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Study Resources (Accounting)

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).
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21) The cost of training personnel is an example of an: A) appraisal cost. B) prevention cost. C) internal failure cost. D) external failure cost. 22) Losses caused by downtime in the production process are considered a(n): A) external failure cost. B) prevention cost. C) appraisal cost. D) internal failure cost. 23) Perkins Company has been experiencing lost sales and.
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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.
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21) 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.
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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.
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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).
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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).
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Learning Objective 17-6 1) In a process costing system, each department has its own Work in process account. 2) In a process costing system, conversion costs are normally assumed to be incurred evenly throughout the production process. 3) In a process costing system, direct materials costs are normally assumed to be incurred.
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31) Taizhong Semiconductor Company mass produces several common computer chips.  Type A sells for $1.20 per unit.  Variable cost is $0.95 per unit and the fixed costs are $32,000 per month.  Taizhong currently sells 140,000 units per month.  Under intense pressure to boost profits, the production manager has a plan.
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11) Which of the following is NOT an internal failure cost? A) Production losses caused by downtime B) Warranty costs C) Rework costs D) Rejected product units 12) Which of the following categories includes costs incurred in detecting poor quality goods or services? A) External failure costs B) Prevention costs C) Appraisal costs D) Internal failure costs 13) Which of.
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Learning Objective 17-2 1) When materials are requisitioned for a job, the materials inventory account is debited. 2) Work in process inventory is debited for the incurrence of both direct and indirect labor in a job costing system. 3) Indirect materials and indirect labor are tracked to individual job costing records and.
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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.
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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.
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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.
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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.
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31) At January 1, 2012, Feldstein Manufacturing Company had a beginning balance in Work in process of $80,000 and a beginning balance in Finished goods of $20,000.  During the year, Feldstein incurred manufacturing costs of $350,000. During the year, the following transactions occurred: Job A-12, was completed for a total cost of $120,000,.
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Learning Objective 17-3 1) All manufacturing overhead costs incurred are accumulated as debits to a general ledger account titled Manufacturing overhead. 2) In a manufacturing operation, depreciation of the plant and plant equipment should be debited to Depreciation expense. 3) The entry to allocate manufacturing overhead costs to work in process requires.
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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.
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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,.
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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.
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21) 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.  How much overhead was allocated.
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Learning Objective 19-1 1) Peterson Company has both fixed and variable costs.  If the volume doubles, the total fixed costs will double. 2) Total variable costs change in response to changes in the volume of production. 3) The mixed cost per unit is constant throughout the relevant range of activity. 4) Fixed costs.
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31) Barbicon Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost.  At the beginning of 2012, they formulated a rate of 20% times the direct labor cost.  In June, 2012, Barbicon completed job number 13C.  Job stats are as follows: Direct materials cost  $6,220 Direct.
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  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.
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Learning Objective 17-4 1) The cost of goods manufactured is recorded as a debit to the Work in process account. 2) During 2012, a company incurs $500,000 of manufacturing overhead costs and allocates out $492,000 of manufacturing overhead costs.  Overhead costs have been underallocated. 3) During 2012, a company incurs $500,000 of.
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11) On January 1, 2012, Jackson Company's work in process inventory account had a balance of $65,000. During 2012, materials requisitioned for use in production amounted to $70,000, of which $66,000 represented direct materials. Factory wages for the period were $209,000, of which $186,400 were for direct labor. Manufacturing overhead.
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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.
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31) Orleans Company has a normal range of production volumes between 100,000 units and 180,000 units per month.  That is considered the relevant range for production cost analysis.  If the company expands significantly beyond 180,000 units per month, which of the following would be the most likely expectation? A) The fixed.
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41) Q-dot Manufacturing Company has provided the following information for the year 2012: Actual manufacturing overhead costs incurred$199,900 Manufacturing overhead costs allocated to production$189,000 Actual direct materials cost$560,000 Actual direct labor cost$333,000 Actual direct labor hours9,450 direct labor hours Actual machine hours180,000 machine hours Based on the above information, what was Q-dot's allocation rate?  (Hint: for this.
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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.
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11) Which of the following would be included in the journal entry to record the requisition of indirect materials? A) Debit to Manufacturing overhead B) Debit to Work in process inventory C) Debit to Materials inventory D) Debit to Finished goods inventory 12) In job order costing, the journal entry to issue indirect materials to.
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11) Which of the following would NOT be considered a manufacturing overhead cost? A) Insurance for the factory B) Indirect labor cost C) Property tax for the plant D) Direct labor 12) Which of the following correctly describes the predetermined manufacturing overhead rate? A) The rate for factory utilities costs B) The rate of actual overhead costs.
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11) 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.
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Learning Objective 18-4 1) Inspection of incoming materials and production loss caused by downtime are examples of prevention costs. 2) Internal failure costs occur when poor-quality goods or services are not detected until after delivery to customers. 3) Costs spent to avoid poor quality goods are considered internal failure costs. 4) Internal failure.
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11) Fairfield Company management has budgeted the following amounts for its next fiscal year: Total fixed expenses $832,500 Sale price per unit $40 Variable expenses per unit $25 If Fairfield Company spends an additional $30,000 on advertising, sales volume should increase by 2,500 units. What effect will this decision have on operating income? A) Operating income will decrease.
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11) Chambers Company sells glass vases at a wholesale price of $2.50 per unit.  Variable cost is $1.75 per unit.  Chambers' fixed costs are $6,500 per month.  If Chambers wishes to make operating income of $2,500, how many units must be sold? A) 11,500 B) 11,750 C) 12,000 D) 12,500 12) Chambers Company sells glass.
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11) Which of the following is NOT a fixed cost? A) Property taxes B) Salary of plant manager C) Direct materials cost D) Straight-line depreciation 12) A 15% increase in production volume will result in a: A) 15% increase in the variable cost per unit. B) 15% increase in total mixed costs. C) 15% increase in total manufacturing.
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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.
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