1. For a manufacturing company, which of the following is an example of a period cost rather than a product cost?
a. Depreciation on factory equipment
b. Wages of salespersons
c. Wages of machine operators
d. Insurance on factory equipment
2. A manager that is establishing objectives (strategic or operational) is performing which management function?
a. Controlling
b. Directing
c. Planning
d. Constraining
3. As product costs expire(expensed), they become part of
a. selling expenses.
b. inventory.
c. cost of goods sold.
d. sales revenue.
4. Property taxes on a manufacturing plant are an element of a Product Cost Period Cost
a. Yes No
b. Yes Yes
c. No Yes
d. No No
5. A product requires processing in two departments, Department A and then Department B, before it is completed. Costs transferred out of Department A will be transferred to
a. Finished Goods Inventory.
b. Cost of Goods Sold.
c. Work in Process-Department B.
d. Manufacturing Overhead.
6. An example of both a prime cost and a conversion cost for manufacturing a vehicle would be
a. wages of assembly line workers
b. steel
c. engine
d. depreciation on factory machinery.
7. A cost of goods manufactured schedule shows beginning and ending inventories for:
a. raw materials and work in process only
b. work in process only.
c. raw materials only.
d. raw materials, work in process, and finished goods.
8. A process cost accounting system is most appropriate when
a. a variety of different products are produced, each one requiring different types of materials, labor, and overhead.
b. the focus of attention is on a particular job or order.
c. similar products are mass-produced.
d. individual products are custom made to the specification of customers.
9. The following information was gathered for the Buckley Corporation for the most recent year. Manufacturing overhead is allocated using direct labor hours.
Estimated direct labor hours
54,000
Actual direct labor hours
57,000
Estimated manufacturing overhead costs
$729,000
Actual manufacturing overhead costs
$685,000
What is the amount of overallocated or underallocated overhead for the year?
a. $44,000 overallocated
b. $44,000 underallocated
c. $84,500 overallocated
d. $84,500 underallocated
10. XYZ Company uses job costing. Actual manufacturing overhead for the period is $19,600 while allocated manufacturing overhead is $18,700. What entry will close the manufacturing overhead balance?
a. Debit manufacturing overhead and credit work in process for $900.
b. Debit manufacturing overhead and credit cost of goods sold for $900.
c. Debit cost of goods sold and credit finished goods inventory for $900.
d. Debit costs of goods sold and credit manufacturing overhead for $900..
11. Select the answer that best represents which industry would use (1) process costing and (2) job costing, respectively.
a. (1) Aircraft, (2) pharmaceuticals
b. (1) Chemicals, (2) Commercial building construction
c. (1) Construction, (2) Chemicals
d. (1) Printing, (2) Food and Beverage
12. For the year, Redder Company has cost of goods manufactured of $600,000, beginning finished goods inventory of $200,000, and ending finished goods inventory of $250,000. The cost of goods sold is:
a. $450,000.
b. $500,000.
c. $550,000.
d. $600,000.
13. Cost of Materials Used $45,000
Direct Labor costs $48,000
Factory Overhead $39,000
Work in Process, beg. $28,000
Work in Process, end. $18,000
What is Cost of Goods Manufactured?
a.$178,000
b.$132,000
c.$122,000
d.$142,000
14. Smith Paints allocates overhead based on machine hours. Selected data for the most recent year follow.
Estimated manufacturing overhead cost
$250,000
Actual manufacturing overhead cost
$230,000
Estimated machine hours
20,000
Actual machine hours
21,000
(The estimates were made as of the beginning of the year, while the actual results were for the entire year.)
The predetermined manufacturing overhead rate per machine hour is closest to:
a. $11.90.
b. $10.95.
c. $12.50.
d. $11.50.
15. Williams Company reports production costs for 2015 as follows:
Direct materials used
$345,000
Direct labor incurred
250,000
Factory overhead incurred
400,000
Operating expenses
175,000
Williams Company's period costs for 2015 amount to:
a.345,000
b.$250,000
c.$400,000
d.$175,000
Williams Company's productcosts for 2015 amount to:
a.$995,000
b.$920,000
c.$825,000
d.$770,000
16. In accumulating raw material costs, the cost of raw materials purchased in a perpetual inventory system is debited to:
a. Raw Materials Purchases
b. Raw Materials Inventory
c. Purchases
d. Work in Process
17. A manufacturing company income statement reports only two types of inventory accounts, Raw Materials and Finished Goods.
a True
b. False
18. Before these materials are used to manufacture its cars, Honda classifies steel, glass, and plastic as:
A. finished goods inventory.
B. work in process inventory.
C. raw materials inventory.
D. merchandise inventory.
19. Which of the following is an example of overhead in a factory?
A. Wages of machine operators
B. Wages of factory maintenance personnel
C. Wages of administrators in the corporate office
D. Salaries of salespersons
20. Factory labor data for Reyes Tool & Die is $5,000 (note: Job 1 $1,200; Job 2 $1,600; Job 3 $1,400 and general factory use $800). The summary journal entry to record factory labor incurred is
a. Work in process 4,200
Factory overhead 800
Wages payable 5,000
b. Work in process 5,000
Wages payable 5,000
c. Wages payable 4,200
General wage expense 800
Wages expense 5,000
d. Factory overhead 4,200
Work in process 800
Wages payable 5,000