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Study Resources (Accounting)

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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Accounting:  Concepts & Applications, 11e Chapter 15  1 41.Violet Company typically has $360,000 of fixed costs and $25 of variable costs per unit.  Violet plans to sell 8,000 units this period.  In order for Violet to break-even, what price should Violet charge per unit? a.$70 b.$25 c.$45 d.$20 42.During the quarter, Iris Company sold 100,000.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 5.In the spaces provided, write the letter of the definition for each of the following terms. A. A future cost that can be changed by a decision made now. B. Labor that is necessary in manufacturing a product or service but is not directly related to the.
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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 16  1 21.Which of the following costs is included in manufacturing overhead? a. Indirect materials b. Plant depreciation c. Rent on a manufacturing facility d. All of the these are manufacturing overhead costs 22.A debit to Work-in-Process Inventory is sometimes accompanied by a credit to: a. Accumulated Depreciation b. Indirect Wages Expense c. Manufacturing Overhead d. None of these are correct 23.Predetermined overhead.
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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 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 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 16  1 51.If manufacturing overhead is applied on the basis of machine hours and actual machine hours are more than anticipated, which of the following is true? a. Manufacturing overhead is probably overapplied b. Manufacturing overhead is probably underapplied c. Actual manufacturing overhead equals applied manufacturing overhead d. None of these are correct 52.If.
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Accounting:  Concepts & Applications, 11e Chapter 16  1 41.Which of the following statements is true? a. Actual overhead costs are entered as credits to Manufacturing Overhead b. Manufacturing Overhead is debited when overhead is applied c. When the credit balance in Manufacturing Overhead exceeds the debit balance in Manufacturing Overhead, manufacturing overhead has been underapplied d. When the debit.
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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 15  1 61.In constructing a custom cabinet, an indirect material would be: a.Wood b.Screws c.Brass handles d.Hinges 62.The cost of milk for an ice cream manufacturer would be considered all of the following EXCEPT: a.Product cost b.Manufacturing cost c.Variable cost d.Indirect cost 63.Costs that are NOT classified as direct materials or direct labor but are.
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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 15  1 11.Which of the following is NOT a function of management? a.Planning b.Controlling c.Analyzing d.Regulating 12.The process of making decisions about future operations is called: a.Controlling b.Planning c.Evaluating performance d.Implementing 13.Which is usually conducted by executive level management? a.Evaluating b.Strategic planning c.Operational budgeting d.Controlling 14.Production prioritizing is: a.The continual evaluation of the profitability of the various product lines and divisions. b.The.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 PROBLEM 1.In the spaces provided, write the letter of the definition for each of the following terms. A. Costs that change in total in direct proportion to changes in activity level. B. Costs that remain constant in total, regardless of activity level. C. Outlining the activities that need to be.
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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 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 15  1 81.Which of the following costs would NOT be reported on a financial statement? a.Indirect costs b.Fixed costs c.Sunk costs d.Opportunity costs 82.Which of the following costs should NOT be considered when making a future decision? a.Sunk costs b.Opportunity costs c.Indirect costs d.Fixed costs 83.Costs that are specifically traceable to a unit of business.
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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 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 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 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 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 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 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 16  1 61.The formula for total manufacturing costs is: a. Raw materials used + Direct labor costs + Applied manufacturing overhead b. Raw materials purchased + Direct labor costs + Applied manufacturing overhead c. Raw materials used + Direct labor costs + Actual manufacturing overhead d. Raw materials purchased + Direct labor costs.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 21.All of the following are involved in the management function of planning EXCEPT: a.Operational budgeting b.Capital budgeting c.Strategic planning d.Variance computation 22.Short-run planning involves which one of the following processes? a.Preparing capital budgets b.Tracking actual performance c.Preparing operational budgets d.Comparing actual results with established standards 23.Long-run planning involves which one of the following.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 51.Which of the following would NOT be included in manufacturing overhead? a.Indirect materials b.Factory utilities c.Factory fire insurance d.Direct labor 52.Product costs in a manufacturing firm would NOT include: a.Direct materials b.Manufacturing overhead c.Administrative costs d.Indirect labor 53.Utility expense in a merchandising company would be considered a(n): a.Product cost b.Period cost c.Manufacturing cost d.Indirect cost 54.Which of the.
