Upgrade to remove ads
Only $35.99/year

AC 642 final (Test 1)

Terms in this set (39)

The _____ system is an integrated system capable of providing access to real-time data from the various functional areas of a company.

lean accounting management

operational control information

enterprise resource planning

financial management information
enterprise resource planning
Which of the following relates to the credibility section of the IMA Code of Conduct?

Communicate professional limitations.

Prepare clear and complete reports.

Avoid actual or apparent conflicts of interest.

Communicate information fairly and objectively.
Communicate information fairly and objectively.
Lanowski Corporation seeks to continuously improve its productive capacity to meet increasing demand. In order to accomplish this goal, the company identifies the department that most critically limits the total capacity to produce, and focuses on improving that department's capacity. Lanowski then repeats this process once this department is no longer holding back production. This management method or concept is referred to as

Enterprise resource planning


just-in-time manufacturing


target costing


theory of constraints
Enterprise resource planning*
Disclosing all information, unfavorable as well as favorable, that could influence an intended user's understanding of reports, would relate to what section of the IMA Code of Conduct?

independence

competence

integrity

credibility
credibility
Which of the following costs incurred by an aircraft manufacturer would be traced to the product cost through direct tracing if a specific airplane is the cost object?

cost of a radar for a specific aircraft

factory cafeteria costs

rent on the factory facility

the depreciation on factory equipment
the depreciation on factory equipment
In resolving an ethical conflict, which of the following would NEVER be appropriate?

discussing the matter with an external member of the board of directors

resigning from the position because of a conflict

taking the matter to the press where there is no legal requirement

discussing the matter with the chief executive officer
taking the matter to the press where there is no legal requirement
Cost of goods sold equals cost of goods manufactured

when work-in-process inventories remain constant.

plus beginning work-in-process inventory minus ending work-in-process inventory.

when finished goods inventories remain constant.

when materials inventories remain constant.
plus beginning work-in-process inventory minus ending work-in-process inventory.
Which one of the following does not appear on the balance sheet of a manufacturing company?

Finished goods inventory


Raw materials inventory


Cost of goods manufactured


Work in process inventory
Cost of goods manufactured
Which cost assignment method would likely assign the cost of heating in a plant that makes beds and dressers when the bed product line is the cost object?

direct tracing

allocation

driver tracing

arbitration
allocation
Which one of the following is not considered as material costs?

Partially completed motor engines for a motorcycle plant


Lumber used to build tables


Rivets for the wings of a new commercial jet aircraft


Bolts used in manufacturing the compressor of an engine
Partially completed motor engines for a motorcycle plant
Which of the following managerial objectives is served by traditional product costs?

Product mix decisions

Tactical profitability analysis

External financial reporting

Strategic design decisions
External financial reporting
The subtotal, "Cost of goods manufactured" appears on

a manufacturing company's income statement.

both a manufacturing and a merchandising company's income statement.

a merchandising company's income statement.

neither a merchandising nor a manufacturing company's income statement.
a manufacturing company's income statement.
A manufacturing process requires small amounts of glue. The glue used in the production process is classified as a(n)

indirect material.


direct material.


miscellaneous expense.


period cost.
indirect material.
Inventoriable costs that expire this period will become part of

gross profit.


cost of goods sold.


sales revenue.


selling expenses.
cost of goods sold.
Both direct materials and indirect materials are

sold directly to customers by a manufacturing company.


normally traceable to an individual final product..


raw materials.


manufacturing overhead.
raw materials.
Which of the following statements is true of traceability?

It uses well-specified economic events as inputs, and its processes follow certain rules and conventions.

It is used for investment decisions, stewardship evaluation, activity monitoring, and regulatory measures.

It is concerned with determining what activities should be performed by managers and assessing how well they are performed.

It is the ability to assign a cost directly to a cost object in an economically feasible way by means of a causal relationship.
It is the ability to assign a cost directly to a cost object in an economically feasible way by means of a causal relationship.
The product cost that is most difficult to associate with a product is

direct materials.


advertising.


direct labor.


manufacturing overhead.
manufacturing overhead.
Which of the following would NOT be included in the conversion cost of an automobile?

assembly worker wages

depreciation on machinery

steel

screws used in assembly
steel
Direct costs

are those costs that can be easily and accurately traced to a cost object.

are incurred for the benefit of the business as a whole.

would continue even if a particular product were discontinued.

can be assigned to products only by a process of allocation.
are those costs that can be easily and accurately traced to a cost object.
Which one of the following costs would not be inventoriable?

Factory insurance costs


Indirect materials


Period costs


Indirect labor costs
Period costs
The ending work-in-process inventory is deducted on the

statement of cost of goods manufactured.

income statement.

balance sheet.

statement of cash flows.
statement of cost of goods manufactured.
Direct material purchases for Sandman Corporation were $225,000 last year. Direct materials used in the production process were $275,000, and beginning inventory of direct materials was $125,000. The ending direct materials inventory was

$50,000


$100,000


$75,000


$175,000
$75,000

ending direct materials inventory = beginning inventory + net purchases - cost of goods sold
A cost which remains constant per unit at various levels of activity is a

fixed cost.


variable cost.


manufacturing cost.


mixed cost.
variable cost.
What is the proper classification for assembly line wages of $15 per hour, when there is a direct relationship between hours worked and total wages?

semivariable cost

fixed cost

variable cost

mixed cost
variable cost
A mixed cost contains

both selling and administrative costs.


both retailing and manufacturing costs.


a variable element and a fixed element.


both operating and nonoperating costs.
a variable element and a fixed element.
The high-low method may give unsatisfactory results if

volume of activity is light.

the points are unrepresentative.

the data points all fall on a line.

volume of activity is heavy.
the points are unrepresentative.
The following information is available for electricity costs for Killwillie Company:
​
Month
Production Volume _______ Electricity Costs
January 1,400 $2,200
February2,800 5,400
March 3,200 5,700
April1,750 3,900
May1,200 2,400
June2,100 4,050
​
Using the high low method, what are the estimated fixed costs?

