Question 1

Manufacturing overhead combined with direct materials is known as conversion cost.

Accepted Answer

A) True 
 B)False

Question 2

What was the cost of goods manufactured (finished)for the year (in thousands of dollars)?

Accepted Answer

A)  $540. 
B)  $500. 
C)  $570. 
D)  $590.= 90 + 200 + 230 + 70 - 50 = $540 
A)  $540. 
B)  $500. 
C)  $570. 
D)  $590.= 90 + 200 + 230 + 70 - 50 = $540

Question 3

Williams Company's direct labour cost is 25% of its conversion cost.If the manufacturing overhead cost for the last period is $45,000 and the direct materials cost is $25,000,what is the direct labour cost?

Accepted Answer

A)  $15,000. 
B)  $60,000. 
C)  $33,333. 
D)  $20,000.CC = DL + OHx = 60,000 Therefore DL 60,000 * .25 = $15,000 
A)  $15,000. 
B)  $60,000. 
C)  $33,333. 
D)  $20,000.CC = DL + OHx = 60,000 Therefore DL 60,000 * .25 = $15,000

Question 4

Manufacturing overhead is one of the three elements of manufacturing costs.Unlike direct materials and direct labour costs,assigning manufacturing overhead cost to products can be a very difficult task.
Required:
Do you agree with this aspect of manufacturing overhead? Why or why not?

Accepted Answer

The response is an emphatic yes (note:th

Question 5

Delta Merchandising,Inc. ,has provided the following information for the year just ended:  
What was the ending inventory for the company at year-end?

Accepted Answer

A)  $65,450. 
B)  $24,500. 
C)  $14,050. 
D)  $9,950.EI = 24,000 + 80,000 - (128,500 - 38,550)= $14,050 
A)  $65,450. 
B)  $24,500. 
C)  $14,050. 
D)  $9,950.EI = 24,000 + 80,000 - (128,500 - 38,550)= $14,050

Question 6

To what does the term differential cost refer?

Accepted Answer

A)  A difference in cost that results from selecting one alternative instead of another. 
B)  The benefit forgone by selecting one alternative instead of another. 
C)  A cost that does not entail any dollar outlay,but which is relevant to the decision-making process. 
D)  A cost that continues to be incurred even though there is no activity. 
A)  A difference in cost that results from selecting one alternative instead of another. 
B)  The benefit forgone by selecting one alternative instead of another. 
C)  A cost that does not entail any dollar outlay,but which is relevant to the decision-making process. 
D)  A cost that continues to be incurred even though there is no activity.

Question 7

Which of the following is the cost of goods manufactured?

Accepted Answer

A)  $1,250. 
B)  $1,200. 
C)  $1,220. 
D)  $1,150.= 500 + 300 + 400 + 100 - 150 = $1,150 
A)  $1,250. 
B)  $1,200. 
C)  $1,220. 
D)  $1,150.= 500 + 300 + 400 + 100 - 150 = $1,150

Question 8

Sally Smith is employed in the production of various electronic products,and she earns $8 per hour.She is paid time-and-a-half for work in excess of 40 hours per week.During a given week,she worked 45 hours and had no idle time.How much of her week's wages would be charged to manufacturing overhead?

Accepted Answer

A)  $60. 
B)  $20. 
C)  $40. 
D)  $0. 
A)  $60. 
B)  $20. 
C)  $40. 
D)  $0.

Question 9

Prime costs consist of:

Accepted Answer

A)  Direct Labour and Manufacturing Overhead. 
B)  Direct Material and Direct Labour. 
C)  Direct Material and Manufacturing overhead. 
D)  Direct Material,Direct Labour and Manufacturing OverheaD. 
A)  Direct Labour and Manufacturing Overhead. 
B)  Direct Material and Direct Labour. 
C)  Direct Material and Manufacturing overhead. 
D)  Direct Material,Direct Labour and Manufacturing OverheaD.

Question 10

Advertising costs are considered product costs for external financial reports since they are incurred in order to promote specific products.

