ACCT 201 B Exam - Connect Quiz

From an ABC perspective, what causes costs to be incurred? Financial transactions. The volume of units produced. Debits and credits. Management decisions. Activities.

A job order cost accounting system would best fit the needs of a company that makes: Shoes and apparel. Paint. Cement. Custom machinery. Pencils and erasers.

A job cost sheet shows information about each of the following items except: The direct labor costs assigned to the job. The name of the customer. The costs incurred by the marketing department in selling the job. The overhead costs assigned to the job. The direct materials costs assigned to the job.

When raw materials are used in production and are recorded in a job cost system: Goods in Process is credited and Finished Goods is debited. Direct Material and Indirect Material are debited and Goods in Process is credited. Direct Material and Indirect Material are debited and Raw Materials Inventory is credited. Goods in Process is debited and Raw Materials Inventory is credited. Goods in Process and Factory Overhead are debited and Raw Materials Inventory is credited.

When factory payroll costs are recorded in a job cost accounting system: Factory Payroll is debited and Goods in Process is credited. Goods in Process Inventory and Factory Overhead are debited and Factory Payroll is credited. Cost of Goods Manufactured is debited and Direct Labor is credited. Direct Labor and Indirect Labor are debited and Factory Payroll is credited. Goods in Process is debited and factory payroll is credited

Labor costs in manufacturing can be: Direct or indirect. Indirect or sunk. Direct or payroll. Indirect or payroll. Direct or sunk.

The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to: Jobs Overhead Expense. Cost of Goods Sold. Finished Goods Inventory. Indirect Labor. Goods in Process Inventory.

If overhead applied is less than actual overhead, it is: Fully applied. Underapplied. Overapplied. Expected. Normal.

A cost that remains the same in total even when volume of activity varies is a: Fixed cost. Curvilinear cost. Variable cost. Step-wise variable cost. Standard cost.

A cost that changes in total proportionately to changes in volume of activity is a(n): Differential cost. Fixed cost. Incremental cost. Variable cost. Product cost.

A cost that can be separated into fixed and variable components is called a: Mixed cost. Step-variable cost. Composite cost. Curvilinear cost. Differential cost.

Which one of the following statements is not true? Total fixed costs remain the same regardless of volume. Total variable costs change with volume. Total variable costs decrease as the volume increases. Fixed costs per unit increase as the volume decreases. Variable costs per unit remain the same regardless of the volume.

A company's normal operating range, which excludes extremely high and low volumes that are not likely to occur, is called the: Margin of safety. Contribution range. Break-even point. Relevant range. High-low point.

A direct cost is a cost that is: Identifiable as controllable. Recorded as part of manufacturing overhead. Fixed with respect to the volume of activity. Traceable to a cost object. Sunk with respect to a cost object.

An opportunity cost is: An uncontrollable cost. A cost of potential benefit lost. A change in the cost of a component. A direct cost. A sunk cost.

Labor costs that are clearly associated with specific units or batches of product because the labor is used to convert raw materials into finished products called are: Sunk labor. Direct labor. Indirect labor. Finished labor. Supervisory labor

Costs that are incurred as part of the manufacturing process but are not clearly associated with specific units of product or batches of production, including all manufacturing costs other than direct material and direct labor costs, are called: Administrative expenses. Nonmanufacturing costs. Sunk costs. Factory overhead. Preproduction costs.

Materials that are used in support of the production process but that do not become a part of the product and are not clearly identified with units or batches of product are called: Secondary materials. General materials. Direct materials. Indirect materials. Materials inventory.

The salary paid to the supervisor of an assembly line would normally be classified as: Direct labor. Indirect labor. A period cost. A general cost. An assembly cost.

Classifying costs by behavior involves: Identifying fixed cost and variable cost. Identifying cost of goods sold and operating costs. Identifying all costs. Identifying costs in a physical manner. Identifying both quantitative and qualitative cost factors.

Which of the following is never included in direct materials costs? Invoice costs of direct materials. Outgoing delivery charges. Materials storage costs. Materials handling costs. Insurance on stored material

A fixed cost: Requires the future outlay of cash and is relevant for future decision making. Does not change with changes in the volume of activity within the relevant range. Is directly traceable to a cost object. Changes with changes in the volume of activity within the relevant range. Has already been incurred and cannot be avoided so it is irrelevant for decision making.

Which of the following costs would not be classified as factory overhead? Property taxes on maintenance machinery. Expired insurance on factory equipment. Wages of the factory janitor. Metal doorknobs used on wood cabinets produced. Small tools used in production.

