Differential Cost*

Rent on unused factory space Depreciation on the factory space Direct material and direct labour Rental cost of the small warehouse Advertising cost Production supervisor's salary Sales commissions

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107

* Between the alternatives of (1) renting the space out again or (2) using the space to produce the new product.

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108

188)

A list of accounts for a manufacturing company for an accounting period is given below. Find the unknown amounts indicated by question marks. Sales Cost of goods sold

$39,000 ?

Purchases of direct materials

11,000

Direct labour

5,000

Finished goods inventory, beginning

5,000

Work in process, beginning

800

Work in process, ending

3,000

Gross margin

11,700

Finished goods inventory, ending

Accounts payable, beginning

4,000

Accounts payable, ending

2,800

Direct materials inventory, beginning

1,000

Direct materials inventory, ending

3,000

Indirect labour

2,000

Indirect materials used

4,000

Utilities expense, factory

3,000

Cost of goods manufactured

Depreciation on factory equipment

7,000

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-133 A list of accounts for a manufacturing...

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109

189)

Use the following information to determine the gross margin for British Columbia Manufacturing for the year just ended (all amounts are in thousands ($000) of dollars): Sales

$31,800

Purchases of direct materials

7,000

Direct labour

5,000

Work in process inventory, 1/1

800

Work in process inventory, 12/31

3,000

Finished goods inventory, 1/1

4,000

Finished goods inventory, 12/31

5,300

Accounts payable, 1/1

1,700

Accounts payable, 12/31

1,500

Direct materials inventory, 1/1

6,000

Direct materials inventory, 12/31

1,000

Indirect labour

600

Indirect materials used

500

Utilities expense, factory

1,900

Depreciation on factory equipment

3,500

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-134 Use the following information to determine...

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110

190)

The following information is from Marchant Manufacturing Co. for September:

Direct materials used in production

$95,000

Direct labour

67,000

Total manufacturing cost

234,000

Raw materials inventory, Sept. 1

24,000

Work in process inventory, Sept. 1

6,000

Finished goods inventory, Sept. 1

101,000

Purchases of raw materials

102,000

Cost of goods manufactured

233,000

Administrative expense

41,000

Selling expense

56,000

Sales

344,000

Gross margin

127,000

Net income

30,000

Required: a. Compute the Cost of Goods Sold. b. Compute the balance in Finished Goods Inventory at September 30. c. Compute the balance in Work in Process Inventory at September 30. d. Compute the balance in Raw Materials Inventory at September 30. e. Compute the total Manufacturing Overhead. (Hint: The easiest method of solving this problem is to sketch out the income statement and the schedule of cost of goods manufactured, enter the given amounts, and then enter the unknowns as plug figures.)

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111

191)

The following data (in thousands of dollars) have been taken from the accounting records of Larsen Corporation for the just completed year. Sales

$860

Purchases of raw materials

$150

Direct labour

$110

Manufacturing overhead

$210

Administrative expenses

$130

Selling expenses

$180

Raw materials inventory, beginning

$40

Raw materials inventory, ending

$80

Work in process inventory, beginning

$20

Work in process inventory, ending

$80

Finished goods inventory, beginning

$80

Finished goods inventory, ending

$150

Required: a. Prepare a Schedule of Cost of Goods Manufactured in good form. b. Compute the Cost of Goods Sold. c. Using data from your answers above as needed, prepare an Income Statement in good form.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-136 The following data (in thousands of dollars)...

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112

192)

The following data (in thousands of dollars) have been taken from the accounting records of Larner Corporation for the just completed year. Sales

$870

Purchases of raw materials

$110

Direct labour

$130

Manufacturing overhead

$200

Administrative expenses

$160

Selling expenses

$140

Raw materials inventory, beginning

$30

Raw materials inventory, ending

$60

Work in process inventory, beginning

$50

Work in process inventory, ending

$10

Finished goods inventory, beginning

$150

Finished goods inventory, ending

$140

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-137 The following data (in thousands of dollars)...

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113

193)

The following data (in thousands of dollars) have been taken from the accounting records of Larmont Corporation for the just completed year. Sales

$990

Purchases of raw materials

$100

Direct labour

$240

Manufacturing overhead

$210

Administrative expenses

$100

Selling expenses

$140

Raw materials inventory, beginning

$20

Raw materials inventory, ending

$80

Work in process inventory, beginning

$50

Work in process inventory, ending

$30

Finished goods inventory, beginning

$160

Finished goods inventory, ending

$150

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-138 The following data (in thousands of dollars)...

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114

194)

The following costs relate to one month's activity in Martin Company:

Indirect materials

$350

Rent on factory building

450

Maintenance of equipment

100

Direct material used

1,000

Utilities on factory

300

Direct labour

1,600

Selling expense

500

Administrative expense

300

Work in process inventory, beginning

500

Work in process inventory, ending

900

Finished goods inventory, beginning

400

Finished goods inventory, ending

200

Required: a. Prepare a Schedule of Cost of Goods Manufactured in good form. b. Determine the Cost of Goods Sold.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-139 The following costs relate to...

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115

195)

Simply Sweets has provided the following relating to the most recent month (August 31, 2020) of operations, for their main product, cookies. Baker's salary

3,000

Finished goods inventory, beginning

1,000

Finished goods inventory, ending

3,000

General & administrative expenses

3,500

Indirect materials

500

Production Supervisor, Salary

4,000

Purchases of raw materials

11,000

Raw materials inventory, ending

2,000

Raw materials inventory, beginning

1,000

Rent on production factory

2,000

Rent, retail store

1,000

Sales

40,000

Utilities on production factory

500

Utilities, retail store

500

Wages, retail staff

3,000

WIP inventory, beginning

2,500

WIP inventory, ending

4,500

Required: a. Prepare a schedule of cost of goods manufactured in good format. b. Prepare the cost of goods sold section of the income statement. c. Prepare an income statement in good format.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-140 Simply Sweets has provided the...

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116

196)

Sprinkles Inc. has provided the following relating to the most recent month (October 31, 2020) of operations, for their main product, cupcakes. Baker's salary

7,000

General & administrative expenses

4,500

Indirect materials

2,500

Production Supervisor, Salary

4,000

Raw material purchases

12,000

Rent on production factory

3,000

Rent, retail store

2,000

Sales

45,000

Utilities on production factory

1,000

Utilities, retail store

1,500

Wages, retail staff

4,000

Inventory Balances:

Beginning

Ending

Raw Materials

2,000

5,000

Work in Process

3,000

6,000

Finished Goods

2,000

4,000

a. Prepare a schedule of cost of goods manufactured in good format. b. Prepare the cost of goods sold section of the income statement. c. Prepare an income statement in good format.

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117

197)

Snickerdoodle Inc. has provided the following relating to the most recent month (September 30, 2020) of operations, for their main product, cookies. Baker's salary

13,000

General & administrative expenses

13,500

Indirect materials

10,500

Production Supervisor, Salary

14,000

Raw material purchases

21,000

Rent on production factory

12,000

Rent, retail store

11,000

Sales

140,000

Utilities on production factory

10,500

Utilities, retail store

10,500

Wages, retail staff

13,000

Inventory Balances:

Beginning

Ending

Raw Materials

11,000

12,000

Work in Process

12,500

14,500

Finished Goods

11,000

13,000

Required: 1. Prepare a schedule of cost of goods manufactured in good format. 2. Prepare the cost of goods sold section of the income statement. 3. Prepare an income statement in good format.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-142 Snickerdoodle Inc. has provided...

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118

198)

Snickerdoodle Inc. has provided the following relating to the most recent month (September 30, 2020) of operations, for their main product, cookies. Baker's salary

13,000

General & administrative expenses

13,500

Indirect materials

10,500

Production Supervisor, Salary

14,000

Raw material purchases

21,000

Rent on production factory

12,000

Rent, retail store

11,000

Sales

140,000

Utilities on production factory

10,500

Utilities, retail store

10,500

Wages, retail staff

13,000

Inventory Balances:

Beginning

Ending

Raw Materials

11,000

12,000

Work in Process

12,500

14,500

Finished Goods

11,000

13,000

Required: Calculate the following: 1. Raw materials used in production 2. Total manufacturing overhead 3. Total manufacturing costs 4. Cost of Goods Manufactured 5. Cost of Goods Sold 6. Gross Margin 7. Operating Income (Loss) 8. Prime Costs 9. Conversion Costs

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199)

Frosting Corp. has provided the following relating to the most recent month (August 31, 2020) of operations, for their main product, cupcakes. Baker's salaries

25,000

Finished goods inventory, beginning

18,000

Finished goods inventory, ending

20,000

General & administrative expenses

17,000

Indirect materials

20,000

Production Supervisor, Salary

23,000

Purchases of raw materials

35,000

Raw materials inventory, ending

15,000

Raw materials inventory, beginning

25,000

Rent on production factory

24,000

Rent, retail store

22,000

Sales

300,000

Utilities on production factory

15,000

Utilities, retail store

15,000

Wages, retail staff

15,000

WIP inventory, beginning

16,000

WIP inventory, ending

8,000

Required: 1. Prepare a schedule of cost of goods manufactured in good format. 2. Prepare the cost of goods sold section of the income statement. 3. Prepare an income statement in good format.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-144 Frosting Corp. has provided the following...

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SECTION BREAK. Answer all the part questions. 200) The following account balances has been extracted from Jimbob Co.'s general ledger: Direct materials used in production

$300,000

Depreciation factory building

$20,000

Depreciation factory equipment

$45,000

Depreciation sales department automobiles

$20,000

Direct wages factory employees

$250,000

Sales department salaries and commissions

$160,000

Factory manager’s salary

$55,000

Utility costs factory

$60,000

Utility costs sales office

$15,000

200.1) What was the total of manufacturing overhead? A) $110,000. B) $180,000 C) $400,000. D) $740,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank > TB 02-77 What was the total of manufactur...

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200.2) What was the total of manufacturing costs? A) $400,000. B) $510,000. C) $560,000. D) $730,000 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-16 Manufacturing Overhead Topic : 02-24 Schedule of Cost of Goods Manufactured Topic : 02-14 Direct Materials Topic : 02-15 Direct Labour Source : Chapter 02 Test Bank > TB 02-78 What was the total of...

200.3) What was the total of nonmanufacturing costs? A) $150,000. B) $160,000. C) $195,00 D) $230,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Topic : 02-20 Period Costs Source : Chapter 02 Test Bank > TB 02-79 What was the total of nonmanufacturi...

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201)

The following data (in thousands of dollars) have been taken from the accounting records of Karling Corporation for the just completed year. Sales

$990

Raw materials inventory, beginning

$40

Raw materials inventory, ending

$70

Purchases of raw materials

$120

Direct labour

$200

Manufacturing overhead

$230

Administrative expenses

$150

Selling expenses

$140

Work in process inventory, beginning

$70

Work in process inventory, ending

$50

Finished goods inventory, beginning

$120

Finished goods inventory, ending

$160

201.1) The cost of the raw materials used in production during the year (in thousands of dollars)

was: A) $90. B) $150. C) $160. D) $190. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-80 The cost of the raw materi...

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201.2) The cost of goods manufactured for the year (in thousands of dollars) was: A) $500. B) $540. C) $570. D) $590. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-81 The cost of goods manufactu...

201.3) The cost of goods sold for the year (in thousands of dollars) was: A) $500. B) $580. C) $660. D) $700. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-82 The cost of goods so...

201.4) The net income for the year (in thousands of dollars) was: A) $150. B) $200. C) $250. D) $490. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Source : Chapter 02 Test Bank > TB 02-83 The net income for the...

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202)

The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the just completed year. Sales

$1,000

Raw materials inventory, beginning

$ 90

Raw materials inventory, ending

$ 30

Purchases of raw materials

$ 120

Direct labour

$ 150

Manufacturing overhead

$ 250

Administrative expenses

$160

Selling expenses

$140

Work in process inventory, beginning

$ 50

Work in process inventory, ending

$ 20

Finished goods inventory, beginning

$100

Finished goods inventory, ending

$150

202.1) The cost of the raw materials used in production during the year (in thousands of dollars)

was: A) $40. B) $120. C) $160. D) $180. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-84 The cost of the raw material...

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202.2) The cost of goods manufactured for the year (in thousands of dollars) was: A) $460. B) $500. C) $520. D) $610. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-85 The cost of goods manufacture...

202.3) The cost of goods sold for the year (in thousands of dollars) was: A) $500. B) $560 C) $650. D) $670. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-86 The cost of goods sold fo...

202.4) The net income for the year (in thousands of dollars) was: A) 100 B) $ 140 C) $150. D) $170 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Source : Chapter 02 Test Bank > TB 02-87 The net income for the...

