Principles of Accounting II Lesson 8

Question 1 of 20

5.0 Points

Omega.com sold 25 jet skis for $7,000 which cost $5,000. The entry to record the sale would include __________.

A. credit to Finished Goods Inventory for $5,000

B. credit to Sales for $7,000

C. debit to Cost of Goods Sold for $5,000

D. all of the above

Question 2 of 20

5.0 Points

The statement of cost of goods manufactured does not include __________.

A. direct labor costs

B. raw material costs

C. manufacturing overhead

D. all of the above

Question 3 of 20

5.0 Points

Raw material inventory appears on the __________.

A. balance sheet

B. income statement

C. cost of goods manufactured statement

D. both A and C

The entry for indirect materials (such as glue, etc.. requisitioned for use in production is __________.

A.

Raw Materials Inventory

Work-in-Process Inventory

B.

Work-in-Process Inventory

Accounts Payable

C.

Work-in-Process Inventory

Raw Materials Inventory

D. None of the above

Question 5 of 20

5.0 Points

Calculate the cost of goods sold when beginning finished goods inventory equals $70,000, ending finished goods inventory is $85,000, and cost of goods manufactured is $600,000.

A. $615,000

B. $445,000

C. $685,000

D. $585,000

Question 6 of 20

5.0 Points

Candyland completed the manufacturing process. The entry to transfer the product to finished goods is __________.

A.

Raw Materials Inventory

Finished Goods Inventory

B.

Finished Goods Inventory

Cost of Goods Sold

C.

Finished Goods Inventory

Work-in-Process Inventory

D.

Finished Goods Inventory

Raw Materials Inventory

Question 7 of 20

5.0 Points

The entry to record the requisition of supplies from the storeroom would include __________.

A. debit to Raw Materials; credit to Work-in-Process

B. debit to Overhead-Applied; credit to Overhead-Control

C. debit to Work-in-Process; credit to Overhead-Control

D. debit to Overhead-Control; credit to Supplies Inventory

Question 8 of 20

5.0 Points

Manufacturing overhead includes all manufacturing costs __________.

A. including raw materials

B. including overhead

C. excluding raw materials and direct labor

D. none of the above

Question 9 of 20

5.0 Points

What is the journal entry to record issuing raw materials from the storeroom?

A. debit Raw Materials Inventory; credit Work-in-Process

B. debit Overhead-Control; credit Work-in-Process

C. debit Work-in-Process; credit Overhead-Control

D. debit Work-in-Process; credit Raw Materials Inventory

Question 10 of 20

5.0 Points

The formula for cost of goods manufactured is __________.

A. raw materials plus direct labor minus overhead plus beginning work-in-process inventory plus ending work-in-process inventory

B. raw materials minus direct labor plus overhead plus beginning work-in-process inventory plus ending work-in-process inventory

C. beginning work-in-process plus total manufacturing cost minus ending work-in-process

D. raw materials plus direct labor less overhead plus beginning work-in-process inventory less ending work-in-process inventory

Question 11 of 20

5.0 Points

Direct labor includes the wages of __________.

A. an hourly worker producing the product

B. the shop foreman

C. maintenance workers

D. administrators

Question 12 of 20

5.0 Points

ABC Restaurant?s revenue budget reflects the following information for February:

Food sales	$260,000
Beverage and liquor sales	$140,000
Total sales	$300,000

ABC expects revenue to increase by 5% during both March and April. What is the budgeted amount of food sales revenue for April?

A. $286,650

B. $272,650

C. $288,250

D. $292,350

Question 13 of 20

5.0 Points

A budget enables managers to __________.

A. focus solely on production

B. adopt lax standards

C. abrogate responsibility for financial goals

D. achieve company objectives

Question 14 of 20

5.0 Points

ABC Restaurant?s revenue budget reflects the following information for February:

Food sales:	$260,000
Beverage and liquor sales:	$140,000
Total sales	$300,000

ABC expects revenue to increase by 8% during both March and April. What is the budgeted amount of total sales revenue for April?

A. $350,000

B. $345,580

C. $353,620

D. $349,920

Question 15 of 20

5.0 Points

Sensitivity analysis is part of __________.

A. income statement analysis

B. gross profit analysis

C. cost analysis

D. cost-volume-profit analysis

Question 16 of 20

5.0 Points

If direct labor for the month is $40,000, overhead is applied based on direct labor, annual overhead is $600,000, and annual direct labor is $1,000,000, what is the entry to charge direct labor to production?

A. debit Work-in-Process Inventory $40,000; credit Payroll $40,000

B. debit Overhead-Applied $40,000; credit Work-in-Process Inventory $40,000

C. debit Work-in-Process Inventory $24,000; credit Overhead-Applied $24,000

D. debit Work-in-Process Inventory $66,000; credit Overhead-Applied $66,000

Question 17 of 20

5.0 Points

The budget that is developed first when preparing the master budget is the __________ budget.

A. cash receipts

B. inventory purchases

C. sales

D. administrative expense

Question 18 of 20

5.0 Points

An element of sensitivity analysis includes __________.

A. unidimensional changes

B. a sole focus on profit

C. simultaneous changes

D. a financial accounting approach

Question 19 of 20

5.0 Points

Journal entries crediting Payroll and debiting Work-in-Process Inventory are made for __________.