Period costs for a manufacturing company would flow directly to: The current income statement. Factory overhead. The current balance sheet. Job cost sheet. The current manufacturing statement.

Costs that are first assigned to inventory are called: Period costs. Product costs. General costs. Administrative costs. Fixed costs.

Products that are in the process of being manufactured but are not yet complete are called: Raw materials inventory. Conversion costs. Cost of goods sold. Goods in process inventory. Finished goods inventory.

The cost of labor that is not clearly associated with specific units or batches of product is called: Unspecified labor. Direct labor. Indirect labor. Basic labor. Joint labor.

Factory overhead costs normally include all of the following except: Indirect labor costs. Indirect material costs. Selling costs. Factory machinery oil. Factory rent

Which of the following costs is not a period cost? Shipping costs Administrative salaries Indirect materials Sales commissions

All of the following are product costs for financial reporting except: rent on factory space. idle time. indirect materials. advertising.

You are provided the following information: Salaries for assembly workers $ 32,500 Cost of materials $ 1,400 Lubricants for machines $ 710 Accountant's salary $ 8,000 Factory supervisor's salary $ 5,600 Sales commissions $ 3,500 How much are the period costs? $32,500 $11,500 $40,500 $17,100

If the activity level increases, one would expect the fixed cost per unit to: increase. decrease. remain unchanged. none of these.

If the activity level drops by 5%, variable costs should: increase per unit of product. decrease per unit of product. remain constant in total. drop in total by 5%.

The following costs are some of the costs incurred by Norwood Incorporated to produce and sell 1,000 units of one of their primary products: • Direct materials, $32,000. • Direct labor, $72,000. • Factory building rent, $10,000. • Factory maintenance salaries, $7,800. • Sales commissions, $9,200. • Shipping costs, $3,000. • Factory equipment lubrication supplies, $1,200. • Factory supervisor's salary, $21,500. • Straight-line depreciation expense on factory equipment, $6,000. • Advertising campaign costs, $3,000. How much are the total variable costs? $120,400 $128,200 $108,200 $117,400

The following costs are some of the costs incurred by Norwood Incorporated to produce and sell 1,000 units of one of their primary products: • Direct materials, $21,000. • Direct labor, $65,000. • Factory building rent, $15,000. • Factory maintenance salaries, $7,000. • Sales commissions, $10,400. • Shipping costs, $2,300. • Factory equipment lubrication supplies, $1,000. • Factory supervisor's salary, $19,000. • Straight-line depreciation expense on factory equipment, $5,000. • Advertising campaign costs, $3,600. How much are the total fixed costs? $49,600 $48,300 $51,900 $46,000

A company's cost formula for maintenance is Y = $7,200 + $3X, where X is machine-hours. During a period in which 11,500 machine-hours are worked, the expected maintenance cost would be: $41,700. $7,200. $34,500. $21,600.

In March, Espresso Express had electrical costs of $450 when the total volume was 2,800 cups of coffee served. In April, electrical costs were $452.6 for 3,320 cups of coffee. Using the high-low method, what is the estimated fixed cost of electricity per month? $436 $450 $406 $400

Last year, Barker Company's sales were $420,000, its fixed costs were $50,000, and its variable costs were $5 per unit. During the year, 78,000 units were sold. The contribution margin was: $162,000. $258,000. $30,000. $420,000.

Waddington Company has provided the following information pertaining to its most recent month of operations: • Sales totaled $300,000. • Finished goods inventory increased by $25,500. • Cost of goods manufactured was $187,000. • Selling and administrative expenses totaled $40,000. • Direct labor costs totaled $30,000. • Depreciation expense on the manufacturing equipment was $19,500. How much was the net operating income? $73,000 $16,500 $23,500 $98,500

Potsdam Pottery has provided the following data for its last year of operations: • Sales totaled $67,000. • The finished goods inventory account decreased by $7,200. • The cost of goods manufactured was $34,000. • Selling and administrative expenses totaled $11,000. • The work in process account increased $3,800. How much is Potsdam Pottery's gross margin? $23,000 $40,200 $22,000 $25,800

Which of the following would be considered an indirect cost? An assembly worker's salary Wages for cooks in a restaurant Lubricants for a machine The cost of wood for the production of furniture

Which of the following would be considered a direct cost? Wood pulp used to produce paper Janitor's salary Glue used to construct chairs Lubricants for a machine

