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charter oak acc102 midterm exam

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Question;?;1. Manufacturing overhead is considered an;indirect cost, since overhead costs generally cannot be traced conveniently;and directly to specific units of product.;Answer;?;Question 2;2 out of 2 points;2. Supervisor salaries, equipment repairs, depreciation;of machinery and indirect materials are all examples of manufacturing;overhead.;Answer;?;Question 3;2 out of 2 points;3. Direct labor and overhead costs that are;required to convert raw materials into finished goods are considered to be;conversion costs.;Answer;?;Question 4;0 out of 2 points;4. A real estate company incurs $500,000 in;direct labor, direct material and overhead costs on October 30th. At the end;of the year they have not sold any houses yet so these costs should be;reported on their income statement.;Answer;Selected Answer;True;Correct Answer;False;Response Feedback;The costs should be reported on their balance;sheet as inventory because they are not related to any revenue earned;during the year.;?;Question 5;2 out of 2 points;5. The payment of a factories electricity bill;would be a debit to Manufacturing Overhead.;Answer;?;Question 6;2 out of 2 points;6. A credit balance in the manufacturing overhead;account at month end indicates that the actual overhead costs were less than;the amount applied to jobs.;Answer;?;Question 7;2 out of 2 points;7. Job order costing is appropriate for;businesses that produce mass quantities of identical units using the same;amount of direct labor, direct materials and overhead.;Answer;?;Question 8;0 out of 2 points;8. A companies Work in Process account in a job;order costing system will be debited for Direct Material, Direct Labor and;actual overhead.;Answer;Response Feedback;WIP is debited for DM, DL and applied overhead;(not actual);?;Question 9;2 out of 2 points;9. An overhead application rate is a device used;to assign overhead costs to units of product in proportion to some;activity base" that can be traced directly to the manufactured;products.;Answer;?;Question 10;2 out of 2 points;10. In activity-based costing, only one cost;driver should be used in applying overhead.;Answer;?;Question 11;2 out of 2 points;11. Process costing provides information on a;total and per-unit bases as well as the per-unit cost of performing each step;in the production process.;Answer;?;Question 12;2 out of 2 points;12. Completing 3,000 units which were each 75%;complete at the beginning of the period represents 2,250 equivalent full;units of work during the current period.;Answer;?;Question 13;0 out of 2 points;13. An equivalent unit measures the percentage of;a completed unit's cost that is present in a partially finished unit.;Answer;?;Question 14;2 out of 2 points;14. Direct materials and overhead may be referred;to as conversion costs.;Answer;?;Question 15;2 out of 2 points;15. If beginning inventory was 6,000 units;29,000 were started and completed and 5,000 units were in ending inventory;28,000 units were completed and transfered out.;Answer;?;Question 16;2 out of 2 points;16. Target cost equals target price plus profit;margin.;Answer;?;Question 17;0 out of 2 points;17. If a customer is willing to pay $400 for a;new stereo system Radio Shack and Radio Shack requires a 30% return on sales;for all of its products then the target cost of the stereo would be $280.;Answer;?;Question 18;0 out of 2 points;18. The achievement of the target cost occurs at;the first 2 stages of of the target costing process;Answer;=;?;Question 19;2 out of 2 points;19. Cycle time is the length of time required for;a product to pass completely though inspection.;Answer;?;Question 20;2 out of 2 points;20. Rather than aiming to produce inventory;Just-in-Time costing attempts to pull production according to customer;demand.;Answer;?;Question 21;2 out of 2 points;21. Costs which increase in total amount in;direct proportion to an increase in output are called variable costs.;Answer;?;Question 22;2 out of 2 points;22. The contribution margin is the difference;between total revenue and fixed costs.;Answer;?;Question 23;2 out of 2 points;23. Margin of safety is the dollar amount by;which actual sales volume exceeds the break-even sales volume.;Answer;?;Question 24;2 out of 2 points;24. Operating Income is found by multiplying;Margin of Safety by the Contribution Margin Ratio;Answer;?;Question 25;0 out of 2 points;25. The volume of output which causes fixed costs;to be equal in amount to total revenue is called the break-even point.;Answer;?;Question 26;4 out of 4 points;26. Manufacturing costs do not include;A) Direct labor applicable to production