ACCT 241 Exam 1

ACCT 241 Exam 1 | Assignment Help  American University 

Exam  1

1

The cost of electricity for running production equipment is classified as:

Multiple ChoiceTop of Form

Choice C

Choice B

Choice D

Choice A

2.

Product costs that have become expenses can be found in:

Multiple ChoiceTop of Form

Cost of goods sold.

Period costs.

Administrative expenses.

Selling expenses.

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3.

Rotonga Manufacturing Company leases a vehicle to deliver its finished products to customers. Which of the following terms correctly describes the monthly lease payments made on the delivery vehicle?

Multiple ChoiceTop of Form

Direct Cost - Yes; Fixed Cost - No

Direct Cost - No; Fixed Cost - No

Direct Cost - No; Fixed Cost - Yes

Direct Cost - Yes; Fixed Cost - Yes

4.

Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year:

Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be:

Multiple Choice

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$6.80 per machine-hour

$3.40 per machine-hour

$6.00 per machine-hour

$3.00 per machine-hour

5.

Which of the following statements about using a plantwide overhead rate based on direct labor is correct?

Multiple Choice

It is often overly simplistic and incorrect to assume that direct labor-hours is a company’s only manufacturing overhead cost driver.Top of Form

Using a plant wide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to jobs.

Using a plant wide overhead rate based on direct labor costs will ensure that direct labor costs will be correctly traced to jobs.

The labor theory of value ensures that using a plan twide overhead rate based on direct labor will do a reasonably good job of assigning overhead costs to jobs.

6.

Brothern Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below:

The predetermined overhead rate for the recently completed year was closest to:

Multiple ChoiceTop of Form

$6.76 per machine-hour

$27.13 per machine-hour

$20.37 per machine-hour

$25.37 per machine-hour

7.

Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs:

Multiple Choice

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started in process during the period.

completed during the period.

completed and sold during the period.

in process during the period.

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8.

In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the “Total raw materials available” is computed by adding together the “Beginning raw materials inventory” and:

Multiple Choice

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Indirect materials included in manufacturing overhead

Purchases of raw materials

 Ending raw materials inventory

Raw materials used in production

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9.

Bottum Corporation, a manufacturing Corporation, has provided data concerning its operations for May. The beginning balance in the raw materials account was $20,000 and the ending balance was $36,000. Raw materials purchases during the month totaled $63,000. Manufacturing overhead cost incurred during the month was $111,000, of which $2,000 consisted of raw materials classified as indirect materials. The direct materials cost for May was:

Multiple Choice

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$63,000

$79,000

$45,000

$47,000

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10.

All of the following statements are correct when referring to process costing except:

Multiple Choice

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Units produced are indistinguishable from each other.

A process costing system has the same basic purposes as a job-order costing system.

Process costing would be appropriate for a jeweler who makes custom jewelry to order.

Costs are accumulated by department.

11.

Arona Corporation manufactures canoes in two departments, Fabrication and Waterproofing. In the Fabrication Department, fiberglass panels are attached to a canoe- shaped aluminum frame. The canoes are then transferred to the Waterproofing department to be coated with sealant. Arona uses a weighted-average process cost system to collect costs in both departments.

All materials in the Fabrication Department are added at the beginning of the production process. On July 1, the Fabrication Department had 30 canoes in process that were 20% complete with respect to conversion cost. On July 31, Fabrication had 20 canoes in process that were 40% complete with respect to conversion cost. During July, the Fabrication Department completed 70 canoes and transferred them to the Waterproofing Department.

What journal entry should Arona make to record the completion of the production process by the Waterproofing Department?

Multiple ChoiceTop of Form

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12.

Carrington Corporation produces canned vegetable soup. The company uses the weighted-average method in its process costing system. The company sold 300,000 units in January. Data concerning inventories follow:

What were the equivalent units for conversion costs for January?

Multiple ChoiceTop of Form

303,000 units

309,000 units

300,000 units

285,000 units.

13.

Tatman Corporation uses an activity-based costing system with the following three activity cost pools:

The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs.

The company has provided the following data concerning its costs:

The distribution of resource consumption across activity cost pools is given below:

The activity rate for the Fabrication activity cost pool is closest to:

Multiple ChoiceTop of Form

$8.80 per machine-hour

$10.30 per machine-hour

$3.30 per machine-hour

$13.20 per machine-hour

14.

Mayeux Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity-based costing system:

Distribution of resource consumption:

 How much cost, in total, would be allocated in the first-stage allocation to the Setting Up activity cost pool?

Multiple Choice

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$288,000

$348,000

$336,000

$360,000

15.

Purchase order processing is an example of a:

Multiple Choice

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 Batch-level activity.

Product-level activity.

Organization-sustaining activity.

Unit-level activity.

16.

Listed below are costs found in various organizations.

Required:

For each cost item, indicate whether it would be variable or fixed with respect to the number of units produced and sold; and then whether it would be a selling cost, an administrative cost, or a manufacturing cost. If it is a manufacturing cost, indicate whether it is a direct cost or an indirect cost with respect to units of product.

17.

Moody Corporation uses a job-order costing system with a plant wide predetermined overhead rate based on machine-hours. At the beginning of the year, the company made the following estimates:

Required:

1. Compute the plantwide predetermined overhead rate.

2. During the year, Job 400 was started and completed. The following information was available with respect to this job:

Compute the total manufacturing cost assigned to Job 400.

3. If Job 400 includes 60 units, what is the unit product cost for this job?

4. If Moody uses a mark up percentage of 120% of its total manufacturing cost, then what selling price per unit would it have established for Job 400?

18.

Selected T-accounts of Moore Company are given below for the just completed year:

Required:

1. What was the cost of raw materials used in production during the year?

2. How much of the materials in (1) above consisted of indirect materials?

3. How much of the factory labor cost for the year consisted of indirect labor?

4. What was the cost of goods manufactured for the year?

5. What was the unadjusted cost of goods sold for the year? Do not include any underapplied or overapplied overhead in your answer.

6. If overhead is applied to production on the basis of direct labor cost, what predetermined overhead rate was in effect during the year?

7. Was manufacturing overhead under applied or over applied? By how much?

8. Compute the ending balance in Work in Process. Assume that this balance consists entirely of goods started during the year. If $8,750 of this balance is direct labor cost, how much of it is direct materials cost? Applied overhead cost?

19.

Weston Products manufactures an industrial cleaning compound that goes through three processing departments—Grinding, Mixing, and Cooking. All raw materials are introduced at the start of work in the Grinding Department. The Work in Process T-account for the Grinding Department for May is given below:

The May 1 work in process inventory consisted of 132,000 pounds with $137,280 in materials cost and $36,960 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. During May, 322,000 pounds were started into production. The May 31 inventory consisted of 128,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method in its process costing system.

Required:

1. Compute the Grinding Department's equivalent units of production for materials and conversion in May.

2. Compute the Grinding Department's costs per equivalent unit for materials and conversion for May.

3. Compute the Grinding Department's cost of ending work in process inventory for materials, conversion, and in total for May.

4. Compute the Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May.

20.

Fogerty Company makes two products—titanium Hubs and Sprockets. Data regarding the two products follow:

Additional information about the company follows:

1. Hubs require $26 in direct materials per unit, and Sprockets require $20.
2. The direct labor wage rate is $17 per hour.
3. Hubs require special equipment and are more complex to manufacture than Sprockets.
4. The ABC system has the following activity cost pools:

Required:

1. Compute the activity rate for each activity cost pool.

2. Determine the unit product cost of each product according to the ABC system.