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Cost Accounting Test - Exam 2 Fall 2014

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Question;Take Test: Exam 2 Fall 2014ContentTop of FormInstructionsQuestion 1House CompanyHouse Company adds material at the start of production. The following production information is available for June:Beginning Work in Process Inventory (45% complete as to conversion) 10,000 unitsStarted this period 120,000 unitsEnding Work in Process Inventory (80% complete as to conversion) 8,200 unitsBeginning Work in Process Inventory Costs: Material $24,500 Conversion 68,905 Current Period Costs: Material $ 75,600 Conversion 130,053 Refer to House Company. What are the equivalent units for conversion using the weighted average method? a. 128,360 b. 120,000 c. 130,000 d. 123,4403 points Question 2House CompanyHouse Company adds material at the start of production. The following production information is available for June:Beginning Work in Process Inventory (45% complete as to conversion) 10,000 unitsStarted this period 120,000 unitsEnding Work in Process Inventory (80% complete as to conversion) 8,200 unitsBeginning Work in Process Inventory Costs: Material $24,500 Conversion 68,905 Current Period Costs: Material $ 75,600 Conversion 130,053 Refer to House Company. What is the conversion cost per equivalent unit using the weighted average method? a. $1.01 b. $1.05 c. $1.61 d. $1.55Question 3House CompanyHouse Company adds material at the start of production. The following production information is available for June:Beginning Work in Process Inventory (45% complete as to conversion) 10,000 unitsStarted this period 120,000 unitsEnding Work in Process Inventory (80% complete as to conversion) 8,200 unitsBeginning Work in Process Inventory Costs: Material $24,500 Conversion 68,905 Current Period Costs: Material $ 75,600 Conversion 130,053 Refer to House Company. What is the material cost per equivalent unit using the weighted average method? a. $.62 b. $.82 c. $.58 d. $.77Question 4Allen ManufacturingThe following March information is available for Allen Manufacturing Company when it produced 2,100 units:Standard: Material 2 pounds per unit @ $5.80 per poundLabor 3 direct labor hours per unit @ $10.00 per hour Actual: Material 4,250 pounds purchased and used @ $5.65 per poundLabor 6,300 direct labor hours at $9.75 per hour Refer to Allen Manufacturing. What is the labor efficiency variance? a. $731.25 F b. $731.25 U c. $750.00 F d. $0Question 5In a process costing system, the journal entry to record the transfer of goods from Department #2 to Finished Goods Inventory is a a. debit Finished Goods Inventory, credit Work in Process Inventory #2. b. debit Work in Process Inventory #2, credit Finished Goods Inventory. c. debit Cost of Goods Sold, credit Work in Process Inventory #2. d. debit Finished Goods Inventory, credit Work in Process Inventory #1.3 points Question 6Equivalent units of production are equal to the a. units completed by a production department in the period. b. identifiable units existing at the end of the period in a production department. c. number of units worked on during the period by a production department. d. number of whole units that could have been completed if all work of the period had been used to produce whole units.3 points Question 7Transferred-in cost represents the cost from a. the last department only. b. the current period only. c. the last production cycle. d. all prior departments.3 points Question 8Allen ManufacturingThe following March information is available for Allen Manufacturing Company when it produced 2,100 units:Standard: Material 2 pounds per unit @ $5.80 per poundLabor 3 direct labor hours per unit @ $10.00 per hour Actual: Material 4,250 pounds purchased and used @ $5.65 per poundLabor 6,300 direct labor hours at $9.75 per hour Refer to Allen Manufacturing. What is the material price variance? a. $637.50 U b. $637.50 F c. $630.00 U d. $630.00 FQuestion 9Allen ManufacturingThe following March information is available for Allen Manufacturing Company when it produced 2,100 units:Standard: Material 2 pounds per unit @ $5.80 per poundLabor 3 direct labor hours per unit @ $10.00 per hour Actual: Material 4,250 pounds purchased and used @ $5.65 per poundLabor 6,300 direct labor hours at $9.75 per hour Refer to Allen Manufacturing. What is the material quantity variance? a. $290 F b. $290 U c. $275 U d. $275 F3 points Question 10The term ?standard hours allowed? measures a. actual output at actual hours. b. actual