Info
Warning
Danger

Study Resources (Accounting)

7) Overallocated manufacturing overhead occurs when the manufacturing overhead allocated to work in process inventory is less than the amount actually incurred. 8) Cost of goods sold needs to be debited at year-end when the manufacturing overhead is overallocated in order to clear the overhead account to zero. 9) During 2012, a.
4 Views
View Answer
11) The following information pertains to Bright Toy Company's operating activities for 2012. The company sells light box toys and sold 10,000 units in 2012. Purchases $126,000 Selling and Administrative Expenses 90,000 Merchandise inventory, 1/1/2012 14,000 Merchandise inventory, 12/31/2012 10,000 Sales Revenue 250,000 What is the profit margin percentage? A) 12% B) 56% C) 100% D) 36% 12) The following information pertains to Bright Toy Company's.
3 Views
View Answer
71) Arturo Manufacturing Company provided the following information for the year 2012: Purchases—direct materials $180,000 Direct materials used in production$192,000 Direct labor$235,000 Indirect materials$23,500 Indirect labor $9,500 Depreciation on factory plant & equipment$12,000 Plant utilities & insurance$135,000 Cost of goods manufactured$591,000 Please refer to the T-accounts below which show the beginning balances for the year. Use the T-accounts to record.
2 Views
View Answer
41) Wright Company reports production costs for 2012 as follows: Direct materials used $375,000 Direct labor incurred $250,000 Manufacturing overhead incurred $400,000 Operating expenses $145,000 How much are Wright Company's inventoriable product costs for 2009? A) $925,000 B) $605,000 C) $975,000 D) $1,025,000 42) Which of the following describes the cost of goods manufactured? A) The cost of the goods that were sold during the.
2 Views
View Answer
38) Archangel Manufacturing has just finished the year 2012.  They created a predetermined manufacturing overhead allocation rate at the beginning of the year based on a percentage of direct labor costs.  Below are various data: Total manufacturing overhead estimated at the beginning of the year:$140,000 Total direct labor costs estimated at the.
4 Views
View Answer
Learning Objective 16-5 1) Merchandising businesses resell goods which they purchase from a producer. 2) Which of the following applies to goods that are purchased from a producer and sold by a merchandising company? A) Materials inventory B) Work in process inventory C) Merchandise inventory D) Finished goods inventory 3) Which of the following applies to.
7 Views
View Answer
92) Arturo Manufacturing Company provided the following information for the year 2012: Purchases—direct materials $180,000 Direct materials used in production$192,000 Direct labor$235,000 Indirect materials$23,500 Indirect labor $9,500 Depreciation on factory plant & equipment$12,000 Plant utilities & insurance$135,000 Cost of goods manufactured$591,000 Cost of goods sold$598,500 Please refer to the T-accounts below which show the beginning balances for the year.  Record.
6 Views
View Answer
27) At the beginning of 2012, Conway Manufacturing Company had the following account balances: During the year, the following transactions took place: Direct materials placed in production:$80,000 Direct labor incurred:$190,000 Manufacturing overhead incurred$300,000 Manufacturing overhead allocated to production:$295,000 Jobs completed with cost of:$500,000 Jobs sold for total revenue of:$750,000 Jobs sold with cost of:$440,000 Remaining balance of Manufacturing overhead.
4 Views
View Answer
11) The wages and benefits of the factory manager are product costs. 12) The wages and benefits of the factory manager are included in manufacturing overhead. 13) The wages and benefits of the sales staff are product costs. 14) The wages and benefits of the factory janitors are included in manufacturing overhead. 15) Indirect.
2 Views
View Answer
18) LDR Manufacturing produces a pesticide chemical and uses process costing.  There are three processing departments-Mixing, Refining, and Packaging.  On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production.  During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were.
