Question 1

The three components of product costs are:

Accepted Answer

A) direct material, supervisor salaries, selling expenses. 
B) direct labor, manufacturing overhead, indirect material. 
C) direct material, direct labor, manufacturing overhead. 
D) manufacturing overhead, indirect material, indirect labor. 
A) direct material, supervisor salaries, selling expenses. 
B) direct labor, manufacturing overhead, indirect material. 
C) direct material, direct labor, manufacturing overhead. 
D) manufacturing overhead, indirect material, indirect labor. C

Question 2

The product cost of a single unit of manufactured production is determined by:

Accepted Answer

A) dividing total direct materials and direct labor for a production run by the number of units produced. 
B) adding total direct materials, direct labor, and manufacturing overhead for a production run and then dividing by the number of units produced. 
C) dividing total direct materials, direct labor, manufacturing overhead and delivery expenses for a production run by the number of units produced. 
D) dividing the product's selling price by the its contribution margin ratio. 
A) dividing total direct materials and direct labor for a production run by the number of units produced. 
B) adding total direct materials, direct labor, and manufacturing overhead for a production run and then dividing by the number of units produced. 
C) dividing total direct materials, direct labor, manufacturing overhead and delivery expenses for a production run by the number of units produced. 
D) dividing the product's selling price by the its contribution margin ratio. B

Question 3

Direct costing may be used for:

Accepted Answer

A) internal reporting purposes. 
B) external financial reporting purposes. 
C) income tax reporting purposes. 
D) All of the answers are correct. 
A) internal reporting purposes. 
B) external financial reporting purposes. 
C) income tax reporting purposes. 
D) All of the answers are correct. A

Question 4

The manufacturing overhead component of a product's cost:

Accepted Answer

A) is the sum of the actual overhead costs incurred while manufacturing the product. 
B) is likely to be the same amount for every product made by the company. 
C) includes all manufacturing costs except those for raw materials and direct labor. 
D) can only be determined at the end of the year when actual costs and actual production quantities are known. 
A) is the sum of the actual overhead costs incurred while manufacturing the product. 
B) is likely to be the same amount for every product made by the company. 
C) includes all manufacturing costs except those for raw materials and direct labor. 
D) can only be determined at the end of the year when actual costs and actual production quantities are known.

Question 5

SurfsUp Specialty Products has the following inventory account balances and related manufacturing cost flow information for the month of October: $\begin{array}{lll}
\text { Raw Materials, October } 1 & \$ 20,000 \
\text { Raw Materials, October } 31 & \$  25,000 \
\text { Work in Process, October } 1 & \$  45,000 \
\text { Work in Process, October } 31 & \$40,000 \
\text { Finished Goods, October } 1 & \$  68,000 \
\text { Finished Goods, October } 31 & \$  62,000\
\text {Raw materials purchased}&?\
\text {Raw materials used}&\$75,000\
\text {Direct labor incurred}&?\
\text {Manufacturing overhead incurred}&\$120,000\
\text {Cost of goods manufactured}&\$300,000\
\text {Cost of goods sold}&? 
\end{array}$ 
Raw materials purchased in October is:

Accepted Answer

A) $5,000. 
B) $70,000. 
C) $80,000. 
D) $90,000. 
A) $5,000. 
B) $70,000. 
C) $80,000. 
D) $90,000.

Question 6

Premier Products uses the following account titles:
 $$\begin{array} { | l | l | c | l | } 
\hline \text { A } & \text { Accounts payable } & \text { F. } & \text { Depreciation expense } \
\hline \text { B. } & \text { Raw materials inventory } & \text { G. } & \text { Accumulated depreciation } \
\hline \text { C. } & \text { Work in process inventory } & \text { H. } & \text { Wages and salaries payable } \
\hline \text { D. } & \text { Manufacturing overhead } & \text { I. } & \text { Wages and salaries expense } \
\hline \text { E. } & \text { Cost of goods sold } & \text { J. } & \text { Finished goods inventory } \
\hline
\end{array}$$ 
For each transaction described below, indicate which accounts would be debited and credited under a job order cost system:
 $$\begin{array} { | r | l | l | l | } 
\hline  & & \text { Debit } & \text { Credit } \
\hline 1 & \text { Materials are purchased on account } & & \
\hline2&\text { Materials are placed into production }&&\
\hline 3 & \text { Direct labor cost is incurred } & & \
\hline 4 & \text { Depreciation is recorded on the factory equipment } & & \
\hline5 & \text { Manufacturing overhead is applied to units of product } & & \
\hline 6& \text { Cost of goods manufactured is recorded } & & \
\hline 7 & \text { Cost of goods sold is recorded } & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | r | l | c | c | } 
\

