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Study Resources (Accounting)

81) The following information is provided by Adametz Company: WIP Inventory, January 1 0 units Units started 7,500 Units completed and transferred out 3,300 WIP Inventory, December 31 4,200 Direct materials $15,500 Direct labor $18,400 Manufacturing Overhead $9,000 The units in ending WIP Inventory were 90% complete for materials and 50% complete for conversion costs. At the end of the.
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239)  Costs incurred to detect poor quality goods or services are A) activity-based costing. B) appraisal costs. C) value engineering. D) prevention costs. 240) Which of the following cost of quality categories represent the cost incurred to rework a product after the company detects a poor-quality product before the company delivers the product to a.
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283) Here is some basic data for Shannon Company: Cost of materials purchases on account$72,000 Cost of materials requisitioned (includes $2,000 of indirect)53,000 Direct labor costs incurred79,000 Manufacturing overhead costs incurred, including indirect materials87,000 Cost of goods completed256,750 Cost of goods sold167,000 Beginning raw materials inventory 17,000 Beginning work in process inventory33,000 Beginning finished goods inventory35,000 Predetermined manufacturing overhead rate.
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86) The cost per equivalent unit for direct materials will always be equal to the cost per equivalent unit for conversion costs. 87) The number of equivalent units is computed before computing the cost per equivalent unit. 88) Wong completed 24,000 units and had another 6,000 units 45% complete. The total equivalent.
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312) At Plastastic, Inc., the beginning balance of the work in process inventory account in April of the most recent year was $19,000. Direct materials used during April totaled $130,000. Total manufacturing labor incurred in April was $180,000, 75% of this amount represented direct labor. The predetermined manufacturing overhead rate.
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41) As compared to traditional volume-based costing using a single plantwide overhead rate, activity-based costing (ABC) is a more refined costing system that reduces cost distortion. 42) Traditional costing systems are generally more accurate than ABC costing. 43) It is easier to allocate indirect costs to the products that actually caused those.
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324) The predetermined indirect cost allocation rate is computed as A) total estimated indirect costs / total estimated amount of the allocation base. B) total amount of the allocation base / total estimated indirect costs. C) total estimated indirect costs + total estimated amount of the allocation base. D) total amount of the allocation.
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81) Kramer Company manufactures coffee tables and uses an activity-based costing system to allocate all manufacturing conversion costs. Each coffee tables consists of 20 separate parts totaling $240 in direct materials, and requires 5.0 hours of machine time to produce. Additional information follows: ActivityAllocation BaseCost Allocation Rate Materials handlingNumber of parts$2.00 per.
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189) The eight wastes of traditional operations includes all of the following except A) defects. B) overproduction. C) waiting. D) utilizing people to their full potential. 190) Which of the following is a lean strategy? A) Group like machines together. B) Produce in smaller batches than a traditional system. C) Maintain a higher level of inventory than.
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71) All of the following describe an ABC system except A) ABC systems may only be used by service companies. B) ABC systems can create more accurate product costs. C) ABC systems are more complex and costly than traditional costing systems. D) ABC systems are used in both manufacturing and nonmanufacturing companies. 72) Which of.
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91) Telecom uses activity-based costing to allocate all manufacturing conversion costs. Telecom produces cellular telephones; each phone has $40.00 of direct materials, includes 30 parts and requires 3 hours of machine time. Additional information follows: ActivityAllocation BaseCost Allocation Rate Materials handlingNumber of parts$0.50 per part MachiningMachine hours$14.00 per machine hour AssemblingNumber of parts$1.00 per.
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150) The new manager at Sailboat Manufacturing oversees the manufacturing operations to ensure theeffective manufacturing process of sails to accommodate the special-orders of sails they receive for sailboats. The manager compiled a report that contained the following data: Compute the activity cost allocation rate for each of Sailboat Manufacturing's production activities.
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125) Platinum Company manufactures several different products and uses an activity-based costing system. Information from its system for the year for all products follows: The annual production and sales of one of its products, the Zinger, are 800 units. The following data relate to the production and sales of Widgets in.
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101) Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases: ActivitiesIndirect Activity CostsAllocation Base Account inquiry (hours)$86,4002,700 Account billing (lines)$56,00032,000 Account verification (accounts)$38,25025,500 Correspondence (letters)$80,00010,000 Potter & Weasley uses activity based costing. The above activities are used by Departments P and Q as follows: Department PDepartment Q Account inquiry (hours)400800 Account billing (lines)10,0004,000 Account verification.