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203)

The following data (in thousands of dollars) have been taken from the accounting records of Karlist Corporation for the just completed year. Sales

$800

Raw materials inventory, beginning

$60

Raw materials inventory, ending

$70

Purchases of raw materials

$180

Direct labour

$100

Manufacturing overhead

$190

Administrative expenses

$110

Selling expenses

$150

Work in process inventory, beginning

$70

Work in process inventory, ending

$80

Finished goods inventory, beginning

$120

Finished goods inventory, ending

$160

203.1) The cost of the raw materials used in production during the year (in thousands of dollars)

was: A) $170. B) $190. C) $240. D) $250. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-88 The cost of the raw materials...

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203.2) The cost of goods manufactured, or the year (in thousands of dollars) was: A) $450. B) $470. C) $530. D) $540. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-89 The cost of goods manufact...

203.3) The cost of goods sold for the year (in thousands of dollars) was: A) $410. B) $ 490 C) $570. D) $610. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-90 The cost of goods sold fo...

203.4) The net income for the year (in thousands of dollars) was: A) $70. B) $130. C) $190. D) $390. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Source : Chapter 02 Test Bank > TB 02-91 The net income for the y...

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204)

The following data pertain to Harriman Company's operations during July: July 1

July 31

Raw materials inventory

$5,000

Work in process inventory

4,000

Finished goods inventory

$12,000

Other data: Cost of goods manufactured

$105,000

Raw materials used

40,000

Manufacturing overhead costs

20,000

Direct labour costs

39,000

Gross profit

100,000

Sales

210,000

204.1) The beginning work in process inventory was: A) $1,000. B) $4,000. C) $10,000. D) $14,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-92 The beginning work in process inventory was:

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204.2) The ending finished goods inventory was: A) $2,000. B) $7,000. C) $12,000. D) $17,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-93 The ending finished goods inventory was:

205)

Bergeron Inc. reported the following data for last year:

Work in process inventory, beginning

$90

Work in process inventory, ending

$140

Finished goods inventory, beginning

$200

Finished goods inventory, ending

$180

Direct labour cost

$350

Direct materials cost

$ 550

Manufacturing overhead cost

$ 450

205.1) The prime cost was: A) $500. B) $700. C) $800. D) $900. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank > TB 02-94 The prime cost was:

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205.2) The conversion cost was: A) $500. B) $700. C) $800. D) $900. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank > TB 02-95 The conversion cost was:

205.3) The cost of goods manufactured was: A) $1,150. B) $1,180. C) $1,220. D) $1,300 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-96 The cost of goods manufactured was:

206)

Geneva Steel Corporation produces large sheets of heavy gauge steel. The company showed the following amounts relating to its production for the year just completed: Direct materials used in production

$120,000

Direct labour costs for the year

70,000

Work in process, beginning

25,000

Finished goods, beginning

50,000

Cost of goods available for sale

310,000

Cost of goods sold

260,000

Work in process, ending

16,000

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206.1) The balance of the finished goods inventory at the end of the year was: A) $45,000. B) $50,000. C) $95,000. D) $193,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-97 The balance of the finish...

206.2) Manufacturing overhead cost for the year was: A) $ 44,000 B) $61,000 C) $78,000. D) $84,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-16 Manufacturing Overhead Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-98 Manufacturing overhead cost for the year was:

206.3) Cost of goods manufactured for the year was: A) $160,000. B) $171,000. C) $ 260,000. D) $ 290,0000 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 02-05 Prepare financial reports. Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-99 Cost of goods manufac...

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207)

Boardman Company reported the following data for the month of January: Inventories:

1/1

1/31

Raw materials

$32,000

$31,000

Work in process

$18,000

$12,000

Finished goods

$30,000

$35,000

Additional information: Sales revenue

$210,000

Direct labour costs

40,000

Manufacturing overhead costs

70,000

Selling expenses

25,000

Administrative expenses

35,000

207.1) If raw materials costing $35,000 were purchased during January, the total manufacturing

costs for the month was? A) $144,000. B) $145,000. C) $146,000. D) $151,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-100 If raw materials costing $35,000...

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207.2) Assume that cost of goods sold for January was $124,000. The net income for January

was: A) $25,000. B) $26,000. C) $51,000. D) $61,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-23 The Income Statement Source : Chapter 02 Test Bank > TB 02-101 Assume that cost of goods...

207.3) Boardman Company's total conversion cost for January was: A) $110,000. B) $130,000. C) $135,000. D) $170,000. Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 02-04 Understand cost classification by function. Topic : 02-16 Manufacturing Overhead Source : Chapter 02 Test Bank > TB 02-102 Boardman Company's tota...

208)

Tech Computer manufactures tablets in its plant located in Toronto and then ships the computers directly to distributors and retailers. The company's accountant has enlisted you to classify the following company's expenses:

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208.1) Cost of a new advertising campaign on YouTube. A) Fixed product cost. B) Variable product cost. C) Fixed period cost. D) Variable period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-107 Cost of a new advertising campai...

208.2) Straight line depreciation on the factory building. A) Fixed product cost. B) Variable product cost. C) Fixed period cost. D) Variable period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-108 Straight line deprecia...

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208.3) Units of production depreciation on the factory equipment. A) Fixed product cost. B) Variable product cost. C) Fixed period cost. D) Variable period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-18 Product Costs Versus Period Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-109 Units of production depreci...

208.4) The salary of the Vice President of Sales. A) Fixed product cost. B) Variable product cost. C) Fixed period cost. D) Variable period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-110 The salary of the Vice Presi...

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208.5) The delivery charges incurred when shipping the tablet drives to be installed in the tablet. A) Fixed product cost. B) Variable product cost. C) Fixed period cost. D) Variable period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-111 The delivery charges incurr...

208.6) The drive installed in each tablet. A) Fixed product cost. B) Variable product cost. C) Fixed period cost. D) Variable period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-112 The drive installed in each tablet.

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208.7) Cost of computer motherboard, which is a part of the finished product. A) Fixed product cost. B) Variable product cost. C) Fixed period cost. D) Variable period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-113 Cost of computer motherboard...

208.8) Cost of a warehouse (i.e., rent) used to store finished goods (tablets) prior to selling them

to the customer. A) Fixed product cost. B) Variable product cost. C) Fixed period cost. D) Variable period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-03 Variable Cost Topic : 02-04 Fixed Cost Source : Chapter 02 Test Bank > TB 02-114 Cost of a warehouse (i.e., rent) used to...

209)

Charlie's Chocolate Factory manufactures chocolate bars and ships them directly to wholesalers and retailers across the country. The company has two product lines: milk chocolate bars and chocolate covered almonds. Classify the following company's expenses if the cost object is a single product line (either milk chocolate bars or chocolate covered almonds).

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209.1) The cost of cocoa used in the factory. A) Direct product cost. B) Indirect product cost. C) Direct period cost. D) Indirect period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-07 Indirect Cost Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank > TB 02-115 The cost of cocoa use...

209.2) Lease expenses on equipment used in the production factory. A) Direct product cost. B) Indirect product cost. C) Direct period cost. D) Indirect period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-07 Indirect Cost Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank > TB 02-116 Lease expenses on equipm...

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209.3) Almonds used in the chocolate covered almonds. A) Direct product cost. B) Indirect product cost. C) Direct period cost. D) Indirect period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-07 Indirect Cost Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank > TB 02-117 Almonds used in the choco...

209.4) Shipping costs to deliver ingredients ordered from the suppliers to the production factory. A) Direct product cost. B) Indirect product cost. C) Direct period cost. D) Indirect period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-07 Indirect Cost Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank > TB 02-118 Shipping costs to deliver ingredi...

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209.5) Salaries for milk chocolate bars production line workers A) Direct product cost. B) Indirect product cost. C) Direct period cost. D) Indirect period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-07 Indirect Cost Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank > TB 02-119 Salaries for milk chocolate bar...

209.6) Advertising campaign for chocolate covered almonds. A) Direct product cost. B) Indirect product cost. C) Direct period cost. D) Indirect period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-07 Indirect Cost Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank > TB 02-120 Advertising campaign for choco...

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142

209.7) Sales Commissions paid to Business Development Managers. A) Direct product cost. B) Indirect product cost. C) Direct period cost. D) Indirect period cost. Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 02-04 Understand cost classification by function. Learning Objective : 02-01 Understand cost classification by behaviour. Topic : 02-20 Period Costs Topic : 02-19 Product Costs Topic : 02-18 Product Costs Versus Period Costs Topic : 02-07 Indirect Cost Topic : 02-06 Direct Cost Source : Chapter 02 Test Bank > TB 02-121 Sales Commissions paid to Busin...

210)

Frosting Corp. has provided the following relating to the most recent month (August 31, 2020) of operations, for their main product, cupcakes Baker's salaries

20,000

Finished goods inventory, beginning

18,000

Finished goods inventory, ending

20,000

General & administrative expenses

20,000

Indirect materials

17,500

Production Supervisor, Salary

21,000

Purchases of raw materials

28,000

Raw materials inventory, ending

19,000

Raw materials inventory, beginning

18,000

Rent on production factory

19,000

Rent, retail store

18,000

Sales

243,000

Utilities on production factory

17,500

Utilities, retail store

17,000

Wages, retail staff

20,000

WIP inventory, beginning

19,500

WIP inventory, ending

21,500

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210.1) What was the amount of raw materials used in production? A) $18,000 B) $27,000 C) $28,000 D) $46,000 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-122 What was the amount of raw mat..

210.2) What was the total manufacturing overhead incurred during the period? A) $40,000 B) $57,500 C) $75,000 D) $92,000 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-123 What was the total manufact...

210.3) What was the total manufacturing costs for the period? A) $47,000 B) $95,000 C) $102,000 D) $ 122,000 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-124 What was the total manufa...

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210.4) What was the total prime costs for the period? A) $20,000 B) $27,000 C) $47,000 D) $95,000 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-125 What was the total prime...

210.5) What was the cost of goods manufactured for the period? A) $122,000 B) $120,000 C) $124,000 D) $138,000 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-126 What was the cost of goods...

210.6) What was the cost of goods sold for the period? A) $118,000 B) $ 120,000 C) $121,000 D) $123,000 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-127 What was the cost of goods so...

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210.7) What was the operating income for the period? A) $50,000 B) $68,000 C) $88,000 D) $125,000 Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 02-06 Understand and prepare manufacturing reports. Topic : 02-24 Schedule of Cost of Goods Manufactured Source : Chapter 02 Test Bank > TB 02-128 What was the operating...

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Answer Key Test name: Chapter 02 Test Bank 1) FALSE 2) FALSE 3) FALSE 4) TRUE 5) FALSE 6) TRUE 7) FALSE 8) TRUE 9) FALSE 10) TRUE 11) TRUE 12) FALSE 13) FALSE 14) TRUE 15) TRUE 16) FALSE 17) FALSE 18) TRUE 19) TRUE 20) B

Indirect labour 21) A 22) A 23) D

Depreciation of a machine used in manufacturing. 24) B 25) D 26) D 27) A

Product cost. 28) C

Period cost. 29) B

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30) D 31) B

Choice b. 32) C 33) B 34) A 35) C

Direct labour. 36) D 37) B

Finished goods inventory has increased during the period. 38) D 39) B 40) B 41) A 42) A

$240,000 + $330,000 = $570,000 43) B 44) B 45) A

A difference in the revenue between any two alternatives. 46) C 47) B 48) D 49) A 50) C 51) C 52) D 53) A 54) C

Option C (30,000+35,000+10,000+15,000+5,000+20,000) +15,000-10,000 = 120,000 55) A

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Option A 27,000+34,000+10,000+15,000+2,000+17,000 = 105,000

56) D

Option D (4,000/4) = 1,000. 1,000*70% = 700 // 1,000*30% = 300 57) C

Option C (90+20) -(25+10+30) = 45 58) A

Option A 106,000-27,000-(43,000+8,000-6,000) =34,000 59) D

Option D (35,000+30,000+20,000) +15,000-10,000 = 90,000 60) C

Option-C (17,000+8,500+15,000-2,000) +3,000 = 41,500 61) C

($2,900,000 + $400,000) - ($900,000 + $600,000 + 1,200,000) = $600,000 62) C

Option C ($900,000 + $600,000 + $1,200,000) + $600,000 - $2,900,000 = $400,000 63) A

Option-A Labour – 25%, Manufacturing OH – 75%. (45,000/75%) *25% = 15,000 64) B

Option B ($360,000 - $220,000)-$120,000 + $30,000 = $50,000

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65) C

Option C ($800,000 - $400,000) + $120,000 - $80,000 = $440,000 66) A

Option A ($464,000 – $52,000) + ($73,000 - $74,000) = $411,000 67) A

Option A ($475,000 -$150,000) +($140,475 - $150,750) = $314,725 68) C

Option C ($500,000 - $100,000) +($125,770 - $130,425) = $395,345 69) C

Option C ($30,000 + $110,00) - ($150,000 - $40,000) =$30,000 70) B

Option B $128,900 -$27,500 + $28,750 = $130,150 71) A

Option A $13,000 + $63,000 - $15,000 = $61,000 72) A

Option A $84,000 -$20,000 + $18,000 = $82,000 73) A

Option A $20,000 + $90,000 -$30,000 = $80,000 74) C 75) A 76) B

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Option B ($600,000 – $300,000) +$100,000 -$150,000 = $250,000 77) A

