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18.1-11An 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. 18.1-12A traditional costing system employs multiple allocation rates, but an activity-based costing system uses                                           only one single allocation rate. 18.1-13An.
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18.4-1Inspection of incoming materials and production loss caused by downtime are examples of prevention                                           costs.   18.4-2Internal failure costs occur when poor-quality goods or services are not detected until after delivery to                                           customers. 18.4-3Costs spent to avoid poor quality goods are considered internal failure costs. 18.4-4.
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17.4-21On June 30, Coraline Company finished job number 750, with total job costs of $4,600, and transferred                                           the costs to Finished goods.  On July 6, they completed the sale of the goods to a customer for $5,100                                            cash.  In order to record the sale,.
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17.5-1Darrius 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 $44. 17.5-2Darrius Travel Services provided the following information: Cost allocation rate.
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17.4-42At the beginning of 2012, Conway Manufacturing Company had the following account balances: Work in process inventory Finished goods inventory Manufacturing overhead Cost of goods sold Sales revenue 2,000 8,000 0 0 0 During the year, the following transactions took place: Direct materials placed in production:$  80,000 Direct labor incurred:$190,000 Manufacturing overhead incurred$300,000 Manufacturing overhead allocated to production:$295,000 Jobs completed with.
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18.2-1Activity-based costing systems and traditional costing systems will produce the same results for product                                           cost and profitability, although they use different methods of calculation. 18.2-2Target cost is the price that customers are willing to pay and target price is the desired cost to produce                                                        .
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17.4-31At 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.
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17.4-39At the end of the year, Martin Company has a preliminary credit balance in the Manufacturing overhead                                           account of $95.  Please provide the year-end adjusting entry needed to clear the balance to zero. 17.4-40On June 30, Coraline Company finished job number 750, with total job costs of $4,600,.
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18.3-20Johnson Production Company uses just-in-time production and accounting methods.  On June 1, Johnson paid direct labor costs of $5,000 in cash.  Which of the following journal entries correctly records this transaction? A)  Debit $5,000 to Cash, credit $5,000 to Conversion costs. B)  Debit $5,000 to Conversion costs, credit $5,000 to Cash. C)  Debit $5,000.
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19.1-31Orleans 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.
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18.1-55AAA 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.
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18.2-11Morley Manufacturing is considering the manufacture of a new product. Morley was hoping to sell the     product for $168 per unit and estimated the total cost per unit to be $120. Morley conducted market                             research and found out that the market is only willing to pay $154.
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19.2-21Reevis Company sells hand-sewn shirts for $25 per unit, and has fixed costs of $7,500.  Their                                           contribution margin ratio is 20%. How many units do they have to sell to break even? A)     950 B)  1,750 C)  1,125 D)  1,500 19.2-22Reevis Company sells hand-sewn shirts for $25 per unit, and has fixed.
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19.3-11Chambers 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) .
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17.3-43Davie Company used estimated direct labor hours of 180,000 and estimated manufacturing overhead                                           costs of $990,000 in establishing its 2012 predetermined manufacturing overhead rate. Actual results                                           showed: Actual manufacturing overhead $950,000 Allocated manufacturing overhead $962,500 What was the number of direct labor hours worked during 2009?  A) 180,000 .
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18.4-21The cost of training personnel is an example of an: A) appraisal cost. B) prevention cost. C) internal failure cost. D) external failure cost.              18.4-22Losses 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. 18.4-23Perkins Company has been experiencing lost.
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18.2-41Clark Manufacturing makes blank CDs; it is a very competitive market and the company follows a target                                                         pricing strategy.  Currently the market price for a unit of product (one unit equals a package of 100 CDs)                                                         is $18.00.  Clark’s production costs are.
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17.5-11Abba Accounting expects its accountants to work a total of 24,000 direct labor hours per year. Abba's                                           estimated total indirect costs are $240,000.  The direct labor rate is $75 per hour.  If Abba does a job                                           requiring 40 hours of direct labor, what is.
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17.2-23Specialty Wood Products company had the following manufacturing labor costs last month: Woodworkers' wages $100,000 Indirect laborers’ wages $  20,000 Maintenance personnel wages $  10,000 Please provide the journal entry to record the incurrence of these labor costs. 17.2-24Broxsie Fabrication Company issued $40,000 of direct materials to production and $5,500 of indirect                                           materials to.
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17.6-18LDR 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                                          .
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18.3-30Archetype 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. Raw and in-process inventory Conversion costs Finished goods inventory Cost of goods sold 2,000 0 3,500 0 During.
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18.1-31Pitt 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 accounts Correspondence.
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18.2-31Nemesis 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.
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18.2-21Bakersfield 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.
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19.4-29Arquebus Company is owned and operated by a craftsman who makes replicas of historic firearms for                                           museums, sportsmen and collectors.  He is currently producing 40 flintlock muskets per month.  Cost data                             are as follows: Price$720 per unit Variable cost$470 per unit Fixed costs$8,000 per month How much is his.
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19.4-19Jarvis Foods produces a gourmet condiment which sells for $10.00 per unit.  Variable costs are $7.50 per                                           unit, and fixed costs are $18,000 per month.  Jarvis is currently selling 8,000 units per month.  If Jarvis is                                           forced to reduce the selling price down to.
