ACC241 Examination #2 All Questions Solved.100%
1. All of the following statements are correct when referring to process costing except: 2. Hallow Company produces ping pong balls using a three-step sequential process that includes molding, coloring and finishing. When the balls are completely finished, out of which account should their cost be transferred? Which of the following would use process costing? A company manufactures exterior paint. Last month’s costs were: What were the conversion costs for the month? . In a particular department, 5,000 units were started, 4,400 units were completed and
transferred out, leaving 600 units in WIP at the end of the period. These 600 were 70%
complete for materials and 45% for conversion costs. Costs added were $52,300 for materials and $53,500 for conversion costs. What is the total number of equivalent units for direct materials?
The following information is provided by Dart Manufacturing: The units in ending WIP inventory were 90% complete for materials and 60% complete for
conversion costs. At the end of the year, what are the equivalent units for conversion costs?
If all direct materials are added at the end of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is: Acme Manufacturing produces plastic water bottles using a three-step sequential process that includes molding, coloring and finishing. When the bottles and associated costs are
transferred out of the coloring process and into the finishing process, the journal entry would include a: The entry to record actual manufacturing overhead costs incurred in a process department would include a: Which of the following costs is an example of a fixed cost? Within the relevant range, which of the following statements is TRUE with respect to fixed costs per unit? Which of the following statements describes variable costs? Total costs for Watson & Company at 100,000 units are $350,000, while total fixed costs are $150,000. The total variable costs at a level of 200,000 units would be: Which of the following would be considered a committed fixed cost?
Using account analysis, what type of cost is utilities if you are charged $40 for the first 200 kilowatts hours, $85 for 201- 400 kilowatt hours, and $135 or - for 401-600 kilowatt hours? Harbor Manufacturing is trying to predict the cost associated with producing its anchors. At a production level of 4,000 anchors, Harbor Manufacturing’s average cost per anchor is $50.00. If $20,000 of the total costs are fixed, what is the variable cost of producing each anchor? At Raines Company, total fixed and variable costs are $480,000 at a production level of
140,000 units. The company has total fixed costs of $200,000. The variable cost per unit at
200,000 units is: To follow is information about the units produced and total manufacturing costs for Snow Enterprises for the past six months. Using the high-low method, what will the total monthly manufacturing costs be if the company produces 7,500 units? If a regression analysis shows an R factor of 0.13, it is safe to assume: Cornell Corporation gathered the following information for the year just ended: During the year, Cornell produced and sold 60,000 units of product at a sale price of $8.00
per unit. There was no beginning inventory of product at the start of the year.
What is the contribution margin for the year? On a CVP graph, the area to the right of the break-even point and between the total revenue line and total expense line represents: Warfield Corporation wanted to determine the relationship between its monthly operating costs and a potential cost driver, machine hours. The output of a regression analysis showed the following information (note: only a portion of the regression analysis results is presented here.) What is closest to the total cost if the firm uses 5,000 machine hours? Anthony Office Supplies sells refills on printer ink cartridges for $16 per refill. Variable costs are $4 per refill. Fixed costs are $2,000 per month. What is the contribution margin ratio for the printer ink cartridge refills? If the sale price per unit is $12, the unit contribution margin is $5, and total fixed expenses are $21,000, what are the breakeven sales in units? Schimmel Company provides the following information about its single product. How many units must be sold to earn the targeted operating income? Given breakeven sales in units of 28,000 and a unit contribution margin of $4, how many units must be sold to reach a target operating income of $4,000? Which of the following statements is TRUE if the variable cost per unit decreases while the sales price per unit and total fixed costs remain constant? Busson Company management has budgeted the following amounts for its next fiscal year: If Busson Company can reduce fixed expenses by $10,300, how will breakeven sales in units
be affected? The higher the operating leverage factor, the: Majid Corporation sells a product for $240 per unit. The product's current sales are 41,300 units and its break-even sales are 36,757 units. What is the margin of safety in dollars? In a special sales order decision, incremental fixed costs that will be incurred if the special order is accepted are considered to be Which of the following is a sunk cost? Which would be a consideration when accepting special orders? Woodson Corporation provided the following information regarding its only product: Assuming there is excess capacity, what would be the effect on operating income of
accepting a special order for 1,200 units at a sale price of $60 per product assuming
additional fixed manufacturing overhead costs of $5,000 is incurred? (NOTE: Assume
regular sales are not affected by the special order.) Which of the following is the format of the income statement most useful in decisionmaking? Which of the following describes target total cost? A grocery store decides to drop its health and beauty section of products because it has been
unprofitable. This strategy could backfire because: Housewares Corporation has two product lines: cups and pitchers. Income statement data for the most recent year follow: Assuming the Pitcher line is dropped, total fixed costs remain unchanged, and the space
formerly used to produce the line is rented for $45,000 per year, how will operating income
be affected? Which of the following would NOT be an outsourcing consideration? Which of the following would be a consideration for “sell as is or process further” decisions?
ACC241 Exam 100% answers and worked solutions
Which of the following report to the audit committee of the Board of Directors? Which of the following management responsibilities are being fulfilled when management uses
feedback to take corrective action on the budgets? Which of the following statements is TRUE about managerial accounting information? Which of the following persons or groups would be LEAST likely to receive detailed managerial
accounting reports? To resolve ethical dilemmas, the IMA suggests that management accountants should FIRST: SOX requires publicly traded companies to have ___________ assessed annually Managerial accounting is needed by which type of company? Which of the following items would NOT be found in raw materials inventory for a furniture
manufacturer? When determining the cost of a manufactured product, a salesperson’s salary would be classified
as: All of the following would be considered a direct material for a mattress EXCEPT: Comfy Furniture Company manufactures furniture at its Akron, Ohio, factory. Some of its costs
from the past year include: Prime costs for Comfy Furniture Company totaled: In a manufacturing plant, which is an example of indirect labor? When do inventoriable costs become expenses? When manufacturing products, which of the following is an example of an inventoriable cost? Towpath Tennis & Recreation’s operating activities for the year are listed below (000s omitted). What is the cost of goods sold for the year? Purchases $150,000
Operating expenses 62,000
Beginning inventory 27,000
Ending inventory 32,000
Sales revenue 302,000
____________ information is that which differs between alternatives and can affect the future. Variable costs: Job order costing might be used by a: Selected financial information for Sunnydale Manufacturing is presented in the following table
(000s omitted). Sales revenue $ 4,000
Purchases of direct materials $ 500
Direct labor $ 450
Manufacturing overhead $ 620
Operating expenses $ 700
Beginning raw materials inventory $ 150
Ending raw materials inventory $ 170
Beginning work in process inventory $ 320
Ending work in process inventory $ 310
Beginning finished goods inventory $ 250
Ending finished goods inventory $ 200
What was direct materials used?
The assignment of direct and indirect materials to cost objects reduces:
An internal request for raw materials calls for a _____________ to be completed.
Chilson Company manufactures custom engines for use in the lawn and garden equipment
industry. The company allocates manufacturing overhead based on machine hours. Selected data
for costs incurred for Job 612 are as follows:
What amount of manufacturing overhead would be allocated to Job 612?
Use the following information for Garrett Company for the next two questions.
overhead $ 240,000 Factory utilities $ 29,100
Estimated labor hours 35,000 Indirect labor $ 23,500
Actual direct labor hours 36,000 Sales commissions $ 53,700
Estimated direct labor cost $ 300,000 Factory rent $ 49,200
Actual direct labor cost $ 320,000 Factory property taxes $ 28,100
Factory depreciation $ 67,200 Indirect materials $ 33,000
If the company allocates overhead based on direct labor cost, what is the predetermined
manufacturing overhead rate?
If the company allocates manufacturing overhead based on direct labor cost, what are the
allocated manufacturing overhead costs?
If a job consists of a batch of identical units, managers find the unit cost by:
Clyde Company gathered the following information for the year ended December 31:
Direct labor cost incurred for the year $180,000
Estimated manufacturing overhead costs $240,000
Estimated direct labor cost $200,000
Work in process inventory, Dec. 31 $55,000
Finished goods inventory, Dec. 31 $67,500
Cost of goods sold $141,000
Estimated direct labor hours 300,000
What would the predetermined manufacturing overhead rate for the year be using direct labor
cost as the allocation base?
Before the year began, Johnson Manufacturing estimated that manufacturing overhead for the
year would be $160,000 and that 12,000 direct labor hours would be worked. Actual results for
the year included the following:
If the company allocates manufacturing overhead based on direct labor hours, the manufacturing
overhead for the year would have been:
If manufacturing overhead has been underallocated during the period, then:
Finished goods inventory is debited and work in process inventory is credited for: The journal entry needed to allocate manufacturing overhead to specific jobs would include a: Cost distortion results in the: Which of the following condition(s) favors using departmental overhead rates in place of a
plantwide overhead rate? ABC costing might lead to: Durable Engines Company uses ABC to account for it manufacturing process. Durable Engines Company expects to produce 2,000 engines. Durable Engines Company also
expects to use 12,000 parts and have 16 setups.
The allocation rate for materials handling will be: Sparrow Manufacturing manufactures small parts and uses an activity-based costing system.
Activity Est. Indirect Activity
Allocation base Cost allocation rate
Materials $70,000 Material moves $2.00/move
Assembling $240,000 Direct labor hours $8.00/dir. labor hour
Packaging $80,000 # of finished units $0.80/finished unit
The following parts were produced in October with the following information:
Total manufacturing costs for part A is: Rach & Johnson is an advertising agency. The firm uses an activity-based costing system to
allocate overhead costs to its services. Information about the firm’s activity cost pool rates
Smythe Company was a client of Rach & Johnson. Recently, 8 administrative assistant hours, 2
new ad campaigns, and 6 meeting hours were incurred for the Smythe Company account.
Using the activity-based costing system, how much overhead cost would be allocated to the
Smythe Company account?
Non-value-added activities are:
The benefits of using the ABC costing system are higher if the company:
Which of the following is TRUE about a lean production system? If a company were to increase its appraisal costs by inspecting more units as the units are
completed, the company’s internal failure costs: