Question 1

A predetermined overhead rate times the amount of activity basis equals the overhead cost assigned to the product.

Accepted Answer

A) True 
 B)False

Question 2

Cost of Goods Sold is decreased for underapplied overhead.

Accepted Answer

A) True 
 B)False

Question 3

In which one of the following accounts would all three product costs not be found?

Accepted Answer

A)  Work in Process Inventory 
B)  Materials Inventory 
C)  Finished Goods Inventory 
D)  Cost of Goods Sold 
A)  Work in Process Inventory 
B)  Materials Inventory 
C)  Finished Goods Inventory 
D)  Cost of Goods Sold

Question 4

Consider the following information: direct materials used totaled $134,400; direct labor amounted to $396,800; overhead was computed to be $789,600; Work in Process Inventory on January 1,2010,was $378,200; and Work in Process Inventory on December 31,2010,was $385,200.What was the cost of goods manufactured?

Accepted Answer

A)  $1,313,800 
B)  $1,320,800 
C)  $1,327,800 
D)  $2,084,200 
A)  $1,313,800 
B)  $1,320,800 
C)  $1,327,800 
D)  $2,084,200

Question 5

Fill in the missing data for Company B:
 $\begin{array}{|l|c|}
\hline &\text { Company B }\
\hline \text { Direct materials used } & \$ 9,000 \
\hline \text { Direct labor cost } & 4,000 \
\hline \text { Overhead } & \text { (a) } \
\hline \text { Total manufacturing costs } & 25,000\
\hline \text { Work in process inventory, Jan. } 1 & 1,000 \
\hline \text { Work in process inventory, Dec. } 31 & 3,500 \
\hline \text { Sales revenue } & 40,000\
\hline \text { Finished goods inventory, Jan. } 1 & \text { (b) } \
\hline \text { Cost of goods manufactured } & \text { (c) } \
\hline \text { Cost of goods available for sale } & \text { (d) } \ 
\hline \text { Finished goods inventory, Dec. } 31 & 4,000 \
\hline \text { Cost of goods sold } & 26,500 \
\hline \text { Gross margin } & \text { (e) } \
\hline \text { Operating expenses } & \text { (f) } \ 
\hline\text { Net operating income }&5,500\ 
\hline
\end{array}$

Accepted Answer

a.$12,000
b.$8,000
c

Question 6

Another term for product cost is

Accepted Answer

A)  period cost. 
B)  direct cost. 
C)  value-adding cost. 
D)  inventoriable cost. 
A)  period cost. 
B)  direct cost. 
C)  value-adding cost. 
D)  inventoriable cost.

Question 7

Yamishi Production had the following inventories for the first quarter of 20xx:
 $\begin{array}{lrr}
&\text { Beginning } &\text { Ending }\ 
\text { Materials } & \$ 606,600 & \$ 522,100 \
\text { Work in process } & 312,100 & 280,800 \
\text { Finished goods } & 416,100 & 540,200
\end{array}$

Purchases of materials during the quarter were $427,800.Total direct labor costs were incurred in the amount of $1,482,000.Actual overhead costs were incurred as follows: operating supplies used,$17,100; janitorial and maintenance,$87,300; employee benefits,$26,400; utilities,$162,000; depreciation of factory,$43,200; property taxes,$24,000; factory insurance,$29,000.Net sales for the quarter were $3,562,200.Selling and administrative expenses were $508,000.Income taxes should be computed at 40 percent.
Prepare a statement of cost of goods manufactured for the first quarter of 20xx.

Accepted Answer

The answer of Yamishi Production had the following inventories for...

Question 8

Completed but unsold units for a manufacturing firm would be included in which of the following accounts?

Accepted Answer

A)  Pending-Sale Inventory 
B)  Finished Goods Inventory 
C)  Work in Process Inventory 
D)  Materials Inventory 
A)  Pending-Sale Inventory 
B)  Finished Goods Inventory 
C)  Work in Process Inventory 
D)  Materials Inventory

Question 9

A cost driver is a cost pool that increases with activity.

Accepted Answer

A) True 
 B)False

Question 10

All manufacturing costs that are assigned to completed (but unsold)products should be classified as

Accepted Answer

A)  materials inventory costs. 
B)  overhead costs. 
C)  work in process inventory costs. 
D)  finished goods inventory costs. 
A)  materials inventory costs. 
B)  overhead costs. 
C)  work in process inventory costs. 
D)  finished goods inventory costs.

Question 11

Actual overhead plus overapplied overhead equals applied overhead.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is a source document for materials?

