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Study Resources (Accounting)

Accounting:  Concepts & Applications, 11e Chapter 18  1 Cheroke Company had an accounts receivable balance of $60,000 at December 31, 2011. Projected sales for the first three months of 2012 are: January $120,000 February 130,000 March 100,000 All sales are credit sales. Cheroke Company usually collects 40% of its sales during the month of sale, 50% in the.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 4.Clibon Manufacturing Company uses a job order costing system. All relevant information for the products completed in July is provided below. Beginning work-in-process $3,000 Direct materials cost $12,500 Direct labor cost $9,000 Direct labor hours 750 Units produced 500 Actual manufacturing overhead $7,000 Predetermined overhead rate 75% of direct labor cost Units sold 400 a. How much manufacturing overhead will.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 7.Abe’s Automobile Manufacturing Company reported the following information for 2012: Beginning work-in-process inventory $910,000 Beginning raw materials inventory 332,000 Ending work-in-process inventory 787,000 Ending raw materials inventory 420,000 Raw materials purchased 683,000 Direct labor 651,000 Applied manufacturing overhead 450,000 Prepare a Cost of Goods Manufactured Schedule, in good form, for Abe’s Automobile Manufacturing Company for 2012. 8.Use the following.
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Accounting:  Concepts & Applications, 11e Chapter 17  1 6.Custom Woods Inc. makes three different door styles for kitchen cabinets: standard, flat panel, and raised panel. The following information is provided about the company's costs: Standard Flat Panel Raised Panel Doors made 4,250 3,052 2,964 Direct materials $19,125 $11,445 $20,007 Direct labor $42,500 $42,728 $56,316 Overhead Allocation Overhead Cost Cost Drivers Quality control $13,440 Number of setups Maintenance  12,384 Number of hours worked in    each production.
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Accounting:  Concepts & Applications, 11e Chapter 17  1 5.Carolina manufactures two products. The following information is available concerning the manufacturing overhead costs: Overhead Costs Cost     Cost Drivers Administration $  456,210 Production volume Building lease 4,536,000 Machine floor space Equipment depreciation 280,800 Machine hours Engineering costs 223,200 Engineering hours Maintenance    384,408 Machine hours $5,880,618 Product AB Product YZ Production volume 13,400 17,600 Machine floor space 60,000 140,000 Machine hours per unit     30 70 Total engineering hours     80 400 1. Compute the overhead cost per.
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Accounting:  Concepts & Applications, 11e Chapter 17  1 21.Which of the following would most likely NOT be considered a source of a product line activity? a. Product manager b. In-house training for special services c. Depreciation on the product warehouse d. Maintenance of machinery 22.When using activity-based costing, the cost associated with producing each batch is an example of a: a. Cost.
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Accounting:  Concepts & Applications, 11e Chapter 17  1 7.Westvaco Inc. has two divisions. Gross profit computations for these two divisions for the year 2012 are given below. Foods Division Goods Division Sales $ 450,000 $ 550,000 Direct materials (150,000) (75,000) Direct labor (150,000) (150,000) Manufacturing overhead*  (200,000)  (200,000) Gross Profit $ (50,000) $125,000 *Manufacturing overhead is allocated to products based on the amount of direct labor dollars. Westvaco has determined.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 MULTIPLE CHOICE 1. Which of the following is NOT a type of responsibility center? a. Profit center b. Investment center c. Revenue center d. Cost center 2.Responsibility accounting is the concept that: a. A firm is responsible for reporting to the public all activities that have a social impact, such as pollution control b. Each activity within.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 61.Cachet Inc. had a $93,000 balance in Accounts Receivable on July 1. In July, it expects to collect 55% of these receivables and 30% of the July credit sales, which are budgeted at $138,000. What is the budgeted accounts receivable at the end.
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Accounting:  Concepts & Applications, 11e Chapter 17  1 MULTIPLE CHOICE 1.Assume that direct labor and direct materials are the major cost components of a product and that the small amount of overhead cost can easily be associated with products using a simple overhead allocation basis such as direct labor hours. Which one.
