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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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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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146) Bohemian Manufacturing 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 Sizzler, are 1,500 units. The following data relate to the production and sales of Sizzlers in.
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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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240) Which term below best describes the quality cost category for "cost to re-inspect reworked blenders"? A) Prevention costs B) Internal failure costs C) Appraisal costs D) External failure costs 241) Which term below best describes the quality cost category for "cost of warranty repairs on juicers"? A) Prevention costs B) Appraisal costs C) External failure costs D).
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309) Manufacturing overhead has an underallocated balance of $6,200; raw materials inventory balance is $50,000; work in process inventory is $30,000; finished goods inventory is $20,000; and cost of goods sold is $100,000. Using this information, which account would have an opening credit balance? A) Raw materials inventory B) Finished goods inventory C).
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180) Lean companies typically arrange production activities into self-contained cells. 181) Waste can be reduced by implementing shorter setup times. 182) Lean companies typically cross-train employees to perform more than one task. 183) One key element of lean production is to produce large batches. 184) A lean company typically strives to lengthen.
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110) Hummingbird Manufacturing manufactures small parts and uses an activity-based costing system. Activity Est. Indirect Activity Costs Allocation base Cost allocation rate Materials $75,000   Material moves $3.00/move Assembling $255,000   Direct 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 # Produced Materials Costs # Moves Dir. Labor Hrs. A 2,250 $3,000 900 250 B 4,000 $6,500 1,700 325 C 4,750 $9,000.
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247) The following account balances at the beginning of January were selected from the general ledger of Bluestone Industries: Work in process inventory$0 Raw materials inventory$30,900 Finished goods inventory$54,800 Additional data: 1) Actual manufacturing overhead for January amounted to $80,500. 2) Total direct labor cost for January was $70,000; actual direct labor hours for January were.
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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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289) To record direct labor costs incurred, which of the following would be debited? A) Finished goods inventory B) Manufacturing overhead C) Work in process inventory D) Wages payable 290) To record the requisition of direct materials, which of the following would be debited? A) Finished goods inventory B) Work in process inventory C) Raw materials inventory D) Cost.
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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: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $0.50 per part Machining Machine hours $14.00 per machine hour Assembling Number of parts $1.00 per.
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220) All of the following statements regarding total quality management are true except A) TQM emphasizes educating, training, and cross training employees to increase and broaden their skills. B) TQM is a formal effort to improve quality throughout an organization's value chain. C) TQM extends horizontally across business functions in the value chain. D).
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161) The storage of raw materials is considered a value-added activity. 162) Inspection is considered a non-value-added activity. 163) Non-value-added activities can be described as activities for which the customer is willing to pay. 164) Waste activities is another name for non-value-added activities. 165) Non-value added activities are activities that neither enhance the.
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230) The cost of product liability claims is an example of a(n) ________ cost. A) appraisal B) internal failure C) external failure D) prevention 231) The lost profits from lost customers are an example of what type of cost? A) Prevention costs B) Internal failure costs C) External failure costs D) Appraisal costs 232) The costs of.
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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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39) High Rise Display Company manufactures display cases to be sold to retail stores. The cases come in three sizes: Large, Medium, and Small. Currently, High Rise Display Company uses a single plant-wide overhead rate to allocate its $3,357,800 of annual manufacturing overhead. Of this amount, $820,000 is associated with.
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269) How is the cost of direct materials used in production recorded? A) Credit to manufacturing overhead B) Credit to work in process inventory C) Credit to direct materials expense D) Credit to raw materials inventory 270) How is the cost of indirect materials used in the factory recorded? A) Debit to work in process inventory B).
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259) In job costing, the journal entry to record the use of direct materials on jobs is to debit work in process inventory and credit A) raw materials inventory. B) finished goods inventory. C) manufacturing overhead. D) wages payable. 260) Cost of goods sold is debited and finished goods inventory is credited for A) purchase of.
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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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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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238) The following account balances at the beginning of January were selected from the general ledger of Ocean City Manufacturing Company: Work in process inventory $0 Raw materials inventory $28,000 Finished goods inventory $40,000 Additional data: 1) Actual manufacturing overhead for January amounted to $62,000. 2) Total direct labor cost for January was $63,000. 3) The predetermined manufacturing overhead rate.
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313) 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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208) An underallocation of manufacturing overhead is typically corrected by decreasing cost of goods sold on the income statement. 209) If jobs have been undercosted due to underallocation of manufacturing overhead, then cost of goods sold (COGS) is too low and which of the following corrections must be made? A) Decrease COGS.
