Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
|
|
|
1.
|
For
which of the following businesses would the job order cost system be appropriate? a. | Meat
processor | b. | Automobile manufacturer | c. | Oil
refinery | d. | Construction contractor | | |
|
|
|
2.
|
The
entry to record direct labor costs into production in a job order cost accounting system
is: a. | debit Factory
Overhead, credit Work in Process | b. | debit Finished Goods, credit Wages
Payable | c. | debit Work in Process, credit Wages
Payable | d. | debit Factory Overhead, credit Wages
Payable | | |
|
|
|
3.
|
The
details concerning the costs incurred on each job order are accumulated in a subsidiary ledger known
as the: a. | stock
ledger | b. | materials ledger | c. | cost
ledger | d. | creditors ledger | | |
|
|
|
4.
|
The
finished goods account is the controlling account for the: a. | cost
ledger | b. | materials ledger | c. | work in process
ledger | d. | stock ledger | | |
|
|
|
5.
|
When
job 711 was completed, direct materials totaled $4,000; direct labor, $4,600; and factory overhead,
$2,400, respectively. Units produced totaled 1,000. Unit costs are: a. | $11,000 | b. | $1,100 | c. | $110 | d. | $11 | | |
|
|
|
6.
|
Materials purchased on account during the month amounted to $195,000. Materials
requisitioned and placed in production totaled $168,000. From the following, select the entry
to record the transaction on the day the materials were requisitioned by the production
department. a. | Materials
168,000
Work in
Process
168,000 | b. | Work in
Process
195,000
Materials
195,000 | c. | Work in
Process
168,000
Materials
168,000 | d. | Work in
Process
168,000
Cash
168,000 | | |
|
|
|
7.
|
Costs
that are treated as assets until the product is sold are called: a. | product
costs | b. | period costs | c. | conversion
costs | d. | selling expenses | | |
|
|
|
8.
|
For
the manufacturing business, inventory which is in the process of being manufactured is referred to
as: a. | supplies
inventory | b. | work in process inventory | c. | finished goods
inventory | d. | direct materials inventory | | |
|
|
|
9.
|
Job
cost sheets can provide information to managers for all but the following: a. | cost impact of
materials changes | b. | cost impact of continuous improvement in the manufacturing
process | c. | cost impact of materials price or direct labor rate changes
over time | d. | utilities, managerial salaries, and depreciation of computers
in the corporate office | | |
|
|
|
10.
|
Which
of the following would probably not be found in the accounting system of a service
provider? a. | Cost
ledger | b. | Finished jobs ledger | c. | Deferred revenue
account | d. | Job cost sheets | | |
|
|
|
11.
|
For
which of the following businesses would a process cost system be appropriate? a. | Auto repair
service | b. | Paint manufacturer | c. | Specialty
printer | d. | Custom furniture manufacturer | | |
|
|
|
12.
|
In a
process cost system, ending inventory is valued by: a. | finding the sum
of all open job costs | b. | allocating departmental costs between completed and partially
completed units | c. | multiplying units in ending inventory by the direct materials
cost per unit | d. | all of the above | | |
|
|
|
13.
|
In
process cost accounting, the costs of direct materials and direct labor are charged directly
to: a. | service
departments | b. | processing departments | c. | customer
accounts receivable | d. | job orders | | |
|
|
|
14.
|
Which
of the following costs incurred by a paper manufacturer would be included in the group of costs
referred to as conversion costs? a. | Advertising costs | b. | Raw lumber
(direct materials) | c. | Machine operator's wages (direct
labor) | d. | Sales salaries | | |
|
|
|
15.
|
Department G had 3,600 units, one-third completed at the beginning of the period,
12,000 units were completed during the period, 2,000 units were one-fifth completed at the end of the
period, and the following manufacturing costs were debited to the departmental work in process
account during the period:
Work in process,
beginning of period | $30,000 | Costs added
during period: | | Direct
materials (10,400 at $8) | 83,200 | Direct
labor | 62,000 | Factory
overhead | 24,800 | | |
Assuming that all direct materials are placed in
process at the beginning of production and that the first-in, first-out method of inventory costing
is used, what is the total cost of the departmental work in process inventory at the end of the
period? a. | $19,100 | b. | $26,000 | c. | $23,200 | d. | $12,000 | | |
|
|
|
16.
|
The
debits to Work in Process--Assembly Department for April, together with data concerning production,
are as follows:
April 1, work in
process: | | Materials
cost, 3,000 units | $
7,500 | Conversion costs, 3,000
units, | | 2/3 completed | 6,000 | Materials added
during April, 10,000 units | 26,000 | Conversion costs
during April | 31,000 | Goods finished
during April, 11,500 units | --- | April 30 work in
process, 1,500 units, | | 1/2 completed | --- | | |
All direct materials are placed in process at the
beginning of the process and the first-in, first-out method is used to cost inventories. The
materials cost per equivalent unit for April is: a. | $2.60 | b. | $2.26 | c. | $2.50 | d. | $5.50 | | |
|
|
|
17.
