Exam 5: Product Costing: Job and Process Operations

In a manufacturing organization, manufacturing supplies costs are recorded as expenses as they are used.

Andrea Cookie Company produced 5,000 cases of cookies this year. It sold 4,000 cases for $18 each. There were no beginning inventories. Variable manufacturing costs were $30,000, and fixed manufacturing expenses were $20,000. Selling and administrative expenses were $5,000, all fixed. Required: a. Prepare income statements using the variable costing and absorption costing. b. Reconcile the net income under absorption and variable costing.

Indicate whether each of the following costs, incurred by a manufacturer, are period or product costs.

Process service costing measures the average cost of:

Using the weighted average method, whenever units in process are produced to a different percentage of completion for materials and labor, this creates a condition where:

The purpose of the statement of cost of goods manufactured is to:

For which of the following products would job order costing be least likely to be used?

Which of the following inventories results in recording an expense when its asset account is reduced in the accounting system?

Assuming sales prices and cost behavior remain unchanged, when absorption costing is used, overproducing creates all of the following situations except?

Compare the challenge of determining unit production costs among service, merchandising and manufacturing organizations. Specifically, in which type of organizations is obtaining accurate inventory costs a more important issue? In which type of organization does obtaining accurate inventory costs present the greatest challenge?

Which of the following is an appropriate setting for job order production?

Which of the following views of product costs is consistent with financial reporting requirements?

For which of the following manufactured products would job costing be more appropriate than process costing?

Which of the following is the most reasonable cost driver for direct material costs?

Information from The Crossroad Company is given below in $000s for this period: Required: Determine the following amounts in dollars: a. Ending Raw Materials assuming all Raw Materials costs are classified as direct costs b. Ending Work-in-Process Inventory c. Cost of Goods Sold

Sykora, Inc., which uses a predetermined overhead rate based on direct labor hours, estimated total overhead for the year to be $12,000,000 and total direct labor hours to be 320,000 hours. Calculate Sykora's predetermined overhead rate. In April, Sykora incurred actual overhead costs of $1,050,000 and used 30,000 hours. How much was Sykora's over- or under-applied overhead for the month of April?

Which of the following is not included in work-in-process inventory?

Lorraine Corp. obtained the following information from its absorption costing accounting records: The total Period Costs incurred this period equals:

Classify the following costs incurred in the manufacturing of cookie bars as either (a) Product Cost- Direct Materials, (b) Product Cost- Conversion, or (c) Period Cost.

Inventory values calculated using variable costing as opposed to absorption costing will generally be higher.