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ACCT 2110; T1

Managerial Accounting; T1; Ch 15-17; Practice

QuestionAnswer
1. Which of the following statements is not true about managerial accounting? It is highly aggregated.
2. Which of the following are considered to be management's three broad functions? Planning, directing, & controlling
3. Manufacturing overhead consists of costs that are indirectly associated with the manufacture of the finished product. True
4. Barry’s BarBQue incurred the following costs: $1,400 ribs, 45 hr labor @ $10ph, $50 seasoning/sauce, $300 advertise, $150 to clean, & $100 administrative costs. How much are total product costs? $2,050
5. Which of the following would you find on the income statement of a manufacturing company, but not on the income statement of a merchandising company? Cost of Goods Manufactured
6. The cost of the beginning work in process plus the total manufacturing costs for the current period is the cost of goods manufactured. False
7. Companies generally list manufacturing inventories in the order of completion-raw materials, work in process, and finished goods. False
8. Which one of the following is true concerning manufacturing and merchandising companies’ inventories? The balance sheet for both types of companies reports one category for inventories.
9. Under the just-in-time inventory method, goods are manufactured or purchased just-in-time for use. True
10. Which one of the following is a trend in industry? The U.S. economy has shifted toward an emphasis on providing services.
11. Managerial accounting: Places emphasis on special-purpose information.
12. The management of an organization performs several broad functions. They are: Planning, Directing and Controlling
13. After passage of the Sarbanes-Oakley Act: CEOs and CFOs must certify that financial statements give a fair presentation of the company's operating results.
14. Direct materials are a Product Cost
15. Which of the following costs would a computer manufacturer include in manufacturing overhead? Depreciation on testing equipment
16. Which of the following is not an element of manufacturing overhead? Sales manager’s salary
17. Indirect labor is a: Product cost
18. Which of the following costs are classified as a period cost? Wages paid to a cost accounting department supervisor
19. 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: $550,000
20. Cost of goods available for sale is a step in the calculation of cost of goods sold of: A merchandising company and a manufacturing company
21. A cost of goods manufactured schedule shows beginning and ending inventories for: Raw materials and work in process only
22. The formula to determine the cost of goods manufactured is: Beginning work in process inventory + Total manufacturing costs − Ending work in process inventory.
23. A manufacturer may report three inventories on its balance sheet: (1) raw materials, (2) work in process, and (3) finished goods. Indicate in what sequence these inventories generally appear on a balance sheet (3), (2), (1)
24. Which of the following managerial accounting techniques attempts to allocate manufacturing overhead in a more meaningful fashion? Activity-based costing
25. Corporate social responsibility refers to: Efforts by companies to employ sustainable business practices with regard to employees and the environment.
1. A process cost system is used when a company manufactures a large volume of unique products. False
2. Which one of the following transactions causes the Manufacturing Overhead account to be debited in a job order cost accounting system? Used indirect materials.
3. Labor costs are debited to Work in Process Inventory when they are incurred False
4. Each entry to Work in Process Inventory must be accompanied by a corresponding posting to one or more job cost sheets. True
5. The predetermined overhead rate is based on the relationship between actual annual overhead costs and expected annual operating activity. False
6. Dougan, Inc. allocates OH based on a POR $2.40 pDLh. Employees are paid $12.00 ph. Job 24 requires 4.2 lb of DM @ cost $15.00 plb. Employees worked total=17.5 hr. AMCOC totaled $80,000 for the year. How much is the cost of Job 24? $315
7. Finished Goods Inventory is a control account that controls individual finished goods records in a finished goods subsidiary ledger. True
8. The cost of goods manufactured schedule shows actual overhead costs rather than applied manufacturing overhead. False
9. Underapplied overhead means that the overhead assigned to work in process is less than the overhead incurred. True
10. Walker Company applies manufacturing overhead based on direct labor hours. How much is over or underapplied overhead at year end? $11,300 underapplied
11. Cost accounting involves the measuring, recording, and reporting of: Product cost
12. A company is more likely to use a job order cost system if: It manufactures products with unique characteristics.
13. In accumulating raw materials costs, companies debit the cost of raw materials purchased in a perpetual system to: Raw Materials Inventory.
14. When incurred, factory labor costs are debited to: Factory Labor
15. The flow of costs in job order costing: Parallels the physical flow of materials as they are converted into finished goods.
16. Raw materials are assigned to a job when: The materials are issued by the materials storeroom.
17. The source documents for assigning costs to job cost sheets are: Materials requisition slips, time tickets, and the predetermined overhead rate.
18. In recording the issuance of raw materials in a job order cost system, it would be incorrect to: Debit Finished Goods Inventory.
19. The entry when direct factory labor is assigned to jobs is a debit to: Work in Process Inventory and a credit to Factory Labor.
20. The formula for computing the predetermined manufacturing overhead rate is estimated annual overhead costs divided by an expected annual operating activity, expressed as: Any of the above.
