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Exam 061681RR - THE COSTING OF PRODUCTS

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Question;Exam: 061681RR - THE COSTING OF PRODUCTS When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam. Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer. Use the following information to answer this question. The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the just-completed year. Sales $910 Raw materials, inventory, beginning $80 Raw materials, inventory, ending $20 Purchases of raw materials $100 Direct labor $130 Manufacturing overhead $200 Administrative expenses $160 Selling expenses $140 Work in process inventory, beginning $40 Work in process inventory, ending $10 Finished goods inventory, beginning $130 Finished goods inventory, ending $150 1. The net operating income for the year (in thousands of dollars) wasA. $40.B. $180.C. $110.D. $410. 2. Which of the following is not one of the five steps in the lean-thinking model discussed in the text?A. Automate the business process.B. Create a pull system that responds to customer orders.C. Organize work arrangements around the flow of the business process.D. Identify the business process that delivers value. Use the following information to answer this question. The following data (in thousands of dollars) have been taken from the accounting records of Karlana Corporation for the just-completed year. Sales $910 Raw materials, inventory, beginning $80 Raw materials, inventory, ending $20 Purchases of raw materials $100 Direct labor $130 Manufacturing overhead $200 Administrative expenses $160 Selling expenses $140 Work in process inventory, beginning $40 Work in process inventory, ending $10 Finished goods inventory, beginning $130 Finished goods inventory, ending $150 3. The cost of goods manufactured (finished) for the year (in thousands of dollars) wasA. $500.B. $530.C. $520.D. $460. 4. Assume there's no beginning work-in-process inventory and that the ending work-in-process inventory is 100% complete with respect to materials costs. The number of equivalent units with respect to materials costs under the weighted-average method is A. the same as the number of units put into production.B. less than the number of units completed.C. less than the number of units put into production.D. the same as the number of units completed. 5. Cost of goods manufactured will usually includeA. only costs incurred during the current period.B. only direct labor and direct materials costs.C. some period costs as well as some product costs.D. some costs incurred during the prior period as well as costs incurred during the current period. Use the following information to answer this question.The Lee Company uses a job-order costing system. The following data were recorded for June: Added During June---- Job Number June 1 Work in Process InventoryDirect MaterialsDirect Labor235 $2,500 $600 $400Overhead is charged to production at 80% of direct materials cost. Jobs 235, 237, and 238 were completed during June and transferred to finished goods. Jobs 235 and 238 have been delivered to customers. 236 $1,500 $800 $1,000237 $1,000 $1,200 $1,750238 $800 $1,500 $2,2506. Lee Company's work-in-process inventory balance on June 30 wasA. $3,940.B. $3,300.C. $9,450.D. $4,100. 7. Which situation always results in underapplied overhead?A. Actual overhead is less than applied overhead.B. Estimated overhead is less than actual overhead.C. Estimated overhead is greater than actual overhead.D. Actual overhead is greater than applied overhead. 8. The management of Baggerly Corporation would like to investigate the possibility of basing its predetermined overhead rate on activity at capacity. The company's controller has provided an example to illustrate how this new system would work. In this example, the allocation base is machine hours, and the estimated amount of the allocation base for the upcoming year is 81,000 machine hours. In addition, capacity is 95,000 machine hours, and the actual level of activity for the year is 84,900 machine hours. All of the manufacturing overhead is fixed and is $6,617,700 per year. For simplicity, it's assumed that this is the estimated manufacturing overhead for the year as well as the manufacturing overhead at capacity. It's further assumed that this is also the actual amount of manufacturing overhead for the year. If the company bases its predetermined overhead rate on capacity, by how much was manufacturing overhead underapplied or overapplied?A. $318,630 overappliedB. $703,566 underappliedC. $703,566 overappliedD. $318,630 underapplied Use the following information to answer this question. Abis Corporation uses the weighted-average method in its process-costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were A total of 9,200 units were started, and 8,200 units were transferred to the second processing department Cost Percent CompleteMaterial costs $6,000 50%Conversion costs $9,900 30%during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 80% complete with respect to materials and 20% complete with respect to conversion costs. Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that's the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. CostMaterial costs $113,900Conversion costs $322,5009. The cost per equivalent unit for materials for the month in the first processing department is closest toA. $11.39.B. $12.44.C. $11.99.D. $11.82. 10. Melillo Corporation has provided data concerning the company's manufacturing overhead account for the month of October. Prior to the closing of the overapplied or underapplied balance to cost of goods sold, the total of the debits to the manufacturing overhead account was $67,000, and the total of the credits to the account was $57,000. Which statement is true?A. Manufacturing overhead transferred from finished goods to cost of goods sold during the month was $57,000.B. Actual manufacturing overhead for the month was $67,000.C. Manufacturing overhead for the month was overapplied by $10,000.D. Manufacturing overhead applied to work in process for the month was $67,000. Use the following information to answer this question. Abis Corporation uses the weighted-average method in its process-costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were A total of 9,200 units were started, and 8,200 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Percent CompleteMaterial costs $6,000 50%Conversion costs $9,900 30% CostMaterial costs $113,900Conversion costs $322,500The ending inventory was 80% complete with respect to materials and 20% complete with respect to conversion costs. Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that's the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. 11. The cost per equivalent unit for conversion costs for the first department for the month is closest toA. $33.24.B. $37.68.C. $38.83.D. $40.77. Use the following information to answer this question. Abis Corporation uses the weighted-average method in its process-costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were A total of 9,200 units were started, and 8,200 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 80% complete with respect to materials and 20% complete with respect to conversion costs. Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that's the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. Cost Percent CompleteMaterial costs $6,000 50%Conversion costs $9,900 30% CostMaterial costs $113,900Conversion costs $322,50012. What are the equivalent units for conversion costs for the month in the first processing department?A. 360B. 8,560C. 8,200D. 10,000 Use the following information to answer this question. Sanker Inc. has provided the following data for the month of August. There were no beginning inventories, consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Manufacturing overhead for the month was overapplied by $5,000. The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. Work In ProcessFinished GoodsCost of Goods Sold TotalDirect materials $2,790 $7,680 $18,240 $28,710Direct labor 9,700 19,200 45,600 74,500Manufacturing overhead applied 5,440 8,000 18,560 32,000Total $17,930 $34,880 $82,400 $135,21013. The journal entry to record the allocation of any underapplied or overapplied overhead for August would includeA. credit to finished goods of $1,250.B. debit to finished goods of $1,250.C. credit to finished goods of $34,880.D. debit to finished goods of $34,880. 14. Assume there's no beginning work-in-process inventory and the ending work-in-process inventory is 70% complete with respect to conversion costs. Under the weighted-average method, the number of equivalent units of production with respect to conversion costs would beA. the same as the units completed.B. less than the units completed.C. less than the units started during the period.D. the same as the units started during the period. 15. Dewey Company uses the weighted-average method in its process-costing system. The first processing department, the Welding Department, started the month with 15,000 units in its beginning work-in-process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work-in-process inventory was $19,200. An additional 86,000 units were started into production during the month. There were 13,000 units in the ending work-in-process inventory of the Welding Department that were 60% complete with respect to conversion costs. A total of $575,360 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs is closest toA. $6.690.B. $6.206.C. $5.812.D. $6.400. 16. An operation costing system isA. the same as a job-order system, except that direct materials costs are accounted for in the same way as in process costing.B. identical to a process-costing system, except that actual manufacturing overhead costs are traced to units of product.C. the same as a process-costing system, except that direct materials costs are accounted for in the same way as in job-order costing.D. identical to a job-order costing system, except that actual manufacturing overhead costs are traced to units of product. 17. Malaviya Corporation uses the FIFO method in its process-costing system. Operating data for the Casting Department for the month of September appear below:According to the company's records, the conversion cost in the beginning work-in-process inventory was $63,104 at the beginning of September. Additional conversion costs of $654,240 were incurred in the department during the month. What would be the cost per equivalent unit for conversion costs for September? (Round off to three decimal places.) Units Percent Complete with Respect to ConversionBeginning work in process inventory 17,000 40%Transferred in from the prior department during September 72,000 Ending work in process inventory 18,000 30%A. $9.280B. $9.400C. $9.087D. $8.060 18. The Sarbanes-Oxley Act of 2002 contains all of the following provisions except which one?A. Both the CEO and CFO must certify in writing that their company's financial statements and accompanying disclosures fairly represent the results of operations.B. The audit committee of the board of directors of a company must hire, compensate, and terminate the public accounting firm that audits the company's financial reports.C. Severe penalties are established for altering or destroying documents that may eventually be used in an official proceeding.D. A CFO must be a CPA or CMA. 19. In September, one of the processing departments at Shenkel Corporation had a beginning work-in- process inventory of $25,000 and an ending work-in-process inventory of $18,000. During the month, the cost of units transferred out from the department was $304,000. In the department's cost reconciliation report for September, the total cost accounted for would beA. $43,000.B. $322,000.C. $644,000.D. $619,000. Use the following information to answer this question.The Lee Company uses a job-order costing system. The following data were recorded for June: Added During June---- June 1 Work in End of exam Overhead is charged to production at 80% of direct materials cost. Jobs 235, 237, and 238 were completed during June and transferred to finished goods. Jobs 235 and 238 have been delivered to customers. Job Number Process InventoryDirect MaterialsDirect Labor235 $2,500 $600 $400236 $1,500 $800 $1,000237 $1,000 $1,200 $1,750238 $800 $1,500 $2,25020. Lee Company's cost of goods sold for June wasA. $9,730.B. $15,520.C. $10,170.D. $14,640.

 

Paper#38346 | Written in 18-Jul-2015

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