ACCTG 322 Final Exam
Williams Company's direct labour cost is 25% of its conversion cost. If the
manufacturing overhead cost for the last period is $45,000 and the direct materials cost
is $25,000, what is the direct labour cost?
A) $15,000
B) $33,333
C) $20,000
D) $60,000
Green Company's costs for the month of August are as follows:
Direct materials used $27,000
Direct labour $34,000
Sales salaries $14,000
Indirect labour $10,000
Indirect materials $15,000
General corporate administrative costs $12,000
Property taxes on manufacturing facility $2,000
Rent on factory $17,000
The beginning work-in-process inventory is $16,000 and the ending work-in-process
inventory is $9,000. What is the cost of goods manufactured for the month?
A) $105,000
B) $132,000
C) $112,000
D) $138,000
For a lamp manufacturing company, the cost of the insurance on its vehicles that deliver
lamps to customers is best described as a:
A) Manufacturing Overhead Cost
B) Prime Cost
C) Differential Cost of a Lamp
D) Period Cost
Is costs that are not tied to or related to the production of goods
The salaries of the production supervisors would be an example of
A) Indirect labour
B) Direct labour
,C) Indirect Materials
D) Period Costs
Salaries are not materials and period costs refer to anything not related to the
production of goods. Direct Labour is only costs associated directly with producing
goods.
Costs that are expensed as incurred are
A) Period (non-manufacturing) Costs
B) Indirect Costs
C) Product (manufacturing) Costs
D) Direct Costs
Period Costs are directly defined as costs that are expensed as they are incurred; they
are costs not related to the production of goods
What would be the classification of the transportation costs incurred by a manufacturing
company to ship its product to its customers?
A) Manufacturing Overhead.
B) None of the answers provided
C) Period Cost
D) Product Cost
Period Costs are costs not related to production of goods
Prime Costs consist of:
A) Direct Material and Direct Labour
B) Direct Material, Direct Labour and Manufacturing Overhead
C) Direct Material and Manufacturing Overhead
D) Direct Labour and Manufacturing Overhead
Indirect costs are usually allocated rather than traced to cost objects because
A) No causal relationship exists between indirect costs and the cost object
B) Allocation is more convenient than tracing
C) Allocation is required by external reporting requirements
D) Overall accuracy is improved by allocation
The salary of the vice-president of finance would be classified as
A) Direct Labour
B) Direct Materials
, C) Selling and Administrative Costs
D) Manufacturing Overhead
How would the cost of rent for a manufacturing plant generally be classified?
A) A product cost but not a prime cost
B) A prime cost but not a product cost
C) Neither a product cost nor a prime cost
D) Both a prime cost and a product cost
Prime Cost includes Direct Materials and Direct Labour. Rent for a manufacturing plant
isn't classified as either but is still related to production of goods, hence it is a product
cost.
Shipping expense is $9,000 for 8,000 kilograms shipped and $11,250 for 11,000
kilograms shipped. Assuming that this activity is within the relevant range, if the
company ships 9,000 kilograms, its expected shipping expense would be closest to
which of the following?
A) $8,583
B) $10,125
C) $9,750
D) $9,972
The following is Addison Corporation's contribution format income statement for last
month:
Sales $1,000,000
Less: variable expenses $700,000
Contribution Margin $300,000
Less: fixed expenses$180,000
Operating Income $120,000
The company has no beginning or ending inventories. A total of 20,000 units were
produced and sold last month. What is the company's margin of safety in dollars?
A) $120,000
B) $880,000
C) $400,000
D) $600,000
The following is Addison Corporation's contribution format income statement for last
month:
Sales$1,000,000
Less: variable expenses $700,000
