Deck 9: Recording and Evaluating Conversion Process Activities

Question 1

Which of the following is an activity of the conversion process?

A)Schedule production
B)Pay salary of Chief Financial Officer
C)Pay freight to ship finished inventory
D)Sell finished goods

Answer 1

Schedule production

Question 2

The journal entry to record the application of manufacturing overhead to work in process includes a:

A)debit to Indirect Materials
B)credit to Manufacturing Overhead
C)credit to Work-in-Process Inventory
D)debit to Cost of Goods Manufactured

Answer 2

credit to Manufacturing Overhead

Question 3

The journal entry to record the purchase of direct materials on account would include a:

A)debit to Manufacturing Overhead
B)debit to Raw Materials Inventory
C)credit to Accounts Receivable
D)credit to Cash

Answer 3

debit to Raw Materials Inventory

Question 4

Using the numbers 1-6 indicate the correct order the steps in developing and applying ABC application rates that are listed below.
_____
A.Determine the appropriate cost driver for each activity.
_____
B.Determine the predetermined overhead rate for each cost driver.
_____
C.Estimate the amount of overhead related to each cost driver.
_____
D.Identify and classify production activities by level.
_____
E.Estimate the amount of each cost driver to be used.
_____
_____ F.Apply manufacturing overhead to Work-in-Process Inventory using the

Question 5

The journal entry to record depreciation on production equipment would include a:

A)debit to Accumulated Depreciation - Equipment
B)credit to Work-in-Process Inventory
C)debit to Manufacturing Overhead
D)credit to Cash

Question 6

Depreciation on factory equipment is a(n):

A)selling and administrative cost
B)manufacturing overhead cost
C)other income (expense)D)indirect material

Question 7

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

A)Direct labor
B)Requisition of raw material
C)Purchase of raw material
D)Application of overhead

Question 8

The cost of the wages of assembly line workers is:

A)direct labor
B)indirect labor
C)manufacturing overhead
D)selling and administrative

Question 9

The estimated amount of overhead per cost driver is referred to as the:

A)predetermined overhead rate
B)accounting cost rate
C)overhead cost pool
D)activity cost pool

Question 10

Which of the following is not considered manufacturing overhead?

A)Depreciation on factory equipment
B)Supervisors salaries
C)Cost of utilities for factory
D)Depreciation on warehouse that stores finished goods

Question 11

The journal entry to record the requisition of indirect materials from the raw materials storeroom and the transfer of the materials to the factory would include a:

A)credit to Cost of Goods Manufactured
B)debit to Work-in-Process Inventory
C)debit to Manufacturing Overhead
D)credit to Accounts Payable

Question 12

The journal entry to record wages earned by assembly line workers would include a:

A)credit to Indirect Labor
B)debit to Manufacturing Overhead
C)debit to Work-in-Process Inventory
D)credit to Cost of Goods Manufactured

Question 13

A group of costs that change in response to changes in the same cost driver referred to as:

A)a cost pool
B)activity costs
C)conversion costs
D)a cost accumulation group

Question 14

This prenumbered document is issued by the production function and triggers the manufacture of the company's product.

A)Materials requisition
B)Production order
C)Job cost record
D)Sales invoice

Question 15

The journal entry to record wages earned by the factory maintenance personnel would include a:

A)credit to Direct Labor
B)credit to Administrative Wages
C)debit to Manufacturing Overhead
D)debit to Work-in-Process Inventory

Question 16

The entry to deal with the over application of overhead during a time period is:

A)
B)
C)
D)

Question 17

Which of the following is not one of the activities of the conversion process?

A)Labor cost to assemble product
B)Freight cost paid to obtain raw material
C)Depreciation on raw materials warehouse
D)Cost to ship finished product to customer

Question 18

Which of the following documents does not generate an accounting entry?

A)Production order
B)Materials requisition
C)Job cost record
D)All generate an accounting entry

Question 19

Which of the following is included in cost of work-in-process?

A)Depreciation on finished goods warehouse
B)Cost to ship finished goods to customer
C)Salary of manager of raw materials warehouse
D)Salary of vice president of finance

Question 20

Which of the following is not one of the activities of the conversion process?