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17.3-3The entry to allocate manufacturing overhead costs to work in process requires a debit to Manufacturing                                           overhead. 17.3-4In a manufacturing operation, taxes and insurance for the plant should be debited to Manufacturing                                           overhead. 17.3-5When manufacturing overhead is allocated, the amount is recorded as a debit.
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17.3-13When calculating the predetermined manufacturing overhead rate, what is the correct basis of calculation? A)  Estimated overhead costs divided by the number of days in a year B)  Estimated amount of the cost driver divided by the estimated total overhead costs C)  Actual overhead costs of the prior year divided by the actual.
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17.5-21Fogelin Promotional Services uses a job order system for costing and billing promotional services for                                           dance and ballet  performances.  Fogelin has 4 public relations specialists, plus an office staff.  At the                                           beginning of 2012, Fogelin estimated the total cost of salaries and benefits for.
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18.4-11Which 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  18.4-12Which of the following categories includes costs incurred in detecting poor quality goods or services? A) External failure costs B) Prevention costs C) Appraisal.
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17.2-13The journal entry to issue $500 of direct materials and $30 of indirect materials to production includes                                           which of the following? A) Debit to Work in process for $500 and debit to Finished goods for $30  B) Debit to Manufacturing overhead for $530 C) Debit to Work in process.
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18.1-1With increased competition, managers need more accurate estimates of product costs to set prices and to                                           identify the most profitable products. 18.1-2Activity-based costing focuses on a single predetermined overhead rate for cost analysis. 18.1-3The main difference between activity-based costing and traditional costing systems is that activity-based costing uses a.
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17.4-11On 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.
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19.4-39A small business produces a single product and reports the following data: Price $8.00 per unit Variable cost $5.00 per unit Fixed cost $21,000 per month Volume 10,000 per month The company’s variable cost goes up by $0.25 per unit.  Fixed costs are lowered from $21,000 to $18,000.   Assume other factors remain the same.  How would this change affect.
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19.4-9Juan Martinez played classical guitar professionally until his motorcycle accident left him disabled.  After                             long months of therapy, he hired an experienced luthier (maker of stringed instruments) and opened a                                           small shop that makes and sells Spanish guitars.  The guitars sell for $600, and the.
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18.1-57AAA 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.
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17.6-8LDR 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                            .
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17.3-23Halcyon Company just completed job number 10B.  See details below. Direct labor cost: $2,040 Direct materials cost: $90 Machine hours for milling machinery: 5 Direct labor hours: 75 Predetermined manufacturing overhead allocation rate:  $34.00 per direct labor hour What was the total job cost? A)  $2,640 B)  $4,680 C)  $2,550 D)  $4,590 17.3-24Halcyon Company just completed job number 10-B.  See.
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19.3-21Juan Martinez played classical guitar professionally until his motorcycle accident left him disabled.  After                             long months of therapy, he hired an experienced luthier (maker of stringed instruments) and opened a                                           small shop that makes and sells Spanish guitars.  The guitars sell for $600, and the.
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19.3-1The breakeven point on a CVP graph is the point where the sales revenue line intersects the total cost line.                   19.3-2CVP graphs can help managers quickly estimate the profit or loss earned at different levels of sales                                           volume. 19.3-3On a CVP graph, in the area where the revenue.
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19.1-1Peterson Company has both fixed and variable costs.  If the volume doubles, the total fixed costs will                                           double. 19.1-2Total variable costs change in response to changes in the volume of production. 19.1-3The mixed cost per unit is constant throughout the relevant range of activity. 19.1-4Fixed costs per unit decrease as.
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17.3-33In 2012, the Doric Agricultural Products Company used a predetermined manufacturing overhead rate of                                           150% times direct labor cost.  Information for the year is as follows: Actual direct materials cost$812,500 Actual direct labor cost$180,000 Actual overhead costs incurred:$264,000 Total direct labor hours       5,520 What was the preliminary ending balance in the.
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18.1-21 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.
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19.1-21Which of the following is the term for a cost that does NOT change in total despite wide changes in                                           volume? A)    Fixed cost B)     Variable cost C)     Mixed cost D)    Sunk cost 19.1-22Which of the following is the term for a cost that is part variable and part fixed? A)    Fixed.
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19.2-11Breakeven is the point where the sales revenues are exactly equal to the total variable costs plus the total                                           fixed costs. 19.2-12Arturo Company’s model A generator sells for $456 and model B sells for $390.  The variable cost of                                           model A is $404 and of.
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18.3-10Which of the following pertains to a just-in-time production system? A) An individual does fewer tasks than under a traditional system.  B) Materials and Work in process are combined into a single account. C) Units are produced in larger batches than under a traditional system. D) Direct labor costs are.
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17.4-1The cost of goods manufactured is recorded as a debit to the Work in process account. 17.4-2During 2012, a company incurs $500,000 of manufacturing overhead costs and allocates out $492,000 of                                           manufacturing overhead costs.  Overhead costs have been underallocated. 17.4-3During 2012, a company incurs $500,000 of manufacturing overhead costs.
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18.1-41Orlando 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.
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