21. In Crawford Company, the POR=80% DLC. During the month, Crawford incurs $210,000 FLC, of which $180,000= DL & $30,000 is indirect labor. Actual overhead incurred was $200,000. The amount of overhead debited to Work in Process Inventory should be: $144,000 ($180,000 x 80%)
22. Mynex Company completes Job No. 26 at a cost of $4,500 and later sells it for $7,000 cash. A correct entry is: debit Finished Goods Inventory $4,500 and credit Work in Process Inventory $4,500.
23. At the end of an accounting period, a company using a job order cost system calculates the cost of goods manufactured: from the Work in Process Inventory account.
24. Which of the following statements is true? Job order costing provides more precise costing for custom jobs than process costing.
25. At end of the year, a company has a $1,200 debit balance in Manufacturing Overhead. The company: makes an adjusting entry by debiting Cost of Goods Sold for $1,200 and crediting Manufacturing Overhead for $1,200.
26. Manufacturing overhead is underapplied if: actual overhead is greater than applied.
1. Which of the following companies would most likely use process costing for the product or service it produces? Friskies Cat Food – cans of tuna flavored food
2. Which one of the following occurs in a process cost system? Costs are accumulated in a production cost report
3. Dartmouth Company has two process departments, machining and assembly, that produce products. At what point can the company add manufacturing overhead costs to the products? As the production takes place in each of the two process departments.
4. Marco Company has two processing departments and uses a process costing system. Which account is debited when the company assigns factory labor costs to production? Work in process is debited
5. In computing equivalent units using the weighted-average method, the beginning work in process is part of the equivalent units of production formula. False
6. Unit production costs are costs expressed in terms of equivalent units of production. True
7. Managers can use the cost data in production cost reports to assess whether unit costs and total costs are reasonable. True
8. Companies often use a combination of a process cost and a job order cost system, called operations costing. True
9. The Smith Company has the following production data: BWIP20,000 u (60% complete), SIP340,000 u, C&TO 320,000 u, & EWIP40,000 u (40% complete). Assume materials are entered at the beginning of the process, the equivalent units under the FIFO method are: 324,000
10. Using the data in 57, the equivalent units under the FIFO method for conversion costs are: 350,000
11. Which of the following items is not characteristic of a process cost system? The products produced are heterogeneous in nature.
12. Indicate which of the following statements is not correct. Manufacturing costs are assigned the same way in a job order and in a process cost system
13. In a process cost system, the flow of costs is: Work in process, finished goods, cost of goods sold.
14. In making journal entries to assign raw materials costs, a company using process costing: often debits two or more work in process accounts.
15. In a process cost system, manufacturing overhead: is assigned to a work in process account for each production department on the basis of a predetermined overhead rate.
16. Conversion costs are the sum of: Labor costs and overhead costs
17. The Mixing Department's output during the period consists of 20,000u C&TO, & 5,000u EWIP 60% complete as toM&CC. Beginning inventory is 1,000 units, 40% complete as to materials and conversion costs. The equivalent units of production are: 23,000. (20,000+ (5000*60%))
18. In RYZ Company, there are zero units in beginning work in process, 7,000 units started into production, and 500 units in ending work in process 20% completed. The physical units to be accounted for are: 7000
19. Mora Company has 2,000u BWIP, 20% complete as to CC, 23,000u TOTFG, & 3,000u EWIP complete as to CC. The beginning and ending inventory is fully complete as to materials costs. Equivalent units for materials and conversion costs are, respectively: 26,000, 24,000. (23,000 + 3,000), [23,000 + (3,000 x 33 1/3%)]
20. Fortner Company has no BWIP; 9,000u are transferred out and 3,000 units in ending work in process are one-third finished as to conversion costs and fully complete as to materials cost. If total materials cost is $60,000, the unit materials cost is: 5.00 [$60,000 / (9,000 + 3,000)]
21. Largo Company has UC $10 for M & $30 for CC. If there are 2,500 units in ending work in process, 40% complete as to conversion costs, and fully complete as to materials cost, the total cost assignable to the ending work in process inventory is: $55,000 [($10 x 2,500) + ($30 x 2,500 x 40%)]
22. A production cost report: shows both the production quantity and cost data related to a department.
23. In a production cost report, units to be accounted for are calculated as: Units stated into production + Units in beginning work in process.
24. Hollins Company uses FIFO to compute EU. It has 2,000u BWIP, 20% complete as to CC, 25,000uS&C, &3,000u EWIP, 30% complete as to CC. All units are 100% complete as to materials. Equivalent units for materials and conversion costs are, respectively: 28,000 and 27,500. [25,000 + (3,000 x 100%)]; [(2,000 x 80%) + 25,000 + (3,000 x 30%)]
25. KLM Company uses FIFO to compute EU. It has no BWIP; 9,000u are S&C & 3,000 units in ending work in process are one-third completed. All material is added at the beginning of the process. If total materials cost is $60,000, the unit materials cost is: $5.00 [$60,000 / (9,000 + 3,000)]
26. Toney Company uses FIFO to compute EU. It has UC=$10M and $30 CC. If there are 2,500u in EWIP, 100% complete as to materials and 40% complete as to conversion costs, the total cost assignable to the ending work in process inventory is: $55,000 [($10 x 2,500) + ($30 x 2,500 x 40%)]
Created by: ibenoit95