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Question : 129.Fox Hunting Gear manufactures two products: camouflage jackets and camouflage : 1302771

Economics

 

 

129.Fox Hunting Gear manufactures two products: camouflage jackets and camouflage hats. The company makes 50,000 jackets and 20,000 hats each year. Information for overhead costs and for the two products appears below.

 

ActivityDriverEstimated Total

Overhead CostJacketsHats

Setups# of setups$   200,000500 setups1,500 setups

Ordering parts# of parts300,00060,000 parts40,000 parts

Machining# of machine hours600,00012,000 machine hrs.6,000 machine hrs.

Inspections# of inspections400,00010,000 inspections40,000 inspections

Shipping# of shipments300,00010,000 shipments10,000 shipments

Total overhead$1,800,000

 

 

How much is the overhead cost of each hat if all overhead is assigned using ABC?

A.$159.33 per hat

B.$24.00 per hat

C.$100.00 per hat

D.$47.00 per hat

 

130.Fox Hunting Gear manufactures two products: camouflage jackets and camouflage hats. The company makes 50,000 jackets and 20,000 hats each year. Information for overhead costs and for the two products appears below.

 

ActivityDriverEstimated Total

Overhead CostJacketsHats

Setups# of setups$   200,000500 setups1,500 setups

Ordering parts# of parts300,00060,000 parts40,000 parts

Machining# of machine hours600,00012,000 machine hrs.6,000 machine hrs.

Inspections# of inspections400,00010,000 inspections40,000 inspections

Shipping# of shipments300,00010,000 shipments10,000 shipments

Total overhead$1,800,000

 

If the company uses a single cost pool and assigns overhead using machine hours, how much overhead will be assigned to each hat?

A.$24.00 per hat

B.$100 per hat

C.$30.00 per hat

D.$300.00 per hat

 

131.Fox Hunting Gear manufactures two products: camouflage jackets and camouflage hats. The company makes 50,000 jackets and 20,000 hats each year. Information for overhead costs and for the two products appears below.

 

ActivityDriverEstimated Total

Overhead CostJacketsHats

Setups# of setups$   200,000500 setups1,500 setups

Ordering parts# of parts300,00060,000 parts40,000 parts

Machining# of machine hours600,00012,000 machine hrs.6,000 machine hrs.

Inspections# of inspections400,00010,000 inspections40,000 inspections

Shipping# of shipments300,00010,000 shipments10,000 shipments

Total overhead$1,800,000

 

Fox Hunting Gear uses activity-based costing. What is the rate per inspection that should be used to assign inspection cost to hats?

A.$10 per inspection

B.$40 per inspection

C.$8 per inspection

D.$16 per inspection

 

132.Fox Hunting Gear manufactures two products: camouflage jackets and camouflage hats. The company makes 50,000 jackets and 20,000 hats each year. Information for overhead costs and for the two products appears below.

 

ActivityDriverEstimated Total

Overhead CostJacketsHats

Setups# of setups$   200,000500 setups1,500 setups

Ordering parts# of parts300,00060,000 parts40,000 parts

Machining# of machine hours600,00012,000 machine hrs.6,000 machine hrs.

Inspections# of inspections400,00010,000 inspections40,000 inspections

Shipping# of shipments300,00010,000 shipments10,000 shipments

Total overhead$1,800,000

 

 

What will be the overhead cost of each jacket if overhead is assigned using ABC?

A.$159.33 per jacket

B.$100 per jacket

C.$47 per jacket

D.$17.20 per jacket

 

133.Rather Bedding makes two types of pillow—down and foam. It is currently implementing an activity-based costing system. In the past, all overhead had been applied on the basis of machine hours. The company produces 6,000 down pillows and 18,000 foam pillows per year.

 

Cost PoolDriver and LevelEstimated CostsUse of Driver by Down PillowsUse of Driver by Foam Pillows

Equipment setup360 setups$216,000120 setups240 setups

Materials ordering6,000 orders$60,0002,400 orders3,600 orders

Quality control2,000 inspections$36,000800 inspections1,200 inspections

Machining8,000 machine hours$86,8004,200 machine hours3,800 machine hours

 

What is the overhead cost for each foam pillow when all overhead is applied based on machine hours?

