ACCT 2082 - Final Exam Chapters 18, 19, 20, 21, 23 PDF

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ACCT 2082 - Final Exam Chapters 18, 19, 20, 21, 23...

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1 1.) Which of the following is most associated with managerial accounting? a.is prepared for users outside the organization b.must follow GAAP c.always reports on the entire entity d.may rely on estimates and forecasts Answer: d.may rely on estimates and forecasts 2.) Conversion costs are a.direct materials and indirect labor b.factory overhead and direct labor c.direct materials and factory overhead d.direct materials and direct labor Answer: b.factory overhead and direct labor 3.) All of the following are product costs except a.sales and administrative expenses b.factory overhead c.direct materials d.direct labor Answer: a.sales and administrative expenses 4.) The primary goal of managerial accounting is to provide information to a.creditors b.management c.investors d.external auditors Answer: b.management 5.) What is the primary criterion for the preparation of managerial accounting reports? a.cost of the reports b.timing of the reports c.manager needs d.relevance of the reports Answer: c.manager needs 6.) Work in process inventory increased by $20,000 during the current year. Cost of goods manufactured was $180,000. Total manufacturing costs incurred are a.$200,000 b.$189,000 c.$160,000 d.$198,000 Answer: a.$200,000 7.) Rent expense on a factory building would be treated as a(n) a.direct materials cost b.period cost c.indirect cost d.product cost Answer: d.product cost 8.) Prime costs are

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2 a.period b.direct c.direct d.direct

costs and materials labor and materials

factory overhead and factory overhead factory overhead and direct labor

Answer: d.direct materials and direct labor 9.) A plant manager's salary is a(n) a.direct cost and an indirect cost b.direct cost c.indirect cost d.period cost Answer: c.indirect cost 10.) Use the information below for Jensen Company to answer the question that follow.Direct materials used$345,000 Direct labor incurred 250,000 Factory overhead incurred 400,000 Operating expenses 175,000 Jensen Company's period costs are a.$250,000 b.$400,000 c.$345,000 d.$175,000 Answer: d.$175,000 11.) Which of the following are reported on the income statement as part of cost of goods? a.administrative expenses b.cost of goods manufactured c.period costs d.operating expenses Answer: b.cost of goods manufactured 12.) All of the following would be reported on the balance sheet as a current asset except a.work in process inventory b.finished goods inventory c.factory overhead d.materials inventory Answer: c.factory overhead 13.) Another term for factory overhead is a.factory burden b.surplus c.period cost d.supervisory cost Answer: a.factory burden 14.) Which of the following items would not be classified as part of factory overhead? a.factory supplies used b.production supervisors' salaries c.amortization of manufacturing patents d.direct labor used Answer: d.direct labor used 15.) Compute conversion costs given the following data: direct materials, $347,500; direct labor, $196,300; factory overhead, $187,900; and selling expenses, $45,290. a.$187,900

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3 b.$543,800 c.$731,700 d.$384,200 Answer: d.$384,200 16.) Use the information below for Darwin Company to answer the question that follow.Sales$76,500 Direct materials used 7,300 Depreciation on factory equipment 4,700 Indirect labor 5,900 Direct labor 10,500 Factory rent 4,200 Factory utilities 1,200 Sales salaries expense 15,600 Office salaries expense 8,900 Indirect materials 1,200 Darwin Company's product costs are a.$35,000 b.$29,200 c.$24,500 d.$30,300 Answer: a.$35,000 17.) Given the following data:Beginning raw materials inventory$30,000Materials purchased65,000Ending raw materials inventory40,000What is the amount of raw materials used? a.$5,000 b.$75,000 c.$30,000 d.$55,000 Answer: d.$55,000 18.) Which of the following is not a prime cost? a.direct labor wages b.plant janitor's wages c.machine operator wages d.assembly line wages Answer: b.plant janitor's wages 19.) Which of the following accounts is not an example of a sustainable business activity? a.reduction of employee idle time b.expanded public transportation systems c.use of wind turbines to generate energy d.crop rotation Answer: a.reduction of employee idle time 20.) Costs on the income statement for both a merchandiser and a manufacturer would be a.operating expenses b.direct materials c.cost of goods manufactured d.direct labor incurred Answer: a.operating expenses 21.) Costs other than direct materials cost and direct labor cost incurred in the manufacturing process are classified as a.product costs b.miscellaneous expenses c.period costs d.factory overhead costs Answer: d.factory overhead costs 22.) In order to be useful to managers, managerial accounting reports should possess all of the following characteristics except a.provide objective measures of past operations and subjective estimates about future decisions

