Managerial Accounting Exam 2 Review

8 October 2022
4.7 (114 reviews)
51 test answers

Unlock all answers in this set

Unlock answers (47)
question
1. Which of the following would be most likely to use process costing? a. a custom furniture manufacturer b. an auto body repair shop c. a law firm d.a lawn fertilizer manufacturer
answer
D. A lawn Fertilizing manufacturer
question
Which of the following systems provides for a separate record of the cost of each particular quantity of product that passes through the factory? a. job order cost system b. general cost system c. replacement cost system d. process cost system
answer
A. Job order cost system
question
For which of the following businesses would the job order cost system be appropriate? a. canned soup processor b. oil refinery c. lumber mill d. hospital
answer
D. Hospital
question
For which of the following businesses would the process cost system be appropriate? a. a custom cabinet maker b. a landscaper c. a paper mill d. a catering firm
answer
C. A paper mill
question
Which of the following products would be manufactured using a job order costing system? a. a cell phone b. a highlighter pen c. a graduation invitation d. a recliner
answer
C. A graduation invitation
question
Job order costing and process costing are a. pricing systems b. cost accounting systems c. cost flow systems d. inventory tracking systems
answer
B. Cost accounting systems
question
Which of the following is a period cost? a. depreciation on factory lunchroom furniture b. salary of telephone receptionist in the sales office c. salary of a security guard for the factory parking lot d. computer chips used by a computer manufacturer
answer
B. salary of telephone receptionist in the sales office
question
The entry to record the flow of direct labor costs into production in a job order cost accounting system is to a. debit Factory Overhead, credit Work in Process b. debit Finished Goods, credit Wages Payable c. debit Work in Process, credit Wages Payable d. debit Factory Overhead, credit Wages Payable
answer
C. Debit Work in Process, credit Wages Payable
question
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
question
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
question
Recording jobs completed would include a credit to a. Factory Overhead b. Finished Goods c. Work in Process d. Cost of Goods Sold
answer
C. Work in Process
question
Recording jobs shipped and customers billed would include a debit to a. Accounts Payable b. Cash c. Finished Goods d. Cost of Goods Sold
answer
D. Cost of Goods Sold
question
The entries to record cost and sale of a finished good on account is a. debit Cost of Goods Sold, credit Finished Goods b. debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales c. debit Sales Expense, credit Finished Goods, credit Cash, credit Accounts Receivable d. debit Work in Process, credit Finished Goods, debit Accounts Receivable, credit Sales
answer
B. debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales
question
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. Materials 156,000 Work in Process 156,000 b. Work in Process 190,000 Materials 190,000 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
question
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. Accounts Payable 25,000 Factory Overhead 25,000 b. Factory Overhead 32,000 Accounts Payable 32,000 c. Work in Process 25,000 Wages Payable 25,000 d. Factory Overhead 25,000 Wages Payable 25,000
answer
D. Factory Overhead 25,000 Wages Payable 25,000
question
Costs that are incurred in generating revenues during the period, but are not involved in the manufacturing process are referred to as a. period costs b. conversion costs c. factory overhead costs d. product costs
answer
A. Period Costs
question
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 Cost
question
The journal entry to record the purchase of $45,000 of raw materials is a. Materials 45,000 Accounts Receivable 45,000 b. Materials 45,000 Accounts Payable 45,000 c. Inventory 45,000 Accounts Receivable 30,000 d. Inventory 45,000 Cash 45,000
answer
B. Materials 45,000 Accounts Payable 45,000
question
The journal entry to record the transfer of 1,600 units of part number 1177 with a value of $2.50 each, to work in process is a. Materials 4,000 Work in Process 4,000 b. Work in Process 4,000 Factory Overhead 4,000 c. Work in Process 4,000 Materials 4,000 d. Work in Process 4,000 Cash 4,000
answer
C. Work in Process 4,000 Materials 4,000
question
Which of the following represents the factory overhead applied to a product? a. predetermined factory overhead rate times estimated activity base b. actual factory overhead rate times estimated activity base c. predetermined factory overhead rate times actual activity base d. actual factory overhead rate times actual activity base
answer
C. Predetermined factory overhead rate times actual activity base
question
Aspen Technologies has the following budget data: Estimated direct labor hours 15,000 Estimated direct labor dollars $90,000 Estimated factory overhead costs $198,000 If factory overhead is to be applied based on direct labor hours, the predetermined overhead rate is a. $7.50 b. $13.20 c. $2.20 d. $16.50
answer
B. $13.20
question
