1. When completed units are sold: (Points : 2)
2. [removed] Cost of Goods Sold account is credited.
[removed] Cost of Goods Manufactured account is credited.
[removed] Finished Goods Inventory account is credited.
[removed] Work-in-Process Inventory account is credited.
[removed] Finished Goods Inventory account is debited.
| 2. The two main advantages of using predetermined factory overhead rates are to provide more accurate unit cost information and to: (Points : 2) [removed] Simplify the accounting process. [removed] Provide cost information on a timely basis. [removed] Insure transmission of correct data. [removed] Extend the useful life of the cost data. [removed] Adjust for variances in data sources. |
| 3. The total cost of direct materials, direct labor, and factory overhead transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account during an accounting period is: (Points : 2) [removed] Normal cost of goods sold. [removed] Adjusted cost of goods sold. [removed] Total manufacturing cost. [removed] Cost of goods manufactured. [removed] Actual cost of goods sold. |
| 4. When completed units are transferred to the warehouse: (Points : 2) [removed] Cost of Goods Sold account is debited. [removed] Cost of Goods Manufactured account is debited. [removed] Finished Goods Inventory account is debited. [removed] Work-in-Process Inventory account is debited. [removed] Finished Goods Inventory account is credited. |
| 5. Which of the following activities is a facility-level activity? (Points : 2) [removed] Plant management salaries. [removed] Depreciation on a highly specialized piece of production equipment. [removed] Direct labor. [removed] Product design. |
| 6. An activity that is performed for each unit of production is a(n): (Points : 2) [removed] Product-level activity. [removed] Facility-level activity. [removed] Unit-level activity. [removed] Performance-level activity. [removed] Batch-level activity. |
| 7. An activity that is performed to support the production of a new custom-order product is a(n): (Points : 2) [removed] Product-level activity. [removed] Facility-level activity. [removed] Unit-level activity. [removed] Customer-support activity. [removed] Batch-level activity. |
| 8. Which of the following would likely be the most appropriate cost driver of electric power used by machines? (Points : 2) [removed] Number of units. [removed] Machine size. [removed] Number of machine hours. [removed] Number of production runs. [removed] Purchase cost of machines. |
| 9. The journal entry to record requisitioned and usage of direct materials would include a credit to: (Points : 2) [removed] Work-in-Process Inventory. [removed] Accrued Payroll. [removed] Factory Overhead. [removed] Materials Inventory. [removed] Finished Goods Inventory. |
| 10. In calculating unit cost in a process costing system, “conversion cost” is defined as the sum of: (Points : 2) [removed] Direct and indirect material costs. [removed] Direct and indirect labor costs. [removed] Direct labor and factory overhead costs. [removed] Indirect labor and factory overhead costs. |
| 11. Process cost systems are used in all of the following industries except: (Points : 2) [removed] Chemicals. [removed] Ship building. [removed] Oil refining. [removed] Textiles. [removed] Steel. |
| 12. The key difference between weighted-average and FIFO process costing methods is the handling of the partially completed: (Points : 2) [removed] Beginning direct materials inventory. [removed] Ending direct materials inventory. [removed] Beginning work-in-process inventory. [removed] Ending work-in-process inventory. [removed] Beginning finished goods inventory. |
| 13. ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to WIP, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information: Total Materials (Direct and Indirect) Purchsed = $ 90,000 Indirect Materials Issued to Production = 30,000 Total Materials Issued to Production = 110,000 Beginning Materials Inventory = 50,000 The ending materials inventory cost is: (Points : 2) [removed] $110,000. [removed] $30,000. [removed] $90,000. [removed] $80,000. [removed] $50,000. |
| 14. Wings Co. budgeted $555,600 manufacturing direct wages, 2,315 direct labor hours, and had the following manufacturing overhead: Overhead Cost Pool – Budgeted O/H $ – Budgeted Level for Cost Driver – O/H Cost Driver Materials Handling $160,000 3,200 lbs. Material Weight Machine Setup 13,200 390 S/U’s # of S/Us Machine Repair 1,380 30,000 Mach. Hrs Machine Hrs. Inspections 10,560 160 Inspections # of Inspections Requirements for Job #971 which included 4 Units of Production: D/L Hours = 20 Hours D/Mat’ls = 130 lbs. Machine S/U = 30 Set-ups Machine Hrs. = 15,000 Machine Hours Inspections = 15 Inspections. Using ABC, the materials handling overhead cost assigned to Job #971 is: (Points : 2) [removed] $2,300. [removed] $990. [removed] $6,500. [removed] $690. [removed] $1,020. |
| 15. Randall Company manufactures products to customer specifications. A job costing system is used to accumulate production costs. Factory overhead cost was applied at 125% of direct labor cost. Selected data concerning the past year’s operation of the company are presented below. Direct Materials January 1 = $77,000 Direct Materials December 31 = 40,000 WIP January 1 = 66,000 WIP December 31 = 42,000 Finished Goods January 1 = 115,000 Finished Goods December 31 = 100,000 Other Information: Direct Materials Purchased = $324,000 Cost of Goods Available for Sale = 950,000 Actual Factory Overhead = 206,000 The cost of goods manufactured during the year is: (Points : 2) [removed] $850,000. [removed] $348,000. [removed] $672,000. [removed] $835,000. [removed] $811,000. |
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