|
A
form prepared periodically for each processing department summarizing (1) the units for which the
department is accountable and the units to be assigned costs and (2) the costs charged to the
department and the allocation of these costs is termed a: a. | factory overhead
production report | b. | manufacturing cost report | c. | process cost
report | d. | cost of production report | | |
|
|
|
18.
|
Department J had no work in process at the beginning of the period, 18,000 units were
completed during the period, 2,000 units were 30% completed at the end of the period, and the
following manufacturing costs were debited to the departmental work in process account during the
period:
Direct materials
(20,000 at $4) | $
80,000 | Direct labor | 102,300 | Factory
overhead | 37,200 | | |
Assuming that all direct materials are placed in
process at the beginning of production, what is the total cost of the 18,000 units completed during
the period? a. | $139,500 | b. | $219,500 | c. | $80,000 | d. | $207,000 | | |
|
|
|
19.
|
Lombardi Company manufactures a single product by a continuous process, involving
three production departments. The records indicate that direct materials, direct labor, and applied
factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The
records further indicate that direct materials, direct labor, and applied factory overhead for
Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at
the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the
period totaled $60,000. The journal entry to record the flow of costs into Department 1 during the
period for direct materials is: a. | Work in Process--Department
1 100,000
Materials
100,000 | b. | Work in Process--Department
1 50,000
Materials
50,000 | c. | Materials
100,000
Work in Process--Department
1
100,000 | d. | Materials
50,000
Work in Process--Department
1
50,000 | | |
|
|
|
20.
|
Lombardi Company manufactures a single product by a continuous process, involving
three production departments. The records indicate that direct materials, direct labor, and applied
factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The
records further indicate that direct materials, direct labor, and applied factory overhead for
Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at
the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the
period totaled $60,000. The journal entry to record the flow of costs into Department 2 during the
period for direct materials is: a. | Work in Process--Department
2 100,000
Materials
100,000 | b. | Work in Process--Department
2 50,000
Materials
50,000 | c. | Work in Process--Department
2 150,000
Materials
150,000 | d. | Materials
50,000
Work in Process--Department
2
50,000 | | |
|
|
|
21.
|
Cost
behavior refers to the manner in which: a. | a cost changes as the related activity
changes | b. | a cost is allocated to products | c. | a cost is used
in setting selling prices | d. | a cost is estimated | | |
|
|
|
22.
|
The
three most common cost behavior classifications are: a. | variable costs,
product costs, and sunk costs | b. | fixed costs, variable costs, and mixed
costs | c. | variable costs, period costs, and differential
costs | d. | variable costs, sunk costs, and opportunity
costs | | |
|
|
|
23.
|
Costs
that remain constant in total dollar amount as the level of activity changes are
called: a. | fixed
costs | b. | mixed costs | c. | opportunity
costs | d. | variable costs | | |
|
|
|
24.
|
Which
of the following costs is an example of a cost that remains the same in total as the number of units
produced changes? a. | Direct
labor | b. | Salary of a factory supervisor | c. | Units of
production depreciation on factory equipment | d. | Direct
materials | | |
|
|
|
25.
|
Which
of the following describes the behavior of the variable cost per unit? a. | Varies in
increasing proportion with changes in the activity level | b. | Varies in
decreasing proportion with changes in the activity level | c. | Remains constant
with changes in the activity level | d. | Varies in direct proportion with the activity
level | | |
|
|
|
26.
|
Which
of the graphs in Figure 19-1 illustrates the behavior of a total variable
cost?
a. | Graph
2 | b. | Graph
3 | c. | Graph
4 | d. | Graph
1 | | |
|
|
|
27.
|
What
ratio indicates the percentage of each sales dollar that is available to cover fixed costs and to
provide a profit? a. | Margin of safety
ratio | b. | Contribution margin ratio | c. | Costs and
expenses ratio | d. | Profit ratio | | |
|
|
|
28.
|
If
fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in
units if variable costs are decreased by $.50 a unit? a. | 66,000 | b. | 70,125 | c. | 74,800 | d. | 60,000 | | |
|
|
|
29.
|
Which
of the following conditions would cause the break-even point to increase? a. | Total fixed
costs decrease | b. | Unit selling price increases | c. | Unit variable
cost decreases | d. | Unit variable cost increases | | |
|
|
|
30.
|
Which
of the following conditions would cause the break-even point to increase? a. | Total fixed
costs increase | b. | Unit selling price increases | c. | Unit variable
cost decreases | d. | Total fixed costs decrease | | |
|