Reference no: EM13484879
1. A manufacturing process requires small amounts of glue. The glue used in the production process is classified as a(n)
a. period cost.
b. miscellaneous expense.
c. direct material.
d. indirect material.
2. Because of automation, which component of product cost is declining?
a. Direct labor
b. Direct materials
c. Manufacturing overhead
d. Advertising
3. The management function that requires managers to look ahead and establish objectives is
a. controlling.
b. planning.
c. directing.
d. constraining.
4. Process costing is not used when
a. similar goods are being produced.
b. large volumes are produced.
c. jobs have distinguishing characteristics.
d. a series of connected manufacturing processes is necessary.
5. All of the following would be entries in assigning costs to the Work In Process Inventory except:
a. the purchase of raw materials.
b. raw materials are used.
c. overhead is applied.
d. factory labor is used.
6. 8. Which one of the following is a source document that impacts the job cost sheet?
a. Raw materials receiving slips.
b. Materials purchase orders.
c Labor time tickets
d. Finished goods shipping documents.
7. The predetermined overhead rate is based on the relationship between
a. estimated annual costs and actual activity.
b. estimated annual costs and expected annual activity.
c. actual monthly costs and actual annual activity.
d. estimated monthly costs and actual monthly activity.
8. When determining costs of jobs, how does a company account for indirect materials?
a. It is added to work in process as used.
b. It remains part of raw materials inventory.
c. It is transferred out of raw materials into manufacturing overhead when used.
d. It is transferred out of raw materials into work in process as used.
9. A process cost system would be used for all of the following products except
a. chemicals.
b. computer chips.
c. motion pictures.
d. soft drinks.
10. A process with no beginning work in process, completed and transferred out 65,000 units during a period and had 50,000 units in the ending work in process inventory that were 30% complete. The equivalent units of production for the period were:
a. 75,000 equivalent units.
b. 80,000 equivalent units.
c. 125,000 equivalent units.
d. 37,500 equivalent units.
11. Which of the following is not viewed as part of accumulating manufacturing costs in a job order cost system?
a. Raw materials are purchased
b. Factory labor is incurred
c. Cost of goods sold is recognized
d. Manufacturing overhead is incurred
12. When manufacturing overhead costs are assigned to production in a process cost system, they are debited to
a. the Work in Process account.
b. the Finished Goods Inventory account.
c. Cost of Goods Sold.
d. a Manufacturing Overhead account.
13. Cinder Company had the following department information for the month:
Total materials costs $ 80,000
Equivalent units of materials 8,000
Total conversion costs $120,000
Equivalent units of conversion costs 16,000
How much is the total manufacturing cost per unit?
a. $8.33.
b. $17.50
c. $7.50.
d. $10.00.
14. Which of the following is not a necessary step in preparing a production cost report?
a. Compute the equivalent units of production.
b. Compute the physical unit flow.
c. Prepare a cost reconciliation schedule.
d. Prepare the job order cost sheet
15. A cost which remains constant per unit at various levels of activity is a
a. variable cost.
b. fixed cost.
c. mixed cost.
d. manufacturing cost.
16. Sales are $500,000 and variable costs are $400,000. What is the contribution margin ratio?
a. 43%
b. 20%
c. 70%
d. Cannot be determined because amounts are not expressed per unit.
17.. Fixed costs normally will not include
a. property taxes.
b. direct labor
c. supervisory salaries
d. depreciation on buildings and equipment.
18. In applying the high-low method, which months are relevant?
Month Miles Total Cost
January 80,000 $ 96,000
February 50,000 80,000
March 70,000 94,000
April 90,000 130,000
a. January and February
b. January and April
c. February and April
d. February and March