Multiple Choice Questions - There are 65 questions and I just need a answer not an explanations.
Question 1: An example of a fixed cost is
a. Security guard's wages
b. Thread used in the making of shirts
c. Payroll tax expense for the factory
d. Insurance paid on the factory building
Question 2: The Wreath Company manufactures all shapes and sizes of wreaths. The following data is available for the month of November:
..........................................Beginning..................Ending
Raw materials(direct).......$ 10,000....................$ 5000
Work in process................8,000.........................12,000
Finished goods..................30,000.......................25,000
Direct labor is paid at a rate of $ 8 per hour and overhead for the month is $ 9000.Compute total manufacturing costs for November, if there were 3000 direct labor hours and raw(direct) materials purchased were $ 30,000.
a. 65,000
b. 70,000
c. 61,000
d. 68,000
Question 3: The Sleigh Bell Company manufactures sleighs of all sizes and shapes. For the month of October they had the following information:
................................................Beginning..........................Ending
Raw materials(direct)............$ 20,000..........................$ 15,000
Work in process.......................28,000.............................22,000
Finished goods.........................40,000.............................35,000
Direct labor is paid at a rate of $ 10 per hour and overhead for the month was $ 19,000. Compute prime costs for October, if there were 4000 direct labor hours and raw materials(direct) purchased were $ 50,000.
a. 55,000
b. 95,000
c. 74,000
d. 59,000
Question 4: The Holly Company produces specialty gifts. The following information is available for November:
....................................................................Beginning.....................Ending
Raw materials(direct)..............................$ 6,000..........................$ 7,000
Work in process.........................................18,000............................24,000
Finished goods...........................................10,000............................14,000
Direct labor is paid at a rate of $ 7 per hour and overhead for the month was $ 13,000. The company had 2000 direct labor hours and purchased direct materials of $ 32,000. Compute the cost of goods sold.
a. 52,000
b. 48,000
c. 54,000
d. 49,000
Question 5: What is the proper classification for the storeroom clerk who fills the materials requisitions?
a. Product and overhead
b. Period and administrative
c. Product and direct labor
d. Period and indirect labor
Question 6: What is the ending balance of finished goods inventory if cost of goods sold is $ 250,000, the beginning balance of finished goods is $ 80,000, and the cost of goods manufactured is $ 60,000 less than cost of goods sold?
a. 20,000
b. 40,000
c. 10,000
d. 110,000
Question 7: Cost of goods manufactured consists of what?
a. Total manufacturing costs, beginning and ending work in process
b. Direct materials purchased, direct labor , and factory overhead
c. Direct materials, direct labor, factory overhead, beginning and ending work in process, ending finished goods
d. Direct materials used, direct labor incurred, factory overhead applied, and beginning and ending finished goods
Question 8: Cost of goods manufactured replaces what in retailing income statement?
a. Cost of goods sold
b. Purchases
c. Ending finished goods
d. Credit to work in process
Question 9: The following worksheet which has been prorated already for actual factory overhead from the service departments to the two production departments which are wreath making and wreath assembling:
............................Wreath mainten.....Wreath power...Wreath making....Wreath assem
Overhead.............$ 15,000................$ 10,000............$ 60,000..............$ 30,000
Alloc mainten.........................................2,000.................8,000...................5,000
Alloc power.....................................................................9,000...................3,000
Total estimated factory overhead for wreath making is $ 65,000.
Estimated direct labor hours for wreath making is 10,000.
Actual direct labor hours for wreath making was 10,800.
Total estimated factory overhead for wreath assembly is $ 40,000.
Total estimated direct labor hours for wreath assembly is 5000.
Actual direct labor hours for wreath assembly was 5250.
