ACC 560 Week 3 Quiz – Strayer NEW

2 - 64Test Bank for Managerial Accounting, Sixth Edition

2 - 3Job Order Costing

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http://www.hwgala.com/ACC-560-Week-3-Quiz-Strayer-NEW-ACC560W3Q.htmWeek 3 Quiz 2: Chapter 2 and 3Chapter 2TRUE-FALSE STATEMENTS1.Cost accounting is primarily concerned with accumulating information about product costs.

Ans:, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

2.A job order cost system is most appropriate when a large volume of uniform products are produced.

Ans:, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Reporting

3.A process cost accounting system is appropriate for similar products that are continuously mass produced.


4.The perpetual inventory method cannot be used in a job order cost system.


5.A job order cost system and a process cost system are two alternative methods for valuing inventories.

Ans:, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

6.A job order cost system identifies costs with a particular job rather than with a set time period.


7.A company may use either a job order cost system or a process cost system, but not both.


8.Raw Materials Inventory, Factory Labor, and Manufacturing Overhead are all control accounts in the general ledger when a job order cost accounting system is used.

Ans:, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

9.Accumulating and assigning manufacturing costs are two important activities in a job order cost system.

Ans:, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

10.Recording the acquisition of raw materials is a part of accumulating manufacturing costs.

Ans:, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

11.Manufacturing costs are generally incurred in one period and recorded in a subsequent period.


12.The Purchases account is credited for all raw materials purchase returns and allowances.


13.When raw materials are received, there is no effort at this point to associate the cost of materials with specific jobs.

Ans:, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

14.When raw materials are purchased, the Work in Process Inventory account is debited.


15.Factory labor should be assigned to selling and administrative expenses on a proportionate basis.


16.Fringe benefits and payroll taxes associated with factory workers should be accumulated as a part of Factory Labor.


17.Job order cost sheets constitute the subsidiary ledger of the control account Work In Process Inventory.

Ans:, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

18.In a job order cost system, each entry to the Work In Process Inventory account should be accompanied by a posting to one or more job cost sheets.


19.Direct materials requisitioned from the storeroom should be charged to the Work In Process Inventory account and the job cost sheets for the individual jobs on which the materials were used.


20.Manufacturing overhead is the only product cost that can be assigned to jobs as soon as the costs are incurred.

Ans:, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

21.There should be a separate job cost sheet for each job.

Ans:, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

22.Actual manufacturing overhead costs are assigned to each job by tracing each overhead cost to a specific job.

Ans:, LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: FSA

23.The formula for the predetermined overhead rate is estimated annual overhead costs divided by an expected annual operating activity.

Ans:, LO: 4, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

24.Actual manufacturing overhead costs should be charged to the Work in Process Inventory account as they are incurred.


25.A good system of internal control requires that the job order cost sheet be destroyed as soon as the job is complete.

Ans:, LO: 5, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Risk Management, AICPA PC: None, IMA: Internal Controls

26.Finished Goods Inventory is charged for the cost of jobs completed during a period.


27.When goods are sold, the Cost of Goods Sold account is debited and Work in Process Inventory account is credited.

Ans:, LO: 5, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: FSA

28.Total manufacturing costs for a period consists of the costs of direct materials used, the cost of direct labor incurred, and the manufacturing overhead applied during the period.


29.Overapplied overhead means that actual manufacturing overhead costs were greater than the manufacturing overhead costs applied to jobs.

Ans:, LO: 6, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

30.At the end of the year, the accountant credits the amount of the overapplied overhead to Cost of Goods Sold.

Ans:, LO: 6, Bloom: C, Difficulty: Medium, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

31.A cost accounting system consists of manufacturing cost accounts that are fully integrated into the general ledger of a company.

Ans:, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

32.The cost of raw materials purchased is credited to Raw Materials Inventory when materials are received.


33.Requisitions for direct materials are posted daily to the individual job cost sheets.

Ans:, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: None, AICPA PC: None, IMA: Business Economics

34.The predetermined overhead rate is based on the relationship between estimated annual overhead costs and expected annual operating activity expressed in terms of a common activity base.


35.At the end of the year, underapplied overhead is usually credited to Cost of Goods Sold.


MULTIPLE CHOICE QUESTIONS36.Which of the following is one of the components of cost accounting?a.It involves measuring product costs.b.It involves the determination of company profits.c.It requires GAAP to be applied.d.It requires cost minimizing principles.


37.A major purpose of cost accounting is toa.classify all costs as operating or nonoperating.b.measure, record, and report period costs.c.provide information to stockholders for investment decisions.d.measure, record, and report product costs.


38.The two basic types of cost accounting systems area.job order and job accumulation systems.b.job order and process cost systems.c.process cost and batch systems.d.job order and batch systems.

Ans:, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

39.A process cost system would most likely be used by a company that makesa.motion pictures.b.repairs to automobiles.c.breakfast cereal.d.college graduation announcements.


40.Which of the following would be accounted for using a job order cost system?a.The production of personal computers.b.The production of automobiles.c.The refining of petroleum.d.The construction of a new campus building.


41.Process costing is used whena.the production process is continuous.b.production is aimed at filling a specific customer order.c.dissimilar products are involved.d.costs are to be assigned to specific jobs.


42.Process costing is not used whena.similar goods are being produced.b.large volumes are produced.c.jobs have distinguishing characteristics.d.a series of connected manufacturing processes is necessary.


43.An important feature of a job order cost system is that each joba.must be similar to previous jobs completed.b.has its own distinguishing characteristics.c.must be completed before a new job is accepted.d.consists of one unit of output.


