🏷️ LIMITED TIME OFFER: GET 20% OFF GRADE+ YEARLY SUBSCRIPTION →
Log in
Accounting
2
answers
0
watching
15
views
23 Nov 2019

The balance in the Finished Goods Inventory account on July 1,2007, was

$34,000 and the June 30, 2008, balancein the Finished Goods Inventory account was $41,000. If the cost ofgoods manufactured was $200,000, what was the cost of goodssold?

A. $285,000

B. $193,000

C. $207,000

D. $278,000

Which of the following describes thedifferences between job-order and process costing?
A. Job-order costing isused in financial accounting while process costing is used in managerial accounting.

B. Job-order costing canonly be used by manufacturers; service enterprises must use process costing.

Job-order costing is voluntary while process costing ismandatory.

D. Job-ordercosting traces costs to jobs while process costing traces costs todepartments and averages the costs among the units worked on duringthe period.

Which of the following costs isnot added to the Work in Process account in aprocess
costing system?

manufacturing overhead

direct materials

direct labor

advertising

You have tickets to go to Mexico(Cancun specifically) over spring break. Just this week your bestfriend informs you that s/he is getting married over spring breakand would like you to be in the wedding as an attendant. Which ofthe following is a sunk cost that should not be relevant to yourdecision as to whether be in the wedding or go on the trip toMexico?

The cost of the airline tickets to Mexico

The amount of refund you could get on the airline tickets toMexico

The cost of the clothing you will have to buy/rent to be in thewedding.

The fact that you have never been anywhere for Spring Break andwere really looking forward to going to Mexico

Department A began the period with45,000 units. During the period the department received another30,000 units from the prior department and completed 60,000 unitsduring the period. The remaining units were 75% complete. Theamount of equivalent units in Department A’s work-in-processinventory at the end of the period is:

A. 30,000.

B. 22,500.

C. 15,000.

D. 11,250.

Which of the following costs isleast likely to be a variable cost?

sales commissions

direct labor

indirect materials

supervisory salaries

Which of the following components areincluded in a mixed cost?

a sunk cost and an opportunity cost

a fixed cost and a variable cost

a manufacturing cost and a selling cost

a product cost and a period cost

Kari’s Kookies has total costs of$5,000 when 2,000 units are produced and $11,000 when 5,000 unitsare produced. What is the variable cost per unit?

$2.50

$2.20

$2.00

$0.50

Which of the following items appearson a contribution margin income statement but not on a GAAP incomestatement?

A. Sales

B. Gross margin

C. Net income

D. Contributionmargin

Well Water Inc. wants to produce andsell a new flavored water. In order to penetrate the market, theproduct will have to sell at $2.00 per 12 oz. bottle. The followingdata has been collected:

Annualsales 50,000 bottles

Projected selling and administrativecosts $8,000

Desiredprofit $70,000

The target cost per bottle is

a. $0.44.

b. $0.60.

c. $0.16.

d. $0.40.

The formal documents that quantify a company’s plans forachieving its goals are called

A. variance reports.

B. budgets.

C. exception logs.

D. cost of productionreports.

Which of the following costs doesnot change when the level of business activitychanges?
A. total fixedcosts
B. total variablecosts
C. total direct materialscosts
D. fixed costs perunit

When work is completed on a job, costsfor the completed job are found in which of the followingaccounts?

Raw Materials Inventory

Work in Process Inventory

Finished Goods Inventory

Cost of Goods Sold

In a processcosting system, when raw materials are put into process, the costof the items is moved from
A. Work in Process toFinished Goods.

Finished Goods to Cost of Goods Sold.

Raw Materials to Work in Process.

Finished Goods to Work in Process

Conversion costs are
A. often assumed to beadded at the beginning of the production process in each department.
B. the sum of the directmaterials and direct labor costs.
C. impossible to measurefor any particular department.
D. often assumed to beadded evenly throughout the process within the department.

