Question :
PART I — MULTIPLE CHOICE (30 points)
Instructions: Designate the best : 1311521
PART I — MULTIPLE CHOICE (30 points)
Instructions: Designate the best answer for each of the following questions.
1. A debit balance in the Manufacturing Overhead account at the end of an interim month means that
a. the balance should be reported as an asset in the monthly balance sheet.
b. corrective action by management is necessary.
c. overhead has been underapplied.
d. cost of goods sold should be credited on the monthly income statement.
2. In a job order cost system, which of the following accounts is not a control account?
a. Raw Materials Inventory
b. Factory Labor
c. Finished Goods Inventory
d. Manufacturing Overhead
3. In the current assets section of the balance sheet, in which order are manufacturing inventories listed?
a. Raw materials, work in process, finished goods
b. Finished goods, work in process, raw materials
c. Work in process, finished goods, raw materials
d. Finished goods, raw materials, work in process
4. Which one of the following costs is a component of both manufacturing overhead and total manufacturing costs?
a. Direct labor
b. Direct materials
c. Selling and administrative costs
d. Factory utilities
5. Manufacturing costs are typically classified as
a. product costs or period costs.
b. direct materials or direct labor.
c. direct materials, direct labor, or manufacturing overhead.
d. direct materials, direct labor, or selling and administrative.
The following data should be used for questions 6–9:
Raw materials inventory, January 1$ 12,000
Raw materials inventory, December 3116,000
Work in process, January 15,000
Work in process, December 318,000
Finished goods, January 117,000
Finished goods, December 3112,000
Raw materials purchases118,000
Direct labor165,000
Factory utilities64,000
Indirect labor12,000
Factory depreciation18,000
Selling and administrative expenses220,000
6. How much is the cost of the direct materials used?
a. $118,000
b. $114,000
c. $122,000
d. $130,000
7. Assume your answer to question 6 above is $130,000. How much are total manufacturing costs?
a. $389,000
b. $393,000
c. $295,000
d. $609,000
8. Assume your answer to question 7 above is $400,000. How much is cost of goods manufactured?
a. $400,000
b. $389,000
c. $397,000
d. $403,000
9. Assume your answer to question 8 above is $420,000. How much is cost of goods sold?
a. $420,000
b. $408,000
c. $295,000
d. $425,000
10. The formula for computing a predetermined overhead rate is
a. estimated annual overhead costs ÷ estimated annual operating activity.
b. estimated annual overhead costs ÷ actual annual operating activity.
c. actual annual overhead costs ÷ actual annual operating activity.
d. actual annual overhead costs ÷ estimated annual operating activity.
11. Which one of the following is an example of a period cost?
a. Maintenance on factory machines
b. Wages of factory workers
c. Salesmen’s commissions
d. Depreciation on the factory building
12. When production costs are debited to Work in Process Inventory, which accounts will be credited?
a. Raw Materials Inventory, Factory Labor, and Finished Goods Inventory
b. Manufacturing Overhead, Factory Labor, and Cost of Goods Sold
c. Raw Materials Inventory, Factory Labor, and Manufacturing Overhead
b. Accounts Payable, Factory Wages Payable, and Accumulated Depreciation
13. What are the functions of management in an organization?
a. Planning, controlling, and decision making
b. Planning, directing, and controlling
c. Directing, controlling, and decision making
d. Directing, planning, and decision making
14. Which one of the following is not one of the major activities of managerial accounting?
a. Providing a basis for controlling costs by comparing actual results with planned objectives
b. Preparing financial statements designed primarily for stockholders and creditors
c. Preparing internal reports for management
d. Determining the behavior of costs as activity levels change
15. Which of the following would most likely use a job order cost system?
a. Cement manufacturer
b. Cat food manufacturer
c. Specialty printing company
d. Automobile manufacturer