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Accounting:  Concepts & Applications, 11e Chapter 17  1 31.The traditional overhead cost allocation system focuses the accumulation of overhead cost on: a. Cost pools b. Cost drivers c. Products d. Pool rate 32.Number of purchase orders is an example of a(n): a. Cost driver b. Cost pool c. Allocation rate d. Pool rate 33.With activity-based costing, overhead costs are assigned using a. Product costs b. Cash flows c. Cost drivers d. Direct labor hours 34.When assigning cost drivers.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 6.General Telephone makes telephones and fax machines. During the past several years, management has kept accurate records of costs and resource requirements, determining that the following is needed to make telephones and fax machines: Telephone Production Requirements Unit Cost Plastic  3 pounds $2.00 per pound Components  4 pieces $8.00 each Direct labor 1 hour $18.00 per.
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Accounting:  Concepts & Applications, 11e Chapter 17  1 51.The cost of sewing per tent is: a. $20.00 b. $60.00 c. $160.00 d. $300.00 52.The cost of assembling per tent is: a. $3.00 b. $15.00 c. $20.00 d. $45.00 53.The total manufacturing cost per reel is: a. $128 b. $140 c. $255 d. $268 54.The result of cross-subsidization is that: a. Some products look less profitable than they really are b. Some products look more profitable than they really are c. Both a and b d. Neither.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 11.Seven Peaks Inc. produces German sausage. The company uses process costing. All raw materials are added at the beginning of the mixing process. The following information relates to July operations and the work-in-process inventory account for Seven Peaks' final processing department: Beginning work-in-process: 500 pounds;.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 81.The amount billed to a customer from a computer consulting firm may include: a. Labor costs of professionals b. Costs for diskettes and CDs c. Computers owned by the consulting company d. All of these are correct 82.When supplies, direct labor, and overhead used to produce a service are billed, the costs.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 12.UniCom Manufacturing Company uses FIFO process costing. At the beginning of August, there were 500 units in beginning work-in-process that were 40% complete. In Process 1 all direct materials are added at the beginning of the process. The costs for the 500 units.
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Accounting:  Concepts & Applications, 11e Chapter 17  1 3.In the spaces provided, write the letter of the cost driver that best matches the overhead activity. A. Number of product setups B. Number of inspections C. Number of parts used D. Number of machine hours used E. Receiving orders per product line F. Number of maintenance hours worked in each division G. Number of engineering changes H. Amount.
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Accounting:  Concepts & Applications, 11e Chapter 17  1 41.Under an activity-based product costing system, what is the per unit cost for manufacturing overhead of 15-inch monitors (rounded)? a. $95 b. $155 c. $177 d. $273 42.Under an activity-based product costing system, what is the per unit cost for manufacturing overhead of 17-inch monitors (rounded)? a. $95 b. $155 c. $177 d. $273 43.Under an activity-based product costing system, what.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 9.Prepare the journal entries for the following transactions in a transportation company. 1. Purchased supplies costing $2,000 for cash. 2. Used supplies costing $700. 3. Incurred and paid 3,000 hours of direct labor and 1,000 hours of indirect labor.  The average hourly wage rate for both direct and indirect.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 111.During January, the Farnell Furniture Company produced 30,000 high-quality furniture sets: 7,500 from the January 1 work-in-process inventory and 22,500 from units started during the month. The January 30 work-in-process inventory consisted of 7,000 units 50% complete as to direct materials and 40%.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 2.Prepare the journal entries for the following events. (Assume that purchases and expenses are credited to cash.) 1. Raw materials purchased $30,000 2. Direct materials used 25,000 3. Indirect materials used 3,500 4. Wages payable-direct 30,000 5. Wages payable-indirect 6,000 6. Selling and administrative expenses 16,000 7. Other manufacturing overhead costs 12,500 8. Manufacturing overhead applied 20,000 9. Work-in-process completed 60,000 10. Finished goods sold 67,500 .
