GB519 Management Level Control Quiz

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1.     When completed units are sold: (Points : 2)

2.         [removed] Cost of Goods Sold account is credited.
[removed] Cost of Goods Manufactured account is credited.
[removed] Finished Goods Inventory account is credited.
[removed] Work-in-Process Inventory account is credited.
[removed] Finished Goods Inventory account is debited.

2. The two main advantages of using predetermined factory overhead rates are to provide more accurate unit cost information and to: (Points : 2)

[removed] Simplify the accounting process.
[removed] Provide cost information on a timely basis.
[removed] Insure transmission of correct data.
[removed] Extend the useful life of the cost data.
[removed] Adjust for variances in data sources.

 

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3. The total cost of direct materials, direct labor, and factory overhead transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account during an accounting period is: (Points : 2)

[removed] Normal cost of goods sold.
[removed] Adjusted cost of goods sold.
[removed] Total manufacturing cost.
[removed] Cost of goods manufactured.
[removed] Actual cost of goods sold.

 

4. When completed units are transferred to the warehouse: (Points : 2)

[removed] Cost of Goods Sold account is debited.
[removed] Cost of Goods Manufactured account is debited.
[removed] Finished Goods Inventory account is debited.
[removed] Work-in-Process Inventory account is debited.
[removed] Finished Goods Inventory account is credited.

 

5. Which of the following activities is a facility-level activity? (Points : 2)

[removed] Plant management salaries.
[removed] Depreciation on a highly specialized piece of production equipment.
[removed] Direct labor.
[removed] Product design.

 

6. An activity that is performed for each unit of production is a(n): (Points : 2)

[removed] Product-level activity.
[removed] Facility-level activity.
[removed] Unit-level activity.
[removed] Performance-level activity.
[removed] Batch-level activity.

 

7. An activity that is performed to support the production of a new custom-order product is a(n): (Points : 2)

[removed] Product-level activity.
[removed] Facility-level activity.
[removed] Unit-level activity.
[removed] Customer-support activity.
[removed] Batch-level activity.

 

8. Which of the following would likely be the most appropriate cost driver of electric power used by machines? (Points : 2)

[removed] Number of units.
[removed] Machine size.
[removed] Number of machine hours.
[removed] Number of production runs.
[removed] Purchase cost of machines.

 

9. The journal entry to record requisitioned and usage of direct materials would include a credit to: (Points : 2)

[removed] Work-in-Process Inventory.
[removed] Accrued Payroll.
[removed] Factory Overhead.
[removed] Materials Inventory.
[removed] Finished Goods Inventory.

 

10. In calculating unit cost in a process costing system, “conversion cost” is defined as the sum of: (Points : 2)

[removed] Direct and indirect material costs.
[removed] Direct and indirect labor costs.
[removed] Direct labor and factory overhead costs.
[removed] Indirect labor and factory overhead costs.

 

11. Process cost systems are used in all of the following industries except: (Points : 2)

[removed] Chemicals.
[removed] Ship building.
[removed] Oil refining.
[removed] Textiles.
[removed] Steel.

 

12. The key difference between weighted-average and FIFO process costing methods is the handling of the partially completed: (Points : 2)

[removed] Beginning direct materials inventory.
[removed] Ending direct materials inventory.
[removed] Beginning work-in-process inventory.
[removed] Ending work-in-process inventory.
[removed] Beginning finished goods inventory.

 

13. ABC Company uses a Materials Inventory account to record both direct and indirect materials. ABC charges direct materials to WIP, while indirect materials are charged to the Factory Overhead account. During the month of April, the company has the following cost information:

Total Materials (Direct and Indirect) Purchsed   =        $ 90,000
Indirect Materials Issued to Production         =                30,000
Total Materials Issued to Production             =              110,000
Beginning Materials Inventory                      =                 50,000

The ending materials inventory cost is: (Points : 2)

[removed] $110,000.
[removed] $30,000.
[removed] $90,000.
[removed] $80,000.
[removed] $50,000.

 

14. Wings Co. budgeted $555,600 manufacturing direct wages, 2,315 direct labor hours, and had the following manufacturing overhead:

Overhead Cost Pool  – Budgeted O/H $ –   Budgeted Level for Cost Driver  – O/H Cost Driver
Materials Handling         $160,000                      3,200 lbs.                                 Material Weight
Machine Setup                   13,200                          390 S/U’s                               # of S/Us
Machine Repair                   1,380                      30,000 Mach. Hrs                      Machine Hrs.
Inspections                         10,560                           160 Inspections                     # of Inspections

Requirements for Job #971 which included 4 Units of Production:
D/L Hours     =      20 Hours
D/Mat’ls        =     130 lbs.
Machine S/U  =      30 Set-ups
Machine Hrs.  =    15,000 Machine Hours
Inspections    =       15 Inspections.

Using ABC, the materials handling overhead cost assigned to Job #971 is: (Points : 2)

[removed] $2,300.
[removed] $990.
[removed] $6,500.
[removed] $690.
[removed] $1,020.

 

15. Randall Company manufactures products to customer specifications. A job costing system is used to accumulate production costs. Factory overhead cost was applied at 125% of direct labor cost. Selected data concerning the past year’s operation of the company are presented below.

Direct Materials January 1      =          $77,000
Direct Materials December 31 =            40,000
WIP January 1    =                                 66,000
WIP December 31    =                           42,000
Finished Goods January 1 =                       115,000
Finished Goods December  31 =                100,000

Other Information:
Direct Materials Purchased     =             $324,000
Cost of Goods Available for Sale   =       950,000
Actual Factory Overhead =                       206,000

The cost of goods manufactured during the year is: (Points : 2)

[removed] $850,000.
[removed] $348,000.
[removed] $672,000.
[removed] $835,000.
[removed] $811,000.

 

 

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