Question;Managerial Accounting- Online EXAM I - Chapters 1, 2, 3 & 4;Name;PART I (20 Points, 2 Points each) Multiple Choice;Indicate the answer that best completes the opening statement.;1. Cost of goods manufactured during;a period is obtained by taking the total manufacturing costs incurred during;the period and adding and subtracting the following inventories.;Adding;Subtracting;a. Beginning work in process;inventory;Ending work in process inventory;b. Beginning work in process;inventory;Ending finished goods inventory;c. Beginning raw materials;inventory;Ending finished goods inventory;d. Beginning finished goods;inventory;Ending finished goods inventory;2. Raw materials that can be;physically and conveniently associated with the finished product are called;a. indirect materials.;b. direct materials.;c. conversion costs.;d. finished materials.;3. Which one of the following would NOT;be classified as a component of conversion costs?;a. Indirect materials;b. Direct labor;c. Indirect labor;d. Direct materials;4. In a process cost system;equivalent units of production are the;a.;units completed and transferred to finished goods.;b. units that are transferred;to the next processing department.;c. work done on physical units;expressed in fully completed units.;d. units that are incomplete at the end of a period.;Use the following information for;questions 5 and 6.;In the month of April, a department;had 500 units in the beginning work in process inventory that were 60%;complete. These units had $4,000 of materials cost and $3,000 of conversion;costs. Materials are added at the beginning of the process and conversion costs;are added uniformly throughout the process. During April, 10,000 units were completed;and transferred to the finished goods inventory and there were 2,000 units that;were 25% complete in the ending work in process inventory on April 30. During;April, manufacturing costs charged to the department were: Materials $92,000;Conversion costs $102,000.;5. The cost assigned to the units;transferred to finished goods during April was;a. $171,000.;b. $180,000.;c. $187,000.;d. $170,000.;6. The cost assigned to the units in;the ending work in process inventory on April 30 was;a. $36,000.;b. $21,000.;c. $16,000.;d. $31,000.;7. An appropriate cost driver for;ordering and receiving materials cost is the;a. direct labor hours.;b. machine hours.;c. number of purchase orders.;d. number of parts.;8. Benefits of activity-based;costing include all of the following except;a. more accurate product costing.;b. fewer cost pools used to assign;overhead costs to products.;c. enhanced control over overhead;costs.;d. better management decisions.;9. An example of a value-added;activity in a manufacturing operation is;a. machine repair.;b. engineering design.;c. building maintenance.;d. inventory control.;10. Assigning manufacturing costs to;work in process results in credits to all of the following accounts except;a. Work in Process Inventory.;b. Manufacturing Overhead.;c. Raw Materials Inventory.;d. Factory Labor.;PART II (20 Points)? Cost of Goods Manufactured and Sold;Selected account balances of Downing;Manufacturing Company appear below for the current year;Beginning;of Year;End;of Year;Finished Goods Inventory;$25,000;$;32,000;Work In Process Inventory;30,000;35,000;Raw Materials Inventory;46,000;26,000;Sales;380,000;Direct Labor;45,000;Factory Supervisory Salaries;18,000;Income Tax Expense;25,000;Factory Insurance;12,000;Raw Material Purchases;75,000;Administrative Expenses;17,000;Sales Returns and Allowances;15,000;Factory Depreciation;22,000;Indirect Labor;11,000;Selling Expenses;35,000;Instructions;Using the above information for;Downing Manufacturing Company, answer the following questions. Support your;answers with clearly identified computations.;1. What was the amount of direct;materials used in production?;2. What was the total conversion;costs incurred?;3. What was the cost of goods;manufactured?;4. What was the cost of goods sold?;5. What was the amount of net;income? PART III (20 Points) ? Job Order Cost Accounting;Wilkins Manufacturing uses a job;order cost accounting system. On December 1, the company has a balance in Work;in Process Inventory of $5,500 and two jobs in process: Job No. 429, $3,000 and;Job No. 430, $2,500. During December, a summary of source documents reveals the;following;For;Materials;Requisition Slips;Labor;Time Tickets;Job No. 429;$;3,200;$;4,100;Job No. 430;2,600;3,400;Job No. 431;3,400;4,200;Job No. 432;3,000;4,000;General Use;1,000;1,500;$13,200;$17,200;Wilkins Manufacturing applies;manufacturing overhead to jobs at an overhead rate of 70% of direct labor cost.;Job No. 429 is completed during the month.;Instructions;(a);Prepare;summary journal entries to record the requisition slips, time tickets, the;assignment of manufacturing overhead to jobs, and the completion of Job No.;429. Show computations.;(b);Answer the following questions.;1. What is the balance in Work in Process Inventory at;December 31?;2.;If Wilkins Manufacturing incurred $6,000 of manufacturing overhead in addition;to indirect materials and indirect labor, was overhead over- or underapplied in;December and by how much?;3.;Without regard to your answer in (2) above, assume manufacturing overhead was;underapplied in December. How would this amount be reported in the company's;financial statements at December 31?;PART IV (25 Points) ? Process Cost Accounting;The Painting Department of the;Garner Manufacturing Company has the following production and manufacturing;cost data for September.;Production: Beginning inventory 4,000 units, units started into;production 16,000, ending inventory of 5,000 units 20% complete as to;conversion costs.;Manufacturing;Costs: Beginning work in process;inventory of $80,000, comprised of $49,000 of materials and $31,000 of;conversion costs. Materials added during the month, $231,000, labor and;overhead applied during the month, $94,400 and $50,600, respectively.;Instructions;(a) Compute the equivalent units of;production for materials and conversion costs for the month of September.;(b) Compute the unit costs for;materials and conversion costs.;(c) Determine the costs to be;assigned to the units transferred out and ending work in process.;PART V;(15 Points) ? Activity-Based;Costing;Modine Manufacturing Company;manufactures two products: radiators and gas tanks. During March, 200 radiators;and 400 gas tanks were produced and overhead costs of $54,000 were incurred.;The following information related to overhead costs was available;Activity;Cost Driver;Total Cost;Materials handling;Number of requisitions;$20,000;Machine setup;Number of setups;18,000;Quality inspections;Number of inspections;16,000;The cost driver volume for each;product was as follows;Cost Driver;Radiators;Gas Tanks;Total;Number of requisitions;600;400;1,000;Number of setups;120;180;300;Number of inspections;190;210;400;Instructions;(a) Compute the overhead rate for each activity.;(b);Assign the manufacturing overhead costs for March to the two products using;activity-based costing and show manufacturing overhead cost per unit for Radiators;and Gas Tanks.
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