44.As of December 31, 2013, Stand Still Industries had $2,500 of raw materials inventory. At the beginning of 2013, there was $2,000 of materials on hand. During the year, the company purchased $325,000 of materials; however, it paid for only $312,500. How much inventory was requisitioned for use on jobs during 2013?a.$312,000b.$324,500c.$325,500d.$313,000

Ans:, LO: 2, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Resource Management, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Business Economics

45.The flow of costs in a job order cost systema.involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done.b.cannot be measured until all jobs are complete.c.measures product costs for a set time period.d.generally follows a LIFO cost flow assumption.


46.In a job order cost accounting system, the Raw Materials Inventory account isa.an expense.b.a control account.c.not used.d.a period cost.


47.When a job is completed and all costs have been accumulated on a job cost sheet, the journal entry that should be made isa.Finished Goods InventoryDirect MaterialsDirect LaborManufacturing Overheadb.Work In Process InventoryDirect MaterialsDirect LaborManufacturing Overheadc.Raw Materials InventoryWork In Process Inventoryd.Finished Goods InventoryWork In Process Inventory

Ans:, LO: 2, Bloom: C, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: FSA

48.The two major steps in the flow of costs area.allocating and assigning.b.acquiring and accumulating.c.accumulating and assigning.d.accumulating and amortizing.


49.The Raw Materials Inventory account isa.a subsidiary account.b.debited for invoice costs and freight costs chargeable to the purchaser.c.debited for purchase discounts taken.d.debited for purchase returns and allowances.


50.Records of individual items of raw materials would not be maintaineda.electronically.b.manually.c.on stores ledger cards.d.in the Raw Materials Inventory account.

Ans:, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Leverage Technology, AICPA PC: Project Management, IMA: Business Applications

51.Cost of raw materials is debited to Raw Materials Inventory when thea.materials are ordered.b.materials are received.c.materials are put into production.d.bill for the materials is paid.


52.Which of the following is not included in factory labor costs?a.Gross earnings.b.Net earnings.c.Fringe benefits.d.Employer payroll taxes.


53.All of the following would be entries in assigning accumulated costs to the Work In Process Inventory except:a.the purchase of raw materials.b.raw materials are used.c.overhead is applied.d.factory labor is used.


54.Factory labor costsa.are accumulated in a control account.b.do not include pension costs.c.include vacation pay.d.are based on workers net pay.


55.Factory Labor is a(n)a.expense account.b.control account.c.subsidiary account.d.temporary account.


56.Kline Manufacturing has the following labor costs:FactoryGross wages$490,000FactoryNet wages420,000Employer Payroll Taxes Payable50,000The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor fora.$540,000.b.$490,000.c.$470,000.d.$440,000.

Ans:, LO: 2, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

57.Factory labor costsa.accumulate in advance of utilization.b.accumulate in a control account.c.include sick pay earned by factory workers.d.accumulate in the Factory Labor Expense account.


58.Which of the following is not a control account?a.Manufacturing Overheadb.Factory Laborc.Accounts Receivabled.Raw Materials Inventory

Ans:, LO: 2, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

59.Manufacturing Overhead would not have a subsidiary account fora.utilities.b.property taxes.c.insurance.d.raw materials inventory.

Ans:, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

60.The entry to record the acquisition of raw materials on account isa.Work in Process InventoryAccounts Payableb.Manufacturing OverheadRaw Materials InventoryAccounts Payablec.Accounts PayableRaw Materials Inventoryd.Raw Materials InventoryAccounts Payable

Ans:, LO: 2, Bloom: C, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

61.Which one of the following best describes a job cost sheet?a.It is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job.b.It is used to track manufacturing overhead costs to specific jobs.c.It is used by management to understand how direct costs affect profitability.d.It is a daily form that management uses for tracking worker productivity on which employee raises are based.


62.Job cost sheets constitute the subsidiary ledger for thea.Finished Goods Inventory account.b.Cost of Goods Sold account.c.Work In Process Inventory account.d.Cost of Goods Manufactured account.


63.A materials requisition slip showed that direct materials requested were $63,000 and indirect materials requested were $9,000. The entry to record the transfer of materials from the storeroom isa.Work In Process Inventory63,000Raw Materials Inventory63,000b.Direct Materials63,000Indirect Materials9,000Work in Process Inventory72,000c.Manufacturing Overhead72,000Raw Materials Inventory72,000d.Work In Process Inventory63,000Manufacturing Overhead9,000Raw Materials Inventory72,000


64.The job cost sheet does not showa.costs chargeable to a specific job.b.the total costs of a completed job.c.the unit cost of a completed job.d.the cost of goods sold.


65.Under an effective system of internal control, the authorization for issuing materials is madea.orally.b.on a prenumbered materials requisition slip.c.by the accounting department.d.by anyone on the production line.

Ans:, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Risk Management, AICPA PC: None, IMA: Internal Controls

66.A copy of the materials requisition slip would not include the:a.quantity.b.stock number.c.cost per unit.d.name of the supplier.

Ans:, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Internal Controls

67.Materials requisition slips are costeda.by production supervisors.b.by factory personnel who work on the production line.c.after the goods have been sold.d.using any of the inventory costing methods.


68.Postings to control accounts in a costing system are madea.monthly.b.daily.c.annually.d.semi-annually.

Ans:, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Applications

69.Which one of the following should be equal to the balance of the Work In Process Inventory account at the end of the period?a.The total of the amounts transferred from raw materials for the current periodb.The sum of the costs shown on the job cost sheets of unfinished jobsc.The total of manufacturing overhead applied to work in process for the periodd.The total manufacturing costs for the period


70.Which of the following shows entries only to control accounts?a.Factory LaborFactory Wages Payableb.Work in ProcessFactory LaborRaw Materials InventoryFactory Wages Payablec.Work in ProcessManufacturing OverheadRaw Materials Inventoryd.Factory LaborRaw Materials InventoryAccounts PayableFactory Wages Payable

Ans:, LO: 3, Bloom: C, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

71.A time ticket does not indicate thea.employee's name.b.account to be charged.c.number of personal exemptions claimed by the employee.d.job number.