A)Schedule production
B)Obtain raw material
C)Use labor and other manufacturing resources to create finished goods.
D)Selling finished goods

Question 21

The journal entry to record the completion and transfer of the cost of goods manufactured includes a:

A)debit to Cost of Goods Sold
B)debit to Manufacturing Overhead
C)credit to Finished Goods Inventory
D)credit to Work-in-Process Inventory

Question 22

Overapplied manufacturing overhead exists when:

A)there is a debit balance in the manufacturing overhead account at the end of the period
B)actual manufacturing overhead is less than applied manufacturing overhead
C)the products manufactured during a period are undercosted
D)applied overhead is larger that direct labor

Question 23

The journal entry to record the sale of a product,assuming a perpetual inventory system,would include a:

A)debit to Sales Revenue
B)credit to Cost of Goods Sold
C)debit to Work-in-Process Inventory
D)credit to Finished Goods Inventory

Question 24

Microsmart,Inc.'s ending balances for Work-in-Process and Finished Goods Inventory were $365,800 and $743,200,respectively.The unadjusted Cost of Goods Sold was $1,543,700,and underapplied manufacturing overhead amounted to $148,000,which was deemed significant.When Microsmart closed out the underapplied manufacturing overhead,the Cost of Goods Sold account would have been: (rounded to the nearest whole dollar)

A)credited for $148,000
B)debited for $106,324
C)debited for $86,126
D)credited for $14,189

Question 25

Which of the following is not associated with the manufacture and sale of a product?

A)Finished Goods Inventory
Work-in-Process
B)Cost of Goods Sold
Finished Goods Inventory
A/R
Sales
C)Work-in-Process
Raw Material Inventory
D)Manufacturing Overhead
Work-in-Process

Question 26

When a product has completed the manufacturing process what is the journal entry to record the transfer of its cost?

A)debit to Cost of Goods Sold credit Work-in-Process
B)debit to Finished Goods credit of Work-in-Process
C)debit to Cost of Good Sold credit to Finished Goods Inventory
D)debit to Work-in-Process Inventory credit to Finished Good Inventory

Question 27

The activity "setting up machines" is part of the activity level:

A)product sustaining
B)facility sustaining
C)batch related
D)unit related

Question 28

Use the following to answer questions
Sarasota Copy Company applies batch-related manufacturing overhead on the basis of the number of production runs. The following information is available:

The amount of over/underapplied manufacturing overhead is:

A)$71,370 underapplied
B)$54,250 underapplied
C)$17,120 underapplied
D)$54,250 overapplied

Question 29

When the amount of over-underapplied manufacturing overhead is small,the Manufacturing Overhead account is generally closed out to:

A)Cost of Goods Sold
B)Work-in-Process Inventory
C)Cost of Goods Manufactured
D)Finished Goods Inventory,Work-in-Process Inventory,and Cost of Goods Sold

Question 30

When the amount of over-underapplied manufacturing overhead is large,the Manufacturing Overhead account is generally closed out to:

A)Cost of Goods Sold
B)Work-in-Process Inventory
C)Cost of Goods Manufactured
D)Finished Goods Inventory,Work-in-Process Inventory,and Cost of Goods Sold

Question 31

Use the following to answer questions
Giltronics, Inc. applies materials handling manufacturing overhead on the basis of the number of moves required. The following information is available:

The amount of manufacturing overhead applied to Work-in-Process Inventory is:

A)$94,300
B)$87,400
C)$87,043
D)$80,674

Question 32

Use the following to answer questions
Sarasota Copy Company applies batch-related manufacturing overhead on the basis of the number of production runs. The following information is available:

The predetermined manufacturing overhead rate per production run is:

A)$1,582
B)$1,693
C)$1,550
D)$1,448

Question 33

The entry to close out a significant amount of overapplied manufacturing overhead would affect all of the below except:

A)decrease the cost of goods manufactured
B)decrease finished goods inventory
C)increase cost of goods sold
D)increase net income

Question 34

The entry to close out a small amount of overapplied manufacturing overhead would:

A)decrease the cost of goods manufactured
B)decrease finished goods inventory
C)increase cost of goods sold
D)increase net income

Question 35

All of the following are activity levels except:

A)unit related
B)driver related
C)facility sustaining
D)product sustaining

Question 36

Use the following to answer questions
Giltronics, Inc. applies materials handling manufacturing overhead on the basis of the number of moves required. The following information is available:

The predetermined manufacturing overhead rate per move is:

A)$37
B)$38
C)$41
D)$42

Question 37

The costing system that reflects the amount of raw materials purchased,direct labor used,and manufacturing overhead applied in the Cost of Goods Sold account is the:

A)backflush costing system
B)job order costing system
C)process costing system
D)direct costing system

Question 38

The activity "maintaining parts inventory" is part of the activity level:

A)product sustaining
B)facility sustaining
C)batch related
D)unit related

Question 39

Underapplied manufacturing overhead exists when:

A)there is a debit balance in the manufacturing overhead account at the end of the period
B)actual manufacturing overhead is less than applied manufacturing overhead
C)the products manufactured during a period are undercosted
D)applied overhead is larger that direct labor

Question 40

Use the following to answer questions
Sarasota Copy Company applies batch-related manufacturing overhead on the basis of the number of production runs. The following information is available:

The amount of manufacturing overhead applied to Work-in-Process Inventory is:

A)$846,370
B)$829,250
C)$775,000
D)$745,000

Question 41

Which of the following is not an inventory account for a manufacturer?

