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13) A company experienced a machinery breakdown on one of its production lines. As a consequence of the breakdown, manufacturing fell behind schedule, and a
13) A company experienced a machinery breakdown on one of its production lines. As a consequence of the breakdown, manufacturing fell behind schedule, and a decision was made to schedule overtime to return manufacturing to schedule. Which one of the following methods is the proper way to account for the overtime paid to the direct laborers? a) The overtime hours times the sum of the straight-time wages and overtime premium would be charged entirely to manufacturing overhead. The overtime hours times the sum of the straight-time wages and overtime premium would be treated as direct labor b) c) The overtime hours times the overtime premium would be charged to repair and maintenance expense, and the overtime hours times the straight-time wages would be treated as direct labor d) The overtime hours times the overtime premium would be charged to manufacturing overhead, and the overtime hours times the straight-time wages would be treated as direct labor 14) Cost-volume-profit analysis is a key factor in many decisions, including choice of product lines, pricing of products, marketing strategy, and use of productive facilities. A calculation used in a CVP analysis is the breakeven point. Once the breakeven point has been reached, operating income will increase by the (CMA adapted) a) Gross margin per unit for each additional unit sold b) Contribution margin per unit for each additional unit sold. c) Variable costs per unit for each additional unit sold d) Sales price per unit for each additional unit sold. 15) Jago Co. has two products that use the same manufacturing facilities and cannot be subcontracted. Each product has sufficient orders to utilize the entire manufacturing capacity. For short-run profit maximization, Jago should manufacture the product with the: - a) Lower total manufacturing costs for the manufacturing capacity b) Lower total variable manufacturing costs for the manufacturing capacity c) Greater gross profit per hour of manufacturing capacity d) Greater contribution margin per hour of manufacturing capacity 16) Under the job-order system of cost accounting, the dollar amount of the general ledger entry involved in the transfer of inventory from work-in-process to finished goods is the sum of the costs charged to all jobs (CPA adapted): a) Started in process during the period b) In process during the period c) Completed and sold during the period d) Completed during the period
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