Accepted Answer

A) True 
 B)False

Question 11

When a decision is made among a number of alternatives,the benefit that is lost by choosing one alternative over another is called what?

Accepted Answer

A)  Realized cost. 
B)  Opportunity cost. 
C)  Conversion cost. 
D)  Accrued cost. 
A)  Realized cost. 
B)  Opportunity cost. 
C)  Conversion cost. 
D)  Accrued cost.

Question 12

For a lamp manufacturing company,the cost of the insurance on its vehicles that deliver lamps to customers is best described as a:

Accepted Answer

A)  Prime cost. 
B)  Manufacturing overhead cost. 
C)  Period cost. 
D)  Differential cost of a lamp. 
A)  Prime cost. 
B)  Manufacturing overhead cost. 
C)  Period cost. 
D)  Differential cost of a lamp.

Question 13

Which of the following statements regarding variable cost is true?

Accepted Answer

A)  Variable cost increases on a per unit basis as the number of units produced increases. 
B)  Variable cost remains constant on a per unit basis as the number of units produced increases. 
C)  Variable cost remains the same in total as production increases. 
D)  Variable cost decreases on a per unit basis as the number of units produced increases. 
A)  Variable cost increases on a per unit basis as the number of units produced increases. 
B)  Variable cost remains constant on a per unit basis as the number of units produced increases. 
C)  Variable cost remains the same in total as production increases. 
D)  Variable cost decreases on a per unit basis as the number of units produced increases.

Question 14

Logan Products,a small manufacturer,has submitted the items below concerning last year's operations.The president's secretary,trying to be helpful,has alphabetized the list.   
Required:
a. )Prepare a schedule of cost of goods manufactured in good form for the year.
b. )Determine the cost of goods sold for the year.

Accepted Answer

The answer of Logan Products,a small manufacturer,has submitted the items...

Question 15

When raw materials are used in production,their costs are transferred to the work in process inventory account as direct materials.

Accepted Answer

A) True 
 B)False

Question 16

The following would typically be considered indirect costs of manufacturing a particular Boeing 747 to be delivered to Singapore Airlines: electricity to run production equipment,the factory manager's salary,and the cost of the General Electric jet engines installed on the aircraft.

Accepted Answer

A) True 
 B)False

Question 17

You have the following data:  
Which of the following represents the beginning work-in-process inventory?

Accepted Answer

A)  $20. 
B)  $15. 
C)  $55. 
D)  $25. 
A)  $20. 
B)  $15. 
C)  $55. 
D)  $25.

Question 18

In external financial reports,factory utilities costs may be included in an asset account on the balance sheet at the end of the period.

Accepted Answer

A) True 
 B)False

Question 19

What would be the classification of corporate controller's salary?

Accepted Answer

A)  Manufacturing cost. 
B)  Product cost. 
C)  Administrative cost. 
D)  Selling cost. 
A)  Manufacturing cost. 
B)  Product cost. 
C)  Administrative cost. 
D)  Selling cost.

Question 20

Mary Tappin,an assistant Vice President at Galaxy Toys,was disturbed to find on her desk a memo from her boss,Gary Resnick,to the controller of the company.The memo appears below:
Galaxy Toys Internal Memo
Sept 15
To: Harry Wilson,Controller
Fm: Gary Resnick,Executive Vice President
As you know,we won't start recording many sales until October when stores start accepting shipments from us for the Christmas season.Meanwhile,we are producing flat-out and are building up our finished goods inventories so that we will be ready to ship next month.Unfortunately,we are in a bind right now since it looks like the net income for the quarter ending on Sept 30 is going to be pretty awful.This may get us in trouble with the bank since they always review the quarterly financial reports and may call in our loan if they don't like what they see.Is there any possibility that we could change the classification of some of our period costs to product costs--such as the rent on the finished goods warehouse?
Please let me know as soon as possible.The President is pushing for results.
Mary didn't know what to do about the memo.It wasn't intended for her,but its contents were alarming.
Required:
a.Why has Gary Resnick suggested reclassifying some period costs as product costs?
b.Why do you think Mary was alarmed about the memo?