8 Views
View Answer
42) At the beginning of 2012, Conway Manufacturing Company had the following account balances:   During the year, the following transactions took place: Direct materials placed in production:$80,000 Direct labor incurred:$190,000 Manufacturing overhead incurred$300,000 Manufacturing overhead allocated to production:$295,000 Jobs completed with cost of:$500,000 Please record these transactions to the T-accounts and calculate preliminary balances in the.
5 Views
View Answer
31) Which of the following is an example of a period cost? A) Advertising expense B) Depreciation on factory equipment C) Indirect materials D) Property taxes for the factory 32) Which of the following costs would appear on the income statements for both a merchandiser and a manufacturer? A) Direct labor B) Cost of goods manufactured C) Direct.
2 Views
View Answer
21) Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. Additional information follows: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $.08 Machining Machine hours $7.20 Assembling Number of parts $.35 Packaging Number of finished units $2.70 What is.
9 Views
View Answer
21) Advertising and marketing costs are product costs. 22) Advertising and marketing costs are included in manufacturing overhead. 23) Accounting, legal and administrative costs are product costs. 24) Accounting, legal and administrative costs are included in manufacturing overhead. 25) Repair and maintenance costs for factory equipment are product costs. 26) Repair and maintenance costs for.
4 Views
View Answer
31) Archetype Fabrication makes pre-stressed concrete forms for the building industry. They use just-in-time production and accounting methodology.  At the beginning of January, selected account balances are shown in the T-accounts below. During January, the following 5 transactions take place: 1.Purchase $40,000 of materials on account. 2.Pay out $25,000 of direct labor costs. 3.Incur.
5 Views
View Answer
31) Pitt Jones Company had the following activities, allocated costs, and allocation bases: Activities Allocated Costs Allocation Base Account inquiry (hours) $60,000 2,000 hours Account billing (lines) $30,000 20,000 lines Account verification (accounts) $15,000 20,000 accounts Correspondence (letters) $10,000 1,000 letters The above activities are carried out at two of their regional offices. Northeast Office Midwest Office Account inquiry (hours) 100 hours 200 hours Account billing (lines) 10,000 lines 7,000 lines Account verification (accounts) 1,000 accounts 600.
5 Views
View Answer
21) Fogelin Promotional Services uses a job order system for costing and billing promotional services for dance and ballet performances.  Fogelin has 4 public relations specialists, plus an office staff.  At the beginning of 2012, Fogelin estimated the total cost of salaries and benefits for the public relations specialists at.
4 Views
View Answer
8) Which of the following describes the allocation base for allocating manufacturing overhead costs? A) The factor that reflects the relationship between goods produced and the amount of overhead costs incurred B) The estimated base amount of manufacturing overhead costs in a year C) The percentage used to allocate direct labor to work.
3 Views
View Answer
81) For a manufacturing business, which of the following would be considered an inventoriable product cost? A) Research and development B) Factory janitorial services C) Advertising D) Delivery costs 82) For a manufacturing business, which of the following would be considered an inventoriable product cost? A) Salaries of salesmen B) Salary of the CEO C) Salaries of the.
2 Views
View Answer
11) Which of the following is CORRECT about a just-in-time production system? A) Customer orders drive the production process. B) Goods are produced ahead of time to protect against running out of inventory. C) Materials are purchased in large quantities. D) Inventory levels are maintained at high levels. 12) Which of the following pertains to.
4 Views
View Answer
19) Best Company sells office supplies. The following information summarizes Best's operating activities for 2012: Utilities for store $6,000 Rent for store $8,000 Sales commissions $4,500 Purchases of merchandise $54,000 Inventory on January 1, 2012 $30,000 Inventory on December 31, 2012 $20,500 Sales revenue $108,000 Required: Prepare an income statement for Best Company, a merchandiser, for the year ended December 31, 2012.using the format below: .
4 Views
View Answer
61) The following information has been provided by LeMaire Company: •Direct labor: $50,000 •Direct materials used: $20,000 •Materials purchased: $27,000 •Cost of goods manufactured: $100,000 •Ending work in process: $16,000 •Corporate headquarters' property taxes: $6,000 •Manufacturing overhead: $39,000 The beginning work in process was: A) $23,000. B) $7,000. C) $9,000. D) $1,000. 62) The following information was obtained from Sizzler Company: •Advertising costs: $7,900 •Indirect.