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 factory overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year? a. $6,000 overapplied b. $6,000 underapplied c. $54,800 overapplied d. $54,800 underapplied
answer
C. $54,800 overapplied
question
The following budget data are available for Sharp Company: 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. 199% b. 196% c. $14.92 d. $15.65
answer
A. 199%
question
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. $12.00 b. $10.00 c. $12.57 d. $10.48
answer
A. $12.00
question
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. The entry to apply the factory overhead costs for the year would include a a. debit to Factory Overhead for $360,000 b. credit to Factory Overhead for $432,000 c. debit to Factory Overhead for $377,200 d. credit to Factory Overhead for $360,000
answer
B. Credit to Factory Overhead for $432,000
question
Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year. Below is a list of all the jobs for the quarter: Balance Job No. 356 $ 450 Job No. 357 1,235 Job No. 358 378 Job No. 359 689 Job No. 360 456 Jobs 356, 357, 358, and 359 were completed. Jobs 356 and 357 were sold at a profit of $500 on each job. What is the ending balance of Cost of Goods Sold for Adams Company at the end of the first quarter? a. $456 b. $2,685 c. $1,685 d. $685
answer
C. $1685
question
What is the ending balance of Finished Goods for Adams Company at the end of the first quarter? a. $456 b. $1,067 c. $1,685 d. $2,752
answer
B. $1,076
question
All of the following are characteristics of a process cost system except a. the system may use several work in process inventory accounts b. manufacturing costs are grouped by department rather than by jobs c. the system accumulates costs per job d. the system emphasizes time periods rather than the time it takes to complete a job
answer
C. The system accumulates costs per job
question
Which of the following would use a process costing system? a. custom home builder b. custom helicopter manufacturer c. graduation photographer d. lumber mill
answer
D. Lumber Mill
question
Which of the following is not a characteristic of a process cost system? a. manufacturing costs are grouped by departments b. the system may use several work in process accounts c. the system measures costs for each completed job d. the system allocates costs between completed and partially completed units within a department
answer
C. The system measures costs for each completed job
question
Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs? a. accounting department costs b. raw lumber c. assembly labor's wages d. administrative salaries
answer
C. Assembly labor's wages
question
Which of the following costs incurred by a tool manufacturer would not be included in conversion costs? a. factory supervisor's salary b. machine operator's wages c. raw steel d. factory maintenance personnel supplies
answer
C. Raw steel
question
In the manufacture of 10,000 units of a product, direct materials cost incurred was $165,000, direct labor cost incurred was $105,000, and applied factory overhead was $53,000. What is the total conversion cost? a. $218,000 b. $158,000 c. $323,000 d. $53,000
answer
B.$158,000
question
Department M had 2,000 units 40% completed in process at the beginning of June, 12,000 units completed during June, and 1,200 units 25% 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. 11,500 units b. 11,200 units c. 15,200 units d. 10,000 units
answer
A. 11,500
question
Department B had 3,000 units in Work in Process that were 25% completed at the beginning of the period at a cost of $12,500. 13,700 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 1,700 units were 95% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. The number of equivalent units of production for the period for conversion if the first-in, first-out method is used to cost inventories was a. 14,365 b. 13,615 c. 12,000 d. 15,865
answer
D. 15,865
question
The number of equivalent units of production for the period for materials, if the first-in, first-out method is used to cost inventories was a. 16,700 b. 12,000 c. 1,700 d. 13,700
answer
D. 13,700
question
Equivalent production units are generally determined for a. direct materials and conversion costs b. direct materials only c. conversion costs only d. direct materials and direct labor costs only
answer
A. Direct materials and conversion costs
question
The portion of whole units that were completed with respect to either materials or conversion costs within a given accounting period is the definition of a. units started and completed b. equivalent units c. conversion costs d. ending work in process
answer
B. Equivalent units
question
Which of the following is not included in conversion costs? a. direct labor b. factory overhead c. indirect labor d. direct materials
answer
D. Direct Materials
question
Mocha Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $55,000, $65,000, and $80,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. 40. The journal entry to record the flow of costs into Department 1 during the period for direct materials is a. Work in Processā€”Department 1 100,000 Materials 100,000 b. Work in Processā€”Department 1 55,000 Materials 55,000 c. Materials 100,000 Work in Processā€”Department 1 100,000 d. Materials 55,000 Work in Processā€”Department 1 55,000
