QUESTION 1 Overhead costs cannot be traced to cost objects, but can be allocated to cost objects can be traced to cost objects in a cost effective manner are not incurred by most companies primarily are variable costs 5 points QUESTION 2 Barr Company makes steel and titanium handle bars for bicycles It requires approximately one hour to make one handle bar of either type During the most recent accounting period, Barr Company made 7,000 steel bars and 3,000 titanium bars Setup costs amounted to $42,000 One batch of each type of bar was run each month If a single company wide overhead rate based on direct labor hours is used to allocate overhead costs to products, the amount of setup cost assigned to the steel bars will be $42,000 $4,200 $12,600 $29,400 5 points QUESTION 3 The East and West Railroad has 2 divisions The company recently invested $800,000 to maintain its railroad track and pertinent data for the two divisions are as follows Total Miles Traveled East Division, 800,000 miles West Division, 1,200,000 miles The amount of track improvement cost that should be allocated to the West Division is $480,000 $500,000 $320,000 $400,000 5 points QUESTION 4 Leather Company makes two types of women's handbags Making a standard handbag requires 2 hours of labor while making a deluxe handbag requires 5 hours of labor During the most recent accounting period the company made 2,000 standard handbags and 500 deluxe handbags Indirect manufacturing costs amounted to $52,000 Based on this information $20 80 of overhead cost should be allocated to each handbag regardless of the type of handbag $8 of overhead cost should be allocated to each handbag regardless of the type of handbag $16 of overhead cost should be assigned to each standard handbag and $40 of overhead cost should be assigned to each deluxe bag None of the above 5 points QUESTION 5 Shed Industries produces two products The products' identified costs are as follows Product AProduct B Direct Materials$20,000$15,000 Direct Labor Cost$12,000$24,000 The company's overhead costs of $54,000 are allocated based on direct labor cost Assume 4,000 units of product A and 5,000 units of Product B are produced What is the cost per unit for product A $12 50 $17 00 $14 75 None of these 5 points QUESTION 6 The process of dividing a total cost into parts and assigning it to a cost object is known as divide and conquer cost allocation accurate costing cost division 5 points QUESTION 7 Mickey Co expects overhead costs of $30,000 per month and direct production costs of $12 per unit The estimated production activity for the 2009 accounting period is as follows Units Produced Quarter 1 11,500 Quarter 2 9,000 Quarter 3 8,250 Quarter 4 11,250 The predetermined overhead rate based on units produced is (rounded to the nearest penny) $1 33 per unit $0 75 per unit $21 00 per unit $9 00 per unit 5 points QUESTION 8 Halt Company employs material handling employees who move materials between production divisions at a labor cost of $160,000 a year It is estimated that these employees move 800,000 pounds of material per year If 60,000 pounds are moved in March, how much of the material handling cost should be assigned to products made in March $13,333 $12,000 $12,800 $26,666 5 points QUESTION 9 A chair manufacturer makes custom chairs using hand tools, wood, glue, and varnish Which of the following statements is true The costs of wood and glue would be treated as direct costs Wood would be accounted for as a direct cost, and glue and varnish as indirect costs Wood, glue, and varnish would all be direct materials The concepts of direct and indirect costs are not applicable here 5 points QUESTION 10 Cost allocation involves Identifying an appropriate cost driver calculating an allocation rate for the cost to be allocated multiplying the allocation rate by the weight or amount of the cost driver all of these 5 points QUESTION 11 At the beginning of the year, Roach Company expected to incur $54,000 of overhead costs in producing 6,000 units of product The direct material cost is $20 per unit of product Direct labor cost is $30 per unit During January, 500 units were produced The total cost of the units made in January was $4,500 $29,500 $25,000 $354,000 5 points QUESTION 12 Firms in the business are most likely to use a process costing system automobile repair dental petroleum construction 5 points QUESTION 13 Match each of the following terms with its correct definition A B C D E F G H I J K L M N O job order costing system A B C D E F G H I J K L M N O Process costing system A B C D E F G H I J K L M N O overapplied overhead A B C D E F G H I J K L M N O plantwide overhead rate A B C D E F G H I J K L M N O predetermined overhead rate A B C D E F G H I J K L M N O job order cost sheet A B C D E F G H I J K L M N O overhead variance A B C D E F G H I J K L M N O applied overhead A B C D E F G H I J K L M N O actual cost system A B C D E F G H I J K L M N O Time Ticket A B C D E F G H I J K L M N O materials requisition form A B C D E F G H I J K L M N O underapplied overhead A B C D E F G H I J K L M N O normal cost sytem A B C D E F G H I J K L M N O direct materials A B C D E F G H I J K L M N O manufacturing overhead A This form is filled out by each employee every day B The job order number, or name, head this form C An approach that assigns the actual costs of direct materials and direct labor to products but uses a predetermined rate to assign overhead costs D A costing system in which costs are collected and assigned to units of production for each individual job E An overhead rate computed using estimated data F This form asks for the type, quantity, and unit price of direct materials G A costing system that accumulates production costs by process or by department for a given period of time H Indirect materials, indirect labor, and other costs related to manufacturing that cannot be easily to traced to a specific job I Overhead assigned to production using predetermined rates J The amount by which actual overhead exceeds applied overhead K Materials that can be easily and cost effectively traced to a specific job L The difference between actual overhead and applied overhead M A single overhead rate calculated using all estimated overhead for a factory divided by the estimated activity level across the entire factory N An approach that assigns actual costs of direct materials, direct labor, and overhead to products O The amount by which applied overhead exceeds actual overhead 15 points QUESTION 14 Which type of cost poses the most problems in using an actual cost system selling and administrative overhead direct labor direct materials 5 points QUESTION 15 Which of the following is NOT on a time ticket cost of materials employee's wage rate hours worked on each job employee's name 5 points QUESTION 16 Which of the following costs would be classified as an indirect cost for a company that produces lawn mowers assembly labor depreciation on equipment used to produce the lawnmowers wheels used in the lawn mowers none of these 5 points QUESTION 17 During its first year of operations, Beta Company paid $16,000 for direct materials and $17,000 in wages for production workers Lease payments and utilities on the production facilities amounted to $7,000 General, selling, and administrative expenses were $6,000 The company produced 5,000 units and sold 4,000 units for $15 00 a unit The average cost to produce one unit is which of the following amounts $9 20 $8 00 $11 50 $10 00 5 points QUESTION 18 Which of the following statements is true Neither direct nor indirect costs are easily traced to a cost object Indirect costs can be traced easily to a cost object, but direct costs cannot be Both direct and indirect costs can easily be traced to a cost object Direct costs can easily be traced to a cost object indirect costs cannot be