3 Views
View Answer
4) Internal failure costs occur when the company detects and corrects poor-quality goods or services before delivery to customers. 5) Costs spent to detect poor-quality goods are considered appraisal costs. 6) Costs incurred when the company corrects for poor-quality goods before they are delivered to the customer are considered internal failure costs. 7).
13 Views
View Answer
23) Specialty Wood Products company had the following manufacturing labor costs last month: Woodworkers' wages $100,000 Indirect laborers' wages $20,000 Maintenance personnel wages $10,000 Please provide the journal entry to record the incurrence of these labor costs. 24) Broxsie Fabrication Company issued $40,000 of direct materials to production and $5,500 of indirect materials to production.  Please prepare the.
3 Views
View Answer
89) South State Company used $71,000 of direct materials and incurred $37,000 of direct labor costs during 2012. Indirect labor amounted to $2,700 while indirect materials used totaled $1,600. Other operating costs pertaining to the factory included utilities of $3,100; maintenance of $4,500; repairs of $1,800; depreciation of $7,900; and.
3 Views
View Answer
51) Which of the following would NOT be considered an activity for the purposes of an activity-based costing system? A) Materials handling B) Machine processing C) Direct materials cost D) Packaging 52) Which of the following would most likely be treated as an activity in an activity-based costing system? A) Direct labor cost B) Machine processing C) Direct.
6 Views
View Answer
3) Indirect materials and indirect labor are tracked to individual job costing records and recorded in the Work in process account. 4) When direct materials are requisitioned, the Work in process account will be debited. 5) Indirect materials issued and indirect labor costs incurred are debited to the Manufacturing overhead account. 6) Direct.
6 Views
View Answer
Learning Objective 18-2 1) Activity-based costing systems and traditional costing systems will produce the same results for product cost and profitability, although they use different methods of calculation. 2) Target cost is the price that customers are willing to pay and target price is the desired cost to produce the product. 3).
5 Views
View Answer
56) AAA Metal Bearings produces two sizes of metal bearings (sold by the crate)-standard and heavy.  The standard bearings require $200 of direct materials per unit (per crate) and the heavy bearings require $245 of direct materials per unit.  The operation is mechanized and there is no direct labor.  Previously.
5 Views
View Answer
11) An activity-based costing system would be of less value to a business making a single product than it would be for a company with multiple products. 12) A traditional costing system employs multiple allocation rates, but an activity-based costing system uses only one single allocation rate. 13) An activity-based costing system.
8 Views
View Answer
Learning Objective 16-6 1) GAAP requires companies to treat product costs such as factory overhead as an asset until the product is sold. 2) Cost of goods manufactured includes direct materials, direct labor, and manufacturing overhead. 3) Manufacturing overhead includes all manufacturing costs, such as direct labor and direct materials. 4) Manufacturing overhead.
4 Views
View Answer
8) LDR Manufacturing produces a pesticide chemical and uses process costing.  There are three processing departments?Mixing, Refining, and Packaging.  On January 1, 2012, the first department, Mixing, had a zero beginning balance.  During January, 40,000 liters of chemicals were started into production.  During the month, 32,000 liters were completed, and.
6 Views
View Answer
Learning Objective 18-3 1) Just-in-time methodology depends on maintaining higher inventory levels to ensure that the manufacturing process isn't interrupted by supply shortages. 2) Just-in-time production systems are organized into independent work cells that have all the resources needed to complete the manufacturing process. 3) The traditional manufacturing process focuses on small.
4 Views
View Answer
47) Gardner Machine Shop estimates manufacturing overhead costs for the coming year at $316,000.  They will allocate based on direct labor hours.  Gardner estimates 5,000 direct labor hours for the coming year.  In January, Gardener completed job number A33, which included 15 direct labor hours.  Please provide the journal entry.