within;the period.;B) Selling expenses related to goods manufactured;during the period.;C) Direct materials used during the period.;D) Manufacturing overhead charged to work in;process during the period.;Answer;?;Question 27;4 out of 4 points;27. Direct labor costs in a paint factory would;include wages of employees who;A) Supervise heavy equipment operators.;B) Operate paint-mixing machines.;C) Develop highly secret formulas for new;products.;D) Paint the interior of the factory every two;years.;Answer;?;Question 28;0 out of 4 points;28. Which of the following costs wouldnotbe considered part of the;manufacturing overhead of a furniture manufacturer?;A) The cost of compliance with federal factory;safety regulations.;B) Depreciation expense on factory equipment.;C) The cost of grease used to lubricate factory;equipment.;D) The cost of wood used in furniture;construction.;Answer;?;Question 29;0 out of 4 points;29. Which of the following should not be;classified as a manufacturing cost?;A) Indirect factory labor costs, such as salaries;of plant security guards.;B) Direct materials used in the production;process.;C) Utility bills related to factory operations.;D) Commissions paid to salespeople.;Answer;?;Question 30;0 out of 4 points;30. In a manufacturing company, the cost of goods;sold is equal to;A) The beginning inventory of finished goods;plus net purchases, less the ending inventory of finished goods.;B) The sum of the manufacturing costs charged;(debited) to the Work in Process Inventory account during the period.;C) The costs of direct materials, direct labor;and manufacturing overhead incurred in manufacturing the goods sold during;the period.;D) The beginning inventory of work in process;plus total manufacturing costs for the period, less the ending inventory of;work in process.;Answer;?;Question 31;4 out of 4 points;31. A job order cost system would be appropriate;in the manufacture of;A) Paints.;B) Custom-made furniture.;C) Breakfast cereal.;D) Standard-grade plywood.;Answer;?;Question 32;0 out of 4 points;32. Manufacturing overhead is;A) A direct cost that can traced to a specific;job.;B) An indirect cost that can be traced to a;specific job.;C) A direct cost that cannot be traced to a;specific job.;D) An indirect cost that cannot be traced to a;specific job.;Answer;?;Question 33;4 out of 4 points;33. Benefits of activity-based costing include;all of the following except;A) More accurate measures of product costs.;B) More accurate evaluations of product;profitability.;C) A better understanding of what "drives;manufacturing overhead costs.;D) More subjective product pricing decisions.;Answer;?;Question 34;4 out of 4 points;34. The cost of salaries paid to employees who;work in a factory maintaining the heating system is considered;A) Direct labor;B) Indirect materials;C) Factory overhead;D) General and administrative costs;Answer;?;Question 35;4 out of 4 points;35. Process cost systems;A) Are good when companies produce homogeneous;units;B) May have work-in-process accounts for each;department.;C) Use equivalent units of production;D) All of the above.;Answer;?;Question 36;4 out of 4 points;36. Per-unit costs;A) Are relevant only when a company is engaged in;manufacturing activities.;B) Are determined in job order cost systems but;cannot be computed when a process cost system is in use.;C) Are relevant in manufacturing, merchandising;and service industries, regardless of the type of cost accounting system in;use.;D) Are determined by relating manufacturing costs;to the number of units sold.;Answer;?;Question 37;4 out of 4 points;37. Department X of a manufacturing company works;on only one product, and all costs are incurred uniformly as the product goes;along the assembly line. The 6,000 units in process on December 1 were 60%;completed. An additional 60,000 units were placed in production during;December. At December 31, the 10,000 units in process were 80% completed. The;equivalent full units of production during December amounted to;A) 60,400.;B) 61,600.;C) 79,600.;D) 76,000.;Answer;?;Question 38;4 out of 4 points;38. The computation of equivalent full units is generally not;necessary when;A) Beginning work in process inventories are;significantly larger than ending work in process inventories.;B) Beginning and ending work in process;inventories differ only slightly.;C) The number of units in ending work in process;exceeds the number of units completed and transferred to finished goods;during the period.;D) Per-unit costs become distorted as a result of;not computing equivalent full units of production.;Answer;?;Question 39;4 out of 4 points;Use the following to answer questions 39-40;Winter Brothers manufactures a single product;using