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4 b.be prepared in accordance with generally accepted accounting principles c.be provided at any time management needs information d.be prepared to report information for any unit of the business to support decision making Answer: b.be prepared in accordance with generally accepted accounting principles 23.) Compute conversion costs given the following data: direct materials, $355,000; direct labor, $197,300; factory overhead, $203,200 and selling expenses, $42,700. a.$558,200 b.$755,500 c.$160,500 d.$400,500 Answer: d.$400,500 24.) Which of the following will not be found on the balance sheet of a manufacturing company? a.finished goods b.work in process c.materials d.cost of goods sold Answer: d.cost of goods sold 25.) Which of the following costs are conversion costs? a.direct materials cost and direct labor cost b.direct materials cost and factory overhead cost c.direct labor cost and factory overhead cost d.factory overhead cost Answer: c.direct labor cost and factory overhead cost 26.) A widely used activity base for developing factory overhead rates in highly automated settings is a.direct labor dollars b.direct labor hours c.machine hours d.direct materials Answer: c.machine hours 27.) A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $345,000 and direct labor hours would be 47,700. Actual manufacturing overhead costs incurred were $310,700, and actual direct labor hours were 53,400. What is the predetermined overhead rate per direct labor hour? a.$8.68 b.$7.23 c.$5.79 d.$10.85 Answer: b.$7.23 28.) The amount of time spent by an employee on an individual job is recorded on a.time tickets b.employees' earnings records c.pay stubs d.in-and-out cards Answer: a.time tickets 29.) The recording of the application of factory overhead costs to jobs would include a credit to a.Wages Payable

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5 b.Work in Process c.Factory Overhead d.Cost of Goods Sold Answer: c.Factory Overhead 30.) Costs that are treated as assets until the product is sold are a.product costs b.period costs c.conversion costs d.selling expenses Answer: a. product costs 31.) A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $403,677 and direct labor hours would be 44,853. Actual factory overhead costs incurred were $435,430, and actual direct labor hours were 50,397. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year? a.$18,143 overapplied b.$453,573 overapplied c.$18,143 underapplied d.$49,896 underapplied Answer: a.$18,143 overapplied 32.) A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $408,200 and direct labor hours would be 31,400. Actual manufacturing overhead costs incurred were $306,000, and actual direct labor hours were 20,400. The entry to apply the factory overhead costs for the year would include a a.debit to Factory Overhead for $265,200 b.credit to Factory Overhead for $265,200 c.debit to Factory Overhead for $306,000 d.credit to Factory Overhead for $408,200 Answer: b.credit to Factory Overhead for $265,200 33.) If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a a.debit balance and be underapplied b.credit balance and be underapplied c.credit balance and be overapplied d.debit balance and be overapplied Answer: a.debit balance and be underapplied 34.) A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual manufacturing overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the predetermined overhead rate per direct labor hour? a.$12.57 b.$10.48 c.$12.00 d.$10.00 Answer: c.$12.00 35.) During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. Factory overhead applied to production was $32,000. The entry to record the actual factory overhead costs incurred is a.Factory Overhead 25,000 Wages Payable 25,000 b.Accounts Payable 25,000 Factory Overhead 25,000