72.Which one of the following is a source document that impacts the job cost sheet?a.Raw materials receiving slips.b.Materials purchase orders.c.Labor time tickets.d.Finished goods shipping documents.

Ans:, LO: 3, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Internal Controls

73.Time tickets should be approved bya.the audit committee.b.co-workers.c.the employee's supervisor.d.the payroll department.

Ans:, LO: 3, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Internal Controls

74.If the entry to assign factory labor showed only a debit to Work In Process Inventory, then all labor costs werea.direct labor.b.indirect labor.c.overtime related.d.regular hours.


75.The principal accounting record used in assigning costs to jobs isa.a job cost sheet.b.the cost of goods manufactured schedule.c.the Manufacturing Overhead control account.d.the stores ledger cards.


76.The following information is available for completed Job No. 402: Direct materials, $80,000; direct labor, $120,000; manufacturing overhead applied, $60,000; units produced, 5,000 units; units sold, 4,000 units. The cost of the finished goods on hand from this job isa.$40,000.b.$260,000.c.$52,000.d.$208,000.

Ans:, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

77.Sportly, Inc. completed Job No. B14 during 2013. The job cost sheet listed the following:Direct materials$55,000Direct labor$30,000Manufacturing overhead applied$20,000Units produced3,000 unitsUnits sold1,800 unitsHow much is the cost of the finished goods on hand from this job?a.$105,000b.$63,000c.$42,000d.$51,000


78.Madison Inc. uses job order costing for its brand new line of sewing machines. The cost incurred for production during 2013 totaled $18,000 of materials, $9,000 of direct labor costs, and $6,000 of manufacturing overhead applied. The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any year. Beginning work in process totaled $15,000, and the ending balance is $9,000. During the year, the company completed 20 machines. How much is the cost per machine?a.$1,350b.$1,950c.$1,650d.$2,400

Ans:, LO: 3, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Business Economics

79.As of December 31, 2013, Nilsen Industries had $2,000 of raw materials inventory. At the beginning of 2013, there was $1,600 of materials on hand. During the year, the company purchased $324,000 of materials; however it paid for only $314,000. How much inventory was requisitioned for use on jobs during 2013?a.$324,400b.$314,400c.$313,600d.$323,600


80.Cost of goods manufactured equals $65,000 for 2013. Finished goods inventory is $2,000 at the beginning of the year and $5,500 at the end of the year. Beginning and ending work in process for 2013 are $4,000 and $5,000, respectively. How much is cost of goods sold for the year?a.$67,500b.$63,000c.$61,500d.$68,500


81.A company expected its annual overhead costs to be $1,800,000 and direct labor costs to be $1,000,000. Actual overhead was $1,740,000, and actual labor costs totaled $1,100,000. How much is the companys predetermined overhead rate to the nearest cent?a.$1.74b.$1.57c.$1.80d.$1.64


82.Vektek, Inc. thinks machine hours is the best activity base for its manufacturing overhead. The estimate of annual overhead costs for its jobs was $1,025,000. The company used 1,000 hours of processing on Job No. B12 during the period and incurred overhead costs totaling $1,050,000. The budgeted machine hours for the year totaled 20,000. How much overhead should be applied to Job No. B12?a.$1,050b.$51,250c.$52,500d.$1,025


83.Barr Mfg. provided the following information from its accounting records for 2013:Expected production30,000 labor hoursActual production28,000 labor hoursBudgeted overhead$900,000Actual overhead$870,000How much is the overhead application rate if Barr bases the rate on direct labor hours?a.$32.14 per hourb.$30.00 per hourc.$29.00 per hourd.$31.07 per hour


84.Kinney Company applies overhead on the basis of 150% of direct labor cost. Job No. 176 is charged with $100,000 of direct materials costs and $120,000 of manufacturing overhead. The total manufacturing costs for Job No. 176 isa.$220,000.b.$400,000.c.$300,000.d.$270,000.


85.Redman Company manufactures customized desks. The following pertains to Job No. 978:Direct materials used$11,450Direct labor hours worked360Direct labor rate per hour$15.00Machine hours used300Applied factory overhead rate per machine hour$22.00What is the total manufacturing cost for Job No. 978?a.$21,650b.$23,450c.$24,950d.$26,750


86.Henson Company applies overhead on the basis of 120% of direct labor cost. Job No. 190 is charged with $120,000 of direct materials costs and $180,000 of manufacturing overhead. The total manufacturing costs for Job No. 190 isa.$300,000.b.$516,000.c.$324,000.d.$450,000.


87.Norman Company manufactures customized desks. The following pertains to Job No. 953:Direct materials used$18,800Direct labor hours worked600Direct labor rate per hour$16.00Machine hours used400Applied factory overhead rate per machine hour$30.00What is the total manufacturing cost for Job No. 953?a.$37,200b.$40,400c.$43,200d.$46,400


88.Minton Company provided the following information from its accounting records for 2013:Expected production60,000 labor hoursActual production56,000 labor hoursBudgeted overhead$1,500,000Actual overhead$1,450,000How much is the overhead application rate if Minton Company bases it on direct labor hours?a.$25.00 per hourb.$26.79 per hourc.$25.89 per hourd.$24.17 per hour


89.The labor costs that have been identified as indirect labor should be charged toa.manufacturing overhead.b.direct labor.c.the individual jobs worked on.d.salary expense.

Ans:, LO: 4, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Reporting

90.Manufacturing overhead is applied to each joba.at the time when the overhead cost is incurred.b.by means of a predetermined overhead rate.c.at the end of the year when actual costs are known.d.only if the overhead costs can be directly traced to that job.