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QUESTION 1 Overhead costs cannot be traced to cost objects, but can be allocated to cost objects can be traced to cost objects in a

QUESTION 1

Overhead costs
cannot be traced to cost objects, but can be allocated to cost objects
can be traced to cost objects in a cost-effective manner.
are not incurred by most companies.
primarily are variable costs.

5 points

QUESTION 2

Barr Company makes steel and titanium handle bars for bicycles.It requires approximately one hour to make one handle bar of either type.During the most recent accounting period, Barr Company made 7,000 steel bars and 3,000 titanium bars.Setup costs amounted to $42,000. One batch of each type of bar was run each month.If a single company-wide overhead rate based on direct labor hours is used to allocate overhead costs to products, the amount of setup cost assigned to the steel bars will be
$42,000
$4,200
$12,600
$29,400

5 points

QUESTION 3

The East and West Railroad has 2 divisions.The company recently invested $800,000 to maintain its railroad track and pertinent data for the two divisions are as follows:
Total Miles Traveled:
East Division, 800,000 miles
West Division, 1,200,000 miles
The amount of track improvement cost that should be allocated to the West Division is
$480,000
$500,000
$320,000
$400,000

5 points

QUESTION 4

Leather Company makes two types of women's handbags. Making a standard handbag requires 2 hours of labor while making a deluxe handbag requires 5 hours of labor. During the most recent accounting period the company made 2,000 standard handbags and 500 deluxe handbags. Indirect manufacturing costs amounted to $52,000. Based on this information:
$20.80 of overhead cost should be allocated to each handbag regardless of the type of handbag
$8 of overhead cost should be allocated to each handbag regardless of the type of handbag
$16 of overhead cost should be assigned to each standard handbag and $40 of overhead cost should be assigned to each deluxe bag.
None of the above

5 points

QUESTION 5

Shed Industries produces two products.The products' identified costs are as follows:
Product AProduct B
Direct Materials$20,000$15,000
Direct Labor Cost$12,000$24,000
The company's overhead costs of $54,000 are allocated based on direct labor cost. Assume 4,000 units of product A and 5,000 units of Product B are produced. What is the cost per unit for product A?
$12.50
$17.00
$14.75
None of these

5 points

QUESTION 6

The process of dividing a total cost into parts and assigning it to a cost object is known as
divide and conquer.
cost allocation.
accurate costing.
cost division.

5 points

QUESTION 7

Mickey & Co. expects overhead costs of $30,000 per month and direct production costs of $12 per unit. The estimated production activity for the 2009 accounting period is as follows:
Units Produced:
Quarter 1: 11,500
Quarter 2: 9,000
Quarter 3: 8,250
Quarter 4: 11,250
The predetermined overhead rate based on units produced is (rounded to the nearest penny)
$1.33 per unit
$0.75 per unit
$21.00 per unit
$9.00 per unit

5 points

QUESTION 8

Halt Company employs material handling employees who move materials between production divisions at a labor cost of $160,000 a year. It is estimated that these employees move 800,000 pounds of material per year. If 60,000 pounds are moved in March, how much of the material handling cost should be assigned to products made in March?
$13,333
$12,000
$12,800
$26,666

5 points

QUESTION 9

A chair manufacturer makes custom chairs using hand tools, wood, glue, and varnish. Which of the following statements is true?
The costs of wood and glue would be treated as direct costs.
Wood would be accounted for as a direct cost, and glue and varnish as indirect costs.
Wood, glue, and varnish would all be direct materials.
The concepts of direct and indirect costs are not applicable here