Option D $140,000-$30,000+$35,000 = $145,000 78) D

Option D (($60,000 /30,000) *45,000)) +$80,000 = $170,000 79) B

Option B ((($60,000/32,000) *50,000) +$64,000)/50,000 = $3.16 ($3.155, Rounded off to 2 decimals) 80) B

Option B ($31,000 – $32,000) +($12,000 -$18,000) +($35,000 – $30,000) +$5,000 = $3,000 81) A

Conversion cost = Direct labour + Manufacturing overhead = $33,400 + $25,100 = $58,500 82) A

Manufacturing overhead = 0.35 × Conversion cost Direct labour = $126,100 Conversion cost = Direct labour + Manufacturing overhead Conversion cost = $126,100 + Manufacturing overhead Conversion cost = $126,100 + (0.35 × Conversion cost) 0.65 × Conversion cost = $126,100 Conversion cost = $126,100 ÷ 0.65 = $194,000 Manufacturing overhead = 0.35 × Conversion cost Manufacturing overhead = 0.35 × $194,000 = $67,900 83) D

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Direct labour cost = $13,400 Direct labour cost = 0.40 × Prime cost Total manufacturing cost = $73,000 Direct labour cost = 0.40 × Prime cost Prime cost = Direct labour cost ÷ 0.40 Prime cost = $13,400 ÷ 0.40 = $33,500 Total manufacturing cost = Prime cost + Manufacturing overhead cost $73,000 = $33,500 + Manufacturing overhead cost Manufacturing overhead cost = $39,500 84) B

Direct labour = 0.20 × Conversion cost Manufacturing overhead = $153,600 Conversion cost = Direct labour + Manufacturing overhead Conversion cost = Direct labour + $153,600 Conversion cost = (0.20 × Conversion cost) + $153,600 0.80 × Conversion cost = $153,600 Conversion cost = $153,600 ÷ 0.80 Conversion cost = $192,000 Direct labour = 0.20 × Conversion cost = 0.20 × $192,000 = $38,400 85) C

Prime cost = Direct materials + Direct labour = $43,700 + $29,600 = $73,300 86) C Total variable manufacturing overhead cost ($1.80 per unit × 7,400 units) Total fixed manufacturing overhead cost ($3.10 per unit × 9,800 units*) Total manufacturing overhead cost

$13,320 30,380 $43,700

*The average fixed manufacturing overhead cost per unit was determined by dividing the total fixed manufacturing overhead cost by 9,800 units. 87) D

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Annual insurance expense = $5,190 ÷ 3 = $1,730 Portion applicable to product cost = 0.90 × $1,730 = $1,557 Portion applicable to period cost = 0.10 × $1,730 = $173 88) C

Variable cost per machine-hour = $779,950 ÷ 9,500 machine-hours = $82.10 per machine-hour Fixed cost per machine-hour at 9,900 machine-hours = $200,970 ÷ 9,900 machine-hours = $20.30 per machine-hour Total cost = Variable cost + Fixed cost = $82.10 per machine-hour + $20.30 per machine-hour = $102.40 per machine-hour 89) D Fixed manufacturing overhead per unit Number of units produced* Total fixed manufacturing overhead cost

$ 3.50 6,400 $ 22,400

*The average fixed manufacturing overhead cost per unit was determined by dividing the total fixed manufacturing overhead cost by 6,400 units. 90) B Direct materials Direct labour Variable manufacturing overhead

$ 6.75 3.60 1.25

Incremental manufacturing cost

$ 11.60

91) B Direct materials Direct labour Variable manufacturing overhead

$ 6.65 3.00 1.70

Incremental manufacturing cost

$ 11.35

92) C

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Cost of goods sold = Beginning merchandise inventory + Purchases − Ending merchandise inventory $65,500 = $19,400 + Purchases − $26,600 Purchases = $65,500 − $19,400 + $26,600 = $72,700 93) B

Direct costs of the Cosmetics Department = Cosmetics Department sales commissions + Cosmetics Department cost of sales + Cosmetics Department manager's salary = $5,740 + $33,000 + $4,620 = $43,360 94) A

Costs that are not direct costs of the Northridge Store = Corporate headquarters building lease + Corporate legal office salaries + Central warehouse lease cost = $82,600 + $60,100 + $15,500 = $158,200 95) A Direct materials Direct labour Variable manufacturing overhead

$ 6.50 3.40 1.25

Variable manufacturing cost per unit

$ 11.15

Total variable manufacturing cost ($11.15 per unit × 5,200 units produced) Total fixed manufacturing overhead cost ($3.50 per unit × 5,200 units produced) Total product (manufacturing) cost

$ 57,980 18,200 $ 76,180

96) A Direct materials Direct labour Direct manufacturing cost per unit (a) Number of units produced (b) Total direct manufacturing cost (a) × (b)

$ 6.95 3.00 $ 9.95 3,400 $ 33,830

97) C

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Total variable manufacturing overhead cost ($2.15 per unit × 4,600 units) Total fixed manufacturing overhead cost ($3.50 per unit × 5,600 units*) Total indirect manufacturing cost

$ 9,890 19,600 $ 29,490

*The average fixed manufacturing overhead cost per unit was determined by dividing the total fixed manufacturing overhead cost by 5,600 units. 98) B Total variable manufacturing overhead cost ($1.75 per unit × 7,000 units) Total fixed manufacturing overhead cost Total manufacturing overhead cost

$ 12,250 15,000 $ 27,250

99) C Total variable manufacturing overhead cost ($1.45 per unit × 6,000 units) Total fixed manufacturing overhead cost Total indirect manufacturing cost 100)

$ 8,700 15,000 $ 23,700

Direct materials Direct labour Variable manufacturing overhead

$ 6.95 3.80 1.35

Incremental manufacturing cost

$ 12.10

101)

C Direct costs include the cost of clay used in production and the wages paid to the workers who paint the figurines. $74,000 + $98,000 = $172,000 102)

C Product costs include the cost of clay used in production and the wages paid to the workers who paint the figurines. $75,000 + $86,000 = $161,000 103)

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Conversion costs include only the wages paid to the workers who paint the figurines. 104)

Direct materials Direct labour Variable manufacturing overhead Sales commissions Variable administrative expense

$ 7.20 4.00 1.45 0.65 0.75

Variable cost per unit sold

$ 14.05

Variable cost per unit sold (a) Number of units sold (b) Total variable costs (a) × (b)

$ 14.05 5,000 $ 70,250

105)

Total variable manufacturing overhead cost ($1.50 per unit × 5,500 units) Total fixed manufacturing overhead cost

$ 8,250

Total manufacturing overhead cost

$ 29,150

106)

20,900

Sales commissions Variable administrative expense

$ 1.20 0.30

Variable selling and administrative expense per unit

$ 1.50

Total variable selling and administrative expense ($1.50 per unit × 4,500 units sold) Total fixed selling and administrative expense Total period (nonmanufacturing) cost 107)

$ 6,750 3,300 $ 10,050

Direct materials Direct labour Variable manufacturing overhead Sales commissions Variable administrative expense

$ 4.95 3.30 1.65 1.20 0.40

Variable cost per unit sold

$ 11.50

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108)

Direct materials Direct labour Variable manufacturing overhead Sales commissions Variable administrative expense

$ 4.50 3.20 1.20 1.20 0.30

Variable cost per unit sold

$ 10.40

Variable cost per unit sold (a) Number of units sold (b) Total variable costs (a) × (b)

$ 10.40 5,500 $ 57,200

109)

C Sales commission per unit = Total sales commissions ÷ Unit sales = $620,800 ÷ 32,000 = $19.40 Total sales commission = Sales commission per unit × Unit sales = $19.40 × 30,100 = $583,940 110)

A Sales commission per unit = Total sales commissions ÷ Unit sales = $620,800 ÷ 32,000 = $19.40 The average sales commission per unit is constant within the relevant range. 111)

D Average fixed inspection cost = Total fixed inspection cost ÷ Total activity = $162,477 ÷ 6,300 machine-hours = $25.79 per machine-hour 112)

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Unit sales = $1,000,000 ÷ $50 per book = 20,000 books Selling expenses = Fixed selling expenses + ($4 per book × 20,000 books) $107,000 = Fixed selling expenses + $80,000 Fixed selling expenses = $107,000 − $80,000 = $27,000 Administrative expenses = Fixed administrative expenses + (0.03 × $1,000,000) $118,000 = Fixed administrative expenses + $30,000 Fixed administrative expenses = $118,000 − $30,000 = $88,000 Variable administrative expense per unit = 0.03 × $50 per book = $1.50 per book Y = ($27,000 + $88,000) + ($4 + $1.50) X Y = $115,000 + $5.50X 113)

A Sunk cost = Cost of old machine = $473,000 114)

A Differential cost = $511,000 − $471,000 = $40,000 115)

D Opportunity cost = Return from alternative investment = $450,000 116)

Sales Cost of goods sold Gross margin 117)

$ 419,000 175,500 $ 243,500

Short Answer

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1) Product. 2) Product. 3) Period. 4) Product. 5) Period. 6) Period. 7) Product. 8) Product. 9) Product. 10) Product. 11) Product. 12) Product. 13) Period. 14) Product. 15) Period. 118)

Short Answer Opportunity Variable Manuf. Cost Sunk Cost Fixed Overhead Cost Cost

Product Selling Differential Cost Cost Cost

General rent

Utilities

Cost of the industrial design course

Equipment rented Material cost

Labour cost

Present salary

Advertising

119)

X X

Short Answer

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a. LOGAN COMPANY Schedule of Cost of Goods Manufactured Raw materials used: Beginning inventory

$2,100

Purchases

14,600

Available

16,700

Less ending inventory

3,200

Direct labour

$13,500 21,900

Manufacturing overhead: Depreciation—factory building

800

Depreciation—factory equipment

1,600

Indirect labour cost

11,800

Insurance on factory

1,400

Repairs and maintenance

900

Taxes on factory

450

16,950

Total manufacturing cost

52,350

Add work in process inventory, beginning

1,670 54,020

Less work in process inventory, ending Cost of goods manufactured

1,110 $ 52,910

b. Cost of Goods Sold Finished goods inventory, beginning

$46,980

Cost of goods manufactured (above)

52,910

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Available for sale

99,890

Less finished goods inventory, ending

44,410

Cost of goods sold 120)

$ 55,480

Short Answer Opportunity Sunk Variable Fixed Product Selling Differential Cost Cost Cost Cost Cost & Admin. Cost* Cost

Rent on unused X factory space Depreciation on the factory space

X X

Direct material and direct labour

Rental cost of the small warehouse

Advertising cost

Production supervisor's salary Sales commissions

We suggest you allow either answers (a blank or an X) in this cell. Some experts would consider an opportunity cost to be a differential cost and others would not. It is all a matter of definition and the definitions given in the text do not really cover this contingency. 121)

Short Answer Cost of goods sold = 39,000 - 11,700 = 27,300. Direct materials used = 1,000 + 11,000 - 3,000 = 9,000. Cost of goods manufactured = 9,000 + 5,000 + (2,000 + 4,000 + 3,000 + 7,000) +800 - 3,000 = 27,800. Finished goods inventory, ending = 5,000 + 27,800 - 27,300 = 5,500. 122)

Short Answer

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Direct materials used = 6,000 + 7,000 - 1,000 = 12,000. Cost of goods manufactured = 12,000 + 5,000 + (600 + 500 + 1,900 + 3,500) +800 - 3,000 = 21,300. Cost of goods sold = 4,000 + 21,300 - 5,300 = 20,000. Gross margin = 31,800 - 20,000 = 11,800 123)

Short Answer

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MARCHANT MANUFACTURING Schedule of Cost of Goods Manufactured Direct materials used: Inventory, Sept. 1

$24,000

Purchases

102,000 126,000

Inventory, Sept. 30 (d)

31,000

Direct materials used—given

95,000

Direct labour

67,000

Manufacturing overhead (e)

72,000

Total manufacturing cost—given

234,000

Inventory of work in process, Sept 1

6,000 240,000

Inventory of work in process, Sept 30 (c)

7,000

Cost of goods manufactured—given

$ 233,000

MARCHANT MANUFACTURING Income Statement Sales

$344,000

Cost of goods sold: Finished goods, Sept 1

$101,000

Cost of goods manufactured—above

233,000

Available for sale

334,000

Finished goods, Sept 30 (b)

117,000

Cost of goods sold (a)

217,000

Gross margin—given

127,000

Operating expenses: Administrative expenses

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41,000

163

Selling expenses Net income—given

56,000

97,000 $ 30,000

124)

Short Answer a. Larsen Corporation Schedule of Cost of Goods Manufactured Direct materials: Raw materials inventory, beginning