91.The predetermined overhead rate is based on the relationship betweena.estimated annual costs and actual activity.b.estimated annual costs and expected annual activity.c.actual monthly costs and actual annual activity.d.estimated monthly costs and actual monthly activity.


92.The predetermined overhead rate isa.determined on a moving average basis throughout the year.b.not calculated until actual overhead costs are incurred.c.determined at the beginning of the year.d.determined at the end of the current year.


93.In calculating a predetermined overhead rate, a recent trend in automated manufacturing operations is to choose an activity base related toa.direct labor hours.b.indirect labor dollars.c.machine hours.d.raw materials dollars.


94.If annual overhead costs are expected to be $800,000 and direct labor costs are expected to be $1,000,000, then if the activity base is direct labor costs:a.$1.25 is the predetermined overhead rate.b.for every dollar of manufacturing overhead, 80 cents of direct labor will be assigned.c.for every dollar of direct labor, 80 cents of manufacturing overhead will be assigned.d.a predetermined overhead rate cannot be determined.


95.Overhead application is recorded with aa.credit to Work in Process Inventory.b.credit to Manufacturing Overhead.c.debit to Manufacturing Overhead.d.credit to job cost sheets.


96.Manufacturing overhead applied is added to direct labor incurred and to what other item to equal total manufacturing costs for the period?a.Goods available for sale.b.Raw materials purchased.c.Work in process.d.Direct materials used.


97.Simmons Inc. applies overhead to production at a predetermined rate of 90% based on direct labor cost. Job No. 250, the only job still in process at the end of August, has been charged with manufacturing overhead of $7,200. What was the amount of direct materials charged to Job 250 assuming the balance in Work in Process inventory is $30,000?a.$7,500.b.$8,000.c.$14,800.d.$30,000.


98.Spencer Inc. applies overhead to production at a predetermined rate of 80% based on direct labor cost. Job No. 130, the only job still in process at the end of August, has been charged with manufacturing overhead of $5,000. What was the amount of direct materials charged to Job 130 assuming the balance in Work in Process inventory is $20,000?a.$5,000.b.$6,250.c.$8,750.d.$20,000.


99.For Jacobs Company, the predetermined overhead rate is 70% of direct labor cost. During the month, $300,000 of factory labor costs are incurred of which $70,000 is indirect labor. Actual overhead incurred was $160,000. The amount of overhead debited to Work in Process Inventory should be:a.$161,000b.$160,000c.$210,000d.$230,000


100.Simpson Company applies overhead on the basis of 200% of direct labor cost. Job No. 305 is charged with $150,000 of direct materials costs and $200,000 of manufacturing overhead. The total manufacturing costs for Job No. 305 is:a.$350,000b.$450,000c.$500,000d.$550,000


101.For Wilton Company, the predetermined overhead rate is 70% of direct labor cost. During the month, $360,000 of factory labor costs are incurred of which $100,000 is indirect labor. Actual overhead incurred was $180,000. The amount of overhead debited to Work in Process Inventory should be:a.$182,000b.$180,000c.$252,000d.$260,000


102.At the beginning of the year, Monroe Company estimates annual overhead costs to be $1,600,000 and that 300,000 machine hours will be operated. Using machine hours as a base, the amount of overhead applied during the year if actual machine hours for the year was 315,000 hours isa.$1,600,000.b.$1,523,809.c.$1,120,000.d.$1,680,000.


103.Cost of goods sold is obtained froma.analysis of all the control accounts in the cost system.b.the finished goods inventory records.c.the work in process inventory records.d.the Raw Materials Inventory control account.


104.When determining costs of jobs, how does a company account for indirect materials?a.It is added to work in process as used.b.It remains part of raw materials inventory.c.It is transferred out of raw materials into manufacturing overhead when used.d.It is transferred out of raw materials into work in process as used.


105.In a job order cost system, a credit to Manufacturing Overhead will be accompanied by a debit toa.Cost of Goods Manufactured.b.Finished Goods Inventory.c.Work in Process Inventory.d.Raw Materials Inventory.


106.During 2013, Tanner Manufacturing expected Job No. 26 to cost $300,000 of overhead, $500,000 of materials, and $200,000 in labor. Tanner applied overhead based on direct labor cost. Actual production required an overhead cost of $280,000, $550,000 in materials used, and $210,000 in labor. All of the goods were completed. What amount was transferred to Finished Goods?a.$1,000,000b.$1,040,000c.$1,060,000d.$1,075,000


107.Debits to Work in Process Inventory are accompanied by a credit to all but which one of the following accounts?a.Raw Materials Inventoryb.Factory Laborc.Manufacturing Overheadd.Cost of Goods Sold


108.Which of the following is not viewed as part of accumulating manufacturing costs in a job order cost system?a.Cost of goods sold is recognizedb.Raw materials are purchasedc.Factory labor is incurredd.Manufacturing overhead is incurred


109.Which of the following is not viewed as part of assigning manufacturing costs in a job order cost system?a.Manufacturing overhead is appliedb.Raw materials are usedc.Manufacturing overhead is incurredd.Completed goods are recognized


110.In determining total manufacturing costs on the cost of goods manufactured schedule,a.beginning work in process inventory should have a zero balance.b.actual manufacturing overhead costs appear as a deduction.c.manufacturing overhead applied is added to direct materials and direct labor.d.ending work in process inventory is deducted from beginning work in process inventory.


111.Gulick Company developed the following data for the current year:Beginning work in process inventory$160,000Direct materials used96,000Actual overhead192,000Overhead applied144,000Cost of goods manufactured176,000Total manufacturing costs480,000

Gulick Company's direct labor cost for the year isa.$48,000.b.$240,000.c.$144,000.d.$192,000.

