Grand acc650 week 1 quiz latest 2016 oct ( 85% ) grades

Which of the following is the correct method to calculate a predetermined overhead rate?

Budgeted total manufacturing cost ? budgeted amount of cost driver.

Budgeted overhead cost ? budgeted amount of cost driver.

Budgeted amount of cost driver ? budgeted overhead cost.

Actual overhead cost ? budgeted amount of cost driver.

Actual overhead cost ? actual amount of cost driver.

Serina Manufacturing recently sold goods that cost $35,000 for $45,000 cash. The journal entries to record this transaction would include:

a credit to Work-in-Process Inventory for $35,000.

a debit to Sales Revenue for $45,000.

a credit to Profit on Sale for $10,000.

a debit to Finished-Goods Inventory for $35,000.

a credit to Sales Revenue for $45,000.

Reynardo Company incurred $90,000 of depreciation for the year. Eighty percent relates to the firm's production facilities, and 20% relates to sales and administrative offices. If all items are handled in the proper manner, a review of the company's accounting records should reveal a:

debit to Depreciation Expense for $90,000.

debit to Manufacturing Overhead for $90,000.

debit to Manufacturing Overhead for $72,000.

debit to Work-in-Process Inventory for $18,000.

credit to Cash for $90,000.

Product costs are:

expensed when incurred.

inventoried.

treated in the same manner as period costs.

treated in the same manner as advertising costs.

subtracted from cost of goods sold.

The accounting records of Georgia Company revealed the following costs: direct materials used, $250,000; direct labor, $425,000; manufacturing overhead, $375,000; and selling and administrative expenses, $220,000. Georgia's product costs total:

$1,050,000.

$830,000.

$895,000.

$1,270,000.

some other amount.

The accounting records of Bronco Company revealed the following information:

Raw material used: $60,000

Direct labor: 125,000

Manufacturing overhead: 360,000

Work-in-process inventory, 1/1: 50,000

Finished-goods inventory, 1/1: 189,000

Work-in-process inventory, 12/31: 76,000

Finished-goods inventory, 12/31: 140,000

Bronco's cost of goods manufactured is:

$519,000.

$522,000.

$568,000.

$571,000.

some other amount.

Mahler, Inc., applies manufacturing overhead at the rate of $40 per machine hour. Budgeted machine hours for the current period were anticipated to be 120,000; however, a lengthy strike resulted in actual machine hours being worked of only 90,000. Budgeted and actual manufacturing overhead figures for the year were $4,800,000 and $4,180,000, respectively. On the basis of this information, the company's year-end overhead was:

overapplied by $580,000.

underapplied by $580,000.

overapplied by $1,200,000.

underapplied by $1,200,000.

underapplied by $900,000.

The true statement about cost behavior is that:

variable costs are constant on a per-unit basis and change in total as activity changes.

fixed costs are constant on a per-unit basis and change in total as activity changes.

fixed costs are constant on a per-unit basis and constant in total as activity changes.

variable costs change on a per-unit basis and change in total as activity changes.

variable costs are constant on a per-unit basis and are constant in total as activity changes.

The accounting records of Diego Company revealed the following costs, among others:

Factory insurance: $32,000

Raw material used: 256,000

Customer entertainment: 15,000

Indirect labor: 45,000

Depreciation on salespersons' cars: 22,000

Production equipment rental costs: 72,000

Costs that would be considered in the calculation of manufacturing overhead total:

$149,000.

$171,000.

$186,000.

$442,000.

some other amount.

Which of the following statements represents a similarity between financial and managerial accounting?

Both are useful in providing information for external users.

Both are governed by GAAP.

Both draw upon data from an organization's accounting system.

Both rely heavily on published financial statements.

Both are solely concerned with historical transactions.

The accounting records of Brownwood Company revealed the following information:

Work-in-process inventory, Jan 1: $58,000

Work-in-process inventory, Dec 31: 49,000

Finished-goods inventory, Jan 1: 125,000

Finished-goods inventory, Dec 31: 158,000

Cost of goods manufactured: 754,000

Brownwood's cost of goods sold is:

$721,000.

$730,000.

$778,000.

$787,000.

some other amount.

Huxtable charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of machine hours. The following data pertain to the current year:

Budgeted manufacturing overhead: $480,000

Actual manufacturing overhead: $440,000

Budgeted machine hours: 20,000

Actual machine hours: 16,000

Overhead applied to production totaled:

$352,000.

$384,000.

$550,000.

$600,000.

some other amount.

The choices below depict five costs of Benton Corporation and a possible driver for each cost. Which of these choices likely contains an inappropriate cost driver?

Gasoline consumed; number of miles driven.

Manufacturing overhead incurred in a heavily automated facility; direct labor hours.

Sales commissions; gross sales revenue.

Building maintenance cost; building square footage.

Human resources department cost; number of employees.

Strong Company applies overhead based on machine hours. At the beginning of 20x1, the company estimated that manufacturing overhead would be $500,000, and machine hours would total 20,000. By 20x1 year-end, actual overhead totaled $525,000, and actual machine hours were 25,000. On the basis of this information, the 20x1 predetermined overhead rate was:

$0.04 per machine hour.

$0.05 per machine hour.

$20 per machine hour.

$21 per machine hour.

$25 per machine hour.

Sting Corporation debited Cost of Goods Sold and credited Manufacturing Overhead at year-end. On the basis of this information, one can conclude that:

budgeted overhead exceeded actual overhead.

budgeted overhead exceeded applied overhead.

budgeted overhead was less than applied overhead.

actual overhead exceeded applied overhead.

actual overhead was less than applied overhead.

Manufacturing overhead:

includes direct materials, indirect materials, indirect labor, and factory depreciation.

is easily traced to jobs.

includes all selling costs.

should not be assigned to individual jobs because it bears no obvious relationship to them.

is a pool of indirect production costs that must somehow be attached to each unit manufactured.

Electricity costs that were incurred by a company's production processes should be debited to:

Utilities Expense.

Accounts Payable.

Cash.

Manufacturing Overhead.

Work-in-Process Inventory.

Much of managerial accounting information is based on:

a cost-benefit theme.

profit maximization.

cost minimization.

the generation of external information.

effectiveness but not efficiency.

Glass Industries reported the following data for the year just ended: sales revenue, $1,750,000; cost of goods sold, $980,000; cost of goods manufactured, $560,000; and selling and administrative expenses, $170,000. Glass' gross margin would be:

$940,000.

$1,190,000.

$1,020,000.

$380,000.

$770,000.

Managerial accounting:

focuses only on historical data.

is governed by GAAP.

focuses primarily on the needs of personnel within the organization.

provides information for parties external to the organization.

focuses on financial statements and other financial reports.