Southwestern ACCT111 Chapter 1-3 Test Latest 2021

ACCT111 Managerial Accounting

Chapter 1-3 Test

Question 1What activities and responsibilities are not associated with management's functions?

Planning

Accountability

Controlling

Directing

Question 2Both direct materials and indirect materials are

raw materials

manufacturing overhead.

merchandise inventory.

sold directly to customers by a manufacturing company.

Question 3The work of factory employees that can be physically and directly associated with converting raw materials into finished goods is

Manufacturing overhead

indirect materials

indirect labor

direct labor

Question 4Manufacturing costs include

direct materials and direct labor only.

direct materials and manufacturing overhead only

direct labor and manufacturing overhead only.

direct materials, direct labor, and manufacturing overhead.

Question 5A manufacturing process requires small amounts of glue. The glue used in the production process is classified as a(n)

indirect material

period cost

indirect material

direct material

miscellaneous expense

Question 6Which of the following is not classified as direct labor?

bottlers of beer in a brewery

copy machine operators at a copy shop

wages of supervisors

bakers in a bakery

Question 7Which one of the following is an example of a period cost?

A change in benefits for the union workers who work in the New York plant of a Fortune 1000 manufacturer

Workers' compensation insurance on factory workers' wages allocated to the factory

A box cost associated with computers

A manager's salary for work that is done in the corporate head office

Question 8A manufacturing company calculates cost of goods sold as follows:

Beginning FG inventory + cost of goods purchased – ending FG inventory.

Ending FG inventory – cost of goods manufactured + beginning FG inventory.

Beginning FG inventory – cost of goods manufactured – ending FG inventory.

Beginning FG inventory + cost of goods manufactured – ending FG inventory

Question 9The subtotal, "Cost of goods manufactured" appears on

a merchandising company's income statement.

a manufacturing company's income statement.

both a manufacturing and a merchandising company's income statement.

neither a merchandising nor a manufacturing company's income statement

Question 10     Use this information for the next 3 questions:

                                                      Dec. 31, 2011            Dec. 31, 2010

Raw materials inventory            $310,000                   $260,000

Work in process inventory           300,000                      160,000

Finished goods inventory            190,000                      150,000

During 2011, $400,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000.

The total raw materials available for use during 2011 for Dolan Manufacturing Company is

$710,000.

$260,000.

$350,000.

$660,000.

Question 11        Dec. 31, 2011                           Dec. 31, 2010

Raw materials inventory            $310,000                   $260,000

Work in process inventory           300,000                      160,000

Finished goods inventory            190,000                      150,000

During 2011, $400,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000

Dolan Manufacturing Company's total manufacturing costs incurred in 2011 amounted to

 

$1,330,000.

$1,290,000

$1,190,000

$1,380,000.

Question 12        Dec. 31, 2011                           Dec. 31, 2010

Raw materials inventory            $310,000                   $260,000

Work in process inventory           300,000                      160,000

Finished goods inventory            190,000                      150,000

During 2011, $400,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000.

If Dolan Manufacturing Company's cost of goods manufactured for 2011 amounted to $1,190,000, its cost of goods sold for the year is

$1,300,000

$1,050,000

$1,150,000

$1,230,000

Question 13The two basic types of cost accounting systems are

job order and job accumulation systems.

job order and process cost systems.

process cost and batch systems

job order and batch systems

Question 14Process costing is used when

the production process is continuous.

production is aimed at filling a specific customer order

dissimilar products are involved.

costs are to be assigned to specific jobs.

Question 15The flow of costs in a job order cost system

involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done

cannot be measured until all jobs are complete

measures product costs for a set time period

generally follows a LIFO cost flow assumption.

Question 16When a job is completed and all costs have been accumulated on a job cost sheet, the journal entry that should be made is

Finished Goods Inventory

            Direct Materials

            Direct Labor

            Manufacturing Overhead

Work In Process Inventory

            Direct Materials

            Direct Labor

            Manufacturing Overhead

Raw Materials Inventory

                        Work In Process Inventory

Finished Goods Inventory

            Work In Process Inventory

Question 17The two major steps in the flow of costs are

allocating and assigning.

acquiring and accumulating.

accumulating and assigning

accumulating and amortizing.

Question 18Kline Manufacturing has the following labor costs:

Factory—Gross wages                              $390,000

Factory—Net wages                                    340,000

Employer Payroll Taxes Payable                 50,000

The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor for

390,000

440,000

370,000

340,000

Question 19The entry to record the acquisition of raw materials on account is

 

Raw Materials Inventory

            Accounts Payable

Work in Process Inventory

            Accounts Payable

Manufacturing Overhead

            Raw Materials Inventory

            Accounts Payable

Accounts Payable

            Raw Materials Inventory

Raw Materials Inventory

            Accounts Payable

Question 20Which one of the following best describes a job cost sheet?

It is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job.

It is used to track manufacturing overhead costs to specific jobs.

  It is used by management to understand how direct costs affect profitability

It is a daily form that management uses for tracking worker productivity on which employee raises are based.

Question 21Which one of the following should be equal to the balance of the Work In Process Inventory account at the end of the period?

The total of the amounts transferred from raw materials for the current period

The sum of the costs shown on the job cost sheets of unfinished jobs

The total of manufacturing overhead applied to work in process for the period

The total manufacturing costs for the period

Question 22Which one of the following is a source document that impacts the job cost sheet?

Raw materials receiving slips.

Materials purchase orders

Labor time tickets.

Finished goods shipping documents.

Question 23Sportly, Inc. completed Job No. B14 during 2011. The job cost sheet listed the following:

Direct materials                                       $44,000

Direct labor                                              $24,000

Manufacturing overhead applied         $16,000

Units produced                                   3,000 units

Units sold                                            1,800 units

How much is the cost of the finished goods on hand from this job?

$84,000

$50,400

$33,600

$40,800

Question 24A company expected its annual overhead costs to be $900,000 and direct labor costs to be $1,000,000. Actual overhead was $870,000, and actual labor costs totaled $1,100,000. How much is the company’s predetermined overhead rate to the nearest cent?

0.87

0.79

0.90

0.82

Question 25Norman Company manufactures customized desks. The following pertains to Job No. 953:

Direct materials used                                               $16,800

Direct labor hours worked                                              600

Direct labor rate per hour                                          $16.00

Machine hours used                                                       400

Applied factory overhead rate per machine hour $30.00

What is the total manufacturing cost for Job No. 953?

35,200

38,400

41,200

44,400

Question 26Which one of the following is considered a basic similarity between job order cost and   process cost systems?

The point at which costs are totaled

Unit cost computations

The flow of costs through the accounts

Tracking costs through a series of proccesses of department

Question 27Which of the following companies would most likely use process costing for the product listed that it produces?

Taylor Countertops - granite countertops

Campbell's - chicken noodle soup

Mercedes Home Builders - new homes

Lear Jet Cmpany - corporate jets

Question 28The Mixing Department’s output during the period consists of 20,000 units completed and transferred out, and 5,000 units in ending work in process 60% complete as to materials and conversion costs.  Beginning inventory is 1,000 units, 40% complete as to materials and conversion costs.  Assuming the weighted average method, the equivalent units of production are:

22,600

23,000

24,000

25,000

Question 29Which one of the following occurs in a process cost system?

One work in process account is used to accumulate costs

The unit costs is total manufacturing costs incurred divided by the units completed at the end of production

Total costs are determined when the finished product is completed

Costs are accumulated in a production cost report

Question 30In making the journal entry to assign raw materials costs, a company

credits Finished Goods Inventory

often debits two or more work in process accounts

debits Finished Goods Inventory

generally credits two or more work in process accounts

Question 31Glavine Corporation incurred the following costs while manufacturing its product.

Materials used in product                   $ 90,000          Advertising expense                 $45,000

Depreciation on plant                            60,000          Property taxes on plant              19,000

Property taxes on store                           7,500          Delivery expense                        21,000

Labor costs of assembly-line workers  110,000          Sales commissions                     35,000

Factory supplies used                           23,000          Salaries paid to sales clerks       50,000

Work-in-process inventory was $22,000 at January 1 and $15,500 at December 31.

Finished goods inventory was $65,000 at January 1 and $55,600 at December 31.

NOTE: NOT ALL COSTS LISTED ABOVE WILL BE USED.  PERIOD COSTS ARE NOT INCLUDED IN THESE CALCULATIONS. ALSO, CALCULATION FOR ENDING RAW MATERIALS INVENTORY NOT NECESSARY.

Instructions

(part a) Compute cost of goods manufactured (no adjustment for overapplied or underapplied overhead is necessary).

(part b) Compute cost of goods sold.

 

Question 32Finn Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. Prepare journal entries to record the following transactions during the month of June. 40 points

June 1 Purchased raw materials for $20,000 on account.

        8 Raw materials requisitioned by production:

           Direct materials $8,000

           Indirect materials 1,000

      15 Paid factory utilities, $2,100 and repairs for factory equipment, $3,000.

      25 Incurred $84,000 of factory labor.

     25 Time tickets indicated the following:

          Direct Labor (5,000 hrs × $12 per hr)= $60,000

          Indirect Labor (3,000 hrs × $8 per hr) = 24,000

                                                                 $84,000

    25 Applied manufacturing overhead to production based on a predetermined overhead rate of $7 per direct labor hour worked.

    28 Goods costing $18,000 were completed in the factory and were transferred to finished goods.

    30 Goods costing $15,000 were sold for $20,000 on account.

Instructions: Complete the journal entries for each date.  Note: June 25th will have 3 entries.  Use commas as appropriate. Do NOT use dollar signs.

Date      Account Title      Debit     Credit

June 1   [a]          [b]         

                       [c]                   [d]

June 8   [e]          [f]          

                [g]          [h]         

                       [i]                    [j]

June 15 [k]          [l]           

                           [m]                             [n]

 June 25                [o]          [p]         

                     [q]                    [r]

 June 25                [s]           [t]          

                [u]          [v]         

                     [w]                   [x]

 June 25                [y]          [z]          

                      [1]                   [2]

 June 28                [3]          [4]         

                        [5]                 [6]

June 30 [7]          [8]         

                         [9]                [10]

                [11]        [12]       

                          [13]                             [14]

Question 33The Cutting Department of Cassel Company has the following production and cost data for July.

Production

Costs

1.            Transferred out 12,400 units.

Beginning work in process

$0

2.Started 3,400 units that are 60%

Materials

55,774

complete as to conversion

Labor

8,557

costs and 100% complete as

Manufacturing overhead

22,200

to materials at July 31.

Materials are entered at the beginning of the process. Conversion costs are incurred uniformly during the process.

SHOW ALL YOUR WORK FOR PARTIAL CREDIT!!!!!

a.  Determine the equivalent units of production for materials

b. Determine the equivalent units of production for conversion costs

c. Compute unit costs for materials

d. Compute unit costs for conversion costs

e. Prepare a Cost Reconciliation Schedule