Ans:, LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

112.Gulick Company developed the following data for the current year:Beginning work in process inventory$160,000Direct materials used96,000Actual overhead192,000Overhead applied144,000Cost of goods manufactured176,000Total manufacturing costs480,000

Gulick Company's ending work in process inventory isa.$464,000.b.$320,000.c.$304,000.d.$144,000.


113.Hayward Manufacturing Company developed the following data:Beginning work in process inventory $450,000Direct materials used350,000Actual overhead550,000Overhead applied400,000Cost of goods manufactured600,000Ending work in process750,000Hayward Manufacturing Company's total manufacturing costs for the period isa.$950,000.b.$900,000.c.$650,000.d.cannot be determined from the data provided.


114.Which of the following is not used in assigning manufacturing costs to work in process inventory?a.Actual manufacturing overheadb.Time ticketsc.Materials requisitionsd.Predetermined overhead rate


115.On the cost of goods manufactured schedule, the cost of goods manufactured agrees with thea.balance of Finished Goods Inventory at the end of the period.b.total debits to Work in Process Inventory during the period.c.amount transferred from Work in Process Inventory to Finished Goods during the period.d.debits to Cost of Goods Sold during the period.


116.Gannon Company had the following information at December 31:Finished goods inventory, January 1$ 50,000Finished goods inventory, December 31150,000If the cost of goods manufactured during the year amounted to $2,100,000 and annual sales were $2,750,000, the amount of gross profit for the year isa.$650,000.b.$2,000,000.c.$750,000.d.$550,000.


117.Haight Company incurred direct materials costs of $1,500,000 during the year. Manu-facturing overhead applied was $270,000 and is applied at the rate of 60% of direct labor costs. Haight Companys total manufacturing costs for the year wasa.$2,220,000.b.$1,932,000.c.$1,770,000.d.$2,832,000.

Ans:, LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting118.Greer Company developed the following data for the current year:Beginning work in process inventory$ 102,000Direct materials used156,000Actual overhead132,000Overhead applied138,000Cost of goods manufactured675,000Total manufacturing costs642,000

How much is Greer Company's direct labor cost for the year?a.$381,000b.$450,000c.$348,000d.$246,000

Ans:, LO: 5, Bloom: AP, Difficulty: Hard, Min: 3, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Business Economics

119.Greer Company developed the following data for the current year:Beginning work in process inventory$ 102,000Direct materials used156,000Actual overhead132,000Overhead applied138,000Cost of goods manufactured675,000Total manufacturing costs642,000

How much is Greer Company's ending work in process inventory for the year?a.$69,000b.$363,000c.$63,000d.$279,000


120.Chmelar Manufacturing Company developed the following data:Beginning work in process inventory $ 80,000Direct materials used480,000Actual overhead560,000Overhead applied540,000Cost of goods manufactured1,280,000Ending work in process60,000

How much are total manufacturing costs for the period?a.$1,580,000b.$1,260,000c.$1,100,000 d.$1,220,000


121.Barger Company had the following information at December 31:Finished goods inventory, January 1$ 90,000Finished goods inventory, December 31126,000If the cost of goods manufactured during the year amounted to $1,995,000 and annual sales were $2,994,000, how much is the amount of gross profit for the year?a.$999,000b.$909,000c.$1,959,000d.$1,035,000


122.Emley Company incurred direct materials costs of $600,000 during the year. Manufacturing overhead applied was $560,000 and is applied based on direct labor costs. The predetermined overhead rate is 70%. How much are Emley Companys total manufacturing costs for the year?a.$1,552,000b.$1,400,000c.$1,160,000d.$1,960,000


123.During 2013, Durham Manufacturing expected Job No. 51 to cost $300,000 of overhead, $500,000 of materials, and $200,000 in labor. Durham applied overhead based on direct labor cost. Actual production required an overhead cost of $290,000, $550,000 in materials used, and $220,000 in labor. All of the goods were completed. What amount was transferred to Finished Goods?a.$1,070,000b.$1,100,000c.$1,000,000d.$1,060,000


124.During 2013, Cotte Manufacturing expected Job No. 59 to cost $300,000 of overhead, $500,000 of materials, and $200,000 in labor. Cotte applied overhead based on direct labor cost. Actual production required an overhead cost of $290,000, $550,000 in materials used, and $220,000 in labor. All of the goods were completed. How much is the amount of over- or underapplied overhead?a.$10,000 underappliedb.$10,000 overappliedc.$40,000 underappliedd.$40,000 overapplied


125.Kimble Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period:Estimated annual overhead cost$1,600,000Actual annual overhead cost$1,540,000Estimated machine hours400,000Actual machine hours380,000a.$1,520,000 applied and $20,000 overappliedb.$1,600,000 applied and $20,000 overappliedc.$1,520,000 applied and $20,000 underappliedd.$1,463,000 applied and neither under- nor overapplied


126.Barnes Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period:Estimated annual overhead cost$3,000,000Actual annual overhead cost$2,940,000Estimated machine hours300,000Actual machine hours290,000a.$2,900,000 applied and $40,000 overappliedb.$3,000,000 applied and $40,000 overappliedc.$2,900,000 applied and $40,000 underappliedd.$2,940,000 applied and neither under- nor overapplied


127.A company assigned overhead to work in process. At year end, what does the amount of overapplied overhead mean?a.The overhead assigned to work in process is greater than the estimated overhead costs.b.The overhead assigned to work in process is less than the estimated overhead costs.c.The overhead assigned to work in process is less than the actual overhead.d.The overhead assigned to work in process is greater than the overhead incurred.


128.If the Manufacturing Overhead account has a debit balance at the end of a period, it means thata.actual overhead costs were less than overhead costs applied to jobs.b.actual overhead costs were greater than overhead costs applied to jobs.c.actual overhead costs were equal to overhead costs applied to jobs.d.no jobs have been completed.


