08 Oct What activities and responsibilities are not associated with management’s functions?
Managerial Accounting
What 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
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