Question 1

How is depreciation on the manufacturing building and equipment classified in financial reporting?

Accepted Answer

A)  As an irrelevant cost because it has already been incurred 
B)  As a current expense 
C)  As part of the cost of the products produced 
D)  As a period cost 
A)  As an irrelevant cost because it has already been incurred 
B)  As a current expense 
C)  As part of the cost of the products produced 
D)  As a period cost

Question 2

A job costing system is a cost system designed to accumulate the manufacturing costs of producing unique jobs, such as building a house or a naval air craft carrier, but would not include producing a batch of several identical units of product, such as 100 chairs in a furniture factory.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is one of the three major components of product costs?

Accepted Answer

A)  Research and development expenses 
B)  Manufacturing overhead 
C)  Marketing costs related to specific products 
D)  Selling, general and administrative expenses 
A)  Research and development expenses 
B)  Manufacturing overhead 
C)  Marketing costs related to specific products 
D)  Selling, general and administrative expenses

Question 4

Indicate which of the following inventories are typically found in service, merchandising, and manufacturing organizations:
●Supplies Inventories
●Merchandise Inventories
●Raw Materials Inventories
●Work-in-Process Inventories
●Finished Goods Inventories

Accepted Answer

The answer of Indicate which of the following inventories are...

Question 5

Since fixed product costs are eventually recorded as expenses under both variable and absorption costing by the time the inventory is sold, why does it matter whether fixed overhead is treated as a product cost or a period cost?

Accepted Answer

It matters whether fixed overhead is tre

Question 6

Which of the following statements is true about the weighted average process costing method?

Accepted Answer

A)  If all raw materials are added to production at the beginning of the process, the number of equivalent units in process will equal the total number of individual units worked on during the period. 
B)  The cost of the units in beginning work-in-process is accounted for separately from the units started in the current period. 
C)  The method is applicable to any situation where the cost of a specific job is needed. 
D)  All the above statements are true. 
A)  If all raw materials are added to production at the beginning of the process, the number of equivalent units in process will equal the total number of individual units worked on during the period. 
B)  The cost of the units in beginning work-in-process is accounted for separately from the units started in the current period. 
C)  The method is applicable to any situation where the cost of a specific job is needed. 
D)  All the above statements are true.

Question 7

NorthWest Corp. obtained the following information from its accounting records:
   Calculate the Cost of Goods Manufactured for the period.

Accepted Answer

The answer of NorthWest Corp. obtained the following information from...

Question 8

The following information is available:
  Materials are added at the beginning of the process.
How many equivalent units in process for conversion were there in December using the weighted average method?

Accepted Answer

A)  18,000 
B)  15,200 
C)  17,600 
D)  8,800 
A)  18,000 
B)  15,200 
C)  17,600 
D)  8,800

Question 9

In a job costing system, costs are accumulated in a separate Work-in-Process account for each job.

Accepted Answer

A) True 
 B)False

Question 10

Opponents of variable costing argue that in the long run all costs are variable.

Accepted Answer

A) True 
 B)False

Question 11

Below is selected information from Chipset's cost of production report:
  The ending inventory of work-in-process is complete as to materials.
The cost of conversion in the ending inventory is:

Accepted Answer

A)  $ 300,000 
B)  $ 333,000 
C)  $ 21,000 
D)  $ 12,000 
A)  $ 300,000 
B)  $ 333,000 
C)  $ 21,000 
D)  $ 12,000

Question 12

Glen Oak Corp obtained the following information from its absorption costing accounting records:
   Calculate the total Period Costs incurred this period.

Accepted Answer

Since there were no beginning or ending

Question 13

Willow Company produced 15,000 units and sold 13,000 units during the current fiscal period. Beginning inventory was zero. During the period, the following costs were incurred:
   Required: Compute the dollar amount of ending inventory using (a) absorption costing and (b) variable costing.

Accepted Answer

The answer of Willow Company produced 15,000 units and sold...