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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 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 15  1 71.Costs that are directly traceable to a unit of business or segment being analyzed are called: a.Direct costs b.Sunk costs c.Variable costs d.Overhead costs 72.Another name for joint costs is: a.Direct costs b.Indirect costs c.Variable costs d.Fixed costs 73.Costs incurred for the benefit of more than one segment of the business are called: a.Direct.
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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 11.When a product is sold in a job order costing system, the costs associated with that product appear: a. In finished goods inventory b. On the income statement c. On the balance sheet d. None of these are correct 12.Raw Materials Inventory is debited: a. When raw materials are purchased b. When raw materials are used.
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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 16  1 71.Delaware Manufacturing had the following information for March 2012: Beginning raw materials inventory $34,560 Beginning work-in-process inventory 23,040 Beginning finished goods inventory 31,240 General administrative expenses 43,200 Raw materials used 129,600 Indirect labor 24,000 Indirect materials 42,000 Depreciation-factory equipment 22,000 Direct labor 97,920 Applied manufacturing overhead 87,360 Ending work-in-process inventory 28,800 Ending finished goods inventory 66,240 Based on this information, the cost of goods manufactured is: a. $309,120 b. $320,640 c. $326,400 d. $352,320 72.Nester Company recorded.
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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 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 16  1 MULTIPLE CHOICE 1.Which of the following would NOT properly be classified as manufacturing overhead? a. Nails used to manufacture furniture b. Custodial wages for factory custodians c. Wood to manufacture cabinets d. Insurance on factory 2.Which of the following costs would NOT be classified as a product cost? a. Cost of raw materials b. Cost of labor.
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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 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 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 15  1 7.Tulip Company is a tulip bulb distributor.  Every year, Tulip Company plants an outdoor show garden where visitors can see all the varieties of tulips.  The garden is open only during the month of April.  The original cost to design and landscape the.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 MULTIPLE CHOICE 1.Good management accounting is motivated by a.Government regulators b.Accounting rules c.Management’s desire to improve d.All of these are correct 2.Management accounting is established by: a.Individual companies b.FASB c.SEC d.GAAP 3.Which of the following principles are the LEAST uniform and are NOT mandatory? a.Financial reporting principles b.Management accounting principles c.Tax reporting principles d.All the above are equally.
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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 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 15  1 2.In the chart below, list the three main differences between managerial accounting and financial accounting.  Managerial Accounting Financial Accounting Source: Purpose: Outcome: 3.List and describe the three management functions. 4.List and describe the two types of long-run planning and the two types of short-run planning.  .
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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 31.If direct labor time is charged to the wrong job number, that job will: a. Appear more profitable than it should b. Appear less profitable than it should c. Report the correct profitability d. None of these are correct 32.If ending Work-in-Process Inventory is understated, a. Finished Goods Inventory will be understated b. Cost of Goods.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 31.If a cost increases as the sales volume increases, the cost is a(n): a.Direct cost b.Sunk cost c.Variable cost d.Fixed cost 32.If total cost stays the same, even though the production level has risen, the cost is a(n): a.Indirect cost b.Fixed cost c.Variable cost d.Out-of-pocket cost 33.Zodiac Company's total costs are the same.
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Accounting:  Concepts & Applications, 11e Chapter 15  1 6.Complete the following phrases by inserting the appropriate cost term. 1. _____ is a management technique developed by DuPont to measure operating performance and efficiency in using assets. 2. _____ costs often involve the outlay of cash. 3. _____ costs never involve an outlay of cash. 4. _____ costs, often referred to as manufacturing costs,.
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