Part 1
1. To separate the semi-variable costs into their fixed and variable components, one can use which of the following methods?
a. Labor variance method b. Material variance method c. Relevant range of activity method d. High-low point method
2. A budget prepared using several differing levels of activity is a:
a. fixed budget. b. flexible budget. c. manufacturing cost budget. d. budget performance report.
3. Direct factory labor is usually considered to be a cost.
a. variable b. fixed c. semi-variable d. mixed
4. The cost of utilities consumed in the factory is a good example of a ____cost. a. variable b. fixed c. semi-variable d. standard
5. The salary of the factory supervisor is a good example of a _ cost
a. variable b. fixed c. semi-variable d. standard
6. As the level of activity increases, the fixed cost per unit of activity:
a. increases. b. decreases. c. does not change. d. may increase or decrease.
7. As the level of activity increases, the variable cost per unit of activity:
a. increases. b. decreases. c. does not change. d. may increase or decrease.
8. As the level of activity increases, the total variable costs for the period:
a. increase. b.decrease. c.do not change. d. may increase or decrease.
9. As the level of activity increases, the total fixed costs for the period:
a. increase. b.decrease. c. may increase or decrease. d. do not change.
10. Costs that reflect what costs should be for the units of product manufactured during the period under normal efficient operating conditions are known as--------- costs.
a. variable b. fixed c. standard d. semi-variable
11. In a factory, the fixed costs per unit are $45 when 400 units are produced. If 450 units are produced, the fixed costs per unit would be:
a. $45.00. b. $40.00. c. $10.00. d.$50.63.
12. In a factory, the total variable costs are $600 if 500 units are produced. If 400 units are produced, the total variable costs would be:
a. $480. b.$600. c.$120. d. $333.
13. The standard quantity of materials for a product was 40 pounds per unit at the standard price of $2.00 per pound. The actual price per pound of materials was $1.50, and the actual quantity used was 44 pounds. An analysis would indicate a:
a. $20.00 favorable price variance. b. $22.00 favorable price variance. c. $6.00 unfavorable quantity variance. d. $18.00 favorable price variance.
14. The labor standard for a product was five hours at a wage rate of $8 per hour. The firm produced 900 units of the item. Labor costs totaled $35,250 and 4,700 hours of labor were used. An analysis of labor costs would indicate:
a. a $750 favorable labor rate varianc~. b. a $1,600 unfavorable labor time variance. c. both the labor rate variance and the labor time variance listed above. d. a $1,600 favorable labor rate variance.
15. The quantity variance for an item is the difference between its actual quantity and its standard quantity multiplied by the:
a. standard cost of the item. b. actual cost of the item. c.price variance. d. budgeted amount for the item.
16. An unfavorable price variance for materials means that:
a. the actual cost of the materials was more than the budgeted amount. b." more materials were used in' production than anticipated. c. more labor hours were required to work with the materials than expected. d. the actual cost of the materials was more than the standard cost.
17.The materials price variance for an item is the difference between its actual price and its standard cost:
a. multiplied by the actual quantity used. b. multiplied by the standard quantity allowed. c. multiplied by the difference between the actual quantity and the standard quantity. d.divided by the actual quantity.
18. The flexible budget usually shows:
a. only fixed costs. b. only variable costs. c. fixed and variable costs together. d. fixed and variable costs separately.
Use the following information to answer questions 19 and 20.
The standard costs for a unit of product are shown below. Materials 2 pounds at $1.00 per pound $2.00 Labor 1 hour at $10.00 per hour 10.00 Overhead 60% of di.rect labor 6.00 During JUne, Job N-5 for 100 units was completed. The actual costs of the job are shown below. Materials 300 pounds at $1.45 per pound $435 Labor 200 hours at $9.50 per hour 1,900 Overhead Applied 60% of direct labor 1,140
19. Which of the following represents the material price variance?
a. $325 unfavorable b. $235 unfavorable c. $100 unfavorable d. $135 unfavorable
20. Which of the following represents the material quantity variance?
a. $325 unfavorable b. $235 unfavorable c. $100 unfavorable d. $135 unfavorable
1. When indirect materials are requisitioned from the materials storeroom and placed i.n production, an entry is made crediting Raw Materials Inventory and debiting:
a. Work in Process Inventory. b. Cost of Goods Manufactured. c. Manufacturing Overhead Applied. d.Manufacturing Overhead.
2. The entry to record the application of overhead to jobs consists of a debit to and a credit to
a. Manufacturing Overhead Applied; Manufacturing Overhead __ b. Manufacturing Overhead; Manufacturing Overhead Applied c. Work in Process Inventory; Manufacturing Overhead Applied d.Manufacturing Overhead Applied; Work in Process Inventory
3. At the end of the fiscal year, any overapplied or underapplied overhead is:
a.transferred to the Cost of Goods Sold account in an adjustment. b. shown on the balance sheet as either a deferred charge or a deferred credit. c.allocated to Cost of Goods Sold, Finished Goods Inventory, and Work in Process Inventory. d. transferred to the Cost of Goods Manufactured account in an adjustment.