Harry is considering whether to produce and sell classic wooden surfboards in his spare time in his garage. Which of the following would be considered a differential cost? 1. Original cost of garage 2. Wood for each surfboard 3. Workers salary 4. Tool rental 5. Advertising costs 6. Sales commissions 2,3,4 all costs except 6 all costs except 1 all costs are differential costs

Yolanda is planning a trip to the beach instead of staying at home during the next Spring break. Which of the following would be considered an opportunity cost? The cost of gas The cost of food The cost of renting a car to drive to the beach The money she can make by working during Spring break

Lisbon Corporation is analyzing the following costs with respect to its decision to expand production and sales volume: • New delivery equipment cost, $230,000. • Annual depreciation expense on the new delivery equipment, $23,000. • Old delivery equipment cost, $157,000. • Annual depreciation expense on the old delivery equipment, $15,700. • Annual decrease in utilities cost, $2,000. • Annual increase in advertising costs, $7,400. • Annual increase in sales, $87,000. • Annual increase in cost of goods sold, $27,000. • Annual increase in sales commissions, $1,500. • Annual increase in shipping costs, $300. How much is the differential annual net operating income? $60,100 $45,500 $30,400 $29,800

Iadanza Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $222.70 per unit. Sales volume (units) 24,000 25,000 Cost of goods sold $ 479,400 $ 559,300 Selling and administrative costs $ 649,800 $ 662,500 The best estimate of the total contribution margin when 8,100 units are sold is (Do not round your intermediate calculations. Round your final answer to nearest whole dollar.): $1,156,680 $1,053,810 $85,050 $183,870

Carbaugh Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. Production volume 3,000 units 4,000 units Direct materials $ 74.80 per unit $ 74.80 per unit Direct labor $ 50.10 per unit $ 50.10 per unit Manufacturing overhead $ 70.70 per unit $ 56.40 per unit The best estimate of the total cost to manufacture 3,300 units is closest to: $ 645,480 $ 628,320 $ 553,600 $ 627,300

In a job-order costing system, the basic document for accumulating costs for a specific job is: the labor time ticket. the Work in Process inventory account. the job cost sheet. the materials requisition form.

Which of the following statements is FALSE? Process costing prepares a production report for each major product. Job-order costing would be used for customized products. Costs are accumulated by job or customer under job-order costing. There is no need to track individual costs under process costing since all the units are the same.

Which of the following statements is TRUE? Job-order costing is used when the products are homogeneous. Job-order costing would be used when products are unique. There is no need to track individual costs under job-order costing since all the units are the same. Job-order costing is used when there is mass-production of the products using a series of standardized processes.

Boaz Company had the following information: Estimated Overhead $ 300,000 Actual Overhead $ 350,000 Estimated labor hours 75,000 Actual labor hours 84,000 What is the predetermined overhead rate if labor hours are used as the allocation base? $4.67 per labor-hour $3.57 per labor-hour $4.00 per labor-hour $4.17 per labor-hour

Harrington Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on machine-hours in the Machining Department and direct labor cost in the Assembly Department. At the beginning of the year, the company made the following estimates: Machining Assembly Direct labor hours 16,000 12,000 Direct labor cost $ 20,000 $ 15,000 Machine-hours 5,000 1,000 Manufacturing overhead $ 25,000 $ 30,000 What predetermined overhead rates would be used in the Machining and Assembly Departments, respectively? $5.00 and 200% $5.00 and 50% 110% and $15 $8.00 and 50%

Which of the following source documents is used to summarize all of the costs incurred for a specific job? Direct labor time ticket. Overhead application form. Materials requisition form. Job cost sheet.

Stones Corporation uses a predetermined overhead rate based on machine-hours to apply overhead to the manufacturing process. Last year, Stones incurred manufacturing overhead costs totaling $450,000 and used 100,000 machine-hours. This year, Stones estimated manufacturing overhead to be $550,000 and expected to incur 110,000 machine-hours. Stones actually incurred $575,000 of manufacturing overhead and incurred 120,000 machine-hours this year. What is the manufacturing overhead application rate? $4.50 per machine-hour $5.00 per machine-hour $4.79 per machine-hour $5.50 per machine-hour

Byrds Corporation uses a predetermined overhead rate based on machine-hours to apply overhead to the manufacturing process. Last year, Byrds incurred manufacturing overhead costs totaling $225,000 and used 100,000 machine-hours. This year, Byrds estimated manufacturing overhead to be $275,000 and expected to incur 110,000 machine-hours. Byrds actually incurred $287,500 of manufacturing overhead and incurred 120,000 machine-hours this year. What is the manufacturing overhead applied to production? $287,500 $250,000 $300,000 $275,000

Unit product cost information is used for: calculating raw materials used in production. determining nonmanufacturing costs. valuing unsold units in ending inventory and for determining cost of goods sold. measuring manufacturing overhead costs.