Watch
2
answers
0
watching
15
views

For unlimited access to Homework Help, a Homework+ subscription is required.

Unlock all answers

Get 1 free homework help answer.
Get unlimited access
Already have an account? Log in
Share
Elin Hessel
Elin HesselLv2
17 Oct 2019
Get unlimited access
Already have an account? Log in
Share

Related questions

1.) On January 31, Village Bank had 500,000 shares of $3 parvalue common stock outstanding. On that date, the company declareda 10% stock dividend when the market price of the stock was $62 pershare. The immediate effect of this dividend upon Village Bankwas:

A.)A reduction in cash of $3,794,500.

B.) A reduction in retained earnings of $3,100,000.

C.) A reduction in retained earnings of $150,000.

D.) A liability to the stockholders of $150,000.

2.) Mayfair Corporation has outstanding 70,000 shares of $1 parvalue common stock as well as 20,000 shares of 7%, $100 par valuecumulative preferred stock. At the beginning of the year, thebalance in retained earnings was $800,000, and one year's dividendswere in arrears. Net income for the current year is $580,000.Compute the balance in retained earnings at the end of the year ifMayfair Corporation pays a dividend of $3 per share on its commonstock this year.

A.)

$1,080,000.

B.)

$1,670,000.

C.)

$890,000.

D.)

$310,000.

3.) During the years 2009 through 2011, Powers, Inc., reportedthe following amounts of net income (dollars in thousands):

Relative to the prior year, the percentage change in netincome:

A.)

Was the same in 2010 and 2011.

B.)

Was larger in 2011 than in 2010.

C.)

Was smaller in 2011 than in 2010.

D.)

Cannot be determined without knowing how many shares of stockwere outstanding.

4.) Hines Cannery issued capital stock in 2009 for $700,000.During 2009 the company paid dividends of $250,000. What is theeffect of these events in Hines' statement of cash flows for2009?

A.)

$700,000 cash provided by investing activities, and $250,000cash disbursed for financing activities.

B.)

$700,000 cash provided by financing activities, and $250,000cash disbursed for investing activities.

C.)

$700,000 cash provided by financing activities, and $250,000cash disbursed for operating activities.

D.)

$450,000 net cash provided by financing activities

5.) Direct labor costs in a paint factory would include wages ofemployees who:

A.)

Supervise heavy equipment operators.

B.)

Operate paint-mixing machines.

C.)

Develop highly secret formulas for new products.

D.)

Paint the interior of the factory every two years.

6.) Which of the following is a characteristic of manufacturingoverhead in a job order cost system?

A.)

It is indirectly traceable to specific jobs or units.

B.)

It includes the cost of all labor relating to manufacturingoperations.

C.)

It is assigned to units produced by means of an overheadapplication rate.

D.)

It includes the cost of direct materials used and of indirectlabor.

7.) A job order cost system traces direct materials cost to aparticular job by means of:

A.)

Materials requisitions.

B.)

A production budget.

C.)

The Materials Inventory controlling account.

D.)

A debit to the job cost sheet for the job.

8.) Which of the following costing systems would always use jobcost sheets?

A.)

Job order costing.

B.)

Process costing.

C.)

Activity-based costing.

D.)

All three systems.

9.) Edwards Auto Body uses a job order cost system. Overhead isapplied to jobs on the basis of direct labor hours. During thecurrent period, Job No. 337 was charged $425 in direct materials,$475 in direct labor, and $190 in overhead. If direct labor costsan average of $16 per hour, the company's overhead application rateis:

A.)

$7.27 per direct labor hour.

B.)

$6.40 per direct labor hour.

C.)

$17.50 per direct labor hour.

D.)

$40 per direct labor hour.

10.) Marty's Metal Shop uses a job order cost system. It appliesoverhead to jobs at a rate of 175% of direct labor costs. Job No.2617 required $800 in direct labor costs. The job was initiallybudgeted to require $850 in direct labor costs. Overhead applied toJob No. 2617 during the period amounted to:

A.)

$850.