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199) Appraisal costs are incurred to detect poor-quality goods or services. 200) External failure costs occur when the company detects and corrects poor-quality goods or services after delivery to customers. 201) Inspection of incoming raw materials and production loss caused by downtime are examples of prevention costs. 202) External failure costs occur.
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303) Here is selected data for Lori Corporation: Cost of raw material purchased$77,000 Cost of requisitioned direct materials 43,000 Cost of requisitioned indirect materials3,000 Direct labor80,000 Manufacturing overhead incurred 100,000 Cost of goods completed 233,500 Cost of goods sold142,000 Beginning raw materials inventory 17,000 Beginning work in process inventory32,000 Beginning finished goods inventory35,000 Manufacturing overhead allocation rate (based on direct labor).
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37) Cooper's Bags Company manufactures cloth grocery bags to be sold to grocery stores and other retailers. Cooper's Bags Company sells the bags in cases of 1,000 bags. The bags come in three sizes: Large, Medium, and Small. Currently, Cooper's Bags Company uses a single plantwide overhead rate to allocate.
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179) Lean thinking is a management strategy that includes maintaining large inventories. 180) Lean thinking is a management philosophy that strives to create value by eliminating waste. 181) Lean thinking involves carrying large amounts of inventory "just in case" something goes wrong. 182) Lean companies typically arrange production activities into self-contained cells..
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21) Process costing is most likely used in which of the following industries? A) Chemicals B) Aircraft C) Construction D) Printing 22) Process costing is most likely used in which of the following industries? A) Pharmaceuticals B) Health Care C) Shipbuilding D) Construction 23) Process costing would likely be used by which of the following? A) Clear Channel Advertising B) PIP.
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111) Hummingbird Manufacturing manufactures small parts and uses an activity-based costing system. ActivityEst. Indirect Activity CostsAllocation baseCost allocation rate Materials$75,000Material moves$3.00/move Assembling$255,000Direct labor hours$10.00/dir. labor hour Packaging$90,000# of finished units$1.00/finished unit The following parts were produced in October with the following information: Part# ProducedMaterials Costs# MovesDir. Labor Hrs. A2,250 $3,000900250 B4,000 $6,5001,700325 C4,750 $9,0002,5001,500 Total manufacturing costs for part C.
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314) Job costing is not commonly used by service firms (such as law firms) or trades people (such as auto mechanics). 315) Service firms follow the same approach for indirect costs as manufacturing companies because they develop a predetermined indirect cost allocation rate. 316) A service firm's costs are comprised of direct.
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51) Machine set-up would be considered a batch-level cost. 52) Product-level activities and costs are incurred for a particular product, regardless of the number of units or batches of the product produced. 53) The cost to research and develop, design and market new models would be considered a product-level cost..
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41) In a process costing environment, direct labor and Manufacturing Overhead are usually combined into one cost category called "conversion cost." 42) In a mass-production environment, direct labor is usually a relatively small component of the total manufacturing costs. 43) Companies that use automated production processes often condense the three manufacturing costs.
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121) Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division. ActivityEst. Indirect Activity CostsAllocation baseCost allocation rate Materials$60,000Material moves$5.00/move Assembling$175,000Direct labor hours$5.00/dir. labor hour Packaging$70,000# of finished units$2.50/finished unit The following units were produced in December with the following information: Part ## ProducedMaterials Costs# MovesDir. Labor Hours. Part 0011,250 $2,500100200 Part 0023,500 $6,000500300 Part.
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169) The goal of value-engineering is to A) improve value-added activities. B) eliminate or reduce non-value added activities. C) both A and B. D) none of the above. 170) Non-value added activities are A) also called waste activities. B) activities that neither enhance the customer's image of the product or service nor provide a competitive advantage. C) activities.
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143) Kepple Manufacturing currently uses a traditional costing system. The company allocates overhead to its two products, Zips and Dees, using a predetermined manufacturing overhead rate based on direct labor hours. Here is data related to the company's two products: The amount of manufacturing overhead that would be allocated to one.