A.$10.52 per foam pillow

B.$638.85 per foam pillow

C.$49.85 per foam pillow

D.$20.67 per foam pillow

 

134.Rather Bedding makes two types of pillow—down and foam. It is currently implementing an activity-based costing system. In the past, all overhead had been applied on the basis of machine hours. The company produces 6,000 down pillows and 18,000 foam pillows per year.

 

Cost PoolDriver and LevelEstimated CostsUse of Driver by Down PillowsUse of Driver by Foam Pillows

Equipment setup360 setups$216,000120 setups240 setups

Materials ordering6,000 orders$60,0002,400 orders3,600 orders

Quality control2,000 inspections$36,000800 inspections1,200 inspections

Machining8,000 machine hours$86,8004,200 machine hours3,800 machine hours

 

What is the overhead cost for each down pillow using ABC?

A.$50.00 per down pillow

B.$26.00 per down pillow

C.$13.49 per down pillow

D.$16.67 per down pillow

 

135.Rather Bedding makes two types of pillow—down and foam. It is currently implementing an activity-based costing system. In the past, all overhead had been applied on the basis of machine hours. The company produces 6,000 down pillows and 18,000 foam pillows per year.

 

Cost PoolDriver and LevelEstimated CostsUse of Driver by Down PillowsUse of Driver by Foam Pillows

Equipment setup360 setups$216,000120 setups240 setups

Materials ordering6,000 orders$60,0002,400 orders3,600 orders

Quality control2,000 inspections$36,000800 inspections1,200 inspections

Machining8,000 machine hours$86,8004,200 machine hours3,800 machine hours

 

Which two cost pools could be combined without affecting the unit costs using ABC?

A.Equipment setup and machining

B.Materials ordering and quality control

C.Materials ordering and machining

D.None. The drivers for each activity differ.

 

136.Rather Bedding makes two types of pillow—down and foam. It is currently implementing an activity-based costing system. In the past, all overhead had been applied on the basis of machine hours. The company produces 6,000 down pillows and 18,000 foam pillows per year.

 

Cost PoolDriver and LevelEstimated CostsUse of Driver by Down PillowsUse of Driver by Foam Pillows

Equipment setup360 setups$216,000120 setups240 setups

Materials ordering6,000 orders$60,0002,400 orders3,600 orders

Quality control2,000 inspections$36,000800 inspections1,200 inspections

Machining8,000 machine hours$86,8004,200 machine hours3,800 machine hours

 

Using ABC, what is the cost per setup to be assigned to down pillows?

A.$600 per setup

B.$0.10 per setup

C,$3.02 per setup

D.None of these answer choices are correct.

 

137.Rather Bedding makes two types of pillow—down and foam. It is currently implementing an activity-based costing system. In the past, all overhead had been applied on the basis of machine hours. The company produces 6,000 down pillows and 18,000 foam pillows per year.

 

Cost PoolDriver and LevelEstimated CostsUse of Driver by Down PillowsUse of Driver by Foam Pillows

Equipment setup360 setups$216,000120 setups240 setups

Materials ordering6,000 orders$60,0002,400 orders3,600 orders

Quality control2,000 inspections$36,000800 inspections1,200 inspections

Machining8,000 machine hours$86,8004,200 machine hours3,800 machine hours

 

What is the overhead cost for each down pillow when all overhead is applied based on machine hours?

A.$34.90 per down pillow

B.$49.85 per down pillow

C.$10.85 per down pillow

D.None of these answer choices are correct.

 

138.Rather Bedding makes two types of pillow—down and foam. It is currently implementing an activity-based costing system. In the past, all overhead had been applied on the basis of machine hours. The company produces 6,000 down pillows and 18,000 foam pillows per year.

 

Cost PoolDriver and LevelEstimated CostsUse of Driver by Down PillowsUse of Driver by Foam Pillows

Equipment setup360 setups$216,000120 setups240 setups

Materials ordering6,000 orders$60,0002,400 orders3,600 orders

Quality control2,000 inspections$36,000800 inspections1,200 inspections

Machining8,000 machine hours$86,8004,200 machine hours3,800 machine hours

 

What is the overhead cost for each foam pillow using ABC?

A.$10.56 per foam pillow

B.$26.00 per foam pillow

C.$13.49 per foam pillow

D.$50.00 per foam pillow

 

 

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July 1, 2023
    

 

41.The adjusting entry required when amounts previously recorded as unearned revenues are earned includes:
A.A debit to a liability.
B.A debit to an asset.
C.A credit to a liability.
D.A credit to an asset.

