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COST ACCOUNTING 30 mcq AND 2 SHORT ANS

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Question;1.;A company is building a widget. During the;current year, a widget requires direct materials with a cost of $300. The;company must also spend $200 for direct labor. Finally, factory overhead;related to the production of a widget is $100. What is the prime cost;associated with a widget?;A.;100;B.;400;C.;300;D.;500;2.;A company is building a widget. During;the current year, a widget requires direct materials with a cost of $500. The;company must also spend $600 for direct labor. Finally, factory overhead;related to the production of a widget is $100. What is the conversion cost;associated with a widget?;A.;600;B.;900;C.;700;D.;800;3.;Nash accounting;services pays $2,500 a month for a tax preparation software license. In addition, variable charges incurred;average $50 for every tax return the firm prepares. Determine the cost per unit if the firm expects to prepare 150 tax returns. Round to nearest Cent.;A.;$70.50;B.;$66.67;C.;$55.00;D.;$52.50;4.;For 2013, Lorenzo;Auto has a monthly overhead cost formula of $44,000 + $8 per direct labor;hour. The firm?s 2013 annual capacity is;70,000 direct labor hours to be incurred evenly each month. What is the total overhead to be applied per;unit of product in 2013?;A.;$560,000;B.;$885,000;C.;$1,088,000;D.;$1,000,500;5.;The W Hotel has;gathered the following information on its utility cost for the past 6 months.;Machine Hours Utility;Cost;1300;$940;1700;$1075;1250;$900;1800;$1132;1900;$1160;1500;$990;Using the high-low method and considering there are NO outliers;determine the cost formula for utility cost.;A.;y = $400 +.40X;B.;y = $400 +.60X;C.;y = $600 +.40X;D.;y = $600 +.60X;6.;Using the formula;from Question #11, what would be the total cost if the hotel used 1200 Machine;hours for the month of March?;A.;$1000;B.;$880;C.;$420;D.;$950;7.;Cuisinart;manufactures tea pots. In 2013, fixed;overhead was applied to products at a rate of $5 per unit. Variable cost per unit remained constant;throughout the year. In July 2013, income;under variable costing was $152,000.;July?s beginning and ending inventories were 10,000 and 6,500 units;respectively. Calculate income under;absorption costing.;A.;$152,000;B.;$112,500;C.;$134,500;D.;$212,000;8.;Marisa?s Furniture;manufactures wooden chairs for outdoor use.;In May 2013, the company manufactured 15,000 and sold 12,500;chairs. There were no beginning;inventories for May and no work in process at the end of May. The cost per unit for the 15,000 chairs;produced was as follows;Direct material $ 8.00;Direct;Labor 5.00;Variable Overhead 2.00;Fixed Overhead 4.00;Total 19.00;What is the value of ending;finished goods inventory using absorption costing?;A.;$37,500;B.;$35,000;C.;$25,000;D.;$47,500;9.;Assuming the same;information as Question #14, what is the value of ending finished goods;inventory using variable costing?;A.;$37,500;B.;$35,000;C.;$25,000;D.;$47,500;10. Vitamin water makes flavored water and performs the;following tasks in the beverage manufacturing process;Hours;Receive and transfer ingredients;to storage 7.0;Store ingredients;260.0;Transfer ingredients from;storage to production 5.5;Mix and cook ingredients;8.5;Bottle Water;2.0;Transfer bottles to;warehouse 3.0;Calculate the total cycle time of this manufacturing process?;A.;292.5 hours;B.;286 hours;C.;272 hours;D.;286.5 hours;11.;Sheera Company is a design shop;that produces jobs to customer specifications.;During March, Job #351 was worked on and the following information was;available.;Direct Material Used;$2,150;Direct Labor Hours worked 10;Machine Time used;8;Direct Labor Rate per Hour $4;Overhead application rate per hour of machine;time $15;What;was the total cost of Job #351 for March?;A.;$2,015;B.;$2,310;C.;$2,300;D.;$1,992;12.;Havana Company uses a weighted;average process costing system and started 32,000 units this month. Winters had 12,000 units that that