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293) The journal entry to record $300 of depreciation expense on factory equipment involves a A) debit to Accumulated Depreciation account for $300. B) debit to Manufacturing Overhead account for $300. C) debit to Depreciation Expense account for $300. D) credit to Manufacturing Overhead account for $300. 294) Here is some basic data for Delta.
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133) Alexander Inc. uses activity-based costing. The company produces two products: Snaps and Pops. The expected annual production of Snaps is 1,500 units, while the expected annual production of Pops is 2,200 units. There are three activity cost pools: Assembly, Testing, and Packing. The estimated costs and activities for each.
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274) To record depreciation on the factory equipment, the journal entry would include a A) debit to Work-in-Process Inventory account. B) debit to Manufacturing Overhead account. C) debit to Depreciation Expense account. D) debit to Accumulated Depreciation account. 275) To allocate manufacturing overhead to specific jobs, the needed journal entry would include a A) credit to.
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1) When overhead is allocated to every product using the same manufacturing overhead rate, this rate is called the departmental overhead rate. 2) With increased competition, managers need more accurate estimates of product costs in order to set prices and to identify the most profitable products. 3) The plantwide overhead cost.
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264) The cost of direct labor used in production is recorded as a A) debit to Work-in-Process Inventory account. B) debit to Manufacturing Overhead account. C) debit to wages expense. D) debit to wages payable. 265) The cost of direct labor used in production is recorded as a A) credit to Manufacturing Overhead account. B) credit.
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111) The five steps of the process costing procedure are scrambled below: 1.Assign total costs to units completed and to units in ending WIP Inventory. 2.Summarize total costs to account for. 3.Compute the cost per equivalent unit. 4.Summarize the flow of physical units. 5.Compute output in terms of equivalent units. The correct order for these.
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159) The benefits of adopting ABC/ABM are higher for companies in more competitive markets. 160) The goal of value-engineering is to eliminate all waste in the system by making the company's processes as effective and efficient as possible. 161) Value-engineering is accomplished by eliminating, reducing, or simplifying all non-value added activities,.
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61) If conversion costs are added evenly throughout the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is A) 0%. B) 100%. C) 50%. D) cannot determine 62) If conversion costs are added evenly throughout the production process, and the.
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11) Refined costing systems can be used to allocate any indirect costs to any cost objects. 12) Merchandising and service companies, as well as governmental agencies, can use refined cost allocation systems to provide their managers with better cost information. 13) A plantwide overhead rate is calculated by dividing the.
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31) James Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $35 per machine hour, while the Sanding Department uses a departmental overhead rate of $20 per direct labor hour..
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  1) Process costing is typically used for businesses that make unique goods in relatively small amounts. 2) Cost for direct materials, direct labor and Manufacturing Overhead are assigned to each job. 3) A separate Work in Process Inventory account is maintained for each process. 4) Unique or custom-made goods use a process costing.
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31) The Candy Factory manufactures healthy candy that it sells to consumers and groups in themarketplace. The business produces chocolate-covered cherries in a three-step process to develop the center of the cherries, coat the cherries in chocolate, and package the final product. The total cost to produce a pound of.
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21) If a company uses departmental overhead allocation rates, then the amount of manufacturing overhead allocated to the job is equal to the plantwide overhead rate multiplied by the actual use of the cost allocation base. 22) The allocation base selected for each department should be the cost driver of.
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254) Actual manufacturing overhead costs are accumulated as debits to a single general ledger account called Manufacturing Overhead. 255) The entry to allocate manufacturing overhead costs to work-in-process requires a debit to Work-in Process account. 256) The Manufacturing Overhead account is credited for actual manufacturing overhead costs incurred during the period. 257) The.
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147) Duquesne Incorporated recently implemented an activity-based costing system. Total results from all products manufactured in the current year are: Activity cost poolTotal costTotal activity Assembly$7,5001,500machine-hours Packaging$3,150450number of orders Quality control inspections$900200number of inspections Duquesne manufactures sprinkler heads for commercial applications. Annual production and sales of one of its heads, is 2,300. The following relates.
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219) The cost of downtime caused by quality problems with the raw materials would be classified as what type of cost? A) Prevention cost B) Appraisal cost C) External failure cost D) Internal failure cost 220) The cost of fixing defective units found during the quality inspections would be classified as what type of cost? A).
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