Question :
61)
Which of the following entries properly records the cost of : 1196177
61)
Which of the following entries properly records the cost of goods sold for the month? 61)
______ A)
Finished Goods control$1,045,000
Work in Process$1,045,000 B)
Cost of Goods Sold$1,045,000
Finished Goods control$1,045,000 C)
Cost of Goods Sold$1,045,000
Work in Process$1,045,000 D)
Finished Goods control$1,045,000
Cost of Goods Sold$1,045,000 E)
Cost of Goods Sold$1,045,000
Conversion costs control$1,045,000
62)
Acme, Inc., manufactures air compressors. For July there were no beginning inventories of direct materials, and no beginning or ending work in process. Only one indirect manufacturing cost category is currently in use, “conversion costs.” Journal entries are recorded when materials are purchased and when units are transferred to finished goods. Conversion costs are allocated under backflush costing.
Conversion costs – July$350,000
Direct materials purchased – July$650,000
Units produced – July100,000
Units sold – July90,500
Direct materials – price variance$100,000 Favourable
Direct materials are budgeted at 5 units per compressor; however, actual results reflect that 6 units were required per compressor. Under allocated or Over allocated Conversion Costs are written off against Cost of Goods Sold on a monthly basis. The difference between actual conversion costs incurred and standard conversion costs allocated is $50,000.
Which of the following journal entries properly reflects Acme’s write- off of conversion costs? 62)
______ A)
Conversion Costs control$350,000
Conversion Costs Allocated$350,000 B)
Conversion Costs Allocated$350,000
Conversion Costs control$350,000 C)
Conversion Costs control$350,000
Conversion Costs Allocated$300,000
Cost of Goods Sold 50,000 D)
Conversion Costs Allocated$300,000
Cost of Goods Sold50,000
Conversion Costs control$350,000 E)
Cost of Goods Sold$350,000
Conversion costs control$350,000
63)
Complete Microfilm Products manufactures microfilm cameras. For October there were no beginning inventories of direct materials, and no beginning or ending work in process. Only one indirect manufacturing cost category is currently in use, “Conversion Costs.” Journal entries are recorded when materials are purchased and when units are sold.
Conversion costs – October$
90,400
Direct materials purchased – October$250,400
Units produced – October80,000 units
Units sold – October75,000 units
Selling price$
10.00 each
Which of the following journal entries would be recorded when units are sold for the month? 63)
______ A)
Cost of Goods Sold$319,500
Inventory control$229,500
Conversion Costs Allocated 90,000 B)
Cost of Goods Sold$319,500
Inventory control$319,500 C)
Cost of Goods Sold$319,500
Conversion Costs Allocated$319,500 D)
Cost of Goods Sold$319,500
Inventory control$234,750
Conversion Costs Allocated84,750 E)
Inventory control$234,750
Conversion Costs Allocated84,750
Cost of Goods Sold$319,500
64)
Complete Microfilm Products manufactures microfilm cameras. For October there were no beginning inventories of direct materials, and no beginning or ending work in process. Only one indirect manufacturing cost category is currently in use, “Conversion Costs.”
Conversion costs – October$
90,400
Direct materials purchased – October$250,400
Units produced – October 80,000 units
Units sold – October75,000 units
Selling price$
10.00 each
Which of the following entries would occur if the only trigger point is the production of finished units? 64)
______ A)
Finished Goods control$340,800
Accounts Payable Control$250,400
Conversion Costs Allocated90,400 B)
Accounts Payable Control$90,400
Cost of Goods Sold$90,400 C)
Inventory: Raw and In-Process Control$319,500
Cost of Goods Sold$319,500 D)
Accounts Payable Control$250,400
Conversion Costs Allocated90,400
Finished Goods control$340,800 E)
Cost of Goods Sold$319,500
Inventory: Raw and In-Process Control$229,500
Conversion Costs Allocated90,000
65)
A company uses JIT purchasing, JIT production, and backflush costing. Journal entries are prepared for a typical cycle as follows:
*
When raw materials are purchased
*
To allocate conversion costs
*
When finished goods are sold
*
To adjust for under/over-allocated conversion costs
Required:
How many trigger points does this particular backflush system have? 65)
______ A)
5 B)
4 C)
3 D)
2 E)
1
66)
A backflush costing system that journalizes only when raw materials are purchased and when finished goods are sold, will have which of the following results? 66)
______ A)
income is increased if managers produce more output than is sold B)
produce more safety stock, and conversion costs become period costs C)
conversion costs become period costs D)
increased inventoriable costs E)
it will encourage managers to produce safety stock
67)
Accounting practices for trigger points do not strictly adhere to ________ for external reporting purposes. 67)
______ A)
SMAO B)
GAAS C)
GAAP D)
ICAO E)
management accounting guidelines
68)
Criticism of backflush accounting included all of the following EXCEPT: 68)
______ A)
there is an absence of audit trails. B)
managers can keep track of operations by personal observation. C)
the accounting system cannot pinpoint the uses of resources. D)
WIP exists but is not recorded. E)
GAAP is not followed for external reporting purposes.
69)
A trigger point is defined as 69)
______ A)
a stage in the cycle going from the sale of finished goods at which point journal entries are made in the accounting system. B)
a stage in the cycle going from the purchase of direct materials to the sale of finished goods at which no journal entries are made in the accounting system. C)
a stage in the cycle going from the purchase of direct materials at which journal entries are made in the accounting system. D)
a stage in the cycle going from the purchase of accounting software to the sale of finished goods at which point journal entries are made in the new accounting system. E)
a stage in the cycle going from the purchase of direct materials to the sale of finished goods at which point journal entries are made in the accounting system.
