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For each question below, select the best answer and print the letter corresponding to your selection on the answer sheet provided separately. Managerial accounting: focuses only on historical data. is governed by GAAP. focuses primarily on the needs of personnel within the organization. provides information for parties external to the organization. focuses on financial statements and other financial reports. Jones Corporation manufactures two models of office cabinets, a standard and a deluxe model. The following activity and cost information has been compiled. Assume a traditional costing system applies overhead costs based on direct labor hours What is the total amount of overhead costs assigned to the Deluxe model? $22,500 $35,200 $37,500 $57,500 Number of setups and number of components are identified as activ ity-cost drivers for manufacturing overhead (MOH) for ABC Cost Pools 1 & 2. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the Standard model? $24,800 $32,000 $36,000 $44,000 What type of cost pool is ABC Cost Pool #1? Unit level Batch level Product Level Facility level Component level Which of the following choices correctly depicts whether McDonald's, the University Wisconsin, and Apple Inc. would have a need for managerial accounting? The division of activities into unit-level, batch-level, product-sustaining level, and facility-level categories is commonly known as a cost: Object. Application method. Estimation method Hierarchy Classification scheme that is useful in traditional, volume-based systems. Which of the following statements represents a similarity between financial and managerial accounting? Both are useful in providing information for external users. Both are governed by GAAP. Both draw upon data from an organization's accounting system. Both rely heavily on published financial statements. Both are solely concerned with historical transactions. Customer profitability analysis is tied closely to: just-in-time systems. activity-based costing. job costing. Process costing The adoption of a 24/7 customer service help line is an example of a: value-added activity. facility activity nonvalue-added activity. batch-related activity. product-sustaining activity. Majesco, which uses a process-costing system, adds material at the beginning of production and incurs conversion cost evenly throughout manufacturing. The following selected information was taken from the company's accounting records: Total equivalent units of materials: 5,000 Total equivalent units of conversion: 4,400 Units started and completed during the period: 3,500 On the basis of this information, the ending work-in-process inventory's stage of completion is: 40%. 60%. 70%. 80%. Some other percentage. Which of the following is a key document in a typical process-costing system? Departmental production report. Master schedule. Production budget. Sequential product report. Cost management systems tend to focus on an organization's: machines. employees. activities. rules and regulations. Line and staff functions Under the weighted-average process-costing method, the unit cost is based on: Only the current period's manufacturing costs. Only costs in the period's beginning work-in-process inventory. The sum of the costs in the beginning work-in-process inventory plus costs incurred in current period. Only costs incurred in current accounting periods. Which of the following are needed to calculate the total cost of the ending work-in-process inventory under the weighted-average process-costing method? Which of the following manufactures would most likely not use a process-cost accounting system? A producer of computer monitors. A paint manufacturer. A producer of frozen orange juice. A builder of customized yachts. A lumber mill. The value chain of a manufacturer would tend to include activities related to: manufacturing. research and development. product design. marketing. All of the above. Which of the following statements is true? Service firms have little need for determining the cost of their services. The concept of product costing is relevant only for manufacturing firms. The cost of year-end inventory appears on the balance sheet as an expense. Service companies use cost information for planning and control purposes. Mining and petroleum companies have no inventoriable costs. A typical job-cost record would provide information about all of the following items related to an order except: the cost of direct materials used. administrative costs. direct labor costs incurred. applied manufacturing overhead. direct labor hours worked. When using actual costing, the total production cost of a job is composed of: direct material and direct labor. direct material, direct labor, manufacturing overhead, and outlays for selling costs. direct material, direct labor, manufacturing overhead, and outlays for both selling and administrative costs. direct material, direct labor, and applied manufacturing overhead. direct material, direct labor, and actual