What is the partial entry to prorate factory overhead to wreath assembly from the service department wreath maintenance?
a. Debit wreath assembly for 5000
b. Credit factory overhead control for 15,000
c. Debit wreath maintenance for 15,000
d. Credit wreath assembly for 5000
Question 10: Using information from question #9 (the one with the wreaths and the factory overhead worksheet, what is the amount of factory overhead charged to work in process?
a. 115,000
b. 112,200
c. 105,000
d. 120,000
Question 11: Using the information from question #9 (the one with the wreaths and the factory overhead worksheet, what is the amount of under or over applied factory overhead?
a. 2800 underapplied
b. 2200 underapplied
c. 2800 overapplied
d. 2200 overapplied
Question 12: Which of the following is an example of prime costs?
a. Tacks in making shoes
b. The line supervisor in making shoes
c. Leather used in making shoes
d. Electricity to run the machines used in making the shoes
Question 13: The indirect costs of converting materials into finished goods are called?
a. Factory overhead
b. Direct labor
c. Prime costs
d. Conversion costs
Question 14: Variance is best explained as?
a. The variance is unfavorable if budgeted costs are greater than actual costs
b. The difference between a favorable cost and an unfavorable cost
c. The difference between absorption and direct costing
d. The difference between budget costs and actual costs
Question 15: Order point requires all of the following except?
a. Safety stock
b. Daily usage
c. Days worked
d. Lead time
Question 16: What is the equivalent units for conversion using the fifo method and the following information:
Beginning inventory.....2000 units which are 60% complete as to conversion
Transferred out...........10,000
Ending inventory..........3000 units which are 30% complete as to conversion
Beginning inventory costs $ 16,000
Current costs for the month 44,000
a. 9,700
b. 10,300
c. 10,900
d. 11,200
Question 17: What is the equivalent units for conversion using weighted average method and the information from question #16?
a. 9,700
b. 10,300
c. 10,900
d. 11,200
Question 18: Analysis of hours and job worked is recorded on or in a what?
a. Time card or clock card
b. Time ticket
c. Payroll register
d. General journal
Question 19: Debit memorandum is used for what purpose?
a. Credit and increase your account for returned goods
b. Decrease accounts payable for additional goods kept
c. Increase your account for goods received over the original order
d. Decrease your account for goods which were defective and returned
Question 20: Job costing is the system of choice when?
a. Producing similar products
b. Producing dissimilar products
c. Using standard costing and variances
d. Using more than one process account
Question 21: Determine the unit cost for units transferred out under the weighted average method using the following information:
Transferred out.......... 5000 units
Beginning inventory 1500 units 40% complete as to conversion
Ending inventory.......1000 units 75% complete as to conversion
Beginning inventory costs for conversion....$ 10,000
Current month's costs for conversion.............40,000
a. 10
b. 8.7
c. 9.71
d. 6.96
Question 22: Equivalent units are utilized in which method of costing?
a. Job costing
b. Process costing
c. Dissimilar production
d. Breakeven analysis
Question 23: The primary differencd between absorption and variable costing income presentations is what?
a. The treatment of fixed costs
b. There is no difference
c. The treatment of direct materials
d. The treatment of direct labor
Question 24: In job costing, employer payroll taxes for the factory when incurred are recorded as a?
a. Debit to work in process
b. Debit to payroll tax expense
c. Debit to factory overhead
d. Debit to factory payroll clearing
Question 25: If the actual cost for wreath boggles was $ 2 per boggle and you used 10 boggles per wreath, what is your total materials variance if you planned to spend $ 2.25 per boggle and planned to use 14 boggles per wreath. You made 40 wreaths.
a. 460 unfavorable
b. 460 favorable
c. 220 favorable
d. 220 unfavorable
Question 26: Periodic inventory system is best described as a(an)?
a. Physical count done at lease once per year
b. The same as perpetual inventory system
c. Is calculated by periods using moving average
d. Is an estimate using lifo and fifo
Question 27: The three major elements of cost accounting are?
a. Direct materials, direct labor, and factory overhead
b. Materials inventory, work in process inventory, and finished goods inventory
c. Indirect materials, direct labor, and factory overhead
d. Direct materials, work in process, and factory overhead
Question 28: Just in time inventory method does what?
a. Orders should be sold first and then inventory ordered for production
b. Believes inventory should be on hand as production demands it
c. Not a useful method in standard costing
d. Believes inventory should be on hand two months in advance
Question 29: Controlling is a management tool best illustrated by what?