129.If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period, overhead is said to bea.underapplied.b.overapplied.c.in error.d.prepaid.


130.At the end of the year, any balance in the Manufacturing Overhead account is generally eliminated by adjustinga.Work In Process Inventory.b.Finished Goods Inventory.c.Cost of Goods Sold.d.Raw Materials Inventory.

Ans:, LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Business Economics

131.If Manufacturing Overhead has a credit balance at the end of the period, thena.overhead has been underapplied.b.the overhead assigned to Work in Process Inventory is less than the overhead incurred.c.overhead has been overapplied.d.management must take corrective action.


132.The Manufacturing Overhead account shows debits of $30,000, $24,000, and $28,000 and one credit for $86,000. Based on this information, manufacturing overheada.has been overapplied.b.has been underapplied.c.has not been applied.d.shows a zero balance.


133.If Manufacturing Overhead has a debit balance at the end of the period, thena.overhead has been underapplied.b.the overhead assigned to Work in Process Inventory is more than the overhead incurred.c.overhead has been overapplied.d.management must take corrective action.


134.If actual overhead is greater than applied manufacturing overhead, then manufacturing overhead is:a.underapplied.b.overapplied.c.a loss on the income statement under "Other Expenses and Losses."d.considered a miscellaneous expense.


135.If actual overhead is less than applied manufacturing overhead, then manufacturing overhead is:a.underapplied.b.overapplied.c.a loss on the income statement under "Other Expenses and Losses."d.considered a miscellaneous expense.


136.If manufacturing overhead has been underapplied during the year, the adjusting entry at the end of the year will show aa.debit to Manufacturing Overhead.b.credit to Cost of Goods Sold.c.debit to Work in Process Inventory.d.debit to Cost of Goods Sold.


137.If manufacturing overhead has been overapplied during the year, the adjusting entry at the end of the year will show aa.debit to Manufacturing Overhead.b.credit to Finished Goods Inventoryc.debit to Cost of Goods Sold.d.credit to Work in Process Inventory.


138.The existence of under- or overapplied overhead at the end of the year:a.requires an adjustment to Cost of Goods Sold.b.indicates that an error has been made.c.requires a retroactive adjustment to the cost of all jobs completed.d.is written off as a bad estimate expense.


139.Conceptually, any under- or overapplied overhead at the end of the year should be allocated among all of the following excepta.cost of goods sold.b.ending work in process inventory.c.ending raw materials inventory.d.ending finished goods inventory.


140.If, at the end of the year, Manufacturing Overhead has been overapplied, it means thata.actual overhead costs were greater than the overhead assigned to jobs.b.actual overhead costs were less than the overhead assigned to jobs.c.overhead has not been applied to jobs still in process.d.cost of goods will have to be increased by the amount of the overapplied overhead.


141.A process cost system would be used for all of the following except thea.manufacture of cereal.b.refining of petroleum.c.printing of wedding invitations.d.production of automobiles.

Ans:, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Business Applications

142.In a job order cost system, it would be correct in recording the purchase of raw materials to debita.Work in Process Inventory.b.Work in Process and Manufacturing Overhead.c.Raw Materials Inventory.d.Finished Goods Inventory.


143.In a manufacturing company, the cost of factory labor consists of all of the following excepta.employer payroll taxes.b.fringe benefits incurred by the employer.c.net earnings of factory workers.d.gross earnings of factory workers.


144.Which of the following is not a control account?a.Raw Materials Inventory b.Factory Laborc.Manufacturing Overheadd.All of these are control accounts.


145.When the company assigns factory labor costs to jobs, the direct labor cost is debited toa.Direct Labor.b.Factory Labor.c.Manufacturing Overhead.d.Work in Process Inventory.


146.Jinnah Company applies overhead on the basis of 200% of direct labor cost. Job No. 501 is charged with $180,000 of direct materials costs and $240,000 of manufacturing overhead. The total manufacturing costs for Job No. 501 isa.$420,000.b.$660,000.c.$540,000.d.$600,000.Ans:, LO: 4, Bloom: AP, Difficulty: Medium, Min: 1, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting147.Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)a.actual overhead rate.b.estimated overhead rate.c.assigned overhead rate.d.predetermined overhead rate.


148.Overapplied manufacturing overhead exists when overhead assigned to work in process isa.more than overhead incurred and there is a debit balance in Manufacturing Overhead at the end of a period.b.less than overhead incurred and there is a debit balance in Manufacturing Overhead at the end of a period.c.more than overhead incurred and there is a credit balance in Manufacturing Overhead at the end of a period.d.less than overhead incurred and there is a credit balance in Manufacturing Overhead at the end of a period.


149.Usually, under- or overapplied overhead is considered to be an adjustment toa.work in process.b.finished goods.c.finished goods and cost of goods sold.d.cost of goods sold.


150.Which of the following statements about under- or overapplied manufacturing overhead is correct?a.After the entry to transfer over- or underapplied overhead to Cost of Goods Sold is posted, Manufacturing Overhead will have a zero balance.b.When Manufacturing Overhead has a credit balance, overhead is said to be under-applied.c.At the end of the year, under- or overapplied overhead is eliminated by a closing entry.d.When annual financial statements are prepared, overapplied overhead is reported in current liabilities.Ans:, LO: 6, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Reporting

Chapter 3

TRUE-FALSE STATEMENTS1.Process cost accounting focuses on the process involved in mass-producing products that are very similar in nature.

Ans:, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

2.Process cost systems are used to apply costs to a specific job, such as the manufacturing of a specialized machine.


3.A company that produces motion pictures would likely use a process cost system.

