1) Which of the following groups should be the focal point of a company's strategy?

1. Employees
2. Board of directors
3. Shareholders
4. Target customers

2) How should the cost of the fire insurance for a manufacturing plant be classified?

1. Prime cost.
2. Product cost.
3. Period cost.
4. Variable cost.

3)Last month, when 10,000 units of a product were manufactured, the cost per unit was $60. At this level of activity, variable costs were 50% of total unit costs. If 10,500 units are manufactured next month and cost behavior patterns remain unchanged, how will costs be affected?

1. Total variable costs will remain unchanged.
2. Fixed costs will increase in total.
3. Variable cost per unit will increase.
4. Total cost per unit will decrease.

4)Anaconda Mining Company shipped 9,000 tons of copper concentrate for $450,000 in March and 11,000 tons for $549,000 in April. Use the high-low method to estimate the shipping costs for 12,000 tons to be shipped in May.

1. $548,780.
2. $549,020.
3. $594,000.
4. $598,500.

5)Kelly Sportswear manufactures a specialty line of T-shirts. The company uses a job-order costing system. During March, the following costs were incurred on Job 1052:

Direct material $13,700

Direct labour 4,800

Manufacturing overhead was applied at the rate of $25 per machine hour, and Job 1052 required 800 machine hours. In addition, selling and shipping costs of $7,000 were incurred. Job 1052 consisted of 7,000 shirts and was completed on March 24. The total cost of job 1052 transferred from Work in Process to Finished Goods on March 24 is:

1. $33,700
2. $38,500
3. $18,500
4. $20,000

6)Which of the following statements is true if a company applies overhead to jobs on the basis of a predetermined overhead rate and reports a credit balance in the Manufacturing Overhead account at the end of any period?

1. More overhead cost has been charged to jobs than has been incurred during the period.
2. More overhead cost has been incurred during the period than has been charged to jobs.
3. The amount of overhead cost charged to jobs is greater than the estimated cost for the period.
4. The amount of overhead cost charged to jobs is less than the estimated overhead cost for the period.

7)The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of $400 and $200 for direct materials and charges of $300 and $500 for direct labor. From this information, what predetermined overhead rate, as a percentage of direct labor costs, does the company appear to be using?

1. 80%.
2. 125%.
3. 240%.
4. 300%.

8)Freeman Company uses a predetermined overhead rate based on direct labor hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $150,000 and direct labor hours would be 10,000. The actual figures for the year were $186,000 for manufacturing overhead and 12,000 direct labor hours. The cost records for the year will show which of the following?

1. Over applied overhead of $30,000.
2. Under applied overhead of $30,000.
3. Under applied overhead of $6,000.
4. Over applied overhead of $6,000.

9)For the current year, Paxman Company incurred $150,000 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was over applied in the amount of $6,000 for the year. If the predetermined overhead rate was $8.00 per direct labor hour, how many hours were worked during the year?

1. 17,750 hours.
2. 18,000 hours.
3. 18,750 hours.
4. 19,500 hours.

10)Manufacturing overhead is over applied for the year by $3,000. The unadjusted cost of goods sold is $360,000. Closing manufacturing overhead into cost of goods sold will result in which of the following?

1. Adjusted cost of goods sold of $363,000.
2. A credit balance in manufacturing overhead of $6,000.
3. Adjusted cost of goods sold of $357,000.
4. Adjusted cost of goods sold of $360,000.

11)The balances in White Company's Work in Process inventory account were $15,000 on August 1 and $18,000 on August 31. The company incurred $30,000 in direct labor cost during August and requisitioned $25,000 in raw materials (all direct material). The sum of the debits to the Manufacturing Overhead account totaled $28,000 for the month while the sum of the credits totaled $30,000. Which of the following statements is correct?

1. Finished Goods was debited for $82,000 during the month.
2. Finished Goods was debited for $52,000 during the month.
3. Manufacturing Overhead was under applied by $2,000 at the end of the month
4. Finished Goods was credited for $82,000 during the month

12)David Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 20,000 units that were 80% complete with respect to conversion costs. The conversion cost in this beginning work-in-process inventory was $123,200. An additional 65,000 units were started into production during the month. There were 19,000 units in the ending work-in-process inventory of the Welding Department that were 10% complete with respect to conversion costs. A total of $389,250 in conversion costs were incurred in the department during the month.

What would be the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

1. $7.547.
2. $7.700.
3. $4.634.
4. $5.988.