A)raw materials
B)finished goods
C)work-in-process
D)manufacturing overhead inventory

Question 42

Use the following to answer questions
Giltronics, Inc. applies materials handling manufacturing overhead on the basis of the number of moves required. The following information is available:

The amount of over- underapplied manufacturing overhead is:

A)$7,257 underapplied
B)$6,369 underapplied
C)$6,900 overapplied
D)$ 357 overapplied

Question 43

Reynolds Company has estimated its finished goods inventory-handling costs at $240,000.It has determined that an appropriate cost driver is the number of units completed.It estimates that 500,000 units will be completed this year.If 40,000 units are completed during the current month,what amount of inventory-handling cost should be recognized?

A)$83,333
B)$24,000
C)$20,000
D)$19,200

Question 44

Which of the following is an example of a manufacturing overhead cost?

A)salary of firm president
B)lease payments on factory
C)wages of machine operators
D)depreciation of delivery trucks

Question 45

Use the following to answer questions
Dodd Corporation used $90,000 of direct material, $112,000 of direct labor, and applied $104,000 of manufacturing overhead during July. Its beginning and ending work-in-process and finished goods inventories were as follows:

The differences between standard and actual financial amounts of inputs are referred to as:

A)standard deviations
B)variances
C)appraisals
D)exceptions

Question 46

Winslett Company had a $34,000 beginning balance in its raw materials inventory and a $30,000 ending balance.During the period $197,000 of raw materials was purchased.What amount of raw materials was used?

A)$201,000
B)$197,000
C)$193,000
D)$ 4,000

Question 47

Use the following to answer questions
Dodd Corporation used $90,000 of direct material, $112,000 of direct labor, and applied $104,000 of manufacturing overhead during July. Its beginning and ending work-in-process and finished goods inventories were as follows:

What was Dodd's cost of goods manufactured for July?

A)$314,000
B)$306,000
C)$298,000
D)$390,000

Question 48

Use the following to answer questions
Keowee Enterprises began the year with $165,700 of finished goods inventory. During the year the company manufactured goods costing $689,200. At the end of the year, $194,100 of finished goods remained in inventory. Actual manufacturing overhead was $235,800, estimated manufacturing overhead was $230,000, and manufacturing overhead applied totaled $221,500.
The cost of goods available for sale was:

A)$660,800
B)$717,600
C)$854,900
D)$883,300

Question 49

Use the following to answer questions
Dodd Corporation used $90,000 of direct material, $112,000 of direct labor, and applied $104,000 of manufacturing overhead during July. Its beginning and ending work-in-process and finished goods inventories were as follows:

The standard cost for direct labor is $190,000 if the company produces 15,200 units of product.Actual direct labor cost to produce 15,800 units of product totaled $213,300.What is price variance and is it favorable or unfavorable?

A)$19,800 Unfavorable
B)$23,300 Unfavorable
C)$19,800 Favorable
D)$23,300 Favorable

Question 50

Suranden Company manufacturers oil-drilling equipment.The utilities costs incurred in machining the drilling equipment is an example of what kind of cost?

A)product sustaining
B)facility sustaining
C)batch related
D)unit related

Question 51

Paltrow Corporation applies unit-related overhead at the rate of $100 per direct-labor hour.If 3,000 direct labor hours were used,which of the following entries should be made?

A)debit to finished goods and credit to manufacturing overhead
B)debit to manufacturing overhead and credit to finished goods
C)debit to work-in-process and credit to manufacturing overhead
D)debit to manufacturing overhead and credit to work-in-process

Question 52

Hunter Corporation,a computer manufacturer,tests each completed computer before shipping it.This is an example of what kind of cost?