42.Adjusting entries:
A.Often include the Cash account.
B.Usually are recorded at the beginning of the accounting period.
C.Always involve at least one income statement account and one balance sheet account.
D.Adjust the balance of revenue and expense accounts to zero.

43.The adjusting entry required to record accrued expenses includes:
A.A credit to Cash.
B.A debit to an asset.
C.A credit to an asset.
D.A credit to liability.

44.Yummy Foods purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance. At its December 31 year-end, Yummy Foods would record which of the following adjusting entries?
A.
B.
C.
D.

45.The employees of Neat Clothes work Monday through Friday. Every other Friday the company issues payroll checks totaling $32,000. The current pay period ends on Friday, January 3. Neat Clothes is now preparing financial statements for the year ended December 31. What is the adjusting entry to record accrued salaries at the end of the year?
A.
B.
C.
D.

46.On April 1, a $4,800 premium on a one-year insurance policy on equipment was paid and charged to Prepaid Insurance. At the end of the year, the financial statements would report:
A.Insurance Expense, $4,800; Prepaid Insurance $0.
B.Insurance Expense, $3,600; Prepaid Insurance $1,200.
C.Insurance Expense, $3,650; Prepaid Insurance $4,800.
D.Insurance Expense, $1,200; Prepaid Insurance $3,600.

47.On September 1, 2012, Gold Magazine sold 400 one-year subscriptions for $90 each. The total amount received was credited to Unearned Revenue. What would be the required adjusting entry at December 31, 2012?
A.
B.
C.
D.

48.During the year, Cheng Company paid salaries of $24,000. In addition, $8,000 in salaries has accrued by the end of the year but has not been paid. The year-end adjusting entry would include which one of the following?
A.Debit to Salaries Expense for $32,000.
B.Credit to Salaries Expense of $8,000.
C.Debit to Salaries Payable for $24,000.
D.Credit to Salaries Payable for $8,000.

49.At the beginning of December, Global Corporation had $2,000 in supplies on hand. During the month, supplies purchased amounted to $3,000, but by the end of the month the supplies balance was only $800. What is the appropriate month-end adjusting entry?
A.Debit Cash $4,200, credit Supplies $4,200.
B.Debit Supplies $4,200, credit Supplies Expense $4,200.
C.Debit Supplies Expense $4,200, credit Supplies $4,200.
D.Debit Cash $800, credit Supplies $800.

50.Eve's Apples opened for business on January 1, 2012, and paid for two insurance policies effective that date. The liability policy was $36,000 for eighteen-months, and the crop damage policy was $12,000 for a two-year term. What was the balance in Eve's Prepaid Insurance account as of December 31, 2012?
A.$9,000.
B.$18,000.
C.$30,000.
D.$48,000.

 

 

default image
July 1, 2023
    

 

41.The adjusting entry required when amounts previously recorded as unearned revenues are earned includes:
A.A debit to a liability.
B.A debit to an asset.
C.A credit to a liability.
D.A credit to an asset.

42.Adjusting entries:
A.Often include the Cash account.
B.Usually are recorded at the beginning of the accounting period.
C.Always involve at least one income statement account and one balance sheet account.
D.Adjust the balance of revenue and expense accounts to zero.

43.The adjusting entry required to record accrued expenses includes:
A.A credit to Cash.
B.A debit to an asset.
C.A credit to an asset.
D.A credit to liability.

44.Yummy Foods purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance. At its December 31 year-end, Yummy Foods would record which of the following adjusting entries?
A.
B.
C.
D.

45.The employees of Neat Clothes work Monday through Friday. Every other Friday the company issues payroll checks totaling $32,000. The current pay period ends on Friday, January 3. Neat Clothes is now preparing financial statements for the year ended December 31. What is the adjusting entry to record accrued salaries at the end of the year?
A.
B.
C.
D.

46.On April 1, a $4,800 premium on a one-year insurance policy on equipment was paid and charged to Prepaid Insurance. At the end of the year, the financial statements would report:
A.Insurance Expense, $4,800; Prepaid Insurance $0.
B.Insurance Expense, $3,600; Prepaid Insurance $1,200.
C.Insurance Expense, $3,650; Prepaid Insurance $4,800.
D.Insurance Expense, $1,200; Prepaid Insurance $3,600.

47.On September 1, 2012, Gold Magazine sold 400 one-year subscriptions for $90 each. The total amount received was credited to Unearned Revenue. What would be the required adjusting entry at December 31, 2012?
A.
B.
C.
D.

