QuestionQuestion

Transcribed TextTranscribed Text

1. Cloudy Comfort Company's accounting records reflect the following inventories: Dec. 31, 2012 Dec. 31, 2011 Raw materials inventory $310,000 $260,000 Work in process inventory 300,000 160,000 Finished goods inventory 190,000 150,000 During 2012, $400,000 of raw materials were purchased, direct labor costs amounted to $500,000, and manufacturing overhead incurred was $480,000. If Cloudy Comfort Company's cost of goods manufactured for 2012 amounted to $1,190,000, its costof goods sold for the year is A) $1,300,000. B) $1,050,000. C) $1,150,000. D) $1,230,000. 2. Managerial accounting is applicable to A) service entities. B) manufacturing entities. C) not-for-profit entities. D) all of these. 3. Which one of the following is not a direct material? A) A tire used for a lawn mower B) Plastic used in the covered case for a homePC C) Steel used in the manufacturing of steel-radial tires D) Lubricant for a ball-bearing joint for a large crane 4. Managerial accounting information is generally prepared for A) stockholders. B) creditors. C) managers. D) regulatory agencies. 5. A manufacturing process requires small amounts of glue. The glue used in the production processis classified as a(n) A) period cost. B) indirect material. C) direct material. D) miscellaneous expense. 6. Given the following data for Map Company, compute (A) total manufacturing costs and (B) cost of goods manufactured: A) $540,000 $570,000 C) $555,000 $570,000 B) $555,000 $540,000 D) $570,000 $585,000 Direct materials used $180,000 Beginning work in process $30,000 Direct labor 150,000 Ending work in process 15,000 Manufacturing overhead 225,000 Beginning finished goods 38,000 Operating expenses 263,000 Ending finished goods 23,000 (A) (B) Page 2 I` 7. Cinnamon Company reported total manufacturing costs of $205,000, manufacturing overhead totaling $39,000, and direct materials totaling $48,000. How much is direct labor cost? A) Cannot be determined from the information provided. B) $292,000 C) $87,000 D) $118,000 8. For a manufacturing company, which of the following is an example of a period cost rather thana product cost? A) Depreciation on factory equipment C) Wages of machine operators B) Wages of salespersons D) Insurance on factory equipment 9. Cloudy Comfort Company's accounting records reflect the following inventories: Dec. 31, 2012 Dec. 31, 2011 Raw materials inventory $310,000 $260,000 Work in process inventory 300,000 160,000 Finished goods inventory 190,000 150,000 During 2012, $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 2012 for Cloudy Comfortis A) $710,000. B) $260,000. C) $350,000. D) $660,000. 10. Anchor Manufacturing Company reported the following year-end information: beginning work inprocess inventory, $80,000; cost of goods manufactured, $880,000; beginning finished goods inventory,$50,000; ending work in process inventory, $70,000; and ending finished goods inventory, $40,000. How muchis Anchor's cost of goods sold for the year? A) $880,000 B) $890,000 C) $870,000 D) $900,000 11. Clay Tile Manufacturing Inc.'s accounting records reflect the following inventories: Dec. 31, 2011 Dec. 31, 2012 Raw materials inventory $ 80,000 $ 64,000 Work in process inventory 104,000 116,000 Finished goods inventory 100,000 92,000 During 2012, Clay Tile Manufacturing purchased $860,000 of raw materials, incurred direct labor costs of $200,000, and incurred manufacturing overhead totaling $128,000. How much is totalmanufacturing costs incurred during 2012 for ClayTile? A) $1,192,000 B) $1,204,000 C) $1,188,000 D) $1,200,000 12. On the costs of goods manufactured schedule, the item raw materials inventory (ending) appears as a(n) A) addition to raw materials purchases. B) addition to raw materials available for use. C) subtraction from raw materials available for use. D) subtraction from raw materials purchases. Page 3 I` 13. Records of individual items of raw materials would not be maintained A) electronically. C) on stores ledger cards. B) manually. D) in the Raw Materials Inventory account. 