output at standard hours. c. budgeted output at standard hours. d. budgeted output at actual hours.3 points Question 11Which of the following factors should not be considered when deciding whether to investigate a variance? a. likelihood that an investigation will reduce or eliminate future occurrences of the variance b. trend of the variances over time c. magnitude of the variance d. whether the variance is favorable or unfavorable3 points Question 12Seegar CompanySeegar Company uses a standard cost system for its production process and applies overhead based on direct labor hours. The following information is available for August when Seegar made 4,500 units:Standard: DLH per unit 2.50Variable overhead per DLH $1.75Fixed overhead per DLH $3.10Budgeted variable overhead $21,875Budgeted fixed overhead $38,750 Actual: Direct labor hours 10,000Variable overhead $26,250Fixed overhead $38,000 Refer to Seegar Company. Using the four-variance approach, what is the variable overhead spending variance? a. $4,375.00 U b. $4,375.00 F c. $8,750.00 U d. $6,562.50 UQuestion 13Seegar CompanySeegar Company uses a standard cost system for its production process and applies overhead based on direct labor hours. The following information is available for August when Seegar made 4,500 units:Standard: DLH per unit 2.50Variable overhead per DLH $1.75Fixed overhead per DLH $3.10Budgeted variable overhead $21,875Budgeted fixed overhead $38,750 Actual: Direct labor hours 10,000Variable overhead $26,250Fixed overhead $38,000 Refer to Seegar Company. Using the four-variance approach, what is the variable overhead efficiency variance? a. $2,187.50 U b. $9,937.50 F c. $2,937.50 F d. $2,187.50 FQuestion 14Seegar CompanySeegar Company uses a standard cost system for its production process and applies overhead based on direct labor hours. The following information is available for August when Seegar made 4,500 units:Standard: DLH per unit 2.50Variable overhead per DLH $1.75Fixed overhead per DLH $3.10Budgeted variable overhead $21,875Budgeted fixed overhead $38,750 Actual: Direct labor hours 10,000Variable overhead $26,250Fixed overhead $38,000 Refer to Seegar Company. Using the four-variance approach, what is the fixed overhead spending variance? a. $ 750.00 F b. $3,125.00 F c. $ 750.00 U d. $7,000.00 UQuestion 15Seegar CompanySeegar Company uses a standard cost system for its production process and applies overhead based on direct labor hours. The following information is available for August when Seegar made 4,500 units:Standard: DLH per unit 2.50Variable overhead per DLH $1.75Fixed overhead per DLH $3.10Budgeted variable overhead $21,875Budgeted fixed overhead $38,750 Actual: Direct labor hours 10,000Variable overhead $26,250Fixed overhead $38,000 Refer to Seegar Company. Using the four-variance approach, what is the fixed overhead volume variance? a. $3,875.00 U b. $3,125.00 F c. $3,875.00 F d. $6,063.00 UQuestion 16Allen ManufacturingThe following March information is available for Allen Manufacturing Company when it produced 2,100 units:Standard: Material 2 pounds per unit @ $5.80 per poundLabor 3 direct labor hours per unit @ $10.00 per hour Actual: Material 4,250 pounds purchased and used @ $5.65 per poundLabor 6,300 direct labor hours at $9.75 per hour Refer to Allen Manufacturing. What is the labor rate variance? a. $1,575 F b. $1,594 U c. $0 d. $1,575 UQuestion 17The Western Corporation, began operations on October 1. It employs a job-order costing system. Overhead is charged at a normal rate of $2.40 per direct labor hour. The actual operations for the month of October are summarized as follows:a. Purchases of raw material, 33,000 pieces @ $1.40/piece. b. Material and labor costs charged to production: Job No. Units Material Directlabor cost Directlabor hours101 10,000 $5,000 $6,000 3,000102 8,800 3,600 5,400 2,700103 16,000 7,000 9,000 4,500104 8,000 3,200 4,800 2,400105 20,000 8,000 3,600 1,800 c. Actual overhead costs incurred: Variable $18,500Fixed 15,000 d. Completed jobs: 101, 102, 103, and 104 e. Sales-$105,000. All units produced on Jobs 101 and 103 were sold. Required: Compute the following $ balances on October 31:a. Material inventory = b. Work in process inventory c. Finished goods inventory d. Cost of goods sold (before closing OH) e. Under- or overapplied overhead Question 18Discuss why standards may need to be changed after they have been in effect for some period of time.Question 19Compare and contrast job-order and process costing systems.

 

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