Question 7

A predetermined manufacturing overhead rate is used to:

Accepted Answer

A) accumulate actual manufacturing overhead costs as they are incurred. 
B) assign indirect costs to the units produced. 
C) establish predetermined selling prices for manufactured products. 
D) assign selling and administrative expenses to total manufacturing costs. 
A) accumulate actual manufacturing overhead costs as they are incurred. 
B) assign indirect costs to the units produced. 
C) establish predetermined selling prices for manufactured products. 
D) assign selling and administrative expenses to total manufacturing costs.

Question 8

Cost of Goods Manufactured can be computed as:

Accepted Answer

A) ending balance of work in process + raw materials used + direct labor costs incurred + manufacturing overhead costs applied - beginning balance of work in process. 
B) beginning balance of work in process + raw materials purchased + direct labor costs incurred + manufacturing overhead costs applied - ending balance of work in process. 
C) ending balance of work in process + raw materials purchased + direct labor costs incurred + manufacturing overhead costs applied - beginning balance of work in process. 
D) beginning balance of work in process + raw materials used + direct labor costs incurred + manufacturing overhead costs applied - ending balance of work in process. 
A) ending balance of work in process + raw materials used + direct labor costs incurred + manufacturing overhead costs applied - beginning balance of work in process. 
B) beginning balance of work in process + raw materials purchased + direct labor costs incurred + manufacturing overhead costs applied - ending balance of work in process. 
C) ending balance of work in process + raw materials purchased + direct labor costs incurred + manufacturing overhead costs applied - beginning balance of work in process. 
D) beginning balance of work in process + raw materials used + direct labor costs incurred + manufacturing overhead costs applied - ending balance of work in process.

Question 9

The risk of cost distortion is minimized with activity-based costing by applying overhead using:

Accepted Answer

A) a single cost driver rate. 
B) multiple cost driver rates. 
C) an absorption costing rate. 
D) direct costing rates. 
A) a single cost driver rate. 
B) multiple cost driver rates. 
C) an absorption costing rate. 
D) direct costing rates.

Question 10

Envision Company uses activity-based costing (ABC)for allocating manufacturing overhead costs to jobs and it has established the following cost drivers and rates:
 $\begin{array}{lll}
\text { Activity}&\text { Cost Driver}&\text { Rate}\
\text { Material handling } & \text { Number of parts used } & \$ 8.00 \text { per part } \
\text { Machine setups } & \text { Number of production runs } & \$ 3,000 \text { per run } \
\text { Assembly and inspection } & \text { Number of direct labor hours } & \$ 20.00 \text { per DLH } \
\text { Quality control } & \text { Number of units inspected } & \$ 5.00 \text { per unit }
\end{array}$

During July, Job #2005 produced 1,500 units and required the following activity: 1,800 parts, 2 production runs, and 325 direct labor hours.
(a.)Calculate the amount of manufacturing overhead applied to Job #2005.
(b.)Explain the advantage of using the ABC approach.

Accepted Answer

(a.)  
 (b.) The activity based costing

Question 11

Partridge, Inc.incurred the following costs during March:
 $\begin{array}{lr}
\text { Raw materials purchased } & \$ 6,800 \
 \text { Direct labor }(9,200 \text { hours) } & 156,400 \
\text { Manufacturing overhead (actual) } & 83,000 \
\text { Selling expenses } & 47,400 \
\text { Administrative expenses } & 32,600 \
\text { Interest expense } & 14,800
\end{array}$
 