Accepted Answer

A)  Vendor's invoice 
B)  Materials request 
C)  Receiving report 
D)  All of these 
A)  Vendor's invoice 
B)  Materials request 
C)  Receiving report 
D)  All of these

Question 13

Recorded costs for the DC5 Division,which manufactured 6,000 units of Product DC5 during the month,are as follows: $$\begin{array} { l r } 
\text { Direct materials } & \$ 458,000 \
\text { Direct labor } & 400,000 \
\text { Indirect production costs } & 80,000 \
\text { Supervisary services } & \underline{ 40,000} \
\text { Total } &\underline{ \$ 978,000}
\end{array}$$ 
The per-unit cost of manufacturing Product DC5 this month is

Accepted Answer

A)  $163. 
B)  $152. 
C)  $170. 
D)  $150. 
A)  $163. 
B)  $152. 
C)  $170. 
D)  $150.

Question 14

Product costs for a manufacturing company consist of direct materials,direct labor,and overhead.

Accepted Answer

A) True 
 B)False

Question 15

Prime costs consist of

Accepted Answer

A)  direct materials and overhead. 
B)  direct labor and overhead. 
C)  direct labor and indirect labor. 
D)  direct materials and direct labor. 
A)  direct materials and overhead. 
B)  direct labor and overhead. 
C)  direct labor and indirect labor. 
D)  direct materials and direct labor.

Question 16

Overhead costs decrease the Work in Process Inventory account.

Accepted Answer

A) True 
 B)False

Question 17

In a manufacturing environment,costs of materials initially flow

Accepted Answer

A)  into the Work in Process Inventory account. 
B)  into the Materials Inventory account. 
C)  directly to Cost of Goods Sold. 
D)  into the Finished Goods Inventory account. 
A)  into the Work in Process Inventory account. 
B)  into the Materials Inventory account. 
C)  directly to Cost of Goods Sold. 
D)  into the Finished Goods Inventory account.

Question 18

A manufacturing company applies overhead based on direct labor hours.At the beginning of the year,it estimated that overhead costs would be $720,000 and direct labor hours would be 90,000.Actual overhead costs incurred were $754,400,and actual direct labor hours were 92,000.The entry to assign overhead costs during the year would be

Accepted Answer

A)  
$\begin{array}{ll}
\text { Overhead } & 720,000 \
\text { Cash } && 720,000
\end{array}$ 
B) 
$\begin{array}{l}
\text { WIP Inventory }&736,000 \
\text { Overhead }&&736,000
\end{array}$ 
C)  
$\begin{array}{ll}
\text { Cash } & 754,400 \
\text { Overhead } && 754,400
\end{array}$ 
D)  
$$\begin{array} { l } 
\text { Overhead } &754,400\
\text { WIP Inventory }&&754,400
\end{array}$$ 
A)  
$\begin{array}{ll}
\text { Overhead } & 720,000 \
\text { Cash } && 720,000
\end{array}$ 
B) 
$\begin{array}{l}
\text { WIP Inventory }&736,000 \
\text { Overhead }&&736,000
\end{array}$ 
C)  
$\begin{array}{ll}
\text { Cash } & 754,400 \
\text { Overhead } && 754,400
\end{array}$ 
D)  
$$\begin{array} { l } 
\text { Overhead } &754,400\
\text { WIP Inventory }&&754,400
\end{array}$$

Question 19

Period costs are consumed entirely in the current reporting period.

Accepted Answer

A) True 
 B)False

Question 20

The amount for cost of goods manufactured should be the same as the amount transferred from the Work in Process Inventory account to the Finished Goods Inventory account during the year.

Accepted Answer

A) True 
 B)False

Exam 16: Cost Concepts and Cost Allocation

A predetermined overhead rate times the amount of activity basis equals the overhead cost assigned to the product.

Cost of Goods Sold is decreased for underapplied overhead.

In which one of the following accounts would all three product costs not be found?

Another term for product cost is

Completed but unsold units for a manufacturing firm would be included in which of the following accounts?

A cost driver is a cost pool that increases with activity.

All manufacturing costs that are assigned to completed (but unsold)products should be classified as

Actual overhead plus overapplied overhead equals applied overhead.

Which of the following is a source document for materials?

Recorded costs for the DC5 Division,which manufactured 6,000 units of Product DC5 during the month,are as follows: Direct materials \ 458,000 Direct labor 400,000 Indirect production costs 80,000 Supervisary services Total The per-unit cost of manufacturing Product DC5 this month is

Product costs for a manufacturing company consist of direct materials,direct labor,and overhead.

Prime costs consist of

Overhead costs decrease the Work in Process Inventory account.

In a manufacturing environment,costs of materials initially flow

Period costs are consumed entirely in the current reporting period.

The amount for cost of goods manufactured should be the same as the amount transferred from the Work in Process Inventory account to the Finished Goods Inventory account during the year.

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Supplement - Closing Entries and the Work Sheet

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Long-Term Liabilities

Contributed Capital

Investments

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

The Changing Business Environment - a Managers Perspective

Costing Systems- Job Order Costing

Costing Systems- Process Costing

Value-Based Systems- Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, incltarget Costing and Transfer Pricing

Quality Management and Measurement

Financial Analysis of Performance

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