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- If the cost of goods sold is greater than the cost of goods manufactured, then:
a. work in process inventory has decreased during the period.
b. finished goods inventory has increased during the period.
c. total manufacturing costs must be greater than cost of goods manufactured.
d. finished goods inventory has decreased during the period.
- Wages paid to the factory supply shop foreman are considered an example of:
Direct Labor Period Cost
A) Yes Yes
B) Yes No
C) No Yes
D) No No
- The following costs were incurred in April:
Direct materials $18,000
Direct labor $21,000
Manufacturing overhead $33,000
Selling expenses $14,000
Administrative expenses $19,000
Conversion costs during the month totaled:
A) $39,000.
B) $54,000.
C) $105,000.
D) $51,000.
- . The following costs were incurred in April:
Direct materials $29,000
Direct labor $24,000
Manufacturing overhead $14,000
Selling expenses $18,000
Administrative expenses $18,000
Direct costs during the month totaled:
A) $53,000.
B) $67,000.
C) $38,000.
D) $103,000.
- In a job-order cost system, the application of manufacturing overhead usually would be recorded as a debit to:
A) Cost of Goods Sold.
B) Work in Process inventory.
C) Manufacturing Overhead.
D) Finished Goods inventory.
6 The Work in Process inventory account of a manufacturing firm shows a balance of $3,000 at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of $500 and $300 for materials, and charges of $400 and $600 for direct labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of:
A) 83%.
B) 120%.
C) 40%.
D) 300%.
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- Equivalent units for a process costing system using the weighted-average method would be
equal to:
A) units completed during the period and transferred out.
B) units started and completed during the period plus equivalent units in the ending work in process inventory.
C) units completed during the period less equivalent units in the beginning inventory, plus equivalent units in the ending work in process inventory.
D) units completed during the period plus equivalent units in the ending work in process inventory.
- In computing its predetermined overhead rate, Brady Company included its factory insurance cost twice. This error will result in:
A) the ending balance of Finished Goods to be understated.
B) the credits to the Manufacturing Overhead account to be understated.
C) the Cost of Goods Manufactured to be overstated.
D) the Net Operating Income to be overstated.
- Steele Company uses a predetermined overhead rate based on machine hours to apply manufacturing overhead to jobs. Steele Company has provided the following estimated costs for next year:
Direct materials $20,000
Direct labor 60,000
Sales commissions 80,000
Salary of production supervisor 40,000
Indirect materials 8,000
Advertising expense 16,000
Rent on factory equipment 20,000
Steele estimates that 10,000 direct labor hours and 16,000 machine hours will be worked during the year. The predetermined overhead rate per hour will be:
A) $4.25.
B) $8.00.
C) $9.00.
D) $10.25.
- . The Assembly Department started the month with 24,000 units in its beginning work in process inventory. An additional 309,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 29,000 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month?
A) 333,000
B) 362,000
C) 304,000
D) 314,000
- Stay Company uses the weighted-average method in its process costing system. The company’s ending work in process inventory consists of 8,000 units, 60% complete with respect to materials and 80% complete with respect to labor and overhead. If the total cost in this inventory is $200,000 and if the cost for materials is $16 per equivalent unit for the period, the cost of labor and overhead per equivalent unit of the production for the period must be:
A) $19.25.
B) $16.00.
C) $25.67.
D) $31.25.
- Which of the following is not a limitation of activity-based costing?
A) Maintaining an activity-based costing system is more costly than maintaining a traditional direct labor-based costing system.
B) Changing from a traditional direct labor-based costing system to an activity-based costing system changes product margins and other key performance indicators used by managers. Such changes are often resisted by managers.
C) In practice, most managers insist on fully allocating all costs to products, customers, and other costing objects in an activity-based costing system. This results in overstated costs.
D) More accurate product costs may result in increasing the selling prices of some products.