$40

Add: Purchases of raw materials

150

Raw materials available for use

190

Deduct: Raw materials inventory, ending

Raw materials used in production

110

Direct labour

110

Manufacturing overhead

210

Total manufacturing cost

430

Add: Work in process inventory, beginning

20 450

Deduct: Work in process inventory, ending Cost of goods manufactured

80 $ 370

b. Computation of cost of goods sold Finished goods inventory, beginning

$80

Add: Cost of goods manufactured

370

Goods available for sale

450

Deduct: Finished goods inventory, ending

150

Cost of goods sold

$ 300

c. Larsen Corporation Income Statement Sales

$860

Less: Cost of goods sold

300

Gross margin

560

Less: Administrative expenses

130

Less: Selling expenses

180

Net income

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$ 250

164

125)

Short Answer a. Larner Corporation Schedule of Cost of Goods Manufactured Direct materials: Raw materials inventory, beginning

$30

Add: Purchases of raw materials

110

Raw materials available for use

140

Deduct: Raw materials inventory, ending

Raw materials used in production

Direct labour

130

Manufacturing overhead

200

Total manufacturing cost

410

Add: Work in process inventory, beginning

50 460

Deduct: Work in process inventory, ending Cost of goods manufactured

10 $ 450

b. Computation of cost of goods sold Finished goods inventory, beginning

$150

Add: Cost of goods manufactured

450

Goods available for sale

600

Deduct: Finished goods inventory, ending

140

Cost of goods sold

$ 460

c. Larner Corporation Income Statement Sales

$870

Less: Cost of goods sold

460

Gross margin

410

Less: Administrative expenses

160

Less: Selling expenses

140

Net income 126)

$ 110

Short Answer

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a. Larmont Corporation Schedule of the Cost of Goods Manufactured Direct materials: Raw materials inventory, beginning

$20

Add: Purchases of raw materials

100

Raw materials available for use

120

Deduct: Raw materials inventory, ending

Raw materials used in production

Direct labour

240

Manufacturing overhead

210

Total manufacturing cost

490

Add: Work in process inventory, beginning

50 540

Deduct: Work in process inventory, ending Cost of goods manufactured

30 $ 510

b. Computation of cost of goods sold Finished goods inventory, beginning

$160

Add: Cost of goods manufactured

510

Goods available for sale

670

Deduct: Finished goods inventory, ending

150

Cost of goods sold

$ 520

c. Larmont Corporation Income Statement Sales

$990

Less: Cost of goods sold

520

Gross margin

470

Less: Administrative expenses

100

Less: Selling expenses

140

Net income 127)

$ 230

Short Answer

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a. Martin Company Schedule of the Cost of Goods Manufactured Direct materials

$1,000

Direct labour

1,600

Manufacturing overhead: Indirect materials

$ 350

Rent

450

Maintenance

100

Utilities

300

Total manufacturing costs

1,200 3,800

Add: WIP, beginning

500 4,300

Deduct: WIP, ending Cost of goods manufactured

900 $ 3,400

b. Cost of Goods Sold Finished goods, beginning

$500

Add: Cost of goods manufactured

3,400

Goods available for sale

3,900

Finished goods, ending

200

Cost of goods sold 128)

3,700

Short Answer

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Simply Sweets Schedule of Cost of Goods Manufactured For the month ended August 31, 2020 Raw materials, beginning

1,000

Purchases of raw materials

11,000

Raw materials available

12,000

Raw materials inventory, ending

2,000

Raw materials used in production

10,000

Baker's salary

3,000

Manufacturing Overhead: Rent on production factory

2,000

Utilities on production factory

500

Production Supervisor, Salary

4,000

Indirect materials

500

7,000

Total manufacturing costs

20,000

Add: WIP inventory, beginning

2,500

Less: WIP inventory, ending

4,500

Cost of Goods Manufactured

18,000

Simply Sweets Cost of Goods Sold Section For the month ended August 31, 2020 Finished goods inventory, beginning

1,000

Add: Cost of Goods Manufactured

18,000

Finished goods available for sale

19,000

Less: Finished goods inventory, ending

3,000

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Cost of Goods Sold

16,000

Simply Sweets Income Statement For the month ended August 31, 2020 Sales

40,000

Finished goods inventory, beginning

1,000

Add: Cost of Goods Manufactured

18,000

Finished goods available for sale

19,000

Less: Finished goods inventory, ending

3,000

Cost of Goods Sold

16,000

Gross Margin

24,000

Rent, retail store

1,000

Wages, retail staff

3,000

Utilities, retail store

500

General & administrative expenses

3,500

Total operating expenses

8,000

Net Income

16,000

129)

Short Answer

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Sprinkles Inc. Schedule of Cost of Goods Manufactured For the month ended October 31, 2020 Raw materials, beginning

2,000

Purchases of raw materials

15,000

Raw materials available

17,000

Raw materials inventory, ending

5,000

Raw materials used in production

12,000

Baker's salary

7,000

Manufacturing Overhead: Rent on production factory

3,000

Utilities on production factory

1,000

Production Supervisor, Salary

4,000

Indirect materials

2,500

10,500

Total manufacturing costs

29,500

Add: WIP inventory, beginning

3,000

Less: WIP inventory, ending

6,000

Cost of Goods Manufactured

26,500

Sprinkles Inc. Cost of Goods Sold Section For the month ended October 31, 2020 Finished goods inventory, beginning

2,000

Add: Cost of Goods Manufactured

26,500

Finished goods available for sale

28,500

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Less: Finished goods inventory, ending

4,000

Cost of Goods Sold

24,500

Sprinkles Inc. Income Statement For the month ended October 31, 2020 Sales

45,000

Finished goods inventory, beginning

2,000

Add: Cost of Goods Manufactured

26,500

Finished goods available for sale

28,500

Less: Finished goods inventory, ending

4,000

Cost of Goods Sold

24,500

Gross Margin

20,500

Rent, retail store

2,000

Wages, retail staff

4,000

Utilities, retail store

1,500

General & administrative expenses

4,500

Total operating expenses

2,000

Net Income

130)

12,000 8,500

Short Answer

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171

Snickerdoodle Inc. Schedule of Cost of Goods Manufactured For the month ended October 31, 20120 Raw materials, beginning

11,000

Purchases of raw materials

21,000

Raw materials available

32,000

Raw materials inventory, ending

12,000

Raw materials used in production

20,000

Baker's salary

13,000

Manufacturing Overhead: Rent on production factory

12,000

Utilities on production factory

10,500

Production Supervisor, Salary

14,000

Indirect materials

10,500

47,000

Total manufacturing costs

80,000

Add: WIP inventory, beginning

12,500

Less: WIP inventory, ending

14,500

Cost of Goods Manufactured

78,000

Snickerdoodle Inc. Cost of Goods Sold Section For the month ended October 31, 2020 Finished goods inventory, beginning

11,000

Add: Cost of Goods Manufactured

78,000

Finished goods available for sale

89,000

Less: Finished goods inventory, ending

13,000

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Cost of Goods Sold

76,000

Snickerdoodle Inc. Income Statement For the month ended October 31, 2020 Sales

140,000

Finished goods inventory, beginning

11,000

Add: Cost of Goods Manufactured

78,000

Finished goods available for sale

89,000

Less: Finished goods inventory, ending

13,000

Cost of Goods Sold

76,000

Gross Margin

64,000

Rent, retail store

11,000

Wages, retail staff

13,000

Utilities, retail store

10,500

General & administrative expenses

13,500

Total operating expenses

48,000

Net Income

16,000

131)

Short Answer

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Snickerdoodle Inc. Schedule of Cost of Goods Manufactured For the month ended September 30, 2020 Raw materials, beginning

11,000

Purchases of raw materials

21,000

Raw materials available

32,000

Raw materials inventory, ending

12,000

Raw materials used in production

20,000

Baker's salary

13,000

Manufacturing Overhead: Rent on production factory

12,000

Utilities on production factory

10,500

Production Supervisor, Salary

14,000

Indirect materials

10,500

47,000

Total manufacturing costs

80,000

Add: WIP inventory, beginning

12,500

Less: WIP inventory, ending

14,500

Cost of Goods Manufactured

78,000

Snickerdoodle Inc. Income Statement For the month ended August 31, 2020 Sales

140,000

Finished goods inventory, beginning

11,000

Add: Cost of Goods Manufactured

78,000

Finished goods available for sale

89,000

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Less: Finished goods inventory, ending

13,000

Cost of Goods Sold

76,000

Gross Margin

64,000

Rent, retail store

11,000

Wages, retail staff

13,000

Utilities, retail store

10,500

General & administrative expenses

13,500

Total operating expenses

48,000

Net Income

16,000

Prime Costs (RM used + Direct Labor)

33,000

Conversion Costs (Direct Labor + MOH)

60,000

132)

Short Answer

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Frosting Corp. Schedule of Cost of Goods Manufactured For the month ended August 31, 2020 Raw materials, beginning

25,000

Purchases of raw materials

35,000

Raw materials available

60,000

Raw materials inventory, ending

15,000

Raw materials used in production

45,000

Baker's salary

25,000

Manufacturing Overhead: Rent on production factory

24,000

Utilities on production factory

15,000

Production Supervisor, Salary

23,000

Indirect materials

20,000

82,000

Total manufacturing costs

152,000

Add: WIP inventory, beginning

16,000

Less: WIP inventory, ending

8,000

Cost of Goods Manufactured

160,000

Frosting Corp. Cost of Goods Sold Section For the month ended August 31, 2020 Finished goods inventory, beginning

18,000

Add: Cost of Goods Manufactured

160,000

Finished goods available for sale

178,000

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Less: Finished goods inventory, ending

20,000

Cost of Goods Sold

158,000

Frosting Corp. Income Statement For the month ended August 31, 2020 Sales

300,000

Finished goods inventory, beginning

18,000

Add: Cost of Goods Manufactured

160,000

Finished goods available for sale

178,000

Less: Finished goods inventory, ending

20,000

Cost of Goods Sold

158,000

Gross Margin

142,000

Rent, retail store

22,000

Wages, retail staff

15,000

Utilities, retail store

15,000

General & administrative expenses

17,000

Total operating expenses

69,000

Net Income

73,000

133) Section Break 133.1) B

Option B $20,000 + $55,000 + $45,000 + $60,000 = $180,000 133.2) D

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Option D $300,000 + $250,000 + ($20,000 + $55,000 + $45,000 + $60,000) = $730,000 133.3) C

Option C $160,000 + $20,000 + $15,000 = $195,000 134) Section Break 134.1) A

Option A $40 + $120 - $70 = $90 134.2) B

Option B (($40+$120-$70) +$200+$230) +$70-$50 = $540 134.3) A

Option A (($40+$120-$70) +$200+$230) +$70-$50+$120-$160 = $500 134.4) B

Option B $900-$500(from 2-83)-$150-$140 = $200 135) Section Break 135.1) D

Option D $90+$120-$30 = $180 135.2) D

Option D (($90+$120-$30) +$150+$250) +$50-$20 = $610 135.3) B

Option B (($90+$120-$30) +$150+$250) +$50-$20+$100-$150 = $560 135.4) B

Option B $1,000 -(($90+$120-$30) +$150+$250) +$50-$20+$100-$150)-$160-$140 = $140

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136) Section Break 136.1) A

Option A $60+$180-$70 = $170 136.2) A

Option A (($60+$180-$70) +$100+$190) +$70-$80 = $450 136.3) A

Option A ((($60+$180-$70) +$100+$190) +$70-$80) +$120-$160 = $410 136.4) B

Option A ((($60+$180-$70) +$100+$190) +$70-$80) +$120-$160-$110-$150 = $130 137) Section Break 137.1) C

Option C $105,000+$4,000-($40,000+$20,000+$39,000) = $10,000 137.2) B

Option B $105,000+$12,000-$110,000 = $7,000 138) Section Break 138.1) D

Option D $550+$350 = $900 138.2) C

Option C $450+$350 = $800 138.3) D

Option D $1,350+$90-$140 = $1,300 139) Section Break 139.1) B

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179

Option B $310,000 – $260,000 = $50,000 139.2) B

Option B (($310,000 – $50,000)-$25,000+$16,000)-$120,000-$70,000=$61,000 139.3) C

Option C $310,000 – $50,000 = $260,000 140) Section Break 140.1) C

Option C ($32,000+$35,000-$31,000) + $40,000 +$70,000 = $146,000 140.2) B

Option C $210,000-$124,000-$35,000-$25,000 = $26,000 140.3) A

Option A

$40,000+$70,000 = $110,000 141) Section Break 141.1) C

Fixed period cost. 141.2) A

Fixed product cost. 141.3) B

Variable product cost. 141.4) C

Fixed period cost. 141.5) B

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180

Variable product cost. 141.6) B

Variable product cost. 141.7) B

Variable product cost. 141.8) C

Fixed period cost. 142) Section Break 142.1) A

Direct product cost. 142.2) B

Indirect product cost. 142.3) A

Direct product cost. 142.4) A

Direct product cost. 142.5) A

Direct product cost. 142.6) C

Direct period cost. 142.7) D

Indirect period cost. 143) Section Break 143.1) B

Option B $18,000+$28,000-$19,000 =$27,000 143.2) C

Option C $17,500+$21,000+$19,000+$17,500 =$75,000

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181

143.3) D

Option D ($17,500+$21,000+$19,000+$17,500) +$20,000+($18,000+$28,000 -$19,000) = $122,000 143.4) C

Option C $20,000+($18,000+$28,000-$19,000) =$47,000 143.5) B

Option B $(17,500+$21,000+$19,000+$17,500) +$20,000+($18,000+$28,000 -$19,000) +$19,500$21,500 = $120,000

143.6) A

Option A $18,000+(($17,500+$21,000+$19,000+$17,500) +$20,000+($18,000+$28,000 $19,000) +$19,500-$21,500)-$20,000 = $118,000 143.7) A

Option A $243,000-$118,000(Cost of Sales)-$20,000-$18,000-$17,000-$20,000 = $50,000 TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false. 211) In a job-order costing system, costs are traced to departments and then allocated to units of product using an average process. ⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 03-01 Understand the context for costing systems. Topic : 03-03 Job Shops and Job-Order Costing Source : Chapter 03 Test Bank > TB 03-01 In a job-order costing system, costs are tra...