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6 c.Work in Process 25,000 Wages Payable 25,000 d.Factory Overhead 32,000 Accounts Payable 32,000 Answer: a.Factory Overhead 25,000 Wages Payable 25,000 36.) Materials purchased on account during the month amounted to $190,000. Materials requisitioned and placed in production totaled $156,000. The entry to record the transaction for materials requisitioned by the production department is a.Work in Process 190,000 Materials 190,000 b.Materials 156,000 Work in Process 156,000 c.Work in Process 156,000 Materials 156,000 d.Work in Process 156,000 Cash 156,000 Answer: c.Work in Process 156,000 Materials 156,000 37.) The controlling account for the cost ledger is a.Cost of Goods Sold b.Finished Goods c.Work in Process d.Materials Answer: c.Work in Process 38.) a.It b.It c.It d.It

Which of the following is not a characteristic of a job order costing system? is best suited for industries that manufacture custom goods. accumulates cost for each department within the factory. provides a separate record for the cost of each quantity of product that passes through the factory. uses only one work in process account.

Answer: b.It accumulates cost for each department within the factory. 39.) Each document in the cost ledger is called a a.materials requisition b.finished goods sheet c.job cost sheet d.stock record Answer: c.job cost sheet 40.) Selected accounts with a credit amount omitted are as follows: Work in Process Apr. 1 Balance 7,400 Apr. 30 Goods finished X 30 Direct materials 68,700 30 Direct labor 190,900 30 Factory overhead 57,270 Finished Goods Apr. 1 Balance 14,200 30 Goods finished 306,600 What was the balance of Work in Process as of April 30? a.$306,600 b.$14,200 c.$17,670 d.$57,270 Answer: c.$17,670 41.) Use the budget data shown below for Sharp Company to answer the question that follow:Estimated direct labor hours 12,000 Estimated direct labor dollars $90,000 Estimated factory overhead costs $179,000 Actual direct labor hours 11,500 Actual direct labor dollars $92,000 Actual factory overhead costs$180,000 If factory overhead is to be applied based on direct labor dollars, the predetermined overhead rate is a.196% b.$14.92 c.199% d.$15.65

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7 Answer: c.199% 42.) The recording of the factory labor incurred for general factory use would include a debit to a.Factory Overhead b.Wages Payable c.Wages Expense d.Cost of Goods Sold Answer: a.Factory Overhead 43.) At the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to a.increase by $1,700,000 b.increase by $3,400,000 c.decrease by $1,700,000 d.decrease by $3,400,000 Answer: a.increase by $1,700,000 44.) Bar code scanners are now being used to track incoming materials and to electronically transmit these data. Scanners have replaced which of the following? a.receiving report b.materials ledger c.job cost sheet d.materials requisition Answer: a.receiving report 45.) All of the a.product costs b.product costs c.product costs d.product costs

following are true regarding product costs except consist of direct labor, direct materials, and factory overhead are found on the balance sheet until they are sold include sales and administrative expenses can be found in three accounts on the balance sheet

Answer: c.product costs include sales and administrative expenses 46.) In a job order cost accounting system, when goods that have been ordered are received, the receiving department personnel count the goods, inspect the goods, and complete a a.purchase order b.purchase requisition c.receiving report d.sales invoice Answer: c.receiving report 47.) Which of the following represents the factory overhead applied to a product? a.actual factory overhead rate times estimated activity base b.predetermined factory overhead rate times actual activity base c.predetermined factory overhead rate times estimated activity base d.actual factory overhead rate times actual activity base Answer: b.predetermined factory overhead rate times actual activity base 48.) Which of the following would be most likely to use process costing? a.auto body repair shop b.lawn fertilizer manufacturer c.law firm d.custom furniture manufacturer