a process involving (1) mixing ingredients and (2) a subsequent;packaging operation. Winter uses a process cost system to account for the;flow of costs through its production process.;39. Refer to the information above. In the production;process described, the Work in Process Inventory: Packaging Department is;debited for;A) Costs transferred from the Work in Process;Inventory: Mixing Department only.;B) The cost of materials, direct labor, and;overhead applicable to the packaging operation only.;C) Costs transferred from the Work in Process;Inventory: Mixing Department, as well as materials, direct labor, and;overhead applicable to the packaging operation.;D) Costs transferred to the Finished Goods;Inventory.;Answer;?;Question 40;4 out of 4 points;Use the following to answer questions 39-40;Winter Brothers manufactures a single product;using a process involving (1) mixing ingredients and (2) a subsequent;packaging operation. Winter uses a process cost system to account for the;flow of costs through its production process.;40. Refer to the information above. In Winter's;operation, the Finished Goods Inventory account is debited for;A) The cost of units transferred directly from;the Mixing Department.;B) The cost of units transferred directly from;the Packaging Department.;C) The cost of units transferred directly from;both the Mixing Department and the Packaging Department.;D) The cost of the units sold.;Answer;?;Question 41;4 out of 4 points;41. The primary objective of activity-based;management is;A) To develop more accurate product costs.;B) To reduce and eliminate non-value added;activities.;C) To increase product quality.;D) To identify instances of internal failure.;Answer;?;Question 42;4 out of 4 points;42. Quality costs include;A) Costs to prevent poor quality from occurring.;B) Costs of appraising and inspecting the;product.;C) Costs to correct problems before the customer;receives the goods.;D) All of the above.;Answer;?;Question 43;4 out of 4 points;43. Just-in-time manufacturing systems are also;known as;A) Supply push systems.;B) Supply pull systems.;C) Demand push systems.;D) Demand pull systems.;Answer;?;Question 44;4 out of 4 points;44. Four categories of costs associated with;product quality are;A) External failure, internal failure;prevention, and carrying.;B) External failure, internal failure;prevention, and appraisal.;C) External failure, internal failure, training;and appraisal.;D) Warranty, product liability, prevention, and;training.;Answer;?;Question 45;4 out of 4 points;45. External failure costs include;A) Inspections of materials.;B) Training.;C) Rework.;D) Warranty costs.;Answer;?;Question 46;4 out of 4 points;Use the following to answer questions 46-50;Noble Corporation manufactures a single product.;The selling price is $60 per unit, and variable costs amount to $48 per unit.;The fixed costs are $12,000 per month.;46. Refer to the above information. What is the;contribution margin ratio of Noble's product?;A) 65%.;B) 80%.;C) 72%.;D) 20%.;Answer;?;Question 47;4 out of 4 points;Use the following to answer questions 46-50;Noble Corporation manufactures a single product.;The selling price is $60 per unit, and variable costs amount to $48 per unit.;The fixed costs are $12,000 per month.;47. Refer to the above information. What is the;monthly sales volume in dollars necessary to break even?;A) $60,000.;B) $16,667.;C) $18,462.;D) $15,000.;Answer;?;Question 48;4 out of 4 points;Use the following to answer questions 46-50;Noble Corporation manufactures a single product.;The selling price is $60 per unit, and variable costs amount to $48 per unit.;The fixed costs are $12,000 per month.;48. Refer to the above information. How many;units must be sold each month to earn a monthly operating income of $5,000?;A) 283.;B) 1,417.;C) 85,000.;D) 354.;Answer;?;Question 49;4 out of 4 points;Use the following to answer questions 46-50;Noble Corporation manufactures a single product.;The selling price is $60 per unit, and variable costs amount to $48 per unit.;The fixed costs are $12,000 per month.;49. Refer to the above information. What will be;the monthly margin of safety (in dollars) if 1,500 units are sold each month?;A) $60,000.;B) $30,000.;C) $ 9,000.;D) $12,000.;Answer;?;Question 50;4 out of 4 points;Use the following to answer questions 46-50;Noble Corporation manufactures a single product.;The selling price is $60 per unit, and variable costs amount to $48 per unit.;The fixed costs are $12,000 per month.;50. Refer to the above information. What will be;Noble's monthly operating income if 1,500 units are sold each month?;A) $78,000.;B) $30,000.;C) $18,000.;D) $ 6,000.;Answer

 

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