5 Views
View Answer
18) Falstaff Products estimated manufacturing overhead costs for the year at $500,000.  Falstaff also estimated 8,000 machine hours for the year.  Falstaff bases their predetermined manufacturing overhead rate on machine hours.  On January 31, job 300 was completed.  It required 12 machine hours to produce.  How much manufacturing overhead was.
15 Views
View Answer
31) Nemesis Company manufactures water skis.  Nemesis pursues a target pricing strategy.  Please review the data below: Current market price$180 per pair Current manufacturing cost$110 per pair Current non-manufacturing cost$25 per pair Desired profit30% of price Which of the following would be the desired cost reduction?  (Please round all amounts to nearest cent.) A) $12.50 B) $16.00 C).
3 Views
View Answer
Learning Objective 17-1 1) Accounting firms, building contractors, and healthcare providers are companies that use job order costing. 2) Process costing is used by companies that produce large numbers of identical units in a continuous fashion. 3) Which of the following companies would NOT use job order costing? A) A lawn maintenance company B).
8 Views
View Answer
21) Bakersfield Manufacturing produces agricultural tools including a hand tiller.  Their current full-product cost for a hand tiller is $20.   Bakersfield wishes to make a 15% profit on the selling price.  Bakersfield uses a target pricing strategy.  The current competitive market price for this product is $22.  What does Bakersfield.
5 Views
View Answer
41) Orlando Avionics makes three types of radios for small aircraft-model A, model B, and model C.  The manufacturing operations are mechanized and there is no direct labor.  Manufacturing overhead costs are significant, and Orlando has adopted an activity-based costing system.  Direct materials costs per unit for each model are.
4 Views
View Answer
Learning Objective 17-5 1) Darrius Travel Services provided the following information: Cost allocation rate for direct labor:  $40 per hour Cost allocation rate for indirect costs:  $22 per hour If Darrius receives $700 for a job requiring 12 hours of direct labor, they will make a profit of $44. 2) Darrius Travel Services provided.
5 Views
View Answer
17) Excellent Company sells accounting textbooks. The following information summarizes Excellent's operating activities for 2012: Merchandise inventory, January 1, 2012 $10,000 Merchandise inventory, December 31, 2012 $7,000 Purchases $95,000 Selling and Administrative Expenses $65,000 Sales Revenue $180,000 Required: Prepare an income statement for the year ended December 31, 2012. Please use the format provided below, and include a vertical analysis showing.
2 Views
View Answer
51) A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and $114,000 in manufacturing overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $21,000 respectively. What is the cost of goods manufactured? A) $250,000 B) $229,000 C) $215,000 D) $222,000 52) Given the following.
2 Views
View Answer
28) Arabica Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost.  At the beginning of 2012, they estimated total manufacturing overhead costs at $1,050,000, and they estimated total direct labor costs at $840,000.  In June, 2012, Arabica completed job number 511.  Job stats.
3 Views
View Answer
Learning Objective 18-1 1) With increased competition, managers need more accurate estimates of product costs to set prices and to identify the most profitable products. 2) Activity-based costing focuses on a single predetermined overhead rate for cost analysis. 3) The main difference between activity-based costing and traditional costing systems is that activity-based costing.
12 Views
View Answer
37) Altina Company just finished job A40.  It included $400 of direct materials, and $3,600 of direct labor.  Altina uses a predetermined manufacturing overhead rate based on a percentage of direct labor costs.  That rate is 40%.  Please provide the journal entry needed to record the completion of the job. 38).
7 Views
View Answer
21) Johnson Production Company uses just-in-time production and accounting methods.  On June 1, Johnson paid $6,000 for factory repair and maintenance costs in cash. Which of the following journal entries correctly records this transaction? A) Debit $6,000 to Cash, credit $6,000 to Manufacturing overhead. B) Debit $6,000 to Raw and in-process inventory,.
3 Views
View Answer