Accepted Answer

a.Gary Resnick has suggested reclassifyi

Manufacturing overhead combined with direct materials is known as conversion cost.

What was the cost of goods manufactured (finished)for the year (in thousands of dollars)?

Williams Company's direct labour cost is 25% of its conversion cost.If the manufacturing overhead cost for the last period is $45,000 and the direct materials cost is $25,000,what is the direct labour cost?

Manufacturing overhead is one of the three elements of manufacturing costs.Unlike direct materials and direct labour costs,assigning manufacturing overhead cost to products can be a very difficult task. Required: Do you agree with this aspect of manufacturing overhead? Why or why not?

Delta Merchandising,Inc. ,has provided the following information for the year just ended: What was the ending inventory for the company at year-end?

To what does the term differential cost refer?

Which of the following is the cost of goods manufactured?

Sally Smith is employed in the production of various electronic products,and she earns $8 per hour.She is paid time-and-a-half for work in excess of 40 hours per week.During a given week,she worked 45 hours and had no idle time.How much of her week's wages would be charged to manufacturing overhead?

Prime costs consist of:

Advertising costs are considered product costs for external financial reports since they are incurred in order to promote specific products.

When a decision is made among a number of alternatives,the benefit that is lost by choosing one alternative over another is called what?

For a lamp manufacturing company,the cost of the insurance on its vehicles that deliver lamps to customers is best described as a:

Which of the following statements regarding variable cost is true?

When raw materials are used in production,their costs are transferred to the work in process inventory account as direct materials.

The following would typically be considered indirect costs of manufacturing a particular Boeing 747 to be delivered to Singapore Airlines: electricity to run production equipment,the factory manager's salary,and the cost of the General Electric jet engines installed on the aircraft.

You have the following data: Which of the following represents the beginning work-in-process inventory?

In external financial reports,factory utilities costs may be included in an asset account on the balance sheet at the end of the period.

What would be the classification of corporate controller's salary?

Managerial Accounting and the Business Environment

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: a Tool to Aid Decision Making

Variable Costing: a Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis Online

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Exam 2: Cost Terms, Concepts, and Classifications

Manufacturing overhead combined with direct materials is known as conversion cost.

What was the cost of goods manufactured (finished)for the year (in thousands of dollars)?

Williams Company's direct labour cost is 25% of its conversion cost.If the manufacturing overhead cost for the last period is $45,000 and the direct materials cost is $25,000,what is the direct labour cost?

Manufacturing overhead is one of the three elements of manufacturing costs.Unlike direct materials and direct labour costs,assigning manufacturing overhead cost to products can be a very difficult task. Required: Do you agree with this aspect of manufacturing overhead? Why or why not?

Delta Merchandising,Inc. ,has provided the following information for the year just ended: What was the ending inventory for the company at year-end?

To what does the term differential cost refer?

Which of the following is the cost of goods manufactured?

Prime costs consist of:

Advertising costs are considered product costs for external financial reports since they are incurred in order to promote specific products.

When a decision is made among a number of alternatives,the benefit that is lost by choosing one alternative over another is called what?

For a lamp manufacturing company,the cost of the insurance on its vehicles that deliver lamps to customers is best described as a:

Which of the following statements regarding variable cost is true?

When raw materials are used in production,their costs are transferred to the work in process inventory account as direct materials.

The following would typically be considered indirect costs of manufacturing a particular Boeing 747 to be delivered to Singapore Airlines: electricity to run production equipment,the factory manager's salary,and the cost of the General Electric jet engines installed on the aircraft.

You have the following data: Which of the following represents the beginning work-in-process inventory?

In external financial reports,factory utilities costs may be included in an asset account on the balance sheet at the end of the period.

What would be the classification of corporate controller's salary?

Managerial Accounting and the Business Environment

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Job-Order Costing

Systems Design: Process Costing

Activity-Based Costing: a Tool to Aid Decision Making

Variable Costing: a Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis Online

Filters