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Accounting:  Concepts & Applications, 11e Chapter 17  1 11.Which of the following types of costing systems identifies business activities that create overhead costs and then assigns overhead to products or divisions according to these activities? a. Unit-based costing b. Job order costing c. Activity-based costing d. Process costing 12.Which of the following is the correct sequence of the five steps.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 51.Meadowland Clothing uses 3 yards of material for each garment produced. On May 1, Meadowland had 24 yards of material on hand. If Meadowland desires an ending inventory of 15 yards of material and plans to produce 65 garments during the month, how.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 71.Which of the following budgets contains the labor costs involved directly in providing the service for a service firm? a. Supplies budget b. Revenue budget c. Overhead budget d. Wages and salaries budget 72.Which of the following would NOT be in the overhead budget of a hotel? a. Depreciation b. Utilities c. TV and telephone d. Manager’s salary 73.Which of the.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 9.Merrill & Merrill is planning for tax season (February, March, April).  Merrill & Merrill earns all of its revenue through 1040 preparation and generally charges $1,000 per tax return. The following information has been gathered about Merrill & Merrill: Expected Tax Returns: February 150 March 200 April 225 Wages and salaries.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 31.The variance computed by multiplying the difference between the actual rate and the standard rate by the actual hours is: a. The labor rate variance b. The materials price variance c. The manufacturing overhead efficiency variance d. The labor efficiency variance 32.The difference between standard hours and actual hours multiplied by the.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 101.Which of the following is NOT a necessary step when using a process costing system? a. Calculate the product cost per unit b. Combine fixed expenses with variable costs c. Determine the cost of ending work-in-process d. Determine equivalent units of production 102.In a process costing system, units to be accounted for.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 3.Prepare the journal entries for the following events in a dress manufacturing organization. 1. Purchased 400 yards of fabric on account costing $4 per yard. 2. Placed 50 yards of fabric into production 3. 50 hours of labor at $10 per hour were used to produce the shirts. 4. Overhead costs.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 5.Wieland Company uses a job order costing system. Thus, management must establish a predetermined overhead rate for applying manufacturing overhead. During the past three months, the following data have been accumulated: April May June Direct labor hours 20,000 26,000 35,000 Machine hours 50,000 25,000 15,000 Direct materials costs $200,000 $125,000 $175,000 Total budgeted manufacturing overhead $40,000 $35,000 $ 25,000 In good form, prepare a.
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Accounting:  Concepts & Applications, 11e Chapter 17  1 PROBLEM 1.Define activity-based costing and list the five steps in implementing and using an activity-based costing system. 2.BigPlay Company manufactures playground equipment. BigPlay is shifting from a traditional costing system to an activity-based costing system. The company started by identifying four overhead cost activities. Listed.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 10.Seven Peaks Inc. produces German sausage. The company uses process costing. All raw materials are added at the beginning of the mixing process. The following information relates to July operations and the work-in-process inventory account for Seven Peaks' final processing department: Beginning work-in-process: 500 pounds;.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 The July manufacturing overhead budget of Kyoto Corporation, shown below, was constructed assuming an activity level of 48,000 direct labor hours: Variable costs:    Indirect labor $48,000    Indirect materials 24,000    Factory supplies  19,200 $ 91,200 Fixed costs:    Depreciation $38,400    Supervision 69,600    Property taxes  36,000  144,000 Total overhead costs $235,200 91.If management prepared a flexible budget for July using 54,000 direct labor hours, what amount.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 11.The Mt. Airy Bed and Breakfast is planning for the summer tourist season and needs to prepare a flexible budget. The accountant has accumulated the following information: Fixed expenses:    Maid salaries $70,000    Mortgage payments 33,000    Property taxes 6,000    Other 5,000 Variable expenses (per guest):    Linens and toiletries $    10    Food 60    Other 15 Prepare a flexible budget showing expected total costs.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 11.In which of the following is a manager responsible for costs, revenues, and assets? a. Revenue center b. Cost center c. Profit center d. Investment center 12.In which of the following is a manager responsible for only costs? a. Responsibility center b. Cost center c. Profit center d. Investment center 13.How can an organization prevent decisions made by a decentralized manager.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 21.When determining the amount of cash payments for manufacturing overhead, which costs are removed from the budgeted manufacturing overhead? a. Depreciation b. Direct labor c. Direct materials d. Sales commissions 22.Which of the following accumulates all the costs for direct materials, direct labor and manufacturing overhead? a. Production budget b. Budgeted product cost sheet c. Sales budget d. Selling and.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 6.Washington Company has two independent divisions and uses a job order costing system. Washington made the following estimates at the beginning of the year. Division 1 Division 2 Direct labor hours 50,000 35,000 Machine hours 75,000 50,000 Direct labor costs $600,000 $250,000 Total budgeted manufacturing overhead $90,000 $70,000 Manufacturing overhead is applied on the basis of machine hours.