4.Job order cost accounting is appropriate when there are continuous operations:
a.on standard types of products. b.when a company produces more than one product in batches rather than on a continuous basis. c.only for goods produced on special order. d.for all manufacturing companies.
5. When a perpetual inventory system is used, sales revenue is recorded as products are sold:
a.but the cost of the goods sold is not recorded. __ b.and the cost of the goods sold is transferred from the Finished Goods Inventory account to the Cost of Goods Sold account. c.and the cost of the goods sold is transferred from the Work in Process Inventory account to the Cost of Goods Sold account. d.and the cost of goods sold is transferred from the Cost of Goods Manufactured to the Cost of Goods Sold account
6.A firm purchased 25 units of materials with a unit price of $2.00 on May 5. On May 15, the firm purchased 25 units with a unit price of $2.10. If the firm uses the FIFO method of inventory pricing, the total cost of 30 units issued on May 20 would be:
a.$62.50. b.$60.00. c.$63.00. d.$60.50.
7. Job order cost sheets constitute a subsidiary ledger that supports the _____ account.
a. Work in Process Inventory b.Finished Goods lnventory c. Raw Materials Inventory d.Cost of Goods Manufactured
8.Manufacturing overhead includes all of the following EXCEPT:
a. indirect labor. b.direct labor. c.utilities. d.payroll taxes on factory labor.
9.If manufacturing overhead is applied at a rate of$l.50 per direct labor dollar and the Department Bworker had worked 200 hours at $12.00 an hour on Job L1147, then the applied overhead would be:
a.$ 3,600. b.$18. c.$ 300. d.$ 2,400.
10. At the end of the year the Manufacturing Overhead account is closed into what account?
__a. Work in Process __b. Finished Goods __c. Cost of Goods Sold __d. Manufacturing Overhead Control
11.What form is presented at the storeroom to obtain materials or supplies for use in the factory?
a.Materials Request Form b.Materials Requisition Form c.Raw Materials Ledger Card d.Production Order Form
12. During one month, 3,000 units of a product were completed and 800 units were 20-percent complete and still in process. The equivalent production for the month is:
a.3,800 units. b.4,000 units. c.3,040 units. d.3,160 units.
13. Process cost accounting is most appropriate:
a. when there is continuous production on a single product. b.when a company produces more than one product in batches rather than on a continuous basis. c.for companies with either continuous or batch processing of different products. d.for all manufacturing companies.
14.A firm had 600 units in its work in process inventory at the beginning of a month. Of these units, 30 percent were complete with respect to labor, materials, and overhead. The firm transferred 5,000 units to the finished goods inventory during the month. It had 500 units of which 40 percent were complete and still in process at the end of the month. Equivalent production for the month was:
a.5,680 units. b.5,380 units. c.5,200 units. d.5,180 units.
15.A department transferred 7,000 units to the finished goods storeroom during a month. There was no beginning work in process inventory, but 500 units were still in process at the end of the month. Equivalent production for the month was 7,400 units, and production costs incurred totaled $16,800. Inventory costs would be determined using a unit cost of:
a.$2.27. b.$2.40. c.$2.24. d.$2.58.
16. A firm had no work in process at the beginning of a month. It transferred 4,000 units to finished goods dl;lring the month, and 500 units were still in process at the end of the month. Equivalent production for the month was 4,400 units. At what stage of completion were the unfinished units at the end of the month?
a.67 percent b. 75 percent c. 20 percent d.80 percent
17.In a process cost accounting system: a.the Finished Goods Inventory account is debited for the cost of completed units any time during the month. b. the Work in Process Inventory accounts are used to accumulate the costs for labor, materials, and manufacturing overhead. c.manufacturing overhead is not included in the determination of inventory costs. d.inventory costs are calculated when goods are sold.
18.At the end of the month, the entry to close the Manufacturing Overhead control account is recorded as a debit to and a credit to
a. Manufacturing Overhead Applied; Manufacturing Overhead b.Work in Process Inventory accounts; Manufacturing Overhead c.Manufacturing Overhead; the Work in Process inventory accounts d.Manufacturing Overhead; Manufacturing Summary
19.The method that combines the cost of beginning inventory and the current costs of the period is the:
a.market value process costing method. b.method of net realizable value. c.replacement cost method. d.average method of process costing.
20.Total costs accounted for in each department consist of the:
a. cumulative cost plus the work in process-ending costs. b. total costs twnsferred out Jess the total work in processending costs. c. cumulative cost plus total costs transferred out. d.total costs transferred out plus the total work in process ending costs.