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182

212)

Normally a job cost sheet is not prepared for a job until after the job has been completed. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 03-02 Compute the costs of a specific job. Topic : 03-11 Job Cost Sheet Source : Chapter 03 Test Bank > TB 03-02 Normally a job cost sheet is not prepared fo...

213)

Job cost sheets always contain entries for actual direct material, actual direct labour, and actual manufacturing overhead cost incurred in completing a job. ⊚ true ⊚ false

214)

In order to improve the accuracy of unit costs, most companies recompute the predetermined overhead rate each month. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank > TB 03-04 In order to improve the accuracy of unit cos...

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183

215)

The following journal entry would be made to apply overhead cost to jobs in a job-order costing system: Work in Process

XXX

Manufacturing Overhead

XXX

⊚ true ⊚ false Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-13 Application of Overhead Source : Chapter 03 Test Bank > TB 03-05 The following journal...

216)

The following journal entry would be made to apply overhead cost to jobs in a job-order costing system: Finished Goods Inventory

XXX

Manufacturing Overhead

XXX

217)

When the predetermined overhead rate is based on direct labour-hours, the amount of overhead applied to a job is proportional to the amount of actual direct labour-hours incurred on the job. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank > TB 03-07 When the predetermined overhead rate is base...

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184

218)

When completed goods are sold the transaction is recorded as a debit to Cost of Goods Sold and a credit to Work in Process. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 03-06 prepare accounting schedules documenting the costs incurred. Topic : 03-27 Cost of Goods Sold Source : Chapter 03 Test Bank > TB 03-08 When completed goods are sold the transactio...

219)

The most common accounting treatment of underapplied manufacturing overhead is to transfer it to the Manufacturing Overhead control account. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-30 Causes of Under- and Overapplied Overheads Source : Chapter 03 Test Bank > TB 03-09 The most common accounting treatment of unde...

220)

The most common accounting treatment of underapplied manufacturing overhead is to transfer it to the Cost of Goods Sold ⊚ true ⊚ false

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185

221)

In job-order costing, the Work in Process inventory account contains the actual costs of direct labour, direct materials, and manufacturing overhead incurred on partially completed jobs. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 03-06 prepare accounting schedules documenting the costs incurred. Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-27 Cost of Goods Sold Topic : 03-18 Cost Flows in a Job-Order System Source : Chapter 03 Test Bank > TB 03-11 In job-order costing, the Work in Process in...

222)

Nonmanufacturing costs are expensed as incurred, rather than going into the Work in Process account. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-32 Multiple Predetermined Overhead Rates Source : Chapter 03 Test Bank > TB 03-12 Nonmanufacturing costs are expensed as incur...

223)

A credit balance in the Manufacturing Overhead account at the end of the year means that overhead was underapplied. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-30 Causes of Under- and Overapplied Overheads Source : Chapter 03 Test Bank > TB 03-13 A credit balance in the Manufacturing Overhe...

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186

224)

Indirect materials are not charged to a specific job but rather are included in the Manufacturing Overhead account. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Topic : 03-22 Labour Cost Source : Chapter 03 Test Bank > TB 03-14 Indirect materials are not charged to a spec...

225)

The labour time sheet contains a detailed summary of the direct and the indirect labour hours of an employee. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-02 Compute the costs of a specific job. Topic : 03-12 Measuring Direct Labour Cost Source : Chapter 03 Test Bank > TB 03-15 The labour time sheet contains a detailed su...

226)

All costs that cannot be traced directly to a product or an activity are ignored for the purpose of costing. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-02 Compute the costs of a specific job. Topic : 03-09 An Overview of Job-Order Costing—Determining the Cost of a Specific Job Source : Chapter 03 Test Bank > TB 03-16 All costs that cannot be traced directly to ...

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187

227)

Absorption costing includes both fixed and variable costs when computing the cost of a product. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-01 Understand the context for costing systems. Topic : 03-06 Absorption Versus Variable Costing Approaches Source : Chapter 03 Test Bank > TB 03-17 Absorption costing includes both fixed and v...

228)

In a normal costing system actual overhead costs are allocated to jobs. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-01 Understand the context for costing systems. Topic : 03-07 Normal Versus Actual Costing Approaches Source : Chapter 03 Test Bank > TB 03-18 In a normal costing system actual overhead c...

229)

Overhead costs tend to fluctuate with changes in the volume of units produced from period to period. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-13 Application of Overhead Source : Chapter 03 Test Bank > TB 03-19 Overhead costs tend to fluctuate with change...

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188

230)

Indirect labour costs are initially recorded in the Work in Process account and on the job cost sheets of the individual jobs worked on during a period. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-22 Labour Cost Source : Chapter 03 Test Bank > TB 03-20 Indirect labour costs are initially recorded...

231)

If the amount of underapplied or overapplied overhead is considered material at the end of a period, the preferred approach to dispose of such balances is to allocate the amounts proportionally to Cost of Goods Sold for the period and ending Work in Process and Finished Goods inventories. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-30 Causes of Under- and Overapplied Overheads Source : Chapter 03 Test Bank > TB 03-21 If the amount of underapplied or overapplied...

232)

The use of different predetermined overhead rates in departments of larger companies may yield more accurate costing. ⊚ true ⊚ false

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-31 Disposition of Under- or Overapplied Overhead Balances Source : Chapter 03 Test Bank > TB 03-22 The use of different predetermined overhead ...

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189

MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question. 233) Which of the following companies would be most likely to use a job-order costing system rather than a process costing system? A) Fast food restaurant. B) Automobile Manufacturing C) Crude oil refining. D) Candy making. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Easy Learning Objective : 03-01 Understand the context for costing systems. Topic : 03-03 Job Shops and Job-Order Costing Topic : 03-04 Flow Shops and Process Costing Source : Chapter 03 Test Bank > TB 03-23 Which of the following companies would be mo...

234)

Which of the following companies would be most likely to use a process costing system rather than a job costing system? A) Custom tailor B) Shipbuilding. C) Crude oil refining. D) Auto repair shop

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Easy Learning Objective : 03-01 Understand the context for costing systems. Topic : 03-03 Job Shops and Job-Order Costing Topic : 03-04 Flow Shops and Process Costing Source : Chapter 03 Test Bank > TB 03-24 Which of the following companies would be mo...

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190

235)

The costing approach that meets the requirements of financial accounting and tax reporting requirements is: A) variable costing. B) absorption costing. C) throughput costing. D) standard costing

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-01 Understand the context for costing systems. Topic : 03-06 Absorption Versus Variable Costing Approaches Topic : 03-07 Normal Versus Actual Costing Approaches Source : Chapter 03 Test Bank > TB 03-25 The costing approach that meets the requirem...

236)

Work in Process is a control account supported by detailed cost data contained in: A) job cost sheets. B) the Manufacturing Overhead account. C) the Finished Goods inventory account. D) purchase requisitions.

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Easy Learning Objective : 03-02 Compute the costs of a specific job. Topic : 03-11 Job Cost Sheet Source : Chapter 03 Test Bank > TB 03-26 Work in Process is a control account support...

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191

237)

In job-order costing, all the following statements are correct with respect to labour time and cost except: A) time tickets are kept by employees showing the amount of work on specific jobs. B) the job cost sheet for a job will contain all direct labour charges to that job. C) labour cost that can be traced to a job only with a great deal of effort is treated as part of manufacturing overhead. D) a machine operator performing routine annual maintenance work on a piece of equipment would charge the maintenance time to a specific job.

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-12 Measuring Direct Labour Cost Topic : 03-21 Issue of Direct Materials Only Source : Chapter 03 Test Bank > TB 03-27 In job-order costing, all the following stat...

238)

In a job-order costing system, the journal entry to record the application of overhead cost to jobs would include: A) a credit to the Manufacturing Overhead account. B) a credit to the Work in Process inventory account. C) a debit to Cost of Goods Sold. D) a debit to the Manufacturing Overhead account.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Topic : 03-24 The Application of Manufacturing Overhead Source : Chapter 03 Test Bank > TB 03-28 In a job-order costing system, the journal e...

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192

239)

In a job-order costing system, the use of indirect materials would usually be recorded as a debit to: A) Raw Materials. B) Work in Process. C) Manufacturing Overhead. D) Finished Goods.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-20 Issue of Direct and Indirect Materials Source : Chapter 03 Test Bank > TB 03-29 In a job-order costing system, the use of in...

240)

In a job-order costing system, the use of direct materials previously purchased usually is recorded as a debit to: A) Work in Process inventory. B) Finished Goods inventory. C) Manufacturing Overhead. D) Raw Materials inventory.

241)

In a job-order costing system, direct labour costs are usually recorded initially with a debit to: A) Manufacturing Overhead. B) Finished Goods inventory. C) Direct Labour Expense. D) Work in Process.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-21 Issue of Direct Materials Only Source : Chapter 03 Test Bank > TB 03-31 In a job-order costing system, direct labour...

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193

242)

If a company applies overhead to jobs based on a predetermined overhead rate, a debit balance in the Manufacturing Overhead account at the end of any period means that: A) more overhead cost has been charged to jobs than has been incurred during the period. B) more overhead cost has been incurred during the period than has been charged to jobs. C) the amount of overhead cost charged to jobs is greater than the estimated cost for the period. D) the amount of overhead cost charged to jobs is less than the estimated overhead cost for the period.

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-30 Causes of Under- and Overapplied Overheads Source : Chapter 03 Test Bank > TB 03-32 If a company applies overhead to jobs based ...

243)

In a job-order costing system, the amount of overhead cost that has been applied to a job that remains incomplete at the end of a period is: A) deducted on the Income Statement as overapplied overhead. B) closed to Cost of Goods Sold. C) transferred to Finished Goods at the end of the period. D) part of the ending balance of the Work in Process inventory account.

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-30 Causes of Under- and Overapplied Overheads Source : Chapter 03 Test Bank > TB 03-33 In a job-order costing system, the amount of...

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194

244)

The Work in Process inventory account of a manufacturing company shows a balance of $2,200 at the end of an accounting period. The job cost sheets of the two uncompleted jobs show charges of $400 and $200 for direct materials, and charges of $300 and $500 for direct labour. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labour costs, of: A) 80%. B) 100% C) 275% D) 300%.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Topic : 03-13 Application of Overhead Topic : 03-22 Labour Cost Source : Chapter 03 Test Bank > TB 03-34 The Work in Process inventory account of a m...

245)

Freeman Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $150,000 and direct labour hours would be 10,000. The actual figures for the year were $186,000 for manufacturing overhead and 12,000 direct labour hours. The cost records for the year will show: A) overapplied overhead of $30,000. B) underapplied overhead of $30,000. C) underapplied overhead of $6,000. D) overapplied overhead of $6,000.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-28 Summary of Manufacturing Cost Flows Source : Chapter 03 Test Bank > TB 03-35 Freeman Company uses a predetermined overhea...

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195

246)

Harrell Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated its total manufacturing overhead cost at $400,000 and its direct labour-hours at 100,000 hours. The actual overhead cost incurred during the year was $380,000 and the actual direct labour hours incurred on jobs during the year was 90,000 hours. The manufacturing overhead for the year would be? A) $20,000 underapplied. B) $10,000 overapplied. C) $50,000 underapplied. D) $50,000 overapplied.

247)

For the current year, Paxman Company incurred $150,000 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was overapplied in the amount of $6,000 for the year. If the predetermined overhead rate was $8.00 per direct labour hour, how many hours were worked during the year? A) 17,750 hours. B) 18,000 hours. C) 18,750 hours. D) 19,500 hours.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-28 Summary of Manufacturing Cost Flows Source : Chapter 03 Test Bank > TB 03-37 For the current year, Paxman Company incurre...

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196

248)

Carlo Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. The company estimated manufacturing overhead at $255,000 for the year and direct labour-hours at 100,000 hours. Actual manufacturing overhead costs incurred during the year totaled $270,000. Actual direct labour hours were 105,000. What was the overapplied or underapplied overhead for the year? A) $2,250 overapplied. B) $2,250 underapplied. C) $15,000 overapplied. D) $15,000 underapplied.