B.)

$1,400.

C.)

$1,275.

D.)

Some other amount.

11.) In a job cost system, the Work-in-Process Inventorycontrolling account may be reconciled to the total of the:

A.)

Employee time cards.

B.)

Materials requisitions.

C.)

Work-in-Process Inventory records for each department orprocess.

D.)

Job cost sheets.

12.) For the month of December, its first month of operations,the Radcliffe Corporation completed and transferred 800 units ofproduct costing $80,000 to produce to Finished Goods Inventory. IfRadcliffe sold 650 units during the same month, how much was costof goods sold for the same period?

A.)

$80,000.

B.)

$8,000.

C.)

$6,500.

D.)

$65,000.

13.) The computation of equivalent full units is generally notnecessary when:

A.)

Beginning work-in-process inventories are significantly largerthan ending work-in-process inventories.

B.)

Beginning and ending work-in-process inventories differ onlyslightly.

C.)

The number of units in ending work-in-process exceeds the numberof units completed and transferred to finished goods during theperiod.

D.)

Per-unit costs become distorted as a result of not computingequivalent full units of production.

14.) During July, the equivalent full units of direct materialsadded to the product worked on by Department A amounted to a totalof 90,000 applied as follows: beginning inventory, 20,000 units;units started and completed in July, 60,000 units; and endinginventory, 10,000 units. Assuming that the cost of direct materialsrequisitioned by the department in July was $135,000; the amount ofthe materials cost to be assigned to the ending inventory wouldbe:

A.)

$16,875.

B.)

$54,000.

C.)

$15,000.

D.)

$18,000.

CompuFurn, Inc. manufactures furniture for computer workstations. CompuFurn uses a job-order costing system and employs absorption costing. ComuFurn’s work-in-process inventory on November 30 consisted of the following jobs:

JOB NUMBER DESCRIPTION UNIT ACCUMULATED COSTS
CC723 Computer Caddy 20,000 $900,000
CH291 Chair 15,000 $431,000
PS812 Printer Stand 25,000 $250,000
Total $1,581,000

On November 30, the company’s finished-goods inventory, which is evaluated using the first-in, first-out (FIFO) method, consisted of four items:

ITEM QUANTITY & UNIT COSTS ACCUMULATED COSTS

Computer Caddy
7,500 units @ $64 $480,000
Chair
19,400 units @ $35 each $679,000
Printer Stand 21,000 units @ $55 each $1,155,000
Desk 11,200 units @ $102 each $1,142,400
Total $3,456,400


At the end of November, the balance in CompuFurn’s Materials Inventory account, which includes both raw materials and purchased parts, was $668,000. Additions to and requisitions from the materials inventory during the month of December included the following:

ADDITIONS RAW MATERIALS PURCHASED PARTS
Purchases $242,000 $396,000
Requisitions:
Job CC723 $51,000 $104,000
Job CH291 $3,000 $10,800
Job PS812 $124,000 $87,000
Job DS444 (5,000 desks) $65,000 187,000


CompuFurn applies manufacturing overhead on the basis of machine hours. The company’s manufacturing overhead budget for the year totaled $4,500,000. The company planned to use 900,000 machine hours during this period, which is the firm’s estimated practical capacity. Through the first 11 months of the year, a total of 830,000 machine hours were used, and actual manufacturing overhead amounted to $4,140,000.

During the month of December, machine hours and labor hours consisted of the following:

ACCOUNT MACHINE HOURS LABOR HOURS COST
CC723 12,000 11,600 $122,400
CH291 4.400 3,600 $43,200
PS812 19,500 14,300 $200,500
DS444 14,000 12,500 $138,000
Indirect Labor --- 3,000 $29,400
Supervision --- --- $57,600
Total 49,900 45,000 $591,100


The jobs completed in December and the unit sales for that month are as follows:

JOB NO. PRODUCTION ITEMS QUANTITY COMPLETED ITEM QUANTITY SHIPPED
CC723 Computer Caddy 20,000 Computer Caddy 17,500
CH291 Chair 15,000 Chair 21,000
DS444 Desks 5,000 Printer Stand 18,000
Desks 6,000


REQUIRED:

1. Describe when it is appropriate for a company to use a job-order costing system.

2. Calculate the balance in CompuFurn, Inc.’s Work-in-Process Inventory account as of December 31.

3. Calculate the cost of the chairs in CompuFurn, Inc.’s finished-goods Inventory as of December 31.

4. Actual manufacturing overhead incurred in December amounted to $252,000. Calculate CompuFurn’s overapplied or underapplied overhead for the year.


5. Explain two alternative accounting treatments for overapplied or underapplied overhead balances when using a job-order costing system.

I. The basic parts of a joborder costing system are the:

A. Cost______________ and _________________ procedures.

B. ____________________ documents.

C. Accountsthat a company uses when it incurs costs for direct ____________,direct ________________, and ___________________.

II. Accounting for materialsrequires three types of entries.

A. With the ______________ of materials,debit Materials Inventory and credit Accounts Payable.

B. With the _______________ of directmaterials to ________________, debit Work in Process Inventory andcredit Materials Inventory.

C. With the transfer of__________________ materials to production, debit Overhead andcredit Materials Inventory.

III. Accounting for labor requirestwo types of entries.

A. For payroll costs incurred for_____________ labor, debit Work in Process Inventory and creditPayroll Payable.

B. For payroll costs incurred for_______________ labor, debit Overhead and credit PayrollPayable.

IV. Accounting for other overhead requires twotypes of entries.

A. Other overhead includes plant____________, property _____________, insurance, and_______________.

B. To record _____________ overhead costs,debit Overhead and credit Cash or Accumulated Depreciation.

C. To record _____________ overheadcosts, debit Work in Process Inventory and credit Overhead.

D. The actual (debits) and estimated(credits) overhead costs are ________________ at the end of theperiod to determine the accuracy of overhead costrecognition.

V. To recordthe transfer of ________________ units, debit Finished GoodsInventory and credit Work in Process Inventory.

VI. When a companyuses a perpetual inventory system, two accounting entries are madewhen products are sold.

A. To record the sold product’s________________, debit Accounts Receivable (or Cash) and creditSales.

B. To record the sold product’sassociated ____________, debit Cost of Goods Sold and creditFinished Goods Inventory.

VII. Each job in production has a job order_________________.

A. Hasspace for direct materials, direct labor, and overhead costs.

B. Includesthe job order number, product specifications, customer name, dateof order, projected completion date, and a cost summary.

C. Forincomplete jobs, they make up the _______________ ledger for theWork in Process Inventory account.

D. When ajob is completed, the costs are totaled on the_____________________.

1. Unit cost is computed to_____________ items in inventory.

2. Product ___________Cost = Total Costs for Job ÷ Number of Good Units Produced

VIII. Job order costing systems are also used in______________ organizations.

A. Job ordercost cards track ________________ contracts.

IX. Overhead costs are allocated in foursteps.

A. Step 1: _____________ the overheadrate.

1. A ________________ overheadrate is calculated as estimated overhead costs divided by estimatedcost driver activity.

B. Step 2:______________ the overhead rate.

1. Costs are assigned by multiplyingthe actual cost _____________ activity by the predeterminedoverhead rate.

C. Step 3:Record ________________ overhead costs

D. Step 4:_________________ applied and actual overhead amounts

1. Ifover- or underapplied amounts are minimal, credit or debit_________________.

2. Ifover- or underapplied amounts are material, adjustments should bemade to the inventory accounts affected.

X. The__________________ approach to applying overhead costs is to use asingle plantwide rate.

XI. The moreaccurate _____________________ approach to applying overhead costscreates many smaller activity pools and establishes separate ratesfor each pool.

Weekly leaderboard

Home
Homework Help 3,900,000
Accounting 580,000
Start filling in the gaps now
Log in