Question 14

Coleman Manufacturing Company began July with 25,000 units of inventory in process, 30 percent completed. During the month, 125,000 units were completed and transferred to the finished goods warehouse. Ending inventory consisted of 20,000 units, 70 percent completed. Materials were added at the beginning of the process.
Required: Calculate the equivalent units in process for:
a. Materials equivalent units under the weighted average process cost method
b. Conversion equivalent units under the weighted average process cost method

Accepted Answer

The answer of Coleman Manufacturing Company began July with 25,000...

Question 15

If costs are accurately estimated when establishing an annual predetermined overhead rate, there should never be an overapplied or underapplied overhead balance.

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A)  Bridge construction 
B)  Crude oil refining 
C)  Custom-made jewelry 
D)  High rise buildings 
A)  Bridge construction 
B)  Crude oil refining 
C)  Custom-made jewelry 
D)  High rise buildings

Question 17

Arthur Corporation wants to change to the variable costing method of inventory valuation for making internal decisions. The LIFO method is being used. The absorption statements of income for Years 1 and 2 are as follows:
   *Selling and administrative expenses include variable costs of $2 per unit sold.
Production data are as follows:
   Required:
a. Compute the absorption cost per unit manufactured in Years 1 and 2.
b. Explain why the net income for Year 1 was higher than the net income for Year 2 when the same number of units was sold in each year.
c. Prepare income statements for both years using variable costing.
d. Reconcile the absorption costing and variable costing net income figures for each year. Start with variable costing net income.

Accepted Answer

a. For Year 1, absorption costs per unit

Question 18

Under variable costing, which of the following costs are assigned to inventory?

Accepted Answer

A)  Fixed manufacturing costs 
B)  Variable non-manufacturing costs 
C)  Variable manufacturing costs 
D)  None of the above 
A)  Fixed manufacturing costs 
B)  Variable non-manufacturing costs 
C)  Variable manufacturing costs 
D)  None of the above

Question 19

The Matthew Company has the following information for December of this year:
   Overhead rate is 150 percent of direct labor costs. The Matthew Company uses a process costing system.
Calculate the total amount of cost added to Work-in-Process Inventory for December.

Accepted Answer

The answer of The Matthew Company has the following information...

Question 20

The following information pertains to Hamilton Corporation:
  What is the value of the ending inventory using the absorption costing method?

Accepted Answer

A)  $240,000 
B)  $270,000 
C)  $290,000 
D)  $343,000 
A)  $240,000 
B)  $270,000 
C)  $290,000 
D)  $343,000

How is depreciation on the manufacturing building and equipment classified in financial reporting?

A job costing system is a cost system designed to accumulate the manufacturing costs of producing unique jobs, such as building a house or a naval air craft carrier, but would not include producing a batch of several identical units of product, such as 100 chairs in a furniture factory.

Which of the following is one of the three major components of product costs?

Indicate which of the following inventories are typically found in service, merchandising, and manufacturing organizations: ●Supplies Inventories ●Merchandise Inventories ●Raw Materials Inventories ●Work-in-Process Inventories ●Finished Goods Inventories

Since fixed product costs are eventually recorded as expenses under both variable and absorption costing by the time the inventory is sold, why does it matter whether fixed overhead is treated as a product cost or a period cost?

Which of the following statements is true about the weighted average process costing method?

NorthWest Corp. obtained the following information from its accounting records: Calculate the Cost of Goods Manufactured for the period.

The following information is available: Materials are added at the beginning of the process. How many equivalent units in process for conversion were there in December using the weighted average method?

In a job costing system, costs are accumulated in a separate Work-in-Process account for each job.

Opponents of variable costing argue that in the long run all costs are variable.

Below is selected information from Chipset's cost of production report: The ending inventory of work-in-process is complete as to materials. The cost of conversion in the ending inventory is:

Glen Oak Corp obtained the following information from its absorption costing accounting records: Calculate the total Period Costs incurred this period.

Willow Company produced 15,000 units and sold 13,000 units during the current fiscal period. Beginning inventory was zero. During the period, the following costs were incurred: Required: Compute the dollar amount of ending inventory using (a) absorption costing and (b) variable costing.

If costs are accurately estimated when establishing an annual predetermined overhead rate, there should never be an overapplied or underapplied overhead balance.

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

Under variable costing, which of the following costs are assigned to inventory?

The Matthew Company has the following information for December of this year: Overhead rate is 150 percent of direct labor costs. The Matthew Company uses a process costing system. Calculate the total amount of cost added to Work-in-Process Inventory for December.

The following information pertains to Hamilton Corporation: What is the value of the ending inventory using the absorption costing method?

Managerial Accounting: Tools for Decision Making

Cost Behavior, Activity Analysis, and Cost Estimation

Cost-Volume-Profit Analysis and Planning

Relevant Costs and Benefits for Decision Making

Activity-Based Costing, Customer Profitability, and Activity-Based Management

Additional Topics in Product Costing

Pricing and Other Product Management Decisions

Operational Budgeting and Profit Planning

Standard Costs and Performance Reports

Segment Reporting, Transfer Pricing, and Balanced Scorecard

Capital Budgeting Decisions

Appendix: Managerial Analysis of Financial Statements

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Exam 5: Product Costing: Job and Process Operations

How is depreciation on the manufacturing building and equipment classified in financial reporting?

A job costing system is a cost system designed to accumulate the manufacturing costs of producing unique jobs, such as building a house or a naval air craft carrier, but would not include producing a batch of several identical units of product, such as 100 chairs in a furniture factory.

Which of the following is one of the three major components of product costs?

Indicate which of the following inventories are typically found in service, merchandising, and manufacturing organizations: ●Supplies Inventories ●Merchandise Inventories ●Raw Materials Inventories ●Work-in-Process Inventories ●Finished Goods Inventories

Since fixed product costs are eventually recorded as expenses under both variable and absorption costing by the time the inventory is sold, why does it matter whether fixed overhead is treated as a product cost or a period cost?

Which of the following statements is true about the weighted average process costing method?

NorthWest Corp. obtained the following information from its accounting records: Calculate the Cost of Goods Manufactured for the period.

The following information is available: Materials are added at the beginning of the process. How many equivalent units in process for conversion were there in December using the weighted average method?

In a job costing system, costs are accumulated in a separate Work-in-Process account for each job.

Opponents of variable costing argue that in the long run all costs are variable.

Below is selected information from Chipset's cost of production report: The ending inventory of work-in-process is complete as to materials. The cost of conversion in the ending inventory is:

Glen Oak Corp obtained the following information from its absorption costing accounting records: Calculate the total Period Costs incurred this period.

Willow Company produced 15,000 units and sold 13,000 units during the current fiscal period. Beginning inventory was zero. During the period, the following costs were incurred: Required: Compute the dollar amount of ending inventory using (a) absorption costing and (b) variable costing.

If costs are accurately estimated when establishing an annual predetermined overhead rate, there should never be an overapplied or underapplied overhead balance.

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

Under variable costing, which of the following costs are assigned to inventory?

The Matthew Company has the following information for December of this year: Overhead rate is 150 percent of direct labor costs. The Matthew Company uses a process costing system. Calculate the total amount of cost added to Work-in-Process Inventory for December.

The following information pertains to Hamilton Corporation: What is the value of the ending inventory using the absorption costing method?

Managerial Accounting: Tools for Decision Making

Cost Behavior, Activity Analysis, and Cost Estimation

Cost-Volume-Profit Analysis and Planning

Relevant Costs and Benefits for Decision Making

Activity-Based Costing, Customer Profitability, and Activity-Based Management

Additional Topics in Product Costing

Pricing and Other Product Management Decisions

Operational Budgeting and Profit Planning

Standard Costs and Performance Reports

Segment Reporting, Transfer Pricing, and Balanced Scorecard

Capital Budgeting Decisions

Appendix: Managerial Analysis of Financial Statements

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