Ans:, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

4.In a process cost system, costs are tracked through a series of connected manufacturing processes or departments, rather than by individual jobs.


5.In a process cost system, total costs are determined at the end of a month or year.


6.Separate work in process accounts are maintained for each production department or manufacturing process in a process cost system.


7.In a process cost system, materials, labor and overhead are only added in the first production department.


8.The assignment of the three manufacturing cost elements to Work in Process in a process cost system is the same as in a job order cost system.


9.Fewer materials requisitions are generally required in a process cost system than in a job order cost system.


10.In a process cost system, labor costs incurred may be captured on time tickets.


11. A primary driver of overhead costs in continuous manufacturing operations is machine time used.


12.Equivalent units of production are used to determine the cost per unit of completed products.


13.Equivalent units of production measure the work done during a period, expressed in fully completed units.


14.Equivalent units of production is the sum of units completed and transferred out plus equivalent units of beginning work in process.


15.The weighted-average method of computing equivalent units is the most widely used method in practice.


16.There are no units in process at the beginning of the period, 1,500 units in process at the end of the period that are 40% complete, and 15,000 units transferred out during the period. Based on this information, there were 14,400 equivalent units of production during the period.

Ans:, LO: 5, Bloom: AP, Difficulty: Easy, Min: 2, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Cost Management

17.The first step performed in preparing a production cost report is computing the equivalent units of production.


18.Equivalent units of production must be calculated before the unit production costs can be computed.


19.The physical units in a department are another name for the equivalent units of production.


20.Unit material cost is computed by taking total material costs charged to the department for the period and dividing by the physical units in the process during the period.


21.When equivalent units of production are different for materials and conversion costs, unit costs are computed for materials, conversion, and total manufacturing.


22.The total manufacturing cost per unit is used in costing the units completed and transferred during the period.


23.A production cost report is an internal document for management that shows production quantity and cost data for a particular job.


24.Production cost reports provide a basis for evaluating the productivity of a department.


25.Companies often use a combination of a process cost and a job order cost system, called operations costing.


a26.The FIFO method is easier to understand and use than the weighted-average method.

Ans:, LO: 8, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Leverage Technology, AICPA PC: None, IMA: Cost Management

a27.The FIFO method is conceptually superior to the weighted-average method.


a28.When comparing the FIFO with the weighted-average method, the FIFO method provides current cost information.


a29.There are no units in ending work in process at the end of the period under the FIFO method.


a30.Companies using the weighted-average method do not complete units left over from the previous accounting periods, they start new units.


31.In continuous process manufacturing, generally once the production begins, it continues until the finished product emerges.


32.One similarity of process cost accounting with job order cost accounting is that both determine total manufacturing costs after each job.


33.The flow of costs in a process costing system requires that materials be added in one department, labor added in another department and manufacturing overhead in a third department.


34.When finished goods are sold, the entry to record the cost of goods sold is a debit to Finished Goods Inventory and a credit to Cost of Goods Sold.


35.When there is no beginning work in process and materials are entered at the beginning of the process, equivalent units of materials are the same as the units started into production.


36.In order to compute the physical unit flow, a company must first compute unit production costs.


37.Under the FIFO method, it is assumed that the beginning work in process is completed before new work is started.


MULTIPLE CHOICE QUESTIONS38.A process cost accounting system is most appropriate whena.a variety of different products are produced, each one requiring different types of materials, labor, and overhead.b.the focus of attention is on a particular job or order.c.similar products are mass-produced.d.individual products are custom made to the specification of customers.

Ans:, LO: 1, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Applications

39.A characteristic of products that are mass-produced in a continuous fashion is thata.the products are identical or very similar in nature.b.they are grouped in batches.c.they are produced at the time an order is received.d.their costs are accumulated on job cost sheets.


40.A process cost system would be used for all of the following products excepta.chemicals.b.computer chips.c.motion pictures.d.soft drinks.


41.In a process cost system,a.a Work in Process account is maintained for each product.b.a materials requisition must identify the job on which the materials will be used.c.a Work in Process account is maintained for each process.d.one Work in Process account is maintained for all the processes, similar to a job order cost system.


42.Differences between a job order cost system and a process cost system include all of the following except thea.documents used to track costs.b.point at which costs are totaled.c.unit cost computations.d.flow of costs.

Ans:, LO: 1, Bloom: K, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Business Applications

43.Which of these best reflects a distinguishing factor between a job order cost system and a process cost system?a.The detail at which costs are calculated.b.The time period each covers.c.The number of work in process accounts.d.The manufacturing cost elements included.

Ans:, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: None, IMA: Business Applications

44.Which of the following is a true statement about process cost systems?a.In process cost systems, costs are accumulated but not assigned.b.A process cost system has one work in process account for each process.c.In process cost systems, costs are summarized on job cost sheets.d.Unit costs are not computed in process cost systems.


45.Which of the following is correct regarding cost systems?Job OrderProcessa.Work in process accountseveralone for each processb.Work in process accountoneonec.Work in process accountoneone for each processd.Work in process accountseveralone

Ans:, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Applications

46.In a process cost system, unit costs are determined using aa.numerator of costs of each job.b.denominator of units produced during the period.c.denominator of units produced for the job.d.denominator of units produced for the day.


47.In process cost accounting, manufacturing costs are summarized on aa.job order cost sheet.b.process order cost sheet.c.production cost report.d.manufacturing cost sheet.


48.Which of the following manufacturing cost elements occurs in a process cost system?a.Direct materials.b.Direct labor.c.Manufacturing overhead.d.All of these.

Ans:, LO: 2, Bloom: C, Difficulty: Easy, Min: 1, AACSB: None, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: None, IMA: Business Economics

49.In a process cost system, product costs are summarized:a.on job cost sheets.b.on production cost reports.c.after each unit is produced.d.when the products are sold.