14. A company assigned overhead to work in process. At year end, what does the amount of overapplied overhead mean? A) The overhead assigned to work in process is greater than the estimated overhead costs. B) The overhead assigned to work in process is less than the estimated overhead costs. C) The overhead assigned to work in process is less than the actual overhead. D) The overhead assigned to work in process is greater than the overhead incurred. 15. Which of the following is not a control account? A) Manufacturing Overhead C) Accounts Receivable B) Factory Labor D) Raw Materials Inventory 16. At the beginning of the year, Scaled Manufacturing estimates annual overhead costs to be $1,200,000 and that 300,000 machine hours will be operated. Using machine hours as a base, the amount ofoverhead applied during the year if actual machine hours for the year was 315,000 hoursis A) $1,200,000. B) $1,142,857. C) $840,000. D) $1,260,000. 17. Sparky Inc. uses job order costing for its brand new line of sewing machines. The cost incurredfor production during 2012 totaled $18,000 of materials, $9,000 of direct labor costs, and $6,000 of manufacturing overhead applied. The company ships all goods as soon as they are completedwhich results in no finished goods inventory on hand at the end of any year. Beginning work in process totaled $15,000, and the ending balance is $9,000. During the year, the company completed 40 machines.How much is the cost per machine? A) $675 B) $975 C) $825 D) $1,200 18. Sofa Manufacturers applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period: A) $1,450,000 applied and $20,000 overapplied B) $1,500,000 applied and $20,000 overapplied C) $1,450,000 applied and $20,000 underapplied D) $1,470,000 applied and neither under- nor overapplied 19. When the company assigns factory labor costs to jobs, the direct labor cost is debitedto A) Direct Labor. C) Manufacturing Overhead. B) Factory Labor. D) Work in ProcessInventory. Estimated annual overhead cost $1,500,000 Actual annual overhead cost $1,470,000 Estimated machine hours 300,000 Actual machine hours 290,000 Page 4 I` f 20. F actory labor costs A) accumulate in advance of utilization. B) accumulate in a control account. C) include sick pay earned by factory workers. D) accumulate in the Factory Labor Expense account. 21. Sun Screen Manufacturers applies overhead on the basis of 120% of direct labor cost. Job No. 190is charged with $80,000 of direct materials costs and $120,000 of manufacturing overhead. The total manufacturing costs for Job No. 190 is A) $200,000. B) $344,000. C) $216,000. D) $300,000. 22. Which one of the following best describes a job cost sheet? A) 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. B) It is used to track manufacturing overhead costs to specificjobs. C) It is used by management to understand how direct costs affect profitability. D) It is a daily form that management uses for tracking worker productivity on which employee raises are based. 23. As of December 31, 2012, Leaf Manufacturing had $2,000 of raw materials inventory. At thebeginning of 2012, there was $1,600 of materials on hand. During the year, the company purchased $274,000 of materials; however it paid for only $264,000. How much inventory was requisitioned for use on jobs during 2012? A) $274,400 B) $264,400 C) $263,600 D) $273,600 24. Process costing is used when A) the production process is continuous. B) production is aimed at filling a specific customer order. C) dissimilar products are involved. D) costs are to be assigned to specific jobs. 25. Activity-based costing has been found to be useful in each of the following service industries except A) banks. B) hospitals. C) telephone companies. D) ABC has been useful in any of these industries. 26. For its inspecting cost pool, Davidson, Inc. expected overhead cost of $200,000 and 4,000inspections. The actual overhead cost for that cost pool was $240,000 for 5,000 inspections. The activity-based overhead rate used to assign the costs of the inspecting cost pool to productsis A) $40 per inspection. B) $48 per inspection. C) $50 per inspection. D) $60 per inspection. Page 5 I` 27. In the pull approach A) subassembly parts are manufactured and stored just in case they are needed later in the manufacturing process. B) Finished goods are completed and stored just in case unexpected and rush customer orders are received. C) the manufacturing process begins with a customer placing an order. D) None of the above. 