A)product sustaining
B)facility sustaining
C)batch related
D)unit related

Question 53

Use the following to answer questions
Keowee Enterprises began the year with $165,700 of finished goods inventory. During the year the company manufactured goods costing $689,200. At the end of the year, $194,100 of finished goods remained in inventory. Actual manufacturing overhead was $235,800, estimated manufacturing overhead was $230,000, and manufacturing overhead applied totaled $221,500.
Assuming the over-underapplied manufacturing overhead was considered small and,therefore,closed out to Cost of Goods Sold,the cost of goods sold reported on the income statement for the period was:

A)$646,500
B)$675,100
C)$683,600
D)$703,300

Question 54

Which of the following shows the order of cost flows through the manufacturing inventories?

A)raw materials,finished goods,work-in-process
B)raw materials,work-in-process,finished goods
C)work-in-process,raw materials,finished goods
D)work-in-process,finished goods,raw materials

Question 55

Use the following to answer questions
Dodd Corporation used $90,000 of direct material, $112,000 of direct labor, and applied $104,000 of manufacturing overhead during July. Its beginning and ending work-in-process and finished goods inventories were as follows:

The standard cost for direct labor is $190,000 if the company produces 15,200 units of product.Actual direct labor cost to produce 15,800 units of product totaled $213,300.What is the standard cost for direct labor at the actual level of production:

A)$190,000
B)$197,500
C)$205,200
D)$213,300

Question 56

Use the following to answer questions
Fostoria Corporation began the current period with $21,975 of raw materials, purchased $97,950 of raw materials during the period, and ended the period with $30,205 of raw materials. Indirect materials used and indirect labor totaled $16,950 and $25,320, respectively.
The total amount of raw materials put into production during the current period was:

A)$119,925
B)$97,950
C)$89,720
D)$106,670

Question 57

Use the following to answer questions
Dodd Corporation used $90,000 of direct material, $112,000 of direct labor, and applied $104,000 of manufacturing overhead during July. Its beginning and ending work-in-process and finished goods inventories were as follows:

What was Lange's cost of goods sold for July?

A)$320,000
B)$314,000
C)$308,000
D)$348,000

Question 58

Crawford,Inc.,manufacturers lamps.Which of the following is a direct labor cost?

A)wages of machine operators
B)wages of shop foreperson
C)salary of office manager
D)salary of president

Question 59

Use the following to answer questions
Keowee Enterprises began the year with $165,700 of finished goods inventory. During the year the company manufactured goods costing $689,200. At the end of the year, $194,100 of finished goods remained in inventory. Actual manufacturing overhead was $235,800, estimated manufacturing overhead was $230,000, and manufacturing overhead applied totaled $221,500.
The amount of over- underapplied manufacturing overhead was:

A)$ 5,800 underapplied
B)$14,300 underapplied
C)$ 8,500 overapplied
D)$ 2,700 overapplied

Question 60

Use the following to answer questions
Keowee Enterprises began the year with $165,700 of finished goods inventory. During the year the company manufactured goods costing $689,200. At the end of the year, $194,100 of finished goods remained in inventory. Actual manufacturing overhead was $235,800, estimated manufacturing overhead was $230,000, and manufacturing overhead applied totaled $221,500.
The unadjusted cost of goods sold was:

A)$854,900
B)$717,600
C)$675,100
D)$660,800

Question 61

Use the following to answer questions
Hurricane, Inc. manufactures hurricane lamps. Selected data regarding standard costs follow:
Selected actual results for the month of August are shown below:

The direct materials price variance is:

A)$3,750F
B)$3,850F
C)$3,880U
D)$4,000U

Question 62

Use the following to answer questions
The following information relates to Andrews, Inc. for April:

Determine the cost of direct materials issued into production.

A)$524,000
B)$306,000
C)$258,000
D)$250,000

Question 63

Use the following to answer questions
BAK Systems, Inc. gathered the following direct labor cost information for the month of July:

The direct labor usage variance is:

A)$15,275U
B)$23,975U
C)$15,730F
D)$23,520F

Question 64

Use the following to answer questions
Hurricane, Inc. manufactures hurricane lamps. Selected data regarding standard costs follow:
Selected actual results for the month of August are shown below:

The direct labor price variance is:

A)$2,850U
B)$2,925F
C)$4,125F
D)$4,200U

Question 65

Use the following to answer questions
Dodd Corporation used $90,000 of direct material, $112,000 of direct labor, and applied $104,000 of manufacturing overhead during July. Its beginning and ending work-in-process and finished goods inventories were as follows:

The standard cost for direct material is $45,000 if the company produces 10,000 units of product.Actual direct materials used to produce 10,500 units of product amounted to $48,300.What is the standard cost for the direct material at the actual level of production.

