2. Cost of Goods Sold account is credited.
Cost of Goods Manufactured account is credited.
Finished Goods Inventory account is credited.
Work-in-Process Inventory account is credited.
Finished Goods Inventory account is debited.
2.The two main advantages of using predetermined factory
overhead rates are to provide more accurate unit cost information and to:
(Points : 2)
Simplify the accounting process.
Provide cost information on a timely basis.
Insure transmission of correct data.
Extend the useful life of the cost data.
Adjust for variances in data sources.
3.The total cost of direct materials, direct labor, and
factory overhead transferred from the Work-in-Process Inventory account to
the Finished Goods Inventory account during an accounting period is:
(Points : 2)
Normal cost of goods sold.
Adjusted cost of goods sold.
Total manufacturing cost.
Cost of goods manufactured.
Actual cost of goods sold.
4.When completed units are transferred to the warehouse:
(Points : 2)
Cost of Goods Sold account is debited.
Cost of Goods Manufactured account is debited.
Finished Goods Inventory account is debited.
Work-in-Process Inventory account is debited.
Finished Goods Inventory account is credited.
5.Which of the following activities is a facility-level
activity? (Points : 2)
Plant management salaries.
Depreciation on a highly specialized piece of
production equipment.
Direct labor.
Product design.
6.An activity that is performed for each unit of
production is a(n): (Points : 2)
10.In calculating unit cost in a process costing system,
“conversion cost” is defined as the sum of: (Points : 2)
Direct and indirect material costs.
Direct and indirect labor costs.
Direct labor and factory overhead costs.
Indirect labor and factory overhead costs.
11.Process cost systems are used in all of the following
industries except: (Points : 2)
12.The key difference between weighted-average and FIFO
process costing methods is the handling of the partially completed: (Points
: 2)
Beginning direct materials inventory.
Ending direct materials inventory.
Beginning work-in-process inventory.
Ending work-in-process inventory.
Beginning finished goods inventory.
13.ABC Company uses a Materials Inventory account to record
both direct and indirect materials. ABC charges direct materials to WIP,
while indirect materials are charged to the Factory Overhead account.
During the month of April, the company has the following cost information:
Total Materials (Direct and Indirect) Purchsed
= $ 90,000
Indirect Materials Issued to
Production
=
30,000
Total Materials Issued to
Production
=
110,000
Beginning Materials Inventory
=
50,000
The ending materials inventory cost is: (Points : 2)
$110,000.
$30,000.
$90,000.
$80,000.
$50,000.
14.Wings Co. budgeted $555,600 manufacturing direct wages,
2,315 direct labor hours, and had the following manufacturing overhead:
Overhead Cost Pool – Budgeted O/H $ – Budgeted
Level for Cost Driver – O/H Cost Driver
Materials Handling
$160,000
3,200 lbs.
Material Weight
Machine
Setup
13,200
390
S/U’s
# of S/Us
Machine
Repair
1,380
30,000 Mach.
Hrs
Machine Hrs.
Inspections
10,560
160
Inspections
# of Inspections
Requirements for Job #971 which included 4 Units of Production:
D/L Hours = 20 Hours
D/Mat’ls
= 130 lbs.
Machine S/U = 30 Set-ups
Machine Hrs. = 15,000 Machine Hours
Inspections = 15
Inspections.
Using ABC, the materials handling overhead cost assigned to Job #971 is:
(Points : 2)
$2,300.
$990.
$6,500.
$690.
$1,020.
15.Randall Company manufactures products to customer
specifications. A job costing system is used to accumulate production
costs. Factory overhead cost was applied at 125% of direct labor cost.
Selected data concerning the past year’s operation of the company are
presented below.
Direct Materials January 1
= $77,000
Direct Materials December 31
= 40,000
WIP January 1
=
66,000
WIP December 31
=
42,000
Finished Goods January 1
=
115,000
Finished Goods December 31
=
100,000
Other Information:
Direct Materials Purchased
=
$324,000
Cost of Goods Available for Sale
= 950,000
Actual Factory Overhead
=
206,000
The cost of goods manufactured during the year is: (Points : 2)
$850,000.
$348,000.
$672,000.
$835,000.
$811,000.
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