249)

Sawyer Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. Last year, the company worked 57,000 actual direct labour hours and incurred $345,000 of actual manufacturing overhead cost. The Company had estimated that it would work 55,000 direct labour hours during the year and incur $330,000 of manufacturing overhead cost. The company's manufacturing overhead cost for the year was: A) overapplied by $15,000. B) underapplied by $15,000. C) overapplied by $3,000. D) underapplied by $3,000.

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197

250)

Brown Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. Last year, the company worked 55,000 actual direct labour hours and incurred $335,000 of actual manufacturing overhead cost. The Company had estimated that it would work 50,000 direct labour hours during the year and incur $350,000 of manufacturing overhead cost. The company's manufacturing overhead cost applied for the year was: A) $330,000. B) $335,000 C) $342,000 D) $385,000

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank > TB 03-40 Brown Manufacturing Company uses a predeterm...

251)

Brown Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. Last year, the company worked 55,000 actual direct labour hours and incurred $335,000 of actual manufacturing overhead cost. The Company had estimated that it would work 57,000 direct labour hours during the year and incur $342,000 of manufacturing overhead cost. The company's manufacturing overhead for the year was: A) overapplied by $5,000. B) underapplied by $5,000. C) overapplied by $7,000. D) underapplied by $7,000.

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198

252)

The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labour cost in Dept. on machine hours in Dept. B. At the beginning of the year, the company made the following estimates: Dept A

Dept B

Direct labour cost

$30,000

$40,000

Manufacturing overhead

60,000

50,000

Direct labour hours

6,000

8,000

Machine hours

2,000

10,000

What predetermined overhead rates would be used in Dept A and Dept B, respectively? A) 50% and $8.00. B) 50% and $5.00. C) 110% and $15.00. D) 200% and $5.00. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank > TB 03-42 The Watts Company uses...

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199

253)

Compton Company uses a predetermined overhead rate in applying overhead to production orders on a labour cost basis in Department A and on a machine hours basis in Department B. At the beginning of the most recently completed year, the company made the following estimates: Dept. A

Dept. B

Direct labour cost

$60,000

$33,000

Factory overhead

$80,000

$40,000

Direct labour hours

8,000

9,000

Machine hours

4,000

10,000

What predetermined overhead rate would be used in Department A and Department B, respectively? A) 83% and $5. B) 83% and $3. C) 133% and $4 D) 81% and $3. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank > TB 03-43 Compton Company uses...

richard@qwconsultancy.com

200

254)

Kelsh Company uses a predetermined overhead rate based on machine hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year: Direct materials

$10,000

Direct labour

30,000

Sales commissions

40,000

Salary of production supervisor

20,000

Indirect materials

4,000

Advertising expense

8,000

Rent on factory equipment

10,000

Kelsh estimates that 5,000 direct labour hours and 10,000 machine hours will be worked during the year. The predetermined overhead rate per hour will be: A) $3.40. B) $6.40. C) $6.80. D) $8.20. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank > TB 03-44 Kelsh Company uses a...

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201

255)

Simplex Company has the following estimated costs for next year:

Direct materials

$15,000

Direct labour

55,000

Sales commissions

75,000

Salary of production supervisor

35,000

Indirect materials

5,000

Advertising expense

11,000

Rent on factory equipment

16,000

Simplex estimates that 10,000 direct labour and 16,000 machine hours will be worked during the year. If overhead is applied based on machine hours, the overhead rate per hour will be: A) $3.50. B) $6.94. C) $7.63. D) $8.56. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank > TB 03-45 Simplex Company has...

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202

256)

CR Company has the following estimated costs for the next year:

Direct materials

$4,000

Direct labour

20,000

Rent on factory building

15,000

Sales salaries

30,000

Depreciation on factory equipment

10,000

Indirect labour

10,000

Production supervisor's salary

15,000

CR Company estimates that 22,000 labour hours will be worked during the year. If overhead is applied based on direct labour hours, the overhead rate per hour will be? A) $2.25. B) $2.50 C) $3.45. D) $4.70. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank > TB 03-46 CR Company has the...

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203

257)

Jimbob Co. has the following estimated costs for the next year:

Direct materials

$4,000

Direct labour

20,000

Rent on factory building

15,000

Sales salaries

25,000

Depreciation on factory equipment

8,000

Indirect labour

10,000

Production supervisor's salary

12,000

The company estimates that 20,000 labour hours will be worked, and 1,000 machine hours incurred during the year. If overhead is applied based on direct labour costs, the overhead rate will be: A) 100%. B) 200%. C) 225%. D) 400%. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank > TB 03-47 Jimbob Co. has the...

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204

258)

Lucy Sportswear manufactures a specialty line of T-shirts. The company uses a job-order costing system. During March, the following costs were incurred on Job ICU2: direct materials $13,700 and direct labour $4,800. In addition, selling and shipping costs of $7,000 were incurred on the job. Manufacturing overhead was applied at the rate of $25 per machine-hour and Job ICU2 required 800 machine-hours. If Job ICU2 consisted of 7,000 shirts, the Cost of Goods Sold per shirt was: A) $5.50. B) $5.70. C) $6.00. D) $6.50.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-17 Computation of Job Costs Topic : 03-23 Manufacturing Overhead Costs Source : Chapter 03 Test Bank > TB 03-48 Lucy Sportswear manufactures a specialty lin...

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205

259)

Lucas Co. has a job-order costing system. For the month of April, the following debits (credits) appeared in the Work in Process account: April 1

Balance

$24,000

Direct materials

80,000

Direct labour

60,000

Manufacturing overhead

54,000

To finished goods

(200,000)

Lucas applies overhead at a predetermined rate of 90% of direct labour cost. Job No. 100, the only job still in process at the end of April, has been charged with manufacturing overhead of $4,500. The amount of direct materials charged to Job No. 100 was: A) $4,500. B) $5,000. C) $8,500. D) $18,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-10 Measuring Direct Materials Cost Source : Chapter 03 Test Bank > TB 03-49 Lucas Co. has a job-order...

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206

260)

Worrell Corporation has a job-order costing system. The following debits (credits) appeared in the Work in Process account for the month of March: March 1, balance

$12,000

March 31, direct materials

40,000

March 31, direct labour

30,000

March 31, manufacturing overhead applied

27,000

March 31, to finished goods

(95,000)

Worrell applies overhead at a predetermined rate of 100% of direct labour cost. Job No. 232, the only job still in process at the end of March, has been charged with manufacturing overhead of $5,000 What was the amount of direct materials charged to Job No. 232? A) $2,250. B) $2,500. C) $4,500 D) $9,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-10 Measuring Direct Materials Cost Source : Chapter 03 Test Bank > TB 03-50 Worrell Corporation has...

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207

261)

The Samuelson Company uses a job-order costing system. The following data were recorded for June: June 1

Added During June

Job Number

Work in Process Inventory

Direct Material

Direct Labour

475

$1,000

$400

$200

476

$900

$600

$800

477

$800

$900

$1,400

478

$600

$1,100

$1,900

Overhead is charged to production at 70% of the direct materials cost. Jobs 475, 477, and 478 have been delivered to the customer. Samuelson's Work in Process inventory balance on June 30 was: A) $2,300. B) $2,720. C) $2,860. D) $6,450. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-11 Job Cost Sheet Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-13 Application of Overhead Topic : 03-18 Cost Flows in a Job-Order System Source : Chapter 03 Test Bank > TB 03-51 The Samuelson Company...

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208

262)

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour, based on an estimate of 25,000 direct labour hours to be worked during the year. Actual costs and activity during the year were: Actual manufacturing overhead cost incurred

$47,000

Actual direct labour hours worked

24,000

The underapplied or overapplied overhead last year was: A) $1,000 underapplied. B) $1,000 overapplied. C) $3,000 overapplied. D) $2,000 underapplied. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Easy Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-28 Summary of Manufacturing Cost Flows Source : Chapter 03 Test Bank > TB 03-52 Beaver Company used...

263)

Dowan Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. Last year Dowan Company incurred $156,600 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was underapplied by $12,600 for the year. If the predetermined overhead rate is $6.00 per direct labour hour, how many hours did the company work during the year? A) 24,000 hours. B) 25,000 hours. C) 26,000 hours. D) 28,200 hours.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-12 Measuring Direct Labour Cost Source : Chapter 03 Test Bank > TB 03-53 Dowan Company uses a predetermined overhead ...

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209

264)

Paul Company used a predetermined overhead rate during the year just completed of $4.00 per direct labour hour, based on an estimate of 22,000 direct labour hours to be worked during the year. Actual overhead cost and activity during the year were: Actual manufacturing overhead cost incurred

$100,000

Actual direct labour hours worked

28,000

The underapplied or overapplied overhead for the year was: A) $13,000 underapplied. B) $12,000 overapplied. C) $2,500 overapplied. D) $2,500 underapplied. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-28 Summary of Manufacturing Cost Flows Source : Chapter 03 Test Bank > TB 03-54 Paul Company used a...

265)

Sweet Company applies overhead to jobs based on 125% of direct labour cost. If Job 107 shows $10,000 of manufacturing overhead applied, how much was the direct labour cost on the job: A) $8,000. B) $10,000. C) $11,250. D) $12,500.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Easy Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-12 Measuring Direct Labour Cost Source : Chapter 03 Test Bank > TB 03-55 Sweet Company applies overhead to jobs based...

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210

266)

Knowlton Company applies overhead to completed jobs based on 75% of direct labour cost. If Job 501 shows $ 30,000 of manufacturing overhead applied, the direct labour cost on the job was: A) $14,700. B) $21,000. C) $27,300. D) $40,000.

267)

The balance in White Company's Work in Process inventory account was $15,000 on August 1 and $18,000 on August 31. The company incurred $30,000 in direct labour cost during August and requisitioned $25,000 in raw materials (all direct material). If the sum of the debits to the Manufacturing Overhead account total $28,000 for the month, and if the sum of the credits totaled $30,000, then: A) Finished Goods was debited for $82,000 during the month. B) Finished Goods was credited for $83,000 during the month. C) Manufacturing Overhead was underapplied by $2,000 at the end of the month. D) Finished Goods was debited for $85,000 during the month.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Hard Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-17 Computation of Job Costs Source : Chapter 03 Test Bank > TB 03-57 The balance in White Company's...

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211

268)

Under Lamprey Company's job-order costing system, manufacturing overhead is applied to Work in Process inventory using a predetermined overhead rate. During January, Lamprey's transactions included the following: Direct materials issued to production

$90,000

Indirect materials issued to production

8,000

Manufacturing overhead cost incurred

125,000

Manufacturing overhead cost applied

113,000

Direct labour cost incurred

107,000

Lamprey Company had no beginning or ending inventories. What was the cost of goods manufactured for January? A) $302,000. B) $310,000. C) $322,000. D) $330,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-18 Cost Flows in a Job-Order System Source : Chapter 03 Test Bank > TB 03-58 Under Lamprey Company's...

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212

269)

What was the amount of direct materials used during November if $18,000 in raw materials were purchased during the month and if the inventories were as follows? Balance

Balance

November 1

November 30

Raw materials

$4,000

$3,000

Work in process

12,000

15,000

Finished goods

24,000

27,000

A) $15,000. B) $16,000. C) $19,000. D) $21,000. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Easy Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-18 Cost Flows in a Job-Order System Source : Chapter 03 Test Bank > TB 03-59 What was the amount of...

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213

270)

Sharp Company's records show that overhead was overapplied by $10,000 last year. This overapplied overhead was closed out to the Cost of Goods Sold account at the end of the year. In trying to determine why overhead was overapplied by such a large amount, the company has discovered that $6,000 of depreciation on factory equipment was charged to administrative expense in error. Given the above information, which of the following statements is true? A) Manufacturing overhead was overapplied by $16,000 for the year. B) The company's net income is understated by $6,000 for the year. C) Under the circumstances posed above, the error in recording depreciation would have no effect on net income for the year. D) The amount of $6,000 in depreciation should have been charged to Work in Process rather than to administrative expense.

Question Details Accessibility : Keyboard Navigation Bloom's : Analyze Difficulty : Hard Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-28 Summary of Manufacturing Cost Flows Source : Chapter 03 Test Bank > TB 03-60 Sharp Company's records...

271)

The Cost of Goods Sold for September (before disposition of any underapplied or overapplied overhead) is? A) $1,950. B) $2,100. C) $3,700. D) $5,925.

Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-06 prepare accounting schedules documenting the costs incurred. Topic : 03-27 Cost of Goods Sold Source : Chapter 03 Test Bank > TB 03-80 The Cost of Goods Sold for Sep...

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214

272)

Using the following information:

Estimated manufacturing overhead

$840,000

Actual manufacturing overhead

$800,000

Estimated direct labour hours

56,000

Actual direct labour hours worked

40,000

The predetermined overhead rate for applying manufacturing overhead would be: A) $15.00. B) $30.00. C) $40.00. D) $42.00. Question Details Accessibility : Keyboard Navigation Bloom's : Apply Difficulty : Medium Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-13 Application of Overhead Source : Chapter 03 Test Bank > TB 03-94 Using the following information:

273)

Which of the following statements is not always true? A) The job-order costing system is used by manufacturing companies. B) The job-order cost sheet is subsidiary to the work-in-process account. C) The job-order costing system is simpler to use than process costing because the record keeping requirements are less. D) All costs used in job-ordering costing are actual costs.

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Easy Learning Objective : 03-01 Understand the context for costing systems. Topic : 03-03 Job Shops and Job-Order Costing Topic : 03-04 Flow Shops and Process Costing Source : Chapter 03 Test Bank > TB 03-95 Which of the following statements is not alw...

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215

274)

The ending balance of which of the following accounts can be calculated by summing the totals of the open job-order cost sheets: A) Materials. B) Work in Process. C) Finish Goods. D) Cost of Goods Sold.

275)

Hussain Shop uses a job-order costing system. Overhead is applied to jobs based on machine hours. The source document that would give the number of machine hours worked on Job 256 is the: A) material requisition form. B) labour time sheet. C) machine hours usage ticket. D) Job-order cost sheet.

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 03-02 Compute the costs of a specific job. Topic : 03-11 Job Cost Sheet Topic : 03-12 Measuring Direct Labour Cost Source : Chapter 03 Test Bank > TB 03-97 Hussain Shop uses a job-order costing system...

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216

276)

If direct material costing $510 are requisitioned for use on a job, which of the following journal entries is made? A) Materials

510

Work in Process

510

B) Materials

510

Accounts Payable

510

C) Work in Process

510

Accounts Payable

510

D) Work in Process Materials

510 510

Question Details Accessibility : Keyboard Navigation Bloom's : Remember Difficulty : Medium Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-20 Issue of Direct and Indirect Materials Source : Chapter 03 Test Bank > TB 03-98 If direct material costing...

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217

277)

Which of the following statements is not true about the use of a normal costing system? A) Actual overhead costs are never directly assigned to products. B) Actual overhead costs never flow directly through the inventory accounts. C) A normal costing system requires waiting until after a period end to complete the costing for all jobs completed during a period. D) Individual product costs are usually not adjusted for differences between actual and budgeted costs.

Question Details Accessibility : Keyboard Navigation Bloom's : Understand Difficulty : Medium Learning Objective : 03-01 Understand the context for costing systems. Topic : 03-07 Normal Versus Actual Costing Approaches Source : Chapter 03 Test Bank > TB 03-99 Which of the following statements is not tru...

278)

Giannitti Corporation bases its predetermined overhead rate on the estimated machinehours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours

73,000

Estimated variable manufacturing overhead Estimated total fixed manufacturing overhead

$ 3.20 per machine-hour $ 838,770

The predetermined overhead rate for the recently completed year was closest to: A) $9.60 per machine-hour B) $8.70 per machine-hour C) $14.69 per machine-hour D) $6.81 per machine-hour Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-13 Application of Overhead Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-1 (Algo) Giannitti Corporation bases its predetermined...

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218

279)

Gilchrist Corporation bases its predetermined overhead rate on the estimated machinehours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 21,200 machine-hours. The estimated variable manufacturing overhead was $5.32 per machine-hour and the estimated total fixed manufacturing overhead was $600,172. The predetermined overhead rate for the recently completed year was closest to: A) $33.63 per machine-hour B) $32.63 per machine-hour C) $5.32 per machine-hour D) $28.31 per machine-hour

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-13 Application of Overhead Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-2 (Algo) Gilchrist Corporation bases its predetermined overhead...

280)

Longobardi Corporation bases its predetermined overhead rate on the estimated labourhours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the labour-hours for the upcoming year at 36,000 labour-hours. The estimated variable manufacturing overhead was $5.80 per labour-hour and the estimated total fixed manufacturing overhead was $775,800. The actual labour-hours for the year turned out to be 32,200 labour-hours. The predetermined overhead rate for the recently completed year was closest to: A) $27.35 per labour-hour B) $21.55 per labour-hour C) $5.80 per labour-hour D) $30.58 per labour-hour

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-13 Application of Overhead Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-3 (Algo) Longobardi Corporation bases its predetermined overhead...

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219

281)

Brothern Corporation bases its predetermined overhead rate on the estimated machinehours for the upcoming year. Data for the most recently completed year appear below: Estimates made at the beginning of the year: Estimated machine-hours Estimated variable manufacturing overhead Estimated total fixed manufacturing overhead Actual machine-hours for the year

34,200 $ 5.47 per machine-hour $ 769,842 30,600

The predetermined overhead rate for the recently completed year was closest to: A) $27.40 per machine-hour B) $27.98 per machine-hour C) $5.47 per machine-hour D) $22.51 per machine-hour Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-13 Application of Overhead Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-4 (Algo) Brothern Corporation bases its predetermined...

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220

282)

Mahon Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labour-hours. At the beginning of the current year, the company had made the following estimates:

Machine-hours Direct labour-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labour-hour

Casting

Customizing

15,600 5,600 $ 95,160 $ 2.30

13,600 6,800 $ 58,480

$ 4.50

During the current month the company started and finished Job T138. The following data were recorded for this job: Job T138: Machine-hours Direct labour-hours

Casting 100 12

Customizing 30 80

The amount of overhead applied in the Customizing Department to Job T138 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $528.00 B) $89,080.00 C) $1,048.00 D) $264.00 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-5 (Algo) Mahon Corporation has two production departments...

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221

283)

Sargent Corporation applies overhead cost to jobs on the basis of 90% of direct labour cost. If Job 210 shows $18,810 of manufacturing overhead cost applied, how much was the direct labour cost on the job? A) $20,900 B) $35,739 C) $16,929 D) $18,810

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-6 (Algo) Sargent Corporation applies overhead...

284)

Job 910 was recently completed. The following data have been recorded on its job cost sheet: Direct materials Direct labour-hours Direct labour wage rate Machine-hours

$ 2,463 79 labour-hours $ 16 per labour-hour 137 machine-hours

The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $17 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 910 would be: A) $3,380 B) $3,727 C) $6,056 D) $6,896 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-11 Job Cost Sheet Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-10 Measuring Direct Materials Cost Topic : 03-12 Measuring Direct Labour Cost Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-7 (Algo) Job 910 was recently...

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222

285)

The following data have been recorded for recently completed Job 450 on its job cost sheet. Direct materials cost was $2,049. A total of 35 direct labour-hours and 195 machinehours were worked on the job. The direct labour wage rate is $21 per labour-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $24 per machine-hour. The total cost for the job on its job cost sheet would be: A) $7,464 B) $4,839 C) $4,420 D) $9,609

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-11 Job Cost Sheet Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-10 Measuring Direct Materials Cost Topic : 03-12 Measuring Direct Labour Cost Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-8 (Algo) The following data have been recorded...

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223

286)

Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labour-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labour-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per direct labour-hour

107,000 $ 406,600 $ 5.00

Recently, Job P951 was completed with the following characteristics: Number of units in the job Total direct labour-hours Direct materials Direct labour cost

100 100 $ 800 $ 10,700

The total job cost for Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $11,580 B) $11,500 C) $1,680 D) $12,380 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-11 Job Cost Sheet Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-10 Measuring Direct Materials Cost Topic : 03-12 Measuring Direct Labour Cost Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-9 (Algo) Dehner Corporation uses a job-order...

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224

287)

44,000 $ 224,400 $ 5.00

Recently, Job P951 was completed with the following characteristics: Number of units in the job Total direct labour-hours Direct materials Direct labour cost

25 100 $ 750 $ 4,400

The unit product cost for Job P951 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $252.50 B) $246.40 C) $146.40 D) $61.60 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-11 Job Cost Sheet Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-10 Measuring Direct Materials Cost Topic : 03-12 Measuring Direct Labour Cost Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-10 (Algo) Dehner Corporation uses a job-order...

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225

288)

Opunui Corporation has two manufacturing departments--Molding and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:

Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH

Molding

Finishing

Total

6,500 $ 20,000

3,500 $ 5,000

10,000 $ 25,000

$ 2.50

$ 5.00

During the most recent month, the company started and completed two jobs--Job A and Job M. There were no beginning inventories. Data concerning those two jobs follow:

Direct materials Direct labour cost Molding machine-hours Finishing machine-hours

Job A

Job M

$ 16,800 $ 23,500 2,500 2,500

$ 10,100 $ 10,400 4,000 1,000

Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job M is closest to: (Round your intermediate calculations to 2 decimal places.) A) $29,400 B) $10,400 C) $49,900 D) $10,100 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-11 (Algo) Opunui Corporation has two manufacturing...

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226

289)

Lupo Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour

32,600 $ 195,600 $ 4

Recently, Job T687 was completed with the following characteristics: Number of units in the job Total machine-hours Direct materials Direct labour cost

10 30 $ 550 $ 1,100

The amount of overhead applied to Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $300.00 B) $195.60 C) $378.00 D) $60.00 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-13 Application of Overhead Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-12 (Algo) Lupo Corporation uses a job-order...

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227

290)

31,400 $ 219,800 $ 4

Recently, Job T687 was completed with the following characteristics: Number of units in the job Total machine-hours Direct materials Direct labour cost

10 20 $ 580 $ 1,160

The total job cost for Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $1,380 B) $1,740 C) $800 D) $1,960 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-11 Job Cost Sheet Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-10 Measuring Direct Materials Cost Topic : 03-12 Measuring Direct Labour Cost Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-13 (Algo) Lupo Corporation uses a job-order...

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228

291)

30,400 $ 425,600 $ 5

Recently, Job T687 was completed with the following characteristics: Number of units in the job Total machine-hours Direct materials Direct labour cost

10 20 $ 590 $ 1,180

The unit product cost for Job T687 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $97.00 B) $107.50 C) $177.00 D) $215.00 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-11 Job Cost Sheet Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-10 Measuring Direct Materials Cost Topic : 03-12 Measuring Direct Labour Cost Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-14 (Algo) Lupo Corporation uses a job-order...

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229

292)

Kostelnik Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $488,400, variable manufacturing overhead of $2.70 per machine-hour, and 74,000 machine-hours. The company has provided the following data concerning Job A496 which was recently completed: Number of units in the job Total machine-hours Direct materials Direct labour cost

20 80 $ 930 $ 1,860

The unit product cost for Job A496 is closest to: (Round your intermediate calculations to 2 decimal places.) A) $139.50 B) $34.88 C) $44.17 D) $176.70 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-02 Compute the costs of a specific job. Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-11 Job Cost Sheet Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-10 Measuring Direct Materials Cost Topic : 03-12 Measuring Direct Labour Cost Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-15 (Algo) Kostelnik Corporation uses a job-order costing...

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230

293)

Eisentrout Corporation has two production departments, Machining and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Machining Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labour-hours. At the beginning of the current year, the company had made the following estimates:

Machine-hours Direct labour-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labour-hour

Machining

Customizing

10,000 2,000 $ 55,000 $ 1.50

23,000 4,000 $ 12,400

$ 3.20

During the current month the company started and finished Job T272. The following data were recorded for this job: Job T272: Machine-hours Direct labour-hours

Machining 40 40

Customizing 30 60

The estimated total manufacturing overhead for the Machining Department is closest to: A) $70,000 B) $55,000 C) $15,000 D) $89,500 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-13 Application of Overhead Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-16 (Algo) Eisentrout Corporation has two production...

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231

294)

Garza Corporation has two production departments, Casting and Customizing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Casting Department’s predetermined overhead rate is based on machine-hours and the Customizing Department’s predetermined overhead rate is based on direct labour-hours. At the beginning of the current year, the company had made the following estimates:

Machine-hours Direct labour-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labour-hour

Casting

Customizing

23,000 7,000 $ 82,800 $ 1.40

15,000 7,000 $ 30,100

$ 4.70

The estimated total manufacturing overhead for the Customizing Department is closest to: A) $115,700 B) $32,900 C) $63,000 D) $30,100 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-03 Understand the importance of the concept of overhead cost and its computat Topic : 03-14 Using the Predetermined Overhead Rate Topic : 03-13 Application of Overhead Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-17 (Algo) Garza Corporation has two production...

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232

295)

Gullett Corporation had $39,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $88,000 of raw materials. The journal entry to record the purchase of raw materials would include a: A) debit to Raw Materials of $127,000 B) credit to Raw Materials of $88,000 C) debit to Raw Materials of $88,000 D) credit to Raw Materials of $127,000

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-19 The Purchase and Issue of Materials Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-24 (Algo) Gullett Corporation had...

296)

During March, Zea Incorporated transferred $62,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $68,000. The journal entries to record these transactions would include a: A) credit to Cost of Goods Sold of $68,000. B) debit to Finished Goods of $68,000. C) credit to Work in Process of $62,000. D) credit to Finished Goods of $62,000.

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Topic : 03-26 Cost of Goods Manufactured Topic : 03-27 Cost of Goods Sold Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-25 (Algo) During March, Zea Incorporated transferred...