48.During the year, Cheng Company paid salaries of $24,000. In addition, $8,000 in salaries has accrued by the end of the year but has not been paid. The year-end adjusting entry would include which one of the following?
A.Debit to Salaries Expense for $32,000.
B.Credit to Salaries Expense of $8,000.
C.Debit to Salaries Payable for $24,000.
D.Credit to Salaries Payable for $8,000.

49.At the beginning of December, Global Corporation had $2,000 in supplies on hand. During the month, supplies purchased amounted to $3,000, but by the end of the month the supplies balance was only $800. What is the appropriate month-end adjusting entry?
A.Debit Cash $4,200, credit Supplies $4,200.
B.Debit Supplies $4,200, credit Supplies Expense $4,200.
C.Debit Supplies Expense $4,200, credit Supplies $4,200.
D.Debit Cash $800, credit Supplies $800.

50.Eve's Apples opened for business on January 1, 2012, and paid for two insurance policies effective that date. The liability policy was $36,000 for eighteen-months, and the crop damage policy was $12,000 for a two-year term. What was the balance in Eve's Prepaid Insurance account as of December 31, 2012?
A.$9,000.
B.$18,000.
C.$30,000.
D.$48,000.

 

 

default image
July 1, 2023
    

 

41.The adjusting entry required when amounts previously recorded as unearned revenues are earned includes:
A.A debit to a liability.
B.A debit to an asset.
C.A credit to a liability.
D.A credit to an asset.

42.Adjusting entries:
A.Often include the Cash account.
B.Usually are recorded at the beginning of the accounting period.
C.Always involve at least one income statement account and one balance sheet account.
D.Adjust the balance of revenue and expense accounts to zero.

43.The adjusting entry required to record accrued expenses includes:
A.A credit to Cash.
B.A debit to an asset.
C.A credit to an asset.
D.A credit to liability.

44.Yummy Foods purchased a one-year hazard insurance policy on August 1 and recorded the $4,200 premium to prepaid insurance. At its December 31 year-end, Yummy Foods would record which of the following adjusting entries?
A.
B.
C.
D.

45.The employees of Neat Clothes work Monday through Friday. Every other Friday the company issues payroll checks totaling $32,000. The current pay period ends on Friday, January 3. Neat Clothes is now preparing financial statements for the year ended December 31. What is the adjusting entry to record accrued salaries at the end of the year?
A.
B.
C.
D.

46.On April 1, a $4,800 premium on a one-year insurance policy on equipment was paid and charged to Prepaid Insurance. At the end of the year, the financial statements would report:
A.Insurance Expense, $4,800; Prepaid Insurance $0.
B.Insurance Expense, $3,600; Prepaid Insurance $1,200.
C.Insurance Expense, $3,650; Prepaid Insurance $4,800.
D.Insurance Expense, $1,200; Prepaid Insurance $3,600.

47.On September 1, 2012, Gold Magazine sold 400 one-year subscriptions for $90 each. The total amount received was credited to Unearned Revenue. What would be the required adjusting entry at December 31, 2012?
A.
B.
C.
D.

48.During the year, Cheng Company paid salaries of $24,000. In addition, $8,000 in salaries has accrued by the end of the year but has not been paid. The year-end adjusting entry would include which one of the following?
A.Debit to Salaries Expense for $32,000.
B.Credit to Salaries Expense of $8,000.
C.Debit to Salaries Payable for $24,000.
D.Credit to Salaries Payable for $8,000.

49.At the beginning of December, Global Corporation had $2,000 in supplies on hand. During the month, supplies purchased amounted to $3,000, but by the end of the month the supplies balance was only $800. What is the appropriate month-end adjusting entry?
A.Debit Cash $4,200, credit Supplies $4,200.
B.Debit Supplies $4,200, credit Supplies Expense $4,200.
C.Debit Supplies Expense $4,200, credit Supplies $4,200.
D.Debit Cash $800, credit Supplies $800.

50.Eve's Apples opened for business on January 1, 2012, and paid for two insurance policies effective that date. The liability policy was $36,000 for eighteen-months, and the crop damage policy was $12,000 for a two-year term. What was the balance in Eve's Prepaid Insurance account as of December 31, 2012?
A.$9,000.
B.$18,000.
C.$30,000.
D.$48,000.

 

 

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