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150) ABC tends to increase the unit cost of low-volume products and decrease the unit cost of high-volume products. 151) Traditional cost systems with a single-allocation base tend to overcost high-volume products and undercost low-volume products as compared to activity-based costing systems. 152) There will be little benefit to using an activity-based.
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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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299) Job 222 started on June 1 and finished on July 15. Total cost on July 1 was $12,400, and the costs added in July were $188,500. The entry for the sale at a price of $310,000 would be: A) Accounts receivable 310,000 Sales Revenue 310,000 B) Finished goods inv. 200,900 Cost of goods sold 200,900 C) Sales Revenue 310,000 Accounts.
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200) External failure costs occur when poor-quality goods or services are not detected until after delivery to customers. 201) Product testing is an appraisal cost. 202) An example of an appraisal cost is the cost of automating the production process. 203) The cost of training employees would be classified as a prevention.
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198) If manufacturing overhead allocated is less than the actual manufacturing overhead incurred, then jobs have been overcosted. 199) Overallocated overhead costs occur when the overhead costs allocated are greater than the amount actually incurred. 200) If manufacturing overhead has been underallocated during the year, it means the jobs have been undercosted. 201).
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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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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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248) The following information was gathered for the Falsetto Corporation for the most recent year. Manufacturing overhead is allocated using direct labor hours. Estimated direct labor hours 75,000 Actual direct labor hours 82,000 Estimated manufacturing overhead costs $ 1,275,000 Actual manufacturing overhead costs $ 1,335,000 Compute: a)Predetermined manufacturing overhead rate b)Manufacturing overhead allocated for the year c) .
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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: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $2.00 per.
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140) Vintage Fun reproduces old-fashioned style roller skates and skateboards. The annual production and sales of roller skates is 950 units, while 1,750 skateboards are produced and sold. The company has traditionally used direct labor hours to allocate its overhead to products. Roller skates require 2.5 direct labor hours per.
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101) Potter & Weasley Company had the following activities, estimated indirect activity costs, and allocation bases: Activities Indirect Activity Costs Allocation Base Account inquiry (hours) $86,400 2,700 Account billing (lines) $56,000 32,000 Account verification (accounts) $38,250 25,500 Correspondence (letters) $80,000 10,000 Potter & Weasley uses activity based costing. The above activities are used by Departments P and Q as follows: Department P Department Q Account inquiry (hours) 400 800 Account billing (lines) 10,000 4,000 Account verification.
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245) For each of the following statements, determine if it would be handled: A)Before the period B)During the period C)At the end of the period Put the correct letter on the line in front of each statement. ____Calculate the amount of overallocated or underallocated manufacturing overhead. ____Compute the predetermined manufacturing overhead rate. ____Adjust cost of goods sold.
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218) Manufacturing overhead is underallocated if the amount A) estimated for the period is greater than the actual amount incurred. B) estimated for the period is less than the actual amount incurred. C) allocated during the period is less than the actual amount incurred. D) allocated during the period is greater than the actual.
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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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40) Bobke Technologies manufactures three types of computers for a well known national brand. The three types are: laptops, desktops, and tablets. Currently, Bobke uses a single plant-wide overhead rate to allocate its $1,667,250 of annual manufacturing overhead. Of this amount, $562,000 is associated with laptops, $492,000 is associated with.
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190) Which of the following is true about lean thinking? A) Customer orders drive the production process. B) Inventory levels are maintained at high levels. C) Raw materials are purchased in large quantities. D) Finished goods are produced ahead of customers' orders to protect against running out of finished goods inventory. 191) Which of.
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130) Howard, Fine, & Howard is an advertising agency. The firm uses an activity-based costing system to allocate overhead costs to its services. Information about the firm's activity cost pool rates follows: Stooge Company was a client of Howard, Fine, & Howard. Recently, 7 administrative assistant hours, 3 new ad campaigns,.
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120) Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division. Activity Est. Indirect Activity Costs Allocation base Cost allocation rate Materials $60,000   Material moves $5.00/move Assembling $175,000   Direct 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 # # Produced Materials Costs # Moves Dir. Labor Hrs. Part 001 1,250 .
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149) Columbia Corporation manufactures two products: Tricycles and Wagons. The annual production and sales of Tricycles is 2,200 units, while 1,750 units of Wagons are produced and sold. The company has traditionally used direct labor hours to allocate its overhead to products. Tricycles require 2 direct labor hours per unit,.
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228) Before the year began, Plastics Manufacturing estimated that manufacturing overhead for the year would be $150,000 and that 25,000 direct labor hours would be worked. Actual results for the year included the following: Actual direct labor hours $20,000 Actual manufacturing overhead cost 182,000 If the company allocates manufacturing overhead based on direct labor.
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