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233

297)

During June, Buttrey Corporation incurred $79,000 of direct labour costs and $19,000 of indirect labour costs. The journal entry to record the accrual of these wages would include a: A) debit to Work in Process of $79,000. B) credit to Work in Process of $98,000. C) debit to Work in Process of $98,000. D) credit to Work in Process of $79,000.

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234

298)

The following accounts are from last year’s books at Sharp Manufacturing:

Raw Materials Debit Balance (a)

Credit 0 (b) 166,500

155,000

11,500 Work In Process Debit

Credit

Balance (b)

0 (f) 132,500

(c)

169,000

(e)

212,500

514,000

0 Finished Goods Debit Balance (f)

Credit 0 (g) 514,000

465,000

49,000 Manufacturing Overhead Debit

Credit

(b) (c)

22,500 (e) 26,500

(d)

157,000

212,500

6,500 Cost of Goods Sold Debit (g)

richard@qwconsultancy.com

Credit 465,000

235

Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labour costs. What is the manufacturing overhead overapplied or underapplied for the year? A) $6,500 underapplied B) $6,500 overapplied C) $26,500 underapplied D) $26,500 overapplied Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-29 Under- and Overapplied Overheads Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-27 (Algo) The following accounts are from last...

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236

299)

The following accounts are from last year's books of Sharp Manufacturing:

Raw Materials Debit Balance (a)

Credit 0 (b) 173,000

157,600

15,400 Work In Process Debit

Credit

Balance (b)

0 (f) 133,800

(c)

171,600

(e)

219,000

524,400

0 Finished Goods Debit Balance (f)

Credit 0 (g) 524,400

478,000

46,400 Manufacturing Overhead Debit

Credit

(b) (c)

23,800 (e) 27,800

(d)

159,600

219,000

7,800 Cost of Goods Sold Debit (g)

richard@qwconsultancy.com

Credit 478,000

237

Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labour costs. What is the amount of direct materials used for the year? A) $173,000 B) $157,600 C) $133,800 D) $171,600 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-20 Issue of Direct and Indirect Materials Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-28 (Algo) The following accounts are from last year's books...

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238

300)

The following accounts are from last year’s books at Sharp Manufacturing:

Raw Materials Debit Balance (a)

Credit 0 (b) 168,000

155,600

12,400 Work In Process Debit

Credit

Balance (b)

0 (f) 132,800

(c)

169,600

(e)

214,000

516,400

0 Finished Goods Debit Balance (f)

Credit 0 (g) 516,400

468,000

48,400 Manufacturing Overhead Debit

Credit

(b) (c)

22,800 (e) 26,800

(d)

157,600

214,000

6,800 Cost of Goods Sold Debit (g)

richard@qwconsultancy.com

Credit 468,000

239

Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labour costs. What is the amount of cost of goods manufactured for the year? A) $254,800 B) $461,200 C) $516,400 D) $468,000 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Topic : 03-26 Cost of Goods Manufactured Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-29 (Algo) The following accounts are from...

301)

Compute the amount of raw materials used during November if $35,000 of raw materials were purchased during the month and if the inventories were as follows: Inventories Raw materials Work in process Finished goods

Balance November 1 $9,000 $7,000 $11,000

Balance November 30 $5,000 $8,500 $13,000

A) $36,500 B) $35,500 C) $33,000 D) $39,000 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Topic : 03-19 The Purchase and Issue of Materials Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-30 (Algo) Compute the amount of raw materials used during...

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240

302)

Luebke Incorporated has provided the following data for the month of November. The balance in the Finished Goods inventory account at the beginning of the month was $65,000 and at the end of the month was $31,300. The cost of goods manufactured for the month was $218,500. The actual manufacturing overhead cost incurred was $58,900 and the manufacturing overhead cost applied to Work in Process was $63,200. The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. The adjusted cost of goods sold that would appear on the income statement for November is: A) $247,900 B) $184,800 C) $252,200 D) $218,500

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-29 Under- and Overapplied Overheads Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-31 (Algo) Luebke Incorporated has provided the following data...

303)

Rediger Incorporated a manufacturing Corporation, has provided the following data for the month of June. The balance in the Work in Process inventory account was $37,000 at the beginning of the month and $24,500 at the end of the month. During the month, the Corporation incurred direct materials cost of $58,000 and direct labour cost of $32,500. The actual manufacturing overhead cost incurred was $54,500. The manufacturing overhead cost applied to Work in Process was $54,000. The cost of goods manufactured for June was: A) $157,500. B) $157,000. C) $144,500. D) $145,000.

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Learning Objective : 03-06 Prepare accounting schedules documenting the costs incurred. Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-26 Cost of Goods Manufactured Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-32 (Algo) Rediger Incorporated a manufacturing Corporation, has provided...

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241

304)

Bottum Corporation, a manufacturing Corporation, has provided data concerning its operations for May. The beginning balance in the raw materials account was $22,500 and the ending balance was $41,000. Raw materials purchases during the month totaled $68,000. Manufacturing overhead cost incurred during the month was $113,500, of which $2,500 consisted of raw materials classified as indirect materials. The direct materials cost for May was: A) $68,000 B) $49,500 C) $86,500 D) $47,000

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Learning Objective : 03-06 Prepare accounting schedules documenting the costs incurred. Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-20 Issue of Direct and Indirect Materials Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-33 (Algo) Bottum Corporation, a manufacturing Corporation, has provided...

305)

Crich Corporation uses direct labour-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labour-hours were 22,060 hours and the total estimated manufacturing overhead was $560,324. At the end of the year, actual direct labourhours for the year were 22,000 hours and the actual manufacturing overhead for the year was $560,324. Overhead at the end of the year was:(Do not round intermediate calculations.) A) $1,574 overapplied B) $1,574 underapplied C) $1,524 underapplied D) $1,524 overapplied

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-24 The Application of Manufacturing Overhead Topic : 03-29 Under- and Overapplied Overheads Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-34 (Algo) Crich Corporation uses direct labour-hours in its predetermined...

richard@qwconsultancy.com

242

306)

At the beginning of the year, manufacturing overhead for the year was estimated to be $821,100. At the end of the year, actual direct labour-hours for the year were 36,280 hours, the actual manufacturing overhead for the year was $790,000, and manufacturing overhead for the year was overapplied by $44,440. If the predetermined overhead rate is based on direct labour-hours, then the estimated direct labour-hours at the beginning of the year used in the predetermined overhead rate must have been:(Do not round intermediate calculations.) A) 34,348 direct labour-hours B) 35,700 direct labour-hours C) 36,280 direct labour-hours D) 32,416 direct labour-hours

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-24 The Application of Manufacturing Overhead Topic : 03-29 Under- and Overapplied Overheads Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-35 (Algo) At the beginning of the year, manufacturing overhead for the year was...

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243

307)

Weatherhead Incorporated has provided the following data for the month of March. There were no beginning inventories; consequently, the direct materials, direct labour, and manufacturing overhead applied listed below are all for the current month.

Direct materials Direct labour Manufacturing overhead applied Total

Work In Process $ 4,240 10,200 5,830

Finished Goods $14,720 29,440 11,470

$20,270

$55,630

Cost of Goods Total Sold $ 41,760 $ 60,720 83,840 123,480 34,980 52,280 $160,580

$236,480

Manufacturing overhead for the month was overapplied by $3,800. The Corporation allocates any underapplied or overapplied manufacturing overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the manufacturing overhead applied during the month in those accounts. The work in process inventory at the end of March after allocation of any underapplied or overapplied manufacturing overhead for the month is closest to: (Round intermediate percentage computations to the nearest whole percent.) A) $19,923 B) $20,441 C) $20,512 D) $19,852 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-31 Disposition of Under- or Overapplied Overhead Balances Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-36 (Algo) Weatherhead Incorporated has provided the following data...

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244

308)

Daget Corporation uses direct labour-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $364,740. At the end of the year, actual direct labour-hours for the year were 24,000 hours, manufacturing overhead for the year was overapplied by $8,660, and the actual manufacturing overhead was $360,940. The predetermined overhead rate for the year must have been closest to: A) $15.53 per direct labour-hour B) $15.40 per direct labour-hour C) $15.20 per direct labour-hour D) $15.04 per direct labour-hour

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-24 The Application of Manufacturing Overhead Topic : 03-29 Under- and Overapplied Overheads Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-37 (Algo) Daget Corporation uses direct labour-hours in its predetermined...

309)

Bayest Manufacturing Corporation uses a predetermined overhead rate based on direct labour-hours to apply manufacturing overhead to jobs. Last year, the Corporation worked 58,250 actual direct labour-hours and incurred $442,000 of actual manufacturing overhead cost. The Corporation had estimated that it would work 60,900 direct labour-hours during the year and incur $389,760 of manufacturing overhead cost. The Corporation's manufacturing overhead cost for the year was: A) overapplied by $69,200 B) underapplied by $69,200 C) overapplied by $52,240 D) underapplied by $52,240

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Learning Objective : 03-07 Reconcile the difference between actual and applied overhead costs. Topic : 03-24 The Application of Manufacturing Overhead Topic : 03-29 Under- and Overapplied Overheads Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-38 (Algo) Bayest Manufacturing Corporation uses a predetermined overhead...

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245

310)

Matthias Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of May. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $61,000 and the total of the credits to the account was $85,000. Which of the following statements is true? A) Manufacturing overhead applied to Work in Process for the month was $85,000. B) Manufacturing overhead for the month was underapplied by $24,000. C) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $61,000. D) Actual manufacturing overhead incurred during the month was $85,000.

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-06 Prepare accounting schedules documenting the costs incurred. Topic : 03-28 Summary of Manufacturing Cost Flows Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-39 (Algo) Matthias Corporation has provided data concerning the...

311)

Sagon Corporation has provided data concerning the Corporation's Manufacturing Overhead account for the month of September. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $103,000 and the total of the credits to the account was $70,000. Which of the following statements is true? A) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $103,000. B) Actual manufacturing overhead incurred during the month was $70,000. C) Manufacturing overhead applied to Work in Process for the month was $103,000. D) Manufacturing overhead for the month was underapplied by $33,000.

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-06 Prepare accounting schedules documenting the costs incurred. Topic : 03-28 Summary of Manufacturing Cost Flows Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-40 (Algo) Sagon Corporation has provided data concerning the...

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246

312)

On November 1, Arvelo Corporation had $34,500 of raw materials on hand. During the month, the company purchased an additional $75,500 of raw materials. During November, $90,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $3,500. Prepare journal entries to record these events. Use those journal entries to answer the following questions: The credits to the Raw Materials account for the month of November total: A) $90,000 B) $75,500 C) $34,500 D) $110,000

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Learning Objective : 03-06 Prepare accounting schedules documenting the costs incurred. Topic : 03-19 The Purchase and Issue of Materials Topic : 03-28 Summary of Manufacturing Cost Flows Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-41 (Algo) On November 1, Arvelo Corporation had...

313)

During March, Pendergraph Corporation incurred $79,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $81,000. The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a: A) credit to Manufacturing Overhead of $79,000 B) credit to Work in Process of $81,000 C) debit to Work in Process of $81,000 D) debit to Manufacturing Overhead of $79,000

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Learning Objective : 03-06 Prepare accounting schedules documenting the costs incurred. Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-20 Issue of Direct and Indirect Materials Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-42 (Algo) During March, Pendergraph Corporation...

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247

314)

During March, Pendergraph Corporation incurred $76,000 of actual Manufacturing Overhead costs. During the same period, the Manufacturing Overhead applied to Work in Process was $78,000. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a: A) credit to Manufacturing Overhead of $78,000 B) debit to Work in Process of $76,000 C) credit to Work in Process of $76,000 D) debit to Manufacturing Overhead of $78,000

Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-05 Understand the incurrence and application of overhead costs. Learning Objective : 03-06 Prepare accounting schedules documenting the costs incurred. Topic : 03-28 Summary of Manufacturing Cost Flows Topic : 03-20 Issue of Direct and Indirect Materials Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-43 (Algo) During March, Pendergraph Corporation...

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248

315)

Tyare Corporation had the following inventory balances at the beginning and end of May:

Raw materials Finished Goods Work in Process

May 1

May 30

$26,000 $75,500 $14,000

$31,000 $67,000 $16,567

During May, $59,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $12 per direct labourhour, and it paid its direct labour workers $15 per hour. A total of 310 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $7,100 of direct materials cost. The Corporation incurred $42,150 of actual manufacturing overhead cost during the month and applied $39,900 in manufacturing overhead cost. The raw materials purchased during May totaled: A) $59,000 B) $68,433 C) $54,000 D) $64,000 Question Details Accessibility : Keyboard Navigation Gradable : automatic Learning Objective : 03-04 Determine costs incurred in a job-order production system over a specified Learning Objective : 03-06 Prepare accounting schedules documenting the costs incurred. Topic : 03-19 The Purchase and Issue of Materials Topic : 03-28 Summary of Manufacturing Cost Flows Source : Chapter 03 Test Bank - Algorithmic > TB MC Qu. 3-44 (Algo) Tyare Corporation had the following inventory...

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249