A. administrative salaries

B. hourly manufacturing labor

C. foremen?s salaries

D. raw materials

Question 20 of 20

5.0 Points

Which of the following is an approach to sensitivity analysis?

A. contribution

B. distribution

C. margin

D. profit

Principles of Accounting II Lesson 8 Question 1 of 20 5.0 Points Omega.com sold 25 jet skis for $7,000 which cost $5,000. The entry to record the sale would include __________. A. credit to Finished Goods Inventory for $5,000 B. credit to Sales for $7,000 C. debit to Cost of Goods Sold for $5,000 D. all of the above Question 2 of 20 5.0 Points The statement of cost of goods manufactured does not include __________. A. direct labor costs B. raw material costs C. manufacturing overhead D. all of the above Question 3 of 20 5.0 Points Raw material inventory appears on the __________. A. balance sheet B. income statement C. cost of goods manufactured statement D. both A and C The entry for indirect materials (such as glue, etc.. requisitioned for use in production is __________. A. Raw Materials Inventory Work-in-Process Inventory B. Work-in-Process Inventory Accounts Payable C. Work-in-Process Inventory Raw Materials Inventory D. None of the above Question 5 of 20 5.0 Points Calculate the cost of goods sold when beginning finished goods inventory equals $70,000, ending finished goods inventory is $85,000, and cost of goods manufactured is $600,000. A. $615,000 B. $445,000 C. $685,000 D. $585,000 Question 6 of 20 5.0 Points Candyland completed the manufacturing process. The entry to transfer the product to finished goods is __________. A. Raw Materials Inventory Finished Goods Inventory B. Finished Goods Inventory Cost of Goods Sold C. Finished Goods Inventory Work-in-Process Inventory D. Finished Goods Inventory Raw Materials Inventory Question 7 of 20 5.0 Points The entry to record the requisition of supplies from the storeroom would include __________. A. debit to Raw Materials; credit to Work-in-Process B. debit to Overhead-Applied; credit to Overhead-Control C. debit to Work-in-Process; credit to Overhead-Control D. debit to Overhead-Control; credit to Supplies Inventory Question 8 of 20 5.0 Points Manufacturing overhead includes all manufacturing costs __________. A. including raw materials B. including overhead C. excluding raw materials and direct labor D. none of the above Question 9 of 20 5.0 Points What is the journal entry to record issuing raw materials from the storeroom? A. debit Raw Materials Inventory; credit Work-in-Process B. debit Overhead-Control; credit Work-in-Process C. debit Work-in-Process; credit Overhead-Control D. debit Work-in-Process; credit Raw Materials Inventory Question 10 of 20 5.0 Points The formula for cost of goods manufactured is __________. A. raw materials plus direct labor minus overhead plus beginning work-in-process inventory plus ending work-in-process inventory B. raw materials minus direct labor plus overhead plus beginning work-in-process inventory plus ending work-in-process inventory C. beginning work-in-process plus total manufacturing cost minus ending work-in-process D. raw materials plus direct labor less overhead plus beginning work-in-process inventory less ending work-in-process inventory Question 11 of 20 5.0 Points Direct labor includes the wages of __________. A. an hourly worker producing the product B. the shop foreman C. maintenance workers D. administrators Question 12 of 20 5.0 Points ABC Restaurant's revenue budget reflects the following information for February: Food sales Beverage and liquor sales Total sales $260,000 $140,000 $300,000 ABC expects revenue to increase by 5% during both March and April. What is the budgeted amount of food sales revenue for April? A. $286,650 B. $272,650 C. $288,250 D. $292,350 Question 13 of 20 5.0 Points A budget enables managers to __________. A. focus solely on production B. adopt lax standards C. abrogate responsibility for financial goals D. achieve company objectives Question 14 of 20 5.0 Points ABC Restaurant's revenue budget reflects the following information for February: Food sales: Beverage and liquor sales: Total sales $260,000 $140,000 $300,000 ABC expects revenue to increase by 8% during both March and April. What is the budgeted amount of total sales revenue for April? A. $350,000 B. $345,580 C. $353,620 D. $349,920 Question 15 of 20 5.0 Points Sensitivity analysis is part of __________. A. income statement analysis B. gross profit analysis C. cost analysis D. cost-volume-profit analysis Question 16 of 20 5.0 Points If direct labor for the month is $40,000, overhead is applied based on direct labor, annual overhead is $600,000, and annual direct labor is $1,000,000, what is the entry to charge direct labor to production? A. debit Work-in-Process Inventory $40,000; credit Payroll $40,000 B. debit Overhead-Applied $40,000; credit Work-in-Process Inventory $40,000 C. debit Work-in-Process Inventory $24,000; credit Overhead-Applied $24,000 D. debit Work-in-Process Inventory $66,000; credit Overhead-Applied $66,000 Question 17 of 20 5.0 Points The budget that is developed first when preparing the master budget is the __________ budget. A. cash receipts B. inventory purchases C. sales D. administrative expense Question 18 of 20 5.0 Points An element of sensitivity analysis includes __________. A. unidimensional changes B. a sole focus on profit C. simultaneous changes D. a financial accounting approach Question 19 of 20 5.0 Points Journal entries crediting Payroll and debiting Work-in-Process Inventory are made for __________. A. administrative salaries B. hourly manufacturing labor C. foremen's salaries D. raw materials Question 20 of 20 5.0 Points Which of the following is an approach to sensitivity analysis? A. contribution B. distribution C. margin D. profit