$100

$200

$375

$420
$100
The two basic types of cost accounting systems are

job order and job accumulation systems.


job order and process cost systems.


job order and batch systems.


process cost and batch systems.
job order and process cost systems.
Verner Corporation constructs new homes and uses a job costing system. During July, the following transactions occurred:Verner purchased $4,500 of lumber on account.Verner used $3,750 of lumber in production and incurred 50 hours of direct labor hours at $15 per hour.Depreciation of $1,500 on equipment used to build new houses was recorded.A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash.
​
The journal entry to record the requisition of lumber would include a

credit to Finished Goods of $3,750.

debit to Work-in-Process of $3,750.

debit to Materials Inventory of $3,750.

debit to Work-in-Process of $4,500.
debit to Work-in-Process of $4,500.
Which cost accounting processes would be most appropriate for firms that mass-produce large quantities of similar or homogeneous products?

Job-order costing

Process costing

Common-size costing

DuPont costing
Process costing
The entry to record the acquisition of raw materials on account is

Work in Process Inventory Accounts Payable

Raw Materials Inventory Accounts Payable

Accounts Payable Raw Materials Inventory

Manufacturing Overhead Raw Materials Inventory Accounts Payable
Raw Materials Inventory Accounts Payable
If the entry to assign factory labor showed only a debit to Work In Process Inventory, then all labor costs were

overtime related.


indirect labor.


direct labor.


regular hours.
direct labor.
Cost of raw materials is debited to Raw Materials Inventory when the

bill for the materials is paid.


materials are received.


materials are put into production.


materials are ordered.
materials are received.
Bestro Company applies overhead on the basis of 200% of direct labor cost. Job No. 501 is charged with $240,000 of direct materials costs and $320,000 of manufacturing overhead. The total manufacturing costs for Job No. 501 is

$720,000.


$560,000.


$800,000.


$880,000.
$720,000.

total manufacturing cost = 320000/2 + 320000 + 240000
Nowater Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period:

Estimated annual overhead 1600000
actual annual overhead 1575000
estimated machine hours 400000
actual machine hours 390000

$1,560,000 applied and $15,000 overapplied


$1,575,000 applied and neither under-nor overapplied


$1,560,000 applied and $15,000 underapplied


$1,600,000 applied and $15,000 overapplied
$1,560,000 applied and $15,000 underapplied
On March 9, Job XX4 was completed. The job cost sheet showed a total of $6,000 in direct materials and $8,000 in direct labor at a rate of $20 per direct labor hour. Factory overhead is applied at $30 per direct labor hour. The debit to Finished Goods Inventory to record the completion of Job XX4 is

$11,000.

$17,000.

$26,000.

$6,000.
$26,000.

$6,000 + $8,000 + $30($8,000 / $20) = $26,000
In the Skyview Company, the following job cards were totaled at the end of the month:
​
Job 243 $5,750
Job 244 $4,980
Job 245 $3,675
Job 246 $4,250
Job 247 $5,100
Job 248 $3,800
​
Jobs 243 and 244 were in Finished Goods Inventory at the beginning of the month. Jobs 245 and 246 were in Work-in-process at the beginning of the month. Jobs 247 and 248 were started during the month. At the end of the month, Jobs 243 and 247 were sent to customers; jobs 245, 247, and 248 were completed and sent to finished goods.
What is the ending work-in-process inventory for the month?

$4,250

$7,925

$12,575

$10,730
$4,250

add job 245 and 246 because both were work in process, but 245 was completed, so only 246 is wip at end of month
Total manufacturing-related costs incurred by Josephine Company in October for all its jobs is as follows:
Direct materials
$ 1000
Insurance of factory building
160
Direct labor
1,400
Property taxes-factory building
700
Other factory overhead costs
1,550
Factory overhead applied
1,950
​
Assuming Josephine uses a normal costing system and applies overhead based on a predetermined rate, what is the credit to Overhead Control to close the account at the end of the year?

$1,320

$560

$1,250

$460
$460

Actual overhead incurred = insurance of factory building + property taxes factory building + other factory overhead costs. Actual overhead = actual overhead incurred - factory overhead applied
Swan Lake Company's accounting records reflect the following inventories for the most recent year:


__________________________________Beginning Ending
Raw materials inventory $310,000 $260,000
Work in process inventory 300,000 160,000
Finished goods inventory 190,000 150,000

Swan Lake purchased $800,000 of raw materials, direct labor costs amounted to $670,000, and manufacturing overhead was $640,000.If cost of goods manufactured amounted to $1,890,000, its cost of goods sold for the year is

$1,750,000.


$1,930,000.


$1,850,000.


$2,000,000.
$1,930,000.

cost of goods sold = COGM + finished goods beginning - finished goods ending. COGM = direct materials cost + direct labor cost + manufacturing overhead + beginning WIP - ending WIP
Other sets by this creator