Question 1

Job-cost records for Boucher Company contained the following data:
  
Required:
a.Compute WIP inventory at 30 June.
b.Compute finished goods inventory at 30 June.
c.Compute cost of goods sold for June.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Job-cost records for Boucher Company contained the...

Question 2

In the weighted-average costing method,the costs of direct materials in beginning inventory are not included in the cost per unit calculation since direct materials are added at the start of the production process.

Accepted Answer

A) True 
 B)False

Question 3

To calculate weighted-average conversion cost per equivalent unit,you divide total conversion costs to date by total equivalent units of work done to date.

Accepted Answer

A) True 
 B)False

Question 4

Answer the following questions using the information below:
Queanbeyan Company incurred fixed manufacturing costs of $7200 during 2018.Other information for 2018 includes:
The budgeted denominator level is 800 units.
Units produced total 1000 units.
Units sold total 950 units.
Beginning inventory was zero.
The fixed manufacturing cost rate is based on the budgeted denominator level.Manufacturing variances are closed to cost of goods sold.
-Under absorption costing,fixed manufacturing costs expensed on the income statement (excluding adjustments for variances)total:

Accepted Answer

A) $8550 
B) 0 
C) $7200 
D) $9000

Question 5

An updated costing system should:

Accepted Answer

A) provide all information for management decision needs. 
B) focus specifically on the costing needs of the CFO. 
C) be tailored to fit the underlying operations rather than the current cost system. 
D) be installed even if the costs outweigh the additional benefits.

Question 6

A ________ links an indirect cost to a cost object.

Accepted Answer

A) cost assignment 
B) cost-allocation base 
C) cost pool 
D) cost tracing

Question 7

A major advantage of the weighted average process costing is that it provides managers with information about changes in the costs per unit from one period to the next.

Accepted Answer

A) True 
 B)False

Question 8

Answer the following questions using the information below:
Sunny Company makes gas pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $15 per direct labour-hour.The following data are obtained from the accounting records for June 2018:
 $$\begin{array} { l r } 
\text { Direct materials } & \$ 280000 \
\text { Direct labour (7000 hours @ } \$ 11 / \text { hour) } & \$ 77000 \
\text { Ind irect labour } & \$ 20000 \
\text { Plant facility rent } & \$ 60000 \
\text { Deprecia tion on plant machinery and equipment } & \$ 30000 \
\text { Sales commissions } & \$ 40000 \
\text { Administrative expenses } & \$ 50000
\end{array}$$
-Proration is the spreading of underallocated or overallocated overhead among ending work in process,finished goods,and costs of goods sold.

Accepted Answer

A) True 
 B)False

Question 9

Peterson's Plastic Products Company makes rainwater tanks and applies manufacturing costs to production at a budgeted indirect-cost rate of $8 per direct labour-hour.The following data are obtained from the accounting records for June 2018:
 $\begin{array}{ll}
\text { Direct materials } & \$ 400000 \
\text { Direct labour (8000 hours @\$11/hour) } & \$ 88000 \
\text { Ind irect labour } & \$ 10000 \
\text { Plant facility rent } & \$ 50000 \
\text { Deprecia tion on plant machinery and equipment } & \$ 20000 \
\text { Sales commissions } & \$ 30000 \
\text { Administrative expenses } & \$ 40000
\end{array}$ 
Required:
a.What actual amount of manufacturing overhead costs was incurred during June 2018?
b.What amount of manufacturing overhead was allocated to all jobs during June 2018?
c.For June 2018,was manufacturing overhead underallocated or overallocated? Explain.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Peterson's Plastic Products Company makes rainwater tanks...

Question 10

The ________ approach adjusts individual job-cost records to account for underallocated or overallocated overhead.

Accepted Answer

A) proration 
B) adjusted allocation-rate 
C) write-off to cost of goods sold 
D) Both A and B are correct.

Question 11

Marv and Vicki own and operate a vegetable canning plant.In recent years,their business has grown tremendously and,at any point in time,they may have 30 to 35 different vegetables being processed.Also,during the peak summer months there are several thousand bushels of vegetables in some stage of processing at any one time.With the company's growth during the past few years,the owners decided to employ an accountant to provide cost estimations on each vegetable category and prepare monthly financial statements.Although the accountant is doing exactly as instructed,Marv and Vicki are confused about the monthly operating costs.Although they process an average of 50 000 canned units a month,the monthly production report fluctuates wildly.
Required:
Explain how the production report can fluctuate wildly if they process a constant amount of vegetables each month.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Marv and Vicki own and operate a...

Question 12

Transferred-in costs are incurred in previous departments that are carried forward as the product's cost as it moves to a subsequent process in the production cycle.

Accepted Answer

A) True 
 B)False

Question 13

The weighted-average process costing method does not distinguish between units started in the previous period but completed during the current period and units started and completed during the current period.

Accepted Answer

A) True 
 B)False

Question 14

FIFO Aluminium processes a single type of aluminium.During the current period the following information was given:
$$\begin{array} { | l | r | r | r | } 
\hline &  { \text { Units } } & \text { Material Costs } & \text { Conversion Costs } \
\hline \text { Beginning Inventory } & 3000 & \$ 4500 & \text { \$4800 } \
\hline \text { Started During the Curent Period } & 20000 & 48000 &  6 5 0 0 0  \
\hline \text { Ending Inventory } & 2500 & & \
\hline
\end{array}$$
All materials are added at the beginning of the production process.The beginning inventory was 30% complete as to conversion,while the ending inventory was 40% completed for conversion purposes.
FIFO Aluminium uses the first-in,first-out system of process costing.
What were the costs assigned to the units transferred out this period (round equivalent unit cost to the nearest cent)?

Accepted Answer

A) $113 980 
B) $113 236 
C) $122 300 
D) $113 160

Question 15

What is the assignment of direct costs to a cost object called?
Variant question

Accepted Answer

A) Cost assignment 
B) Cost allocation 
C) Cost tracing 
D) Cost pooling

Question 16

Answer the following questions using the information below:
Sunny Company makes gas pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $15 per direct labour-hour.The following data are obtained from the accounting records for June 2018:
 $$\begin{array} { l r } 
\text { Direct materials } & \$ 280000 \
\text { Direct labour (7000 hours @ } \$ 11 / \text { hour) } & \$ 77000 \
\text { Ind irect labour } & \$ 20000 \
\text { Plant facility rent } & \$ 60000 \
\text { Deprecia tion on plant machinery and equipment } & \$ 30000 \
\text { Sales commissions } & \$ 40000 \
\text { Administrative expenses } & \$ 50000
\end{array}$$
-The following information was gathered for Rogers Company for the year ended 31 December 2018.
 $$\begin{array} { l c c } 
& \text { Budgeted } & \text { Actual } \
\text { Direct labour-hours } & 60000 \mathrm { dlh } & 67500 \mathrm { dlh } \
\text { Factory overhead } & \$ 420000 & \$ 458000
\end{array}$$ 
Assume that direct labour-hours are the cost-allocation base.
Required
a.Compute the budgeted factory overhead rate.
b.Compute the factory overhead applied.
c.Compute the amount of over/underapplied overhead.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Accepted Answer

The answer of Answer the following questions using the information...

Question 17

The percentage complete for beginning work in process is used in the weighted-average method.

Accepted Answer

A) True 
 B)False

Question 18

The equivalent unit concept is a means by which a process-costing system can compare partially completed work done in each of the various process categories to obtain a total measure of work done.

Accepted Answer

A) True 
 B)False

Question 19

Examples of industries that would use process costing include the pharmaceutical and semiconductor industry.

Accepted Answer

A) True 
 B)False

Question 20

What source document is used to keep track of direct labour for a job?

Accepted Answer

A) Material requisition 
B) Balanced scorecard 
C) Cost object sheet 
D) Job-cost record

Exam 6: Estimating the Costs of Products and Inventory

Job-cost records for Boucher Company contained the following data: Required: a.Compute WIP inventory at 30 June. b.Compute finished goods inventory at 30 June. c.Compute cost of goods sold for June. _ _

In the weighted-average costing method,the costs of direct materials in beginning inventory are not included in the cost per unit calculation since direct materials are added at the start of the production process.

To calculate weighted-average conversion cost per equivalent unit,you divide total conversion costs to date by total equivalent units of work done to date.

An updated costing system should:

A ________ links an indirect cost to a cost object.

A major advantage of the weighted average process costing is that it provides managers with information about changes in the costs per unit from one period to the next.

The ________ approach adjusts individual job-cost records to account for underallocated or overallocated overhead.

Transferred-in costs are incurred in previous departments that are carried forward as the product's cost as it moves to a subsequent process in the production cycle.

The weighted-average process costing method does not distinguish between units started in the previous period but completed during the current period and units started and completed during the current period.

What is the assignment of direct costs to a cost object called? Variant question

The percentage complete for beginning work in process is used in the weighted-average method.

The equivalent unit concept is a means by which a process-costing system can compare partially completed work done in each of the various process categories to obtain a total measure of work done.

Examples of industries that would use process costing include the pharmaceutical and semiconductor industry.

What source document is used to keep track of direct labour for a job?