Vahedi Company manufactures a specialty line of silk-screened ties. The company uses a job-order costing system. During the month, the following costs were incurred on Job 1041: direct materials $54,800 and direct labor $19,200. In addition, selling and shipping costs of $28,000 were incurred on the job. Manufacturing overhead was applied at the rate of $25 per machine-hour (MH) and Job 1041 required 320 MHs. If Job 1041 consisted of 5,000 ties, the cost of goods sold per tie was: $50.00. $14.80. $16.40. $22.00.

Suppose $20,000 of raw materials is withdrawn from the storeroom to be used in production. Of this amount, $15,000 consists of direct materials and $5,000 consists of indirect materials. What account or accounts will be debited? Manufacturing Overhead $15,000 and Work in Process $5,000. Work in Process $15,000 and Manufacturing Overhead $5,000. Raw Materials $15,000 and Manufacturing Overhead $5,000. Work in Process $15,000 and Raw Materials $5,000.

The entry to record the application of manufacturing overhead to the jobs of the period will increase which account balance? Work in Process Inventory Finished Goods Inventory Manufacturing Overhead Raw Materials Inventory

The entry to record cost of goods sold will decrease which of the following accounts? Finished Goods Inventory Raw Materials Inventory Work in Process Inventory Manufacturing Overhead

The ending Finished Goods account balance is determined by adding the beginning balance to the: cost of goods manufactured and then subtracting the cost of goods sold. cost of goods sold and then subtracting the cost of goods manufactured. direct materials, direct labor, and overhead applied. actual amount of overhead and the subtracting the amount of overhead applied.

On January 1, Hessler Company's Work in Process account had a balance of $18,000. During the year, direct materials costing $35,000 were placed into production. Direct labor cost for the year was $60,000. The predetermined overhead rate for the year was set at 150% of direct labor cost. Actual overhead costs for the year totaled $92,000. Jobs costing $190,000 to manufacture according to their job cost sheets were completed during the year. On December 31, the balance in the Work in Process inventory account was: $13,000. $15,000. $8,000. $18,000.

Walston Manufacturing Company has provided the following data concerning its raw materials inventories last month: Beginning raw materials inventory $ 80,000 Purchases of raw materials 420,000 Ending raw materials inventory 50,000 The cost of the raw materials used in production for the month was: $500,000. $470,000. $390,000. $450,000.

Juniper Company has provided the following data concerning its manufacturing costs and work in process inventories last month: Raw materials used in production $ 270,000 Direct labor 140,000 Manufacturing overhead 190,000 Beginning work in process inventory 50,000 Ending work in process inventory 80,000 The cost of goods manufactured for the month was: $600,000. $570,000. $730,000. $630,000.

The following information was provided by Dylan Manufacturing: Work in process increased by $19,000. Finished goods inventory decreased by $33,000. Direct materials used totaled $54,000. Direct labor incurred totaled $42,000. The predetermined manufacturing overhead rate was $27.00 per machine hour. Actual manufacturing overhead totaled $77,000. The estimated machine-hours were 3,000 hours and the actual machine-hours was 2,800 hours. How much is the cost of goods sold before any adjustment for overapplied or underapplied overhead? $118,200 $121,000 $185,600 $184,200

Stones Corporation uses a predetermined overhead rate based on machine-hours to apply overhead to the manufacturing process. Last year, Stones incurred manufacturing overhead costs totaling $450,000 and used 100,000 machine-hours. This year, Stones estimated manufacturing overhead to be $550,000 and expected to incur 110,000 machine-hours. Stones actually incurred $575,000 of manufacturing overhead and incurred 120,000 machine-hours this year. How much was manufacturing overhead either overapplied or underapplied? $35,000 overapplied $35,000 underapplied $25,000 underapplied $25,000 overapplied

The following information has been provided by Zeppelin Company: Estimated manufacturing overhead for the year was $900,000. The predetermined overhead rate based on labor-hours was $3.75 per hour. Actual direct labor-hours for the year were 250,000. Actual manufacturing overhead for the year was $920,000. How much was Zeppelin's overapplied or underapplied overhead? $20,000 overapplied $17,500 underapplied $17,500 overapplied $20,000 underapplied