were 25%;complete as to conversion costs in beginning WIP inventory and 5,000 units that;were 30% complete as to conversion costs in ending WIP inventory. What are the equivalent units for conversion;costs?;A.;43,250;B.;45,100;C.;42,900;D.;40,500;13.;Marx Company applies Overhead;to jobs at a rate of 30% of direct labor cost.;Direct Material of $1,150 and direct labor of $1,500 were expended on;job #12 during September. On August 31st;the balance of job #12 was $2,500. The;balance on September 30th is?;A.;$4,550;B.;$5,600;C.;$5,450;D.;$6,050;14.;The following information is;for Patterson Company?s July production;Standards;Material 3 feet per unit @ 4.00;per foot;Labor 2.5 hours per unit;@ $7.60 per hour;Actual;Production 2,500 units produced during;this month;Material 8,100 feet used, 9,000 feet purchased at $4.50 per foot;Labor 6,000 direct labor hours;$7.70 per hour;What is the Material;Quantity Variance? (round to the nearest;dollar);A.;$2,400 Favorable;B.;$2,150 Favorable;C.;$2,400 Unfavorable;D.;$2,150 Unfavorable;15.;Using the information from;Question #14, what is the labor rate variance? (round to the nearest dollar);A.;$600 Unfavorable;B.;$850 Favorable;C.;$850 Unfavorable;D.;$600 Favorable;16.;Chronologically, the first part;of the master budget prepared would be the;A.;Sales budget;B.;Production budget;C.;Cash budget;D.;Pro forma financial statements;17.;Soho Company is preparing its;Manufacturing Overhead budget for the second quarter of the year. Budgeted variable factory overhead is $2 per;unit produced, budgeted fixed factory overhead is $54,000 per month, with $18,000;of this amount being factory depreciation.;If the budgeted;production for May is 4,500 units, then the total budgeted factory overhead per;unit is;A.;$14;B.;$18;C.;$12;D.;$15;18.;Using the information from #19;if the budgeted cash disbursements for factory overhead for June are $70,000;then the budgeted production for June must be;A.;13,040 units;B.;16,200 units;C.;17,000 units;D.;16,500 units;19.;Which is the best cost;accumulation procedure to use by companies that make relatively small;quantities of distinct products or perform unique services that conform to the;specifications designated by the purchaser?;A.;Actual;B.;Standard;C.;Job order;D.;Process;20.;Solarte Company uses a job;order costing system and the following information is available from its;records. The company currently has 3;jobs in process #7, #11, and #13.;Raw Material;$120,000;DL per hour;$8.50;Overhead applied based on DL;cost;125%;Direct;material was requisitioned as follows for each job respectively: 25%, 30%, and;30%, the balance of the requisitions was considered indirect. Direct labor hours per job are 2,200, 3,100;and 3,700, respectively. Indirect labor;is $55,000. Other actual Overhead costs;totaled $50,000.;How much;overhead was applied to Work in Process?;A. $95,625;B. $99,235;C. $100,885;D. $90,665;21. McKenzie Enterprises has the following revenue and cost functions;Revenue = $60;per unit;Cost =;$80,000 + $35 per unit;What is the;break-even point in units?;A. 3,000;B. 4,100;C. 4,000;D. 3,200;22. Using the information from Question #21, what is the break-even;point in units?;A. 200,000;B. 195,000;C. 192,000;D. 205,000;23. Jacoby Sports Wear has designed a new athletic suit. The company plans to produce and sell 25,000;units of the new product in the coming year.;Annual fixed costs are $700,000, and variable costs are 50% of selling;price. If the company wants a pre-tax;profit of $200,000, at what minimum price must it sell its product?;A. 2,800,000;B. 1,800,000;C. 1,500,000;D. 2,500,000;24. A cost incurred in the past;and not relevant to any future courses of action is known as;A. Relevant cost;B. Sunk cost;C. Opportunity cost;D. Incremental cost;25. A potential benefit that is foregone because one course of action is;chosen over another is known as;A. Relevant cost;B. Sunk cost;C. Opportunity cost;D. Incremental cost;26. Assume that you are about to graduate from your university and are;deciding