MULTIPLE CHOICE - Choose the one alternative that best completes the statement or answers the question.

1) Which of the following is NOT included in Codes of Ethics for professional accountant

A) Professional competence

B) Objectivity

C) Compensation

D) Confidentiality

2) A manufacturing business has four different departments involved in producing each unit of its product. Maximum daily production capacities of each are: Department A - 100 units; Department B - 135 units; Department C - 95 units, and Department D - 110 units. Which department would be considered first in looking at ways to improve output capacity.

A) A

B) B

C) C

D) D

3) A manufacturing business which operates five days per week has four different departments involved in producing each unit of its product. Maximum daily production capacities of each are: Department A - 100 units; Department B - 135 units; Department C - 95 units, and Department D - 110 units. Maximum weekly output of completed units is?

A) 440

B) 475

C) 550

D) 675

4) Managerial accounting is regulated by:

A) GAAP.

B) IFRS.

C) ASPE.

D) no prescribed standards are followed.

5) The management cycle proceeds in what order?

A) Control, implementation, planning

B) Planning, implementation, control

C) Implementation, planning, control

D) Implementation, control, planning

6) The cost of fire insurance for a manufacturing plant is generally considered to be a:

A) product cost.

B) period cost.

C) variable cost.

D) fixed cost.

7) For a manufacturing company, which of the following is an example of a period rather than a product cost?

A) Depreciation of factory equipment.

B) Wages of salespersons.

C) Wages of machine operators.

D) Insurance on factory equipment.

8) Which of the following would NOT be treated as a product cost for external financial reporting purposes?

A) Depreciation on a factory building.

B) Salaries of factory workers.

C) Indirect labour in the factory.

D) Advertising expenses.

9) Direct materials are a part of:

Conversion cost Manufacturing cost Prime cost

a. Yes Yes No

b. Yes Yes Yes

c. No Yes Yes

d. No No No

A) choice a.

B) choice b.

C) choice c.

D) choice d

10) Rossiter Company failed to record a credit sale at the end of the year, although the reduction in finished goods inventories was correctly recorded when the goods were shipped to the customer. Which one of the following statements is correct?

A) Accounts receivable was not affected, inventory was not affected, sales were understated, and cost of goods sold was understated.

B) Accounts receivable was understated, inventory was overstated, sales were understated, and cost of goods sold was overstated.

C) Accounts receivable was not affected, inventory was understated, sales were understated, and cost of goods sold was understated.

D) Accounts receivable was understated, inventory was not affected, sales were understated, and cost of goods sold was not affected.

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

A) total variable cost will remain unchanged.

B) fixed costs will increase in total.

C) variable cost per unit will increase.

D) total cost per unit will decrease.

12) Variable cost:

A) increases on a per unit basis as the number of units produced increases.

B) remains constant on a per unit basis as the number of units produced increases.

C) remains the same in total as production increases.

D) decreases on a per unit basis as the number of units produced increases.

13) Within the relevant range, the difference between variable costs and fixed costs is:

A) variable costs per unit fluctuate and fixed costs per unit remain constant.

B) variable costs per unit are constant and fixed costs per unit fluctuate.

C) both total variable costs and total fixed costs are constant.

D) both total variable costs and total fixed costs fluctuate.

14) When a decision is made among several alternatives, the potential benefit that is lost by choosing one alternative over another is the:

A) realized cost.

B) opportunity cost.

C) conversion cost.

D) accrued cost.

15) Prime cost consists of direct materials combined with:

A) direct labour.

B) manufacturing overhead.

C) indirect materials.

D) cost of goods manufactured.

16) Brown Company's costs for the month of August were as follows: direct materials, $27,000; direct labour, $34,000; sales salaries, $14,000; indirect labour, $10,000; indirect materials, $15,000; general corporate administrative cost, $12,000; taxes on manufacturing facility, $2,000; and rent on factory, $17,000. The beginning work in process inventory was $16,000 and the ending work in process inventory was $9,000. What was the total manufacturing costs for the month?

A) $105,000.

B) $112,000.

C) $132,000.

D) $138,000.

\17) Using the following data for January, calculate the cost of goods manufactured:

Direct materials $38,000

Direct labour $24,000

Manufacturing overhead $17,000

Beginning work in process inventory $10,000

Ending work in process inventory $11,000

The cost of goods manufactured was:

A) $78,000.

B) $79,000.

C) $80,000.

D) $89,000.

18) During the month of June, Reardon Company incurred $17,000 of direct labour, $8,500 of manufacturing overhead and purchased $15,000 of raw materials. Between the beginning and the end of the month, the raw materials inventory increased by $2,000, the finished goods inventory increased by $1,500, and the work in process inventory decreased by $3,000. The cost of goods manufactured would be:

A) $38,500.

B) $40,500.

C) $41,500.

D) $43,500.

19) Mueller Company reported the following data for the year just ended:

Raw materials used in production $800,000

Direct labour $700,000

Total overhead costs $900,000

Ending work in process inventory $400,000

Cost of goods manufactured $2,500,000

The beginning work in process inventory was:

A) $100,000.

B) $300,000.

C) $500,000.

D) $1,300,000.

20) Mayberry Company reported the following data for the year just ended:

Raw materials used in production $800,000

Direct labour $700,000

Total overhead costs $900,000

Beginning work in process inventory $500,000

Cost of goods manufactured $2,500,000

The ending work in process inventory was:

A) $100,000.

B) $300,000.

C) $400,000.

D) $1,300,000.

21) The beginning balance of the Raw Materials inventory account for May was $27,500. The ending balance for May was $28,750 and $128,900 of raw materials were used during the month. The materials purchased during the month cost:

A) $127,650.

B) $130,150.

C) $131,300.

D) $157,650.

22) Gabel Inc. is a merchandising company. Last month the company's merchandise purchases totaled $63,000. The company's beginning merchandise inventory was $13,000 and its ending merchandise inventory was $15,000. What was the company's cost of goods sold for the month?

A) $61,000.

B) $63,000.

C) $65,000.

D) $91,000.

23) The following account balances has been extracted from Jimbob Co.'s general ledger:

Direct materials used in production $200,000

Depreciation factory building $10,000

Depreciation factory equipment $50,000

Depreciation sales department automobiles $10,000

Direct wages factory employees $200,000

Sales department salaries and commissions $150,000

Factory managers salary $50,000

Utility costs factory $50,000

Utility costs sales

$20,000

What was the total of manufacturing overhead?

A) $110,000.

B) $160,000.

C) $400,000.

D) $740,000. office

24) What was the total of nonmanufacturing costs?

A) $150,000.

B) $160,000.

C) $180,000.

D) $230,000.

25) Frosting Corp. has provided the following relating to the most recent month (August 31, 2020) of operations, for their main product, cupcakes

Baker's salaries 20,000

Finished goods inventory, beginning 18,000

Finished goods inventory, ending 20,000

General & administrative expenses 20,000

Indirect materials 17,500

Production Supervisor, Salary 21,000

Purchases of raw materials 28,000

Raw materials inventory, ending 19,000

Raw materials inventory, beginning 18,000

Rent on production factory 19,000

Rent, retail store 18,000

Sales 243,000

Utilities on production factory 17,500

Utilities, retail store 17,000

Wages, retail staff 20,000

WIP inventory, beginning 19,500

WIP inventory, ending 21,500

What was the cost of goods manufactured for the period?

A) $122,000

B) $120,000

C) $124,000

D) $138,000

26) What was the total manufacturing overhead incurred during the period?

A) $40,000

B) $57,500

C) $75,000

D) $92,00

27) Charlie's Chocolate Factory manufactures chocolate bars and ships them directly to wholesalers and retailers across the country. The company has two product lines: milk chocolate bars and chocolate covered almonds. Classify the following company's expenses if the cost object is a single product line (either milk chocolate bars or chocolate covered almonds).

Advertising campaign for chocolate covered almonds.

A) Direct product cost.

B) Indirect product cost.

C) Direct period cost.

D) Indirect period cost.

28) Tech Computer manufactures tablets in its plant located in Toronto and then ships the computers directly to distributors and retailers. The company's accountant has enlisted you to classify the following company's expenses:

The drive installed in each tablet.

A) Fixed product cost.

B) Variable product cost.

C) Fixed period cost.

D) Variable period cost.

29) Boardman Company reported the following data for the month of January:

Inventories: 1/1 1/31

Raw materials $32,000 $31,000

Work in process $18,000 $12,000

Finished goods $30,000 $35,000

Additional information:

Sales revenue $210,000

Direct labour costs 40,000

Manufacturing overhead costs 70,000

Selling expenses 25,000

Administrative expenses 35,000

If raw materials costing $35,000 were purchased during January, the total manufacturing costs for the month was

A) $144,000.

B) $145,000.

C) $146,000.

D) $151,000.

30) Geneva Steel Corporation produces large sheets of heavy gauge steel. The company showed the following amounts relating to its production for the year just completed:

Direct materials used in production $110,000

Direct labour costs for the year 55,000

Work in process, beginning 22,000

Finished goods, beginning 45,000

Cost of goods available for sale 288,000

Cost of goods sold 238,000

Work in process, ending 16,000

Cost of goods manufactured for the year was:

A) $160,000.

B) $171,000.

C) $243,000.

D) $244,000.

31) Which of the following companies would be most likely to use a job-order costing system rather than a process costing system?

A) Fast food restaurant.

B) Shipbuilding.

C) Crude oil refining.

D) Candy making.

32) Which of the following companies would be most likely to use a process costing system rather than a job costing system?

A) Custom tailor

B) Shipbuilding.

C) Crude oil refining.

D) Auto repair shop

33) The costing approach that meets the requirements of financial accounting and tax reporting requirements is:

A) variable costing.

B) absorption costing.

C) throughput costing.

D) standard costing

34) Work in Process is a control account supported by detailed cost data contained in:

A) job cost sheets.

B) the Manufacturing Overhead account.

C) the Finished Goods inventory account.

D) purchase requisitions.

35) In job-order costing, all the following statements are correct with respect to labour time and cost except:

A) time tickets are kept by employees showing the amount of work on specific jobs.

B) the job cost sheet for a job will contain all direct labour charges to that job.

C) labour cost that can be traced to a job only with a great deal of effort is treated as part of manufacturing overhead.

D) a machine operator performing routine annual maintenance work on a piece of equipment would charge the maintenance time to a specific job.

36) In a job-order costing system, the journal entry to record the application of overhead cost to jobs would include:

A) a credit to the Manufacturing Overhead account.

B) a credit to the Work in Process inventory account.

C) a debit to Cost of Goods Sold.

D) a debit to the Manufacturing Overhead account.

37) In a job-order costing system, direct labour costs are usually recorded initially with a debit to:

A) Manufacturing Overhead.

B) Finished Goods inventory.

C) Direct Labour Expense.

D) Work in Process.

38) Brown Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. Last year, the company worked 55,000 actual direct labour hours and incurred $335,000 of actual manufacturing overhead cost. The Company had estimated that it would work 57,000 direct labour hours during the year and incur $342,000 of manufacturing overhead cost. The company's manufacturing overhead cost applied for the year was:

A) $330,000.

B) $335,000

C) $342,000

D) $347,182

39) Brown Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. Last year, the company worked 55,000 actual direct labour hours and incurred $335,000 of actual manufacturing overhead cost. The Company had estimated that it would work 57,000 direct labour hours during the year and incur $342,000 of manufacturing overhead cost. The company's manufacturing overhead for the year was:

A) overapplied by $5,000.

B) underapplied by $5,000.

C) overapplied by $7,000.

D) underapplied by $7,000.

40) Meyers Company had the following inventory balances at the beginning and end of November:

November 1 November 30

Raw Materials $17,000 $20,000

Finished Goods $50,000 $44,000

Work in Process $9,000 $11,000

During November, $39,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $8 per direct labour-hour, and it paid its direct labour workers $10 per hour. A total of 300 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost.

The raw materials purchased during November totaled:

A) $36,000.

B) $39,000.

C) $42,000.

D) $45,000.