a. Preparing a budget
b. Variance analysis
c. Factory overhead allocation
d. Prime costs
Question 30: Which of the following are the three major inventory accounts?
a. Direct materials, direct labor, and factory overhead
b. Finished goods, direct materials, and work in process
c. Materials, work in process, and finished goods
d. Cost of goods manufactured
Question 31: The direct costs of converting materials into finished goods are called what?
a. Direct labor
b. Factory overhead
c. Prime costs
d. Conversion
Question 32: All costs that vary in total direct proportion to changes in activity levels are called what?
a. Product and variable
b. Variable and period
c. Both fixed and variable
d. Product and fixed
Question 33: The final figure in the cost of goods manufactured statement is what?
a. Added to the work in process beginning inventory
b. The cost of goods sold for the period
c. The total manufacturing cost for the month
d. Credited to work in process account
Question 34: What is the proper classification for the account clerk working for a manufacturing company?
a. Period and administrative
b. Product and overhead
c. Product and administrative
d. Period and overhead
Question 35: The beginning balance of raw materials was 20,000 and raw materials used were 80,000. At the end of the month, 10,000 of raw materials were on hand. What amount of materials were purchased?
a. 94,000
b. 70,000
c. 90,000
d. 110,000
Question 36: Conversion costs include all but which one below?
a. Wages paid to factory workers
b. Leather in making shoes
c. Thread in making pants
d. Salaries paid to factory supervisors
Question 37: Which of the following in a product cost component?
a. President of the company
b. Assembly worker
c. Accountant
d. Administrative secretary
Question 38: When using high-lows method to separate fixed and variable overhead costs, the method determines which cost last?
a. Total costs
b. Fixed costs
c. Variable rate
d. Variable costs
Question 39: Contribution margin is defined as
a. The same as gross profit
b. Used on the absorption costing statement
c. The difference between selling and variable costs
d. The difference between selling price and fixed costs
Question 40: Breakeven point is best described as?
a. The point at which sales volume is equal to fixed costs
b. The point at which net income equals fixed costs
c. The point at which contribution margin equals fixed costs
d. The point at which variable costs equal fixed costs
Question 41: What is the proper classification for a carpenter who builds houses?
a. Period and direct labor
b. Product and direct labor
c. Period and overhead
d. Period and administrative
Question 42: What is compared in a controlable variance?
a. The actual factory overhead and the standard amount of overhead allowed for the actual equivalent production for the period.
b. The budget amount is compared to the overhead applied to the production for the period.
c. The budgeted fixed overhead compared to the fixed overhead applied to production
d. The standard overhead applied for standard hours compared to actual hours in production.
Question 43: Volume variance is calculated by:
a. Standard fixed rate (standard units - actual units)
b. Standard variable rate (standard units - actual units)
c. standard fixed rate (standard hours - actual hours)
d. standard fixed rate (standard price - actual price)
Question 44: A planning device that helps a company set goals and that serves as a gauge against which actual results can be measured is called a(an)
a. Production budget
b. Flexible budget
c. Budget
d. Variance
Question 45: An indirect (nontraceable) cost that cannot be identified directly with a specific segment is called a(an)
a. Segment margin
b. Common cost
c. Variance
d. Fixed overhead
Question 46: Costs incurred to sell and deliver the product are called?
a. Product costs
b. Direct costs
c. Common costs
d. Distribution costs
Question 47: You are making Christmas Wreaths and the total made was 100.
You budgeted (standard) for the following materials was:
......................................Quantity per wreath......Cost per quantity
Fir boughs.....................10 boughs........................60 cents per bough
Ribbon...........................1 yard............................40 cents per yd
Boggles..........................5 boggles.......................70 cents per boggle
Your actual costs for wreaths:
Fir boughs....................11 boughs............50 cents per bough
Ribbon..........................3/4 of a yard ......60 cents per yard
Boggles.........................4 boggles ............85 cents per boggle
What is the total variance to make 100 wreaths?
a. 55 unfavorable
b. 25 favorable
c. 55 favorable
d. 25 unfavorable
Question 48: Using information in question 47 wreath information for variances, what is the materials price variance for ribbons?