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 MULTIPLE CHOICE 1.The overall purpose of a budget is to a. Develop a plan to meet a specified goal b. Determine disposable income c. Allow ongoing comparison between actual results and a specified plan d. To develop a plan to meet specified goals and allow ongoing comparison between actual results and a.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 3.The Sho-lo Company makes measuring devices. The unit sales forecasts for measuring devices for the four quarters of 2011 and the first quarter of 2012 are as follows: Measuring Devices 1st Quarter, 2011 30,000 2nd Quarter, 2011 35,000 3rd Quarter, 2011 33,000 4th Quarter, 2011 40,000 1st Quarter, 2012 32,000 As of December 31, 2012,.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 41.Elsie's Dairy produces various types of cheese. The following resources are used to make five pounds of cheddar cheese: 4 gallons of milk at $2.50 per gallon 4 cakes of yeast at $0.50 per cake 1/2 hour of labor at $10.00 per hour 1/2 hour of overhead.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 31.The master budget includes all the following schedules EXCEPT the: a. Capital expenditures budget b. Production budget c. Selling and administrative expense budget d. Direct materials budget 32.In preparing the sales budget, management should consider: a. External variables such as customer tastes b. Internal variables such as advertising expenditures c. Both external variables and internal variables d. Neither external variables.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 PROBLEM 1.Michele has a salary of $56,000 per year.  Michele estimates her living expenses are approximately as follows: Federal, state, and FICA taxes amount to 35% of income Car payment $305/month Rent $1,500/month Insurance $120/month 401(k) 4% of gross pay Gas and maintenance on car $175/month Entertainment $150/month Utilities $250/month Food $200/month Prepare Michele’s budget for the year. 2.Describe the differences between authoritative budgeting.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 91.Raw Materials Inventory is only found in: a. Merchandising organizations b. Service organizations c. Wholesale organizations d. Manufacturing organizations 92.Ideally, inventory costs for a merchant should include: a. Transportation costs b. Insurance during transportation c. Storage costs d. All of these are correct 93.When inventory is sold, a merchant records a debit to: a. Sales b. Merchandise Inventory c. Cost of Goods Sold d. Selling Expenses 94.Turco Consulting is providing.
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Accounting:  Concepts & Applications, 11e Chapter 19  1 21.Which of the following is NOT an advantage of standard costing? a. Standards are reported as specific figures but are treated by managers as ranges of acceptable performance b. The setting of standard costs requires a careful analysis of operations c. Standard costs provide a basis for measuring performance.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 8.The following information is available for Alastair Company, a merchandising firm: Expected sales volume:    October 5,000 units    November 4,250 units    December 6,200 units Selling price per unit $65 Desired finished goods inventory, December 31 1,150 units Beginning finished goods inventory, October 1 950 units Prepare sales budgets and purchases budgets for October, November, and December..
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Accounting:  Concepts & Applications, 11e Chapter 18  1 10.The Powder Peaks Resort is planning for the winter ski season (December, January, and February).  Powder Peaks has 200 available rooms to rent and charges its customers $150 per room each night. The following information has also been gathered about Powder Peaks Resort: Expected.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 13.The Storm Meadows Resort is preparing a cash budget for March 2011. Management has collected the following information: a. The cash balance on February 28, 2011 is $215,000. b. Actual services provided in January and February and projected services for March are: January February March Cash services $ 96,000 $ 80,000 $ 120,000 Credit services 675,000 835,000 752,000 40%.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 5.Mark-A-Date Corporation makes pocket and wall calendars. The production budget for the next three months for each of the calendars is as follows: Pocket Calendars Wall Calendars June 30,000 30,000 July 24,000 28,000 August 36,000 32,000 From past experience, Mark-A-Date's management knows that it takes approximately 5 minutes to make a pocket calendar and 3.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 PROBLEM 1. Post the following cost data to the appropriate T-accounts to trace the flow of costs from the time they are incurred until the product is completed and sold. (Assume that purchases and expenses are credited to Cash.) 1. Raw materials purchased $30,000 2. Raw materials used-direct 25,000 3. Raw materials.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 81.If actual variable costs per unit are equal to estimated variable costs per unit and a static budget is used, fewer units produced will show: a. Total actual variable costs = total estimated variable costs b. Total actual variable costs < total estimated variable costs c. Total actual variable.
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Accounting:  Concepts & Applications, 11e Chapter 18  1 11.What is budgetary slack? a. Deviations from the budget b. A budget with easy targets c. Budget process not supported by top management d. A bottom-up approach to budgeting 12.Which of the following budget development approaches can be used by management? a. Top-down approach b. Bottom-up approach c. A combination of top-down and bottom-up d. All of these can be.
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