Manufacturing overhead is applied on the basis of $8.50 per direct labor hour.Assume that overapplied or underapplied overhead is transferred to cost of goods sold only at the end of the year.During the month, 3,500 units of product were manufactured and 3,400 units of product were sold.On March 1 and March 31, Partridge carried the following inventory balances:
 $$\begin{array} { l r r } 
& \text { March 1 } & \text { March 31 } \
\text { Raw materials } & \$ 14,200 & \$ 15,400 \
\text { Work-in-process } & 64,700 & 55,800 \
\text { Finished process } & 32,400 & 40,660
\end{array}$$ 
(a.)Prepare a Statement of Cost of Goods Manufactured for the month of March, and calculate the average cost per unit produced.
(b.)Calculate the cost of goods sold during March.
(c.)Where in the financial statements will the difference between cost of goods manufactured and cost of goods sold be classified?

Accepted Answer

(a.)  
 *MOH Applied = $8.50 × 9,200 = $

Question 12

O'Fallon Products estimates manufacturing overhead of $400,000 for 2019 and applies overhead to units produced based on 200,000 machine hours.During 2019, O'Fallon generated 195,120 machine hours and incurred $409,752 of manufacturing overhead.For 2019, O'Fallon's under/overapplied overhead is:

Accepted Answer

A) $4,880 underapplied. 
B) $9,752 underapplied. 
C) $9,752 overapplied. 
D) $19,512 underapplied. 
A) $4,880 underapplied. 
B) $9,752 underapplied. 
C) $9,752 overapplied. 
D) $19,512 underapplied.

Question 13

Total manufacturing costs for the month on the statement of costs of goods manufactured equals:

Accepted Answer

A) variable costs + fixed costs + mixed costs. 
B) work in process inventory - finished goods inventory. 
C) cost of goods sold - cost of goods manufactured. 
D) cost of raw material used + direct labor cost incurred + manufacturing overhead applied. 
A) variable costs + fixed costs + mixed costs. 
B) work in process inventory - finished goods inventory. 
C) cost of goods sold - cost of goods manufactured. 
D) cost of raw material used + direct labor cost incurred + manufacturing overhead applied.

Question 14

The following information is from ABC Company's general ledger: Beginning and ending inventories, respectively, for raw materials were $16,000 and $20,000 and for work in process were $40,000 and $44,000.Raw material purchases and direct labor costs incurred were $72,000 each, and manufacturing overhead applied amounted to $40,000.Determine the total cost of goods manufactured during the period.

Accepted Answer

A) $176,000. 
B) $180,000. 
C) $184,000. 
D) $220,000. 
A) $176,000. 
B) $180,000. 
C) $184,000. 
D) $220,000.

Question 15

SKM Innovations, Inc., anticipates producing 40,000 units and incurring the following manufacturing costs for the coming year: raw material, $35 per unit; direct labor, $50 per unit; manufacturing overhead, $1,200,000 + $40 per unit.Using absorption costing, the unit cost for the coming year will be:

Accepted Answer

A) $85. 
B) $90. 
C) $125. 
D) $155. 
A) $85. 
B) $90. 
C) $125. 
D) $155.

Question 16

Cost accounting is concerned with:

Accepted Answer

A) accumulation and determination of product, process or service cost. 
B) income measurement and inventory valuation. 
C) generally accepted accounting principles. 
D) All of the answers are correct. 
A) accumulation and determination of product, process or service cost. 
B) income measurement and inventory valuation. 
C) generally accepted accounting principles. 
D) All of the answers are correct.

Question 17

Which of the following items would be reported on the Statement of Cost of Goods Manufactured?

Accepted Answer

A) cost of goods sold. 
B) beginning finished goods inventory. 
C) ending work in process inventory. 
D) contribution margin. 
A) cost of goods sold. 
B) beginning finished goods inventory. 
C) ending work in process inventory. 
D) contribution margin.

Question 18

Which of the following is more relevant to management accounting than to cost accounting?

Accepted Answer

A) accumulation and determination of product or service cost. 
B) income measurement and inventory valuation. 
C) generally accepted accounting principles. 
D) providing managers information for planning and control purposes. 
A) accumulation and determination of product or service cost. 
B) income measurement and inventory valuation. 
C) generally accepted accounting principles. 
D) providing managers information for planning and control purposes.

Question 19

Which of the following best describes cost accounting?

Accepted Answer

A) Cost accounting serves the needs of both financial and managerial accounting. 
B) Managerial accounting is a subset of cost accounting. 
C) Financial accounting is a subset of cost accounting. 
D) Cost accounting is an alternative to both financial and managerial accounting. 
A) Cost accounting serves the needs of both financial and managerial accounting. 
B) Managerial accounting is a subset of cost accounting. 
C) Financial accounting is a subset of cost accounting. 
D) Cost accounting is an alternative to both financial and managerial accounting.

Question 20

Strategic cost management initiatives that would occur in an organization's value chain functions begins with ________ and concludes with ________.

Accepted Answer

A) production; marketing 
B) research and development; customer service 
C) design; distribution 
D) marketing; distribution 
A) production; marketing 
B) research and development; customer service 
C) design; distribution 
D) marketing; distribution

The three components of product costs are:

The product cost of a single unit of manufactured production is determined by:

Direct costing may be used for:

The manufacturing overhead component of a product's cost:

A predetermined manufacturing overhead rate is used to:

Cost of Goods Manufactured can be computed as:

The risk of cost distortion is minimized with activity-based costing by applying overhead using:

O'Fallon Products estimates manufacturing overhead of $400,000 for 2019 and applies overhead to units produced based on 200,000 machine hours.During 2019, O'Fallon generated 195,120 machine hours and incurred $409,752 of manufacturing overhead.For 2019, O'Fallon's under/overapplied overhead is:

Total manufacturing costs for the month on the statement of costs of goods manufactured equals:

Cost accounting is concerned with:

Which of the following items would be reported on the Statement of Cost of Goods Manufactured?

Which of the following is more relevant to management accounting than to cost accounting?

Which of the following best describes cost accounting?

Strategic cost management initiatives that would occur in an organization's value chain functions begins with and concludes with .

Accountingpresent and Past

Financial Statements and Accounting Conceptsprinciples

Fundamental Interpretations Made From Financial Statement Data

The Bookkeeping Process and Transaction Analysis

Accounting for and Presentation of Current Assets

Accounting for and Presentation of Property, Plant, and Equipment,

Accounting for and Presentation of Liabilities

Accounting for and Presentation of Stockholders Equity

The Income Statement and the Statement of Cash Flows

Corporate Governance, Notes to the Financial Statements,

Financial Statement Analysis

Managerial Accounting and Cost-Volume-Profit Relationships

Cost Planning

Cost Control

Cost for Decision Making

Filters

Exam 13: Cost Accounting and Reporting

The three components of product costs are:

The product cost of a single unit of manufactured production is determined by:

Direct costing may be used for:

The manufacturing overhead component of a product's cost:

A predetermined manufacturing overhead rate is used to:

Cost of Goods Manufactured can be computed as:

The risk of cost distortion is minimized with activity-based costing by applying overhead using:

O'Fallon Products estimates manufacturing overhead of $400,000 for 2019 and applies overhead to units produced based on 200,000 machine hours.During 2019, O'Fallon generated 195,120 machine hours and incurred $409,752 of manufacturing overhead.For 2019, O'Fallon's under/overapplied overhead is:

Total manufacturing costs for the month on the statement of costs of goods manufactured equals:

Cost accounting is concerned with:

Which of the following items would be reported on the Statement of Cost of Goods Manufactured?

Which of the following is more relevant to management accounting than to cost accounting?

Which of the following best describes cost accounting?

Strategic cost management initiatives that would occur in an organization's value chain functions begins with ________ and concludes with ________.

Accountingpresent and Past

Financial Statements and Accounting Conceptsprinciples

Fundamental Interpretations Made From Financial Statement Data

The Bookkeeping Process and Transaction Analysis

Accounting for and Presentation of Current Assets

Accounting for and Presentation of Property, Plant, and Equipment,

Accounting for and Presentation of Liabilities

Accounting for and Presentation of Stockholders Equity

The Income Statement and the Statement of Cash Flows

Corporate Governance, Notes to the Financial Statements,

Financial Statement Analysis

Managerial Accounting and Cost-Volume-Profit Relationships

Cost Planning

Cost Control

Cost for Decision Making

Filters

Strategic cost management initiatives that would occur in an organization's value chain functions begins with and concludes with .