50.When manufacturing overhead costs are assigned to production in a process cost system, they are debited toa.the Finished Goods Inventory account.b.Cost of Goods Sold.c.a Manufacturing Overhead account.d.a Work in Process account.


51.A product requires processing in two departments, the Baking Department and then the Packaging Department, before it is completed. Costs transferred out of the Baking Department will be transferred to:a.Finished Goods Inventory.b.Cost of Goods Sold.c.Work in ProcessPackaging Department.d.Manufacturing Overhead.


52.Which of the following would not appear as a debit in the Work in Process account of a second department in a two stage production process?a.Materials used.b.Overhead applied.c.Labor assigned.d.Cost of products transferred out.


53.Materials requisitions are:a.not used in process costing.b.generally used more frequently in process costing than job order costing.c.generally used less frequently in process costing than job order costing.d.used more frequently by latter stage production departments.


54.A primary driver of overhead costs in continuous manufacturing operations is:a.direct labor dollars.b.direct labor hours.c.machine hours.d.machine maintenance dollars.


55.Price Company assigns overhead based on machine hours. The Milling Department logs 1,800 machine hours and Cutting Department shows 3,000 machine hours for the period. If the overhead rate is $5 per machine hour, the entry to assign overhead will show aa.debit to Manufacturing Overhead for $24,000.b.credit to Work in ProcessCutting Department for $15,000.c.debit to Work in Process for $15,000.d.credit to Manufacturing Overhead for $24,000.

Ans:, LO: 4, Bloom: C, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

56.Barnes and Miller Manufacturing is trying to determine the equivalent units for conversion costs with 10,000 units of ending work in process at 80% completion and 28,000 physical units. There are no beginning units in the department. Conversion costs occur evenly throughout the entire production period. What are the equivalent units for conversion costs for the current period?a.38,000.b.36,000.c.8,000.d.26,000.

Ans:, LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: FSA

57.15,000 units in a process that are 70% complete are referred to as:a.15,000 equivalent units of production.b.4,500 equivalent units of production.c.10,500 equivalent units of production.d.4,500 equivalent units of production.

Ans:, LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting

58.A process with no beginning work in process, completed and transferred out 95,000 units during a period and had 50,000 units in the ending work in process inventory that were 30% complete. The equivalent units of production for the period were:a.95,000 equivalent units.b.145,000 equivalent units.c.110,000 equivalent units.d.47,500 equivalent units.

Ans:, LO: 5, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Business Economics59.A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning work in process inventory; 80,000 units were started into production in January; and there were 20,000 units that were 40% complete in the ending work in process inventory at the end of January. What were the equivalent units of production for materials for the month of January?a.88,000 equivalent units.b.72,000 equivalent units.c.60,000 equivalent units.d.80,000 equivalent units.


60.A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of January, there were no units in the beginning work in process inventory; 80,000 units were started into production in January; and there were 20,000 units that were 40% complete in the ending work in process inventory at the end of January. What were the equivalent units of production for conversion costs for the month of January?a.60,000 equivalent units.b.72,000 equivalent units.c.68,000 equivalent units.d.80,000 equivalent units.


61.Equivalent units are calculated bya.multiplying the percentage of work done by the equivalent units of output.b.dividing physical units by the percentage of work done.c.multiplying the percentage of work done by the physical units.d.dividing equivalent units by the percentage of work done.


62.Minor Company had the following department data:Physical UnitsWork in process, July 130,000Completed and transferred out135,000Work in process, July 3145,000Materials are added at the beginning of the process. What is the total number of equivalent units for materials in July?a.135,000.b.150,000.c.210,000.d.180,000.


63.Corsi Company had the following department data:Physical UnitsWork in process, beginning-0-Completed and transferred out70,000Work in process, ending7,000Materials are added at the beginning of the process. What is the total number of equivalent units for materials during the period?a.70,000.b.7,000.c.77,000.d.63,000.


64.Gantner Company had the following department information about physical units and percentage of completion:Physical UnitsWork in process, May 1 (60%)60,000Completed and transferred out150,000Work in process, May 31 (40%)50,000If materials are added at the beginning of the production process, what is the total number of equivalent units for materials during May?a.210,000.b.200,000.c.194,000.d.170,000.


65.It is necessary to calculate equivalent units of production in a department becausea.a physical count of units is impossible.b.some units worked on in the department are not fully complete.c.the physical units in the department are always 100% complete.d.at times a department may use a job order cost system and then switch to a process cost system.


66.In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 80,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. How many units were transferred out of the process in June?a.80,000 units.b.70,000 units.c.90,000 units.d.100,000 units.

Ans:, LO: 5, Bloom: AP, Difficulty: Medium, Min: 3, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving, IMA: Cost Management

67.In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 80,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for materials for June werea.90,000 equivalent units.b.100,000 equivalent units.c.104,000 equivalent units.d.80,000 equivalent units.


68.In the month of June, a department had 20,000 units in beginning work in process that were 70% complete. During June, 80,000 units were transferred into production from another department. At the end of June there were 10,000 units in ending work in process that were 40% complete. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. The equivalent units of production for conversion costs for June werea.80,000 equivalent units.b.94,000 equivalent units.c.90,000 equivalent units.d.100,000 equivalent units.


69.A process with no beginning work in process, completed and transferred out 28,000 units during a period and had 14,000 units in the ending work in process that were 50% complete. How much is equivalent units of production for the period for conversion costs? a.35,000 equivalent units.b.42,000 equivalent units.c.49,000 equivalent units.d.21,000 equivalent units.


70.A process with 1,600 units of beginning work in process, completed and transferred out 20,000 units during a period. There were 10,000 units in the ending work in

ACC 560 Week 3 Quiz – Strayer NEW

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