manufacturing overhead. The process of managing the various activities in the value chain, along with the associated costs, is commonly known as: activity-based costing. strategic cost management. total quality management. computer-integrated costing. sound management practices (SMP). Which of the following statements regarding work in process is not correct? Work in process is partially completed inventory. Work in process consists of direct labor, direct material, and manufacturing overhead. Work-in-Process Inventory is debited to record direct material used and direct labor incurred. Work-in-Process Inventory appears on the year-end balance sheet. Work-in-Process Inventory is credited when goods arc sold. A review of a company's Work-in-Process Inventory account found a debit for materials of $67,000. If all procedures were performed in the correct manner, this means that the firm: also recorded a credit to Raw-Material Inventory. also recorded a credit to Manufacturing Supplies Inventory. was accounting for the usage of direct materials. was accounting for the usage of indirect materials. Both A and C. Blarney Company applies manufacturing overhead by using a predetermind rate of 50% of direct labor cost. The data that follow pertain to job no. 764: If Blarney adds a 40% markup on total cost to generate a profit, which of the following choices depicts a portion of the accounting needed to record the sale of job no. 764? Manufacturing Overhead must be overapplied. Manufacturing Overhead must be underapplied. Cost of Goods Sold must be understated. Work-in-Process Inventory must be understated. Both A and C. Total costs are $80,000 when 8,000 units are produced: of this amount, variable costs arc $48,000. What are the total costs when 10,000 units are produced? $80,000. $92,000. $98,000. $100,000. $108,000. Cost objects may include Products. Customers. Departments. All of the above. None of the above For the year just ended, Major Corporation's manufacturing cost Beginning and ending work-in-process inventories were $90,000 and Major's balance sheet also revealed respective beginning and ending of $250,000 and $180,000. On the basis of this information, how report as cost of goods manufactured (COGM) and cost of goods sold COGM. $1,530,000; COGS, $1,600,000. COGM, $1,470,000; COGS, $1,540,000 COGM, $1,530,000; COGS. $1,460,000. COGM, $1,570,000; COGS, $1,540,000. Some other amounts. Cost behavior refers to how costs react to a change in the level of activity. whether a cost is incurred in a manufacturing, merchandising, classifying costs as either inventoriable or period costs. whether a particular expense has been ethically incurred. all of the above The accounting records of Diego Company revealed the following costs, among others: Costs that would be considered in the calculation of manufacturing overhead total: $149,000. $171,000. $186,000. $442,000. None of the above answers arc correct. The choices below depict five costs of Benton Corporation and a possible driver for each cost. Which of these choices likely contains an inappropriate cost driver? Gasoline consumed; number of miles driven. Manufacturing overhead incurred in a heavily automated facility; direct labor hours. Sales commissions; gross sales revenue. Building maintenance cost; building square footage. Human resources department cost; number of employees. Tomotoes used in the manufacture of Hunts betchep Administrative of executives employed by Jet Blue Airlines Wages of assembly-line weetlers at a Faced plaet Marketing expenditiones of the Atlarta Braves baseball club Commissiones paid to Coco-Cola's sadespeople Streight-line depreciations on manufacturing equipement owned by Dell Computer Shipping Charged incurrent by Office Depet on out-going orders Spealcers used in Sony borne-theather systems Insurance costs related to a Mary Kay Coseatics' manufacturing plant Required: Complete the table below by classifying each of the costs listed above as (1) a product or period cost and(2) a variable or fixed cost by placing an X in the appropriate column Rock Star, Inc., which uses a job-costing system, began business on January 1, 20x3 and applies manufacturing overhead on the basis of direct-labor cost. The following information relates to 20x3: Budgeted direct labor and manufacturing overhead were anticipated to be $200,000 and $250,000, respectively. Job nos. 1, 2 and 3 were begun dutring the year and had the following charges for direct material and direct labor: Job nos. 1 and 2 were completed and sold on account to customers at a profit of 60% of cost. Job no. 3 remained in production. Actual manufacturing overhead by year-end totaled $233,000. Rock Star adjusts all under- or over-applied overhead to cost goods sold. Compute the company's predetermined overhead application rate. $ Compute Rock Star's ending work-in-process inventory.