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8 Answer: b.lawn fertilizer manufacturer 49.) For which of the following businesses would the job order cost system be appropriate? a.oil refinery b.hospital c.canned soup processor d.lumber mill Answer: b.hospital 50.) Which of the following is the correct flow of manufacturing costs? a.work in process, finished goods, raw materials, cost of goods sold b.raw materials, finished goods, cost of goods sold, work in process c.raw materials, work in process, finished goods, cost of goods sold d.cost of goods sold, raw materials, work in process, finished goods Answer: c.raw materials, work in process, finished goods, cost of goods sold 51.) Department G had 2,400 units 25% completed at the beginning of the period, 12,100 units were completed during the period, 2,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period: Work in process, beginning of period$26,600 Costs added during period: Direct materials (11,700 units at $9)105,300 Direct labor 130,900 Factory overhead 59,500 All direct materials are placed in process at the beginning of production, and the first-in, first-out method of inventory costing is used. What is the total cost of 2,400 units of beginning inventory that were completed during the period? a.$55,400 b.$26,600 c.$49,640 d.$57,400 Answer: a.$55,400 52.) Department A had 5,000 units in Work in Process that were 60% completed as to labor and overhead at the beginning of the period. 34,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 8,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories.The number of equivalent units of production for material costs for the period was a.32,000 b.29,000 c.34,000 d.29,800 Answer: c.34,000 53.) Equivalent production units are generally determined for a.conversion costs only b.direct materials and conversion costs c.direct materials and direct labor costs only d.direct materials only Answer: b.direct materials and conversion costs 54.) Carmelita Inc. has the following information available:Costs from Beginning Inventory Costs from Current Period Direct materials$2,000$ 22,252 Conversion costs 6,200 150,536 At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. The company uses the FIFO process cost method.The cost of completing a unit (rounded to the nearest cent) during the current period was a.$34.88

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9 b.$36.19 c.$35.95 d.$35.89 Answer: c.$35.95 55.) If a company uses a process costing system to account for the costs in its five production departments, how many work in process accounts will it use? a.5 b.4 c.6 d.2 Answer: a.5 56.) Department M had 2,600 units 56% completed in process at the beginning of June, 11,400 units completed during June, and 1,200 units 29% completed at the end of June. What was the number of equivalent units of production for conversion costs for June if the first-in, first-out method is used to cost inventories? a.11,748 units b.10,292 units c.12,948 units d.8,800 units Answer: b. 10292 units 57.) Department J had no work in process at the beginning of the period. 18,000 units were completed during the period, and 2,000 units were 30% completed at the end of the period. The following manufacturing costs were debited to the departmental work in process account during the period (assume the company uses FIFO and rounds cost per unit to two decimal places):Direct materials (20,000 at $5)$100,000 Direct labor 142,300 Factory overhead 57,200 Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the 18,000 units completed during the period? a.$193,140 b.$283,140 c.$16,438 d.$90,000 P Answer: b.$283,140 58.) Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the period, 3,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period:Work in process, beginning of period $40,000 Costs added during period:Direct materials (10,400 units at $8)83,200 Direct labor 63,000 Factory overhead 25,000 All direct materials are placed in process at the beginning of production, and the first-in, first-out method of inventory costing is used. What is the total cost of the departmental work in process inventory at the end of the period (round unit cost calculations to whole dollars)? a.$35,670 b.$21,432 c.$28,935 d.$16,163 Answer: c.$28,935 59.) The three categories of manufacturing costs comprising the total cost of work in process are direct labor, direct materials, and a.factory overhead b.direct expenses c.accounting salaries expense d.selling expenses Answer: a.factory overhead

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60.) Which of the following would use a process costing system? a.graduation photographer b.lumber mill c.custom helicopter manufacturer d.custom home builder Answer: b.lumber mill 61.) Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs? a.assembly labor's wages b.accounting department costs c.raw lumber d.administrative salaries Answer: a.assembly labor's wages 62.) Department A had 5,000 units in Work in Process that were 60% completed as to labor and overhead at the beginning of the period. 34,000 units of direct materials were added during the period, 31,000 units were completed during the period, and 8,000 units were 80% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. The first-in, first-out method is used to cost inventories.The number of equivalent units of production for conversion costs for the period was a.34,000 b.34,200 c.34,400 d.32,400 Answer: c.34,400 63.) The following unit data were assembled for the assembly process of Super Co. for the month of April. Direct materials are added at the beginning of the process. Conversion costs are added uniformly over the production process. The company uses the FIFO method.Units Beginning work in process (60% completed)5,000 Units ...