whether to apply for graduate school or enter the job market. To help make the decision, you gathered the;following information;Costs incurred for the bachelor?s;degree;$163,000;Out of;pocket costs for a master?s degree $104,000;Estimated starting;salary with B.A. $56,500;Estimated;starting salary with M.A.;$66,800;Estimated time to complete master?s degree 2 years;Estimated time from the present to retirement 40 years;Room;Board;$24,000;Books and;education materials to obtain master?s $5,500;What is the opportunity cost;associated with earning the master?s degree?;A.;113,000;B.;125,000;C.;188,000;D.;326,000;27.;Using the information from;Question #26, what is the out of pocket cost to obtain the master?s degree?;A.;128,000;B.;109,500;C.;133,500;D.;192,500;28.;An incidental output of a joint;process is also known as;A.;Scrap;B.;Waste;C.;Split-off;D.;Garbage;29.;The total cost incurred for the;material, labor and overhead during a joint process is called;A.;Separate costs;B.;Incremental costs;C.;Unknown costs;D.;Joint costs;30.;Almond breeze produces milk and;sour cream from a joint process. During;June, the company produced 240,000 quarts of milk and 190,000 pints of sour;cream (there are 2 pints in a quart).;Sales value at split-off point was $377,400 for the milk and $177,600;for the sour cream. The milk was;assigned $125,800 of the joint cost.;Using the sales value at split-off approach, determine the total joint;cost for June.;A.;$180,000;B.;$185,000;C.;$195,000;D.;$205,000;Short Answers: For each question below, please show as much;work as possible as the you can receive partial credit for your work and the;answers you give.;1.;Ralph Lauren makes;summer dresses for women. The following;information was gathered from the company records for 2013, the first year of;company operations. Work in process;inventory at the end of 2013 was $15,500.;Direct Material purchased on account $;650,000;Direct Material issued to;production 440,000;Direct Labor payroll accrued 305,500;Indirect labor payroll accrued 92,000;Prepaid factory insurance expired 6,000;Factory utilities paid 21,500;Depreciation on factory equipment;recorded;35,500;Factory rent paid 155,000;Sales 1,250,000;The company?s gross profit rate for the year was 25 percent of sales.;A.;Compute the cost of goods sold;for 2013?;B.;What was the total cost of;goods manufactured for 2013?;C.;What is the Finished Goods;Inventory at December 31, 2013?;D.;If Net Income was $105,000;what were total selling and administrative expenses for the year?;2. In July 2013, Zing Corporation purchased 18,000 gallons of Numerol;for $55,000 to use in the production of product MR57. During July, Zing Inc. manufactured 3,700;units of product for MR57. The following;information is available about standard and actual quantities and costs: (Round;to the nearest penny) Make Sure to list if the variance is favorable or;unfavorable.;Standard for 1 Unit Actual Usage for;July;Direct Material 4.2;Gallons @ $3/gallon;16,550 Gallons;Direct Labor 20;minutes @ $8 per DLH 1,250 DLHs @ $8.02 per;DLH;A. Compute the Material price variance;B. Compute the Material quantity variance;C. Compute the Labor Rate Variance;D. Compute the Labor Efficiency Variance;E. Compute the total labor Variance;3. Caputo Automotive sells an auto accessory for $180 per unit. The company?s variable cost per unit is $30;for direct material, $25 per unit for direct labor, and $17 per unit for;overhead. Annual fixed production;overhead is $37,400, and fixed selling and administrative overhead is $25,240.;A. What is the contribution margin per unit?;B. What is the contribution margin ration?;C. What is the break-even point?;D. Using the contribution margin ration, what is the break-even point;in sales dollars?;E. If Caputo Automotive wants to earn an after-tax profit of $135,800;how many units must the company sell?;Top of Form;Bottom of Form;Top of Form;Bottom of Form

 

Paper#41514 | Written in 18-Jul-2015

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