A)$45,000
B)$46,000
C)$47,250
D)$48,300

Question 66

Use the following to answer questions
J & C Electronics, Inc. gathered the following direct materials cost information for the month of March:

The direct materials price variance is:

A)$ 4,250U
B)$ 4,425F
C)$11,865U
D)$12,145F

Question 67

The direct labor price variance is calculated as:

A)(Actual Price - Standard Price)x Actual Quantity
B)(Standard Price - Actual Price)x Standard Quantity Allowed
C)(Standard Quantity Allowed - Actual Quantity)x Actual Price
D)(Actual Quantity - Standard Quantity Allowed)x Standard Price

Question 68

Use the following to answer questions
Dodd Corporation used $90,000 of direct material, $112,000 of direct labor, and applied $104,000 of manufacturing overhead during July. Its beginning and ending work-in-process and finished goods inventories were as follows:

The standard cost for facility sustaining manufacturing overhead is $536,000 if the company produces 78,000 units of product.Actual facility sustaining manufacturing overhead to produce 79,500 units of product was $531,500.What is the standard cost of sustaining manufacturing overhead at the actual level of production?

A)$521,472
B)$531,500
C)$536,000
D)$546,308

Question 69

Use the following to answer questions
Hurricane, Inc. manufactures hurricane lamps. Selected data regarding standard costs follow:
Selected actual results for the month of August are shown below:

The direct materials usage variance is:

A)$ 750U
B)$ 780F
C)$3,000U
D)$3,750F

Question 70

Use the following to answer questions
The following information relates to Andrews, Inc. for April:

Determine the cost of goods manufactured.

A)$1,084,000
B)$1,210,000
C)$1,231,000
D)$1,336,000

Question 71

Use the following to answer questions
Hurricane, Inc. manufactures hurricane lamps. Selected data regarding standard costs follow:
Selected actual results for the month of August are shown below:

The direct labor usage variance is:

A)$2,850U
B)$2,925F
C)$4,125F
D)$4,200U

Question 72

Use the following to answer questions
J & C Electronics, Inc. gathered the following direct materials cost information for the month of March:

The direct materials usage variance is:

A)$4,250U
B)$4,425F
C)$6,800U
D)$7,080F

Question 73

The direct labor usage variance is calculated as:

A)(Standard Price - Actual Price)x Actual Quantity
B)(Actual Price - Standard Price)x Standard Quantity Allowed
C)(Standard Quantity Allowed - Actual Quantity)x Actual Price
D)(Actual Quantity - Standard Quantity Allowed)x Standard Price

Question 74

The direct materials price variance is calculated as:

A)(Standard Price - Actual Price)x Standard Quantity Allowed
B)(Actual Price - Standard Price)x Actual Quantity Purchased
C)(Standard Quantity Allowed - Actual Quantity Purchased)x Actual Price
D)(Actual Quantity Purchased - Standard Quantity Allowed)x Standard Price

Question 75

Use the following to answer questions
Hurricane, Inc. manufactures hurricane lamps. Selected data regarding standard costs follow:
Selected actual results for the month of August are shown below:

The direct materials inventory variance is:

A)$ 750U
B)$ 780F
C)$3,000U
D)$3,750F

Question 76

The direct materials inventory variance is calculated as:

A)(Actual Price - Standard Price)x Actual Quantity Used
B)(Standard Price - Actual Price)x Standard Quantity Allowed
C)(Actual Quantity Used - Actual Quantity Purchased)x Actual Price
D)(Actual Quantity Purchased - Actual Quantity Used)x Standard Price

Question 77

Use the following to answer questions
Hurricane, Inc. manufactures hurricane lamps. Selected data regarding standard costs follow:
Selected actual results for the month of August are shown below:

Which of the following statements about variance analysis is correct?

A)All variances should be investigated
B)Favorable price variances should be rewarded
C)Unfavorable quantity variances are the fault of production
D)Management should investigate only variances that are relatively large

Question 78

Use the following to answer questions
BAK Systems, Inc. gathered the following direct labor cost information for the month of July:

The direct labor price variance is:

A)$15,730U
B)$23,975U
C)$15,275F
D)$23,520F

Question 79

Use the following to answer questions
J & C Electronics, Inc. gathered the following direct materials cost information for the month of March:

The direct materials inventory variance is:

A)$4,250F
B)$4,425U
C)$6,800F
D)$7,080U

Question 80

The direct materials usage variance is calculated as:

A)(Standard Price - Actual Price)x Actual Quantity Used
B)(Actual Price - Standard Price)x Standard Quantity Allowed
C)(Standard Quantity Allowed - Actual Quantity Used)x Actual Price
D)(Actual Quantity Used - Standard Quantity Allowed)x Standard Price