Formula is AQ(SP-AP)
a. 20 unfavorable
b. 15 favorable
c. 20 favorable
d. 15 unfavorable
Question 49: Using information in question # 47 (wreath information for variances), what is the materials quantity variance for boggles?
Formula is SP(SQ-AQ)
a. 40 favorable
b. 70 unfavorable
c. 40 unfavorable
d. 70 favorable
Question 50: Lead time is best described as what?
a. The time that units will take to leave the supplier averaged by the safety stock
b. The number of units needed to meet just in time production
c. Safety stock times average days worked
d. The time that units will take to reach the company who has placed the order.
Question 51: A standard is a (an)
a. Variance compared to actual performance to be measured
b. Norm at maximum degree of efficiency
c. Determined by comparing actual performance to budget performance data
d. Norm against which the actual performance can be measured
Question 52: Standard cost accounting is based on which of the following procedures?
a. Standard costs are determined for the three major inventory accounts.
b. All variances are analyzed, investigated, and no appropriate action taken.
c. The standard costs, actual costs, and the variances between the actual and the standard costs are recorded in appropriate accounts.
d. All are procedures for standard costing.
Question 53: Irving Tannery produces various types of leather. During the past month, Irving manufactured 300 crates of patent leather, using 18,000 lbs of hide in the process. The hides cost them $ 1800. The company's standards for each crate is 70lbs of hide at a cost of .05 per lb. What is the actual cost per pound?
a. 10
b. 0.05
c. 0.1
d. 25.71
Question 54: Using the information from question 3(Irving), what is the materials price variance?
a. 900 U
b. 942.60 U
c. 850 U
d. 540 U
Question 55: Using the information from question 3(Irving), what is the materials quantity variance?
a. 150 U
b. 300 F
c. 150 F
d. 300 U
Question 56: Empire Falls Inc produced 20,000 shirts for the month. Standard per unit: Materials: Cloth 3yds @ .50 per yd Thread 1/2 spool @ .20 per stool Labor: 15 minutes per shirt $ 8 per hour Actual per unit: Materials: Cloth 2.5 @ .40 per yd Thread 1 spool @ .30 per stool Labor: 30 minutes per shirt $ 9 per hour What is the total materials variance?
a. 6000 F
b. 14000 F
c. 2000 F
Question 57: Using information from quest #6 (Empire Falls), what is the total materials price variance?
a. 5000 F
b. 3000 F
c. 2000 U
Question 58: What is the labor efficiency variance using the information from question #6(Empire Falls)?
a. 40,000 U
b. 45,000 U
c. 10,000 U
d. 5,000 U
Question 59: The difference between the actual wage rate and the standard wage rate as it is applied to the actual hours worked is called?
a. Materials rate variance
b. Materials quantity variance
c. Labor efficiency variance
d. Labor rate variance
Question 60: The purpose of standard cost accounting is?
a. To help a company set goals and serve as a gauge against which actual results can be measured.
b. To control costs and promote efficiency.
c. To define accountability for actual results.
d. To determine the level of production needed at normal level or standard volume.
Question 61: In setting standards for materials and labor, which of the following is a factor?
a. The effect of negotiations with labor unions on labor rates
b. The actual price for raw materials at the beginning of the year.
c. The possible increase in labor time due to the use of more modern machinery and equipment.
d. a and c are both correct factors
Question 62: Absorption and direct costing incomes are equal to each other when:
a. Ending inventory is equal to zero
b. Beginning inventory is equal to zero
c. No volume variance exists
d. No beginning or ending inventory exists
Question 63: An example of a period cost would be?
a. Insurance expense on the office personnel
b. Leather stretcher machine
c. Factory storeroom wages
d. Factory supervisor's salary
Question 64: Conversion costs include
a. Factory building insurance
b. Cloth in making shirts
c. Lumber in making furniture
d. Metal in making autos
Question 65: The total factory overhead variance is demonstrated by
a. The total spending and efficiency variances added together
b. The difference between actual factory overhead and applied actory overhead for the period
c. The difference between actual variable overhead and standard variable overhead plus fixed costs.
d. The difference between actual variable overhead and the standard per unit applied to actual units.