$ Determine Rock Star's sales revenue. $ In the space below, provide the journal entry to adjust for any under- or over-applied manufacturing overhead at year-end. If none, so state. Would the presence of under- or over- applied overhead at year-end indicate that Rock Star's accountants made a serious error? Briefly explain. Fedora, Inc., uses a weighted-average process-costing system and has one production department. All materials are introduced at the start of manufacturing; in contrast, conversion cost in incurred uniformly throughout production. The company had work-in-process inventories on May 1 of 62,000 physical units and May 31 of 70,000 units, which were $40% complete. The production supervisor noted that Fedora completed 100,000 units during the month. Costs in the May 1 work-in-process inventory included materials, $40,000 and conversion, $90,000. During May, Fedora charged production with $300,000 of material and $710,000 of conversion, resulting in a material cost per equivalent unit of $2. Required: Show all work and place your answer in the space provided. Determine the number of units that Fedora started during May. Compute the number of equivalent units for conversion. Determine the conversion cost per equivalent unit. Compute the cost of the May 31 work-in-process inventory. $ In the space below, provide the journal entry to record Fedora's completed production for May. Weston Enterprises currently uses a traditional-costing system to estimate quality-control costs for its DEXD product line. Costs are estimated at 32% of direct-labor cost, and direct labor totaled $860,000 for the quarter just ended. Management is contemplating a change to activity-based costing, and has established three cost pools: incoming material inspection, in process inspection, and final product certification. Numbers of parts, number of units, and number of orders have been selected as the respective cost drivers. The following data show the activity cost pool rates that have been calculated by the company along with the quantity of driver units for the DEXs: Required: Show all work and place your answer in the space provided Calculate the quarterly quality-control cost that is allocated to the DEX product line under Weston's traditional-costing system. $ Calculate the quarterly quality-control cost that is allocated to the DEXs if activity-based costing is used. $ Does the traditional approach Circle one {under-cost} {over-cost} the DEX product line? By what amount? List two criteria Weston most likely used to determine the cost drivers for quality control costs: 1. 2. Briefly discuss the merits of an activity-based costing system in comparison with a traditional costing system. For each question below, select the best answer and print the letter corresponding to your selection on the answer sheet provided separately. Managerial accounting: focuses only on historical data. is governed by GAAP. focuses primarily on the needs of personnel within the organization. provides information for parties external to the organization. focuses on financial statements and other financial reports. Jones Corporation manufactures two models of office cabinets, a standard and a deluxe model. The following activity and cost information has been compiled. Assume a traditional costing system applies overhead costs based on direct labor hours What is the total amount of overhead costs assigned to the Deluxe model? $22,500 $35,200 $37,500 $57,500 Number of setups and number of components are identified as activ ity-cost drivers for manufacturing overhead (MOH) for ABC Cost Pools 1 & 2. Assuming an activity-based costing system is used, what is the total amount of overhead costs assigned to the Standard model? $24,800 $32,000 $36,000 $44,000 What type of cost pool is ABC Cost Pool #1? Unit level Batch level Product Level Facility level Component level Which of the following choices correctly depicts whether McDonald's, the University Wisconsin, and Apple Inc. would have a need for managerial accounting? The division of activities into unit-level, batch-level, product-sustaining level, and facility-level categories is commonly known as a cost: Object. Application method. Estimation method Hierarchy Classification scheme that is useful in traditional, volume-based systems. Which of the following statements represents a similarity between financial and managerial accounting? Both are useful in providing information for external users. Both are governed by GAAP. Both draw upon data from an organization's accounting system. Both rely heavily on published financial statements. Both are solely concerned with historical transactions. Customer profitability analysis is tied closely to: just-in-time systems. activity-based costing. job costing. Process costing The adoption of a 24/7 customer service help line is an example of a: value-added activity. facility activity nonvalue-added activity. batch-related activity. product-sustaining activity. Majesco, which uses a process-costing system, adds material at the beginning of production and incurs conversion cost evenly throughout manufacturing. The following selected information was taken from the company's accounting records: Total equivalent units of materials: 5,000 Total equivalent units of conversion: 4,400 Units started and completed during the period: 3,500 On the basis of this information, the ending work-in-process inventory's stage of completion is: 40%. 