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Review 1

Q1

GA Co. produces washers and dryers in an assembly-line process. Labor costs incurred

during a recent period were: corporate executives, $500,000; assembly-line workers,

$180,000; security guards, $45,000; and plant supervisor, $110,000. The total of GA’s

direct labor cost was:

A. $110,000.

B. $180,000.

C. $155,000.

D. $235,000.

E. $735,000

Q2

Which of the following employees would not be classified as indirect labor?

A. Plant custodian.

B. Salesperson.

C. An employee that packs products for shipment.

D. Plant security guard.

E. A line employee that produces parts for chairs using a saw and template

Q3

Which of the following costs is not a component of manufacturing overhead?

A. Indirect materials.

B. Factory utilities.

C. Factory equipment.

D. Indirect labor.

E. Property taxes on the manufacturing plant.

Q4

The predetermined overhead allocation rate is calculated by dividing ________.

A. the total estimated overhead costs by total number of days in a year

B. the estimated amount of cost driver by actual total overhead costs


C. the actual overhead costs by actual amount of the cost driver or allocation base

D. the estimated overhead costs by total estimated quantity of the overhead allocation

base

Q5

Ron, Inc. estimates direct labor costs and manufacturing overhead costs for the coming
2 year to be $760,000 and $520,000, respectively. Ron allocates overhead costs based
on machine hours. The estimated total labor hours and machine hours for the coming
year are 16,000 hours and 8000 hours, respectively. What is the predetermined
overhead

allocation rate? (Round your answer to the nearest cent.)

A. $95.00 per machine hour

B. $32.50 per labor hour

C. $1.46 per labor hour

D. $65.00 per machine hour

Q6

Remy Corporation estimated manufacturing overhead costs for the year to be


$550,000.

Remy also estimated 7000 machine hours and 2000 direct labor hours for the year. It

bases the predetermined overhead allocation rate on machine hours. On January 31,
Job

25 was completed. It required 5 machine hours and 4 direct labor hours. What is the

amount of manufacturing overhead allocated to the completed job? (Round


intermediate calculations to the nearest cent and your final answer to the nearest
dollar.)

A. $79

B. $707

C. $393

D. $1375

Q7

In a production cost report, ________ includes the number of units completed and

transferred out of a process and the number of units remaining in ending WIP. The
weighted-average method is used.

A. total units estimated for

B. total units budgeted for

C. total units accounted for

D. total units to account for

Q8

The Assembly Department of ByteSize, Inc., manufacturer of computers, incurred

$280,000 in direct material costs and $70,000 in conversion costs. The equivalent units

of production for direct materials and conversion costs are 1500 and 600, respectively.

The weighted-average method is used. The cost per equivalent unit of production
(EUP)

for conversion costs is ________. (Round your answer to the nearest cent.)

A. $116.67 per EUP

B. $46.67 per EUP

C. $466.67 per EUP

D. $186.67 per EUP

Q9

Conversion costs are:

A. direct material, direct labor, and manufacturing overhead.

B. direct material and direct labor.

C. direct labor and manufacturing overhead.

D. prime costs.

E. period costs.

Q10

What would the cost of fire insurance for a manufacturing plant generally be

categorized as?

A. Prime cost.

B. Direct material cost.

C. Period cost.
D. Direct labor cost.

E. Product cost. (MC as it is included in MOH)

Q11

How should a company that manufactures automobiles classify its partially completed

vehicles?

A. Supplies.

B. Raw materials inventory.

C. Finished goods inventory.

D. Cost of goods manufactured.

E. Work-in-process inventory.

Q12

Which of the following best describes the term equivalent units?

A) partially completed units expressed in terms of fully completed units

B) partially completed units of output that will be sold as is

C) substitute of units that are partially completed

D) different types of units that have same selling price

Q13

The journal entry to issue indirect materials to production should include a debit to

the ________.

A) Finished Goods Inventory account

B) Raw Materials Inventory account

C) Manufacturing Overhead account

D) Work-in-Process Inventory account

Q14

Which of the following best describes a job cost record?

A) a form used to track the transfer of raw materials to the production floor

B) a record that shows the raw materials balance as well as raw materials received and

issued

C) a document that shows direct materials, direct labor and manufacturing overhead
costs for an individual job

D) a record of employee productivity and downtime for a particular job

Q15

Which of the following correctly describes the term cost driver?

A) the inflation rate that causes costs to rise

B) the average inventory costs incurred at any point of time

C) the primary factor that causes a cost to be incurred

D) the total material, labor, and overhead costs of a completed job

Q16

The predetermined overhead allocation rate is the rate used to ________.

A) assign direct material costs to jobs

B) allocate actual manufacturing overhead costs incurred during a period

C) allocate estimated manufacturing overhead costs to jobs

D) trace manufacturing and nonmanufacturing costs to jobs

Q17

Har Industries began July with a finished-goods inventory of $48,000. The


finishedgoods inventory at the end of July was $56,000 and the cost of goods sold
during the

month was $125,000. The cost of goods manufactured during July was:

A. $104,000.

B. $125,000.

C. $117,000.

D. $133,000.

E. None of the answers is correct.

Q18

Plating Company reported a cost of goods manufactured of $520,000, with the firm's

year-end balance sheet revealing work in process and finished goods of $70,000 and

$134,000, respectively. If supplemental information disclosed raw materials used in

production of $80,000, direct labor of $140,000, and manufacturing overhead of


$240,000, the company's beginning work in process must have been:

A. $130,000.

B. $10,000.

C. $66,000.

D. $390,000.

E. None of the answers is correct.

Q19

Prime costs are comprised of:

A. direct materials and manufacturing overhead.

B. direct labor and manufacturing overhead.

C. direct materials, direct labor, and manufacturing overhead.

D. direct materials and direct labor.

E. direct materials and indirect materials

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