answer
A. Work in Processā€”Department 1 100,000 Materials 100,000
question
The journal entry to record the flow of costs into Department 2 during the period for direct materials is a. Work in Processā€”Department 2 100,000 Materials 100,000 b. Work in Processā€”Department 2 55,000 Materials 55,000 c. Work in Processā€”Department 2 150,000 Materials 150,000 d. Materials 55,000 Work in Processā€”Department 2 55,000
answer
B. Work in Processā€”Department 2 55,000 Materials 55,000
question
The journal entry to record the flow of costs into Department 2 for applied overhead is a. Factory Overheadā€”Department 2 80,000 Work in Processā€”Department 2 80,000 b. Work in Processā€”Department 2 230,000 Factory Overheadā€”Department 2 230,000 c. Work in Processā€”Department 2 80,000 Factory Overheadā€”Department 2 80,000 d. Work in Processā€”Department 2 150,000 Factory Overheadā€”Department 2 150,000
answer
C. Work in Processā€”Department 2 80,000 Factory Overheadā€”Department 2 80,000
question
When a firm adopts a lean manufacturing operating environment, a. new, more efficient machinery and equipment must be purchased and installed in the original layout b. machinery and equipment are moved into small autonomous production lines called manufacturing cells c. new machinery and equipment must be purchased from franchised JIT dealers d. employees are retrained on different equipment but the plant layout generally stays unchanged
answer
B. Machinery and equipment are moved into small autonomous production lines called manufacturing cells
question
Which of the following best describes the effect on direct labor when management adopts a lean manufacturing environment? a. Workers typically perform one function. b. The environment becomes more labor intensive. c. Each employee runs a single machine. d. Workers are often cross-trained to perform more than one function.
answer
D. Workers are often cross-trained to perform more than one function.
question
Everest Co. uses a plant-wide factory overhead rate based on direct labor hours. Overhead costs would be overcharged to which of the following departments? a. A labor-intensive department b. A capital-intensive department c. A materials-intensive department d. All of the above
answer
A. A labor-intensive department
question
Blue Ridge Marketing Inc. manufactures two products, A and B. Presently, the company uses a single plant-wide factory overhead rate for allocating overhead to products. However, management is considering moving to a multiple department rate system for allocating overhead. The following table presents information about estimated overhead and direct labor hours. Overhead Direct Labor Hours (dlh) Product A B Painting Dept. $248,000 10,000 dlh 16 dlh 4 dlh Finishing Dept. 72,000 10,000 4 16 Totals $320,000 20,000 dlh 20 dlh 20 dlh Using a single plant-wide rate, determine the overhead rate per unit for Blue Ridge Marketing Inc.'s Product B. a. $496.00 b. $144.00 c. $640.00 d. $320.00
answer
D. $320.00
question
The Ramapo Company produces two products, Blinks and Dinks. They are manufactured in two departments, Fabrication and Assembly. Data for the products and departments are listed below. Product Number of units Labor hrs per unit Machine hours per unit Blinks 1,000 4 5 Dinks 2,000 2 8 All of the machine hours take place in the Fabrication department, which has an estimated overhead of $84,000. All of the labor hours take place in the Assembly department, which has an estimated total overhead of $72,000. 47. The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours. What is the overhead cost per unit for Blinks? a. $78.00 b. $19.50 c. $37.45 d. $56.00
answer
A. $78.00
question
The Ramapo Company uses a single overhead rate to apply all overhead costs based on labor hours. What is the overhead cost per unit for Dinks? a. $77.00 b. $39.00 c. $19.50 d. $59.92
answer
B. $39.00
question
The Ramapo Company uses a single overhead rate to apply all overhead costs. What would the single plantwide rate be if it was based on machine hours instead of labor hours? a. $9.00 per machine hour b. $19.50 per machine hour c. $7.43 per machine hour d. $4.00 per machine hour
answer
C. $7.43 per machine hour
question
Challenger Factory produces two similar products - regular widgets and deluxe widgets. The total plant overhead budget is $675,000 with 300,000 estimated direct labor hours. It is further estimated that deluxe widget production will need 3 direct labor hours for each unit and regular widget production will require 2 direct labor hours for each unit. Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Challenger Factory allocate to regular widget production if budgeted production for the period is 75,000 units and actual production for the period is 72,000 units? a. $168,750 b. $324,000 c. $162,000 d. $337,500
answer
B. $324,000
question
Using the single plantwide factory overhead rate with an allocation base of direct labor hours, how much factory overhead will Challenger Factory allocate to deluxe widget production if budgeted production for the period is 50,000 units and actual production for the period is 58,000 units? a. $391,500 b. $225,000 c. $261,000 d. $337,500
answer
A. $391,500