60%. 70%. 80%. Some other percentage. Which of the following is a key document in a typical process-costing system? Departmental production report. Master schedule. Production budget. Sequential product report. Cost management systems tend to focus on an organization's: machines. employees. activities. rules and regulations. Line and staff functions Under the weighted-average process-costing method, the unit cost is based on: Only the current period's manufacturing costs. Only costs in the period's beginning work-in-process inventory. The sum of the costs in the beginning work-in-process inventory plus costs incurred in current period. Only costs incurred in current accounting periods. Which of the following are needed to calculate the total cost of the ending work-in-process inventory under the weighted-average process-costing method? Which of the following manufactures would most likely not use a process-cost accounting system? A producer of computer monitors. A paint manufacturer. A producer of frozen orange juice. A builder of customized yachts. A lumber mill. The value chain of a manufacturer would tend to include activities related to: manufacturing. research and development. product design. marketing. All of the above. Which of the following statements is true? Service firms have little need for determining the cost of their services. The concept of product costing is relevant only for manufacturing firms. The cost of year-end inventory appears on the balance sheet as an expense. Service companies use cost information for planning and control purposes. Mining and petroleum companies have no inventoriable costs. A typical job-cost record would provide information about all of the following items related to an order except: the cost of direct materials used. administrative costs. direct labor costs incurred. applied manufacturing overhead. direct labor hours worked. When using actual costing, the total production cost of a job is composed of: direct material and direct labor. direct material, direct labor, manufacturing overhead, and outlays for selling costs. direct material, direct labor, manufacturing overhead, and outlays for both selling and administrative costs. direct material, direct labor, and applied manufacturing overhead. direct material, direct labor, and actual manufacturing overhead. The process of managing the various activities in the value chain, along with the associated costs, is commonly known as: activity-based costing. strategic cost management. total quality management. computer-integrated costing. sound management practices (SMP). Which of the following statements regarding work in process is not correct? Work in process is partially completed inventory. Work in process consists of direct labor, direct material, and manufacturing overhead. Work-in-Process Inventory is debited to record direct material used and direct labor incurred. Work-in-Process Inventory appears on the year-end balance sheet. Work-in-Process Inventory is credited when goods arc sold. A review of a company's Work-in-Process Inventory account found a debit for materials of $67,000. If all procedures were performed in the correct manner, this means that the firm: also recorded a credit to Raw-Material Inventory. also recorded a credit to Manufacturing Supplies Inventory. was accounting for the usage of direct materials. was accounting for the usage of indirect materials. Both A and C. Blarney Company applies manufacturing overhead by using a predetermind rate of 50% of direct labor cost. The data that follow pertain to job no. 764: If Blarney adds a 40% markup on total cost to generate a profit, which of the following choices depicts a portion of the accounting needed to record the sale of job no. 764? Manufacturing Overhead must be overapplied. Manufacturing Overhead must be underapplied. Cost of Goods Sold must be understated. Work-in-Process Inventory must be understated. Both A and C. Total costs are $80,000 when 8,000 units are produced: of this amount, variable costs arc $48,000. What are the total costs when 10,000 units are produced? $80,000. $92,000. $98,000. $100,000. $108,000. Cost objects may include Products. Customers. Departments. All of the above. None of the above For the year just ended, Major Corporation's manufacturing cost Beginning and ending work-in-process inventories were $90,000 and Major's balance sheet also revealed respective beginning and ending of $250,000 and $180,000. On the basis of this information, how report as cost of goods manufactured (COGM) and cost of goods sold COGM. $1,530,000; COGS, $1,600,000. COGM, $1,470,000; COGS, $1,540,000 COGM, $1,530,000; COGS. $1,460,000. COGM, $1,570,000; COGS, $1,540,000. Some other amounts. Cost behavior refers to how costs react to a change in the level of activity. whether a cost is incurred in a