28. Estimated costs for activity cost pools and other item(s) are asfollows: Total estimated overhead is A) $700,000. B) $875,000. C) $1,150,000. D) $1,325,000. 29. Which of the following is not a batch-level activity? A) Purchase ordering B) Equipment setups C) Inspection D) Assembling 30. Which of the following is not a facility-level activity? A) Plant management B) Product design C) Personnel administration D) Training 31. Which of the following is not a unit-level activity? A) Drilling B) Cutting C) Sanding D) Inspecting 32. Sofa Manufacturing manufactures two models of its couch, the Mini and the Maxi. The Minimodel requires 10,000 direct labor hours and the Maxi model requires 40,000 direct labor hours. The company produces 4,000 units of the Mini model and 1,000 units of the Maxi model each year. The company produces the Mini model in batch sizes of 200, while it produces the Maxi model in batch sizes of100. The company expects to incur $180,000 of total setup costs this year. How much of the setup costsare allocated to the Mini model using ABCcosting? A) $120,000 B) $90,000 C) $36,000 D) $150,000 33. Which of the following is not typical of traditional costing systems? A) Use of a single predetermined overhead rate. B) Use of direct labor hours or direct labor cost to assign overhead. C) Assumption of correlation between direct labor and incurrence of overhead cost. D) Use of multiple cost drivers to allocate overhead. 34. The costs that are easiest to trace directly to products are A) direct materials and direct labor. B) direct labor and overhead. C) direct materials and overhead. D) none of the above; all three costs are equally easy to trace to the product. Machining $500,000 Assembling 200,000 Advertising 450,000 Inspecting and testing 175,000 Page 6 I` 35. Activity-based costing is used by A) accounting firms. B) law firms. C) consulting firms. D) all of the above. 36. Mike Greer is studying for his accounting mid-term examination. Summarize for Mike what he should know about management functions. 37. Seasonal Delights manufactures a wide variety of holiday and seasonal decorative items. Seasonal's activity-based costing overhead rates are: Purchasing $350 per order Storing $2 per square foot/days Machining $100 per machine hour Supervision $5 per direct labor hour The Snow Man project involved three purchase orders, 4,000 square feet/days, 60 machine hours, and 30 direct labor hours. The cost of direct materials on the job was $19,000 and the direct labor rate is $30 per hour. Instructions Determine the total cost of the Snow Man project. 38. Heart Manufacturing Company makes specialty tools. In January, Heart incurs manufacturing costsof $10,000,000 for direct materials, direct labor, and overhead. 20% of the total costs represents overhead applied. The overhead rate is $1 for every $2 of direct labor costs incurred. Inventory balances were: January 1 January 31 Raw materials $300,000 $500,000 Work in process 600,000 400,000 Finished goods 400,000 200,000 At the end of January, there was $1,000 of overapplied overhead. Instructions (a) Determine the cost of raw materials purchased in January. (b) Prepare a cost of goods manufactured schedule for January 2012. (c) Compute the cost of goods sold for January.

Solution PreviewSolution Preview

This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.

38 Accounting Questions And Their Solutions
    $13.00 for this solution

    PayPal, G Pay, ApplePay, Amazon Pay, and all major credit cards accepted.

    Find A Tutor

    View available Accounting Tutors

    Get College Homework Help.

    Are you sure you don't want to upload any files?

    Fast tutor response requires as much info as possible.

    Decision:
    Upload a file
    Continue without uploading

    SUBMIT YOUR HOMEWORK
    We couldn't find that subject.
    Please select the best match from the list below.

    We'll send you an email right away. If it's not in your inbox, check your spam folder.

    • 1
    • 2
    • 3
    Live Chats