manufacturing, merchandising, classifying costs as either inventoriable or period costs. whether a particular expense has been ethically incurred. all of the above The accounting records of Diego Company revealed the following costs, among others: Costs that would be considered in the calculation of manufacturing overhead total: $149,000. $171,000. $186,000. $442,000. None of the above answers arc correct. The choices below depict five costs of Benton Corporation and a possible driver for each cost. Which of these choices likely contains an inappropriate cost driver? Gasoline consumed; number of miles driven. Manufacturing overhead incurred in a heavily automated facility; direct labor hours. Sales commissions; gross sales revenue. Building maintenance cost; building square footage. Human resources department cost; number of employees. Tomotoes used in the manufacture of Hunts betchep Administrative of executives employed by Jet Blue Airlines Wages of assembly-line weetlers at a Faced plaet Marketing expenditiones of the Atlarta Braves baseball club Commissiones paid to Coco-Cola's sadespeople Streight-line depreciations on manufacturing equipement owned by Dell Computer Shipping Charged incurrent by Office Depet on out-going orders Spealcers used in Sony borne-theather systems Insurance costs related to a Mary Kay Coseatics' manufacturing plant Required: Complete the table below by classifying each of the costs listed above as (1) a product or period cost and(2) a variable or fixed cost by placing an X in the appropriate column Rock Star, Inc., which uses a job-costing system, began business on January 1, 20x3 and applies manufacturing overhead on the basis of direct-labor cost. The following information relates to 20x3: Budgeted direct labor and manufacturing overhead were anticipated to be $200,000 and $250,000, respectively. Job nos. 1, 2 and 3 were begun dutring the year and had the following charges for direct material and direct labor: Job nos. 1 and 2 were completed and sold on account to customers at a profit of 60% of cost. Job no. 3 remained in production. Actual manufacturing overhead by year-end totaled $233,000. Rock Star adjusts all under- or over-applied overhead to cost goods sold. Compute the company's predetermined overhead application rate. $ Compute Rock Star's ending work-in-process inventory.$ Determine Rock Star's sales revenue. $ In the space below, provide the journal entry to adjust for any under- or over-applied manufacturing overhead at year-end. If none, so state. Would the presence of under- or over- applied overhead at year-end indicate that Rock Star's accountants made a serious error? Briefly explain. Fedora, Inc., uses a weighted-average process-costing system and has one production department. All materials are introduced at the start of manufacturing; in contrast, conversion cost in incurred uniformly throughout production. The company had work-in-process inventories on May 1 of 62,000 physical units and May 31 of 70,000 units, which were $40% complete. The production supervisor noted that Fedora completed 100,000 units during the month. Costs in the May 1 work-in-process inventory included materials, $40,000 and conversion, $90,000. During May, Fedora charged production with $300,000 of material and $710,000 of conversion, resulting in a material cost per equivalent unit of $2. Required: Show all work and place your answer in the space provided. Determine the number of units that Fedora started during May. Compute the number of equivalent units for conversion. Determine the conversion cost per equivalent unit. Compute the cost of the May 31 work-in-process inventory. $ In the space below, provide the journal entry to record Fedora's completed production for May. Weston Enterprises currently uses a traditional-costing system to estimate quality-control costs for its DEXD product line. Costs are estimated at 32% of direct-labor cost, and direct labor totaled $860,000 for the quarter just ended. Management is contemplating a change to activity-based costing, and has established three cost pools: incoming material inspection, in process inspection, and final product certification. Numbers of parts, number of units, and number of orders have been selected as the respective cost drivers. The following data show the activity cost pool rates that have been calculated by the company along with the quantity of driver units for the DEXs: Required: Show all work and place your answer in the space provided Calculate the quarterly quality-control cost that is allocated to the DEX product line under Weston's traditional-costing system. $ Calculate the quarterly quality-control cost that is allocated to the DEXs if activity-based costing is used. $ Does the traditional approach Circle one {under-cost} {over-cost} the DEX product line? By what amount? List two criteria Weston most likely used to determine the cost drivers for quality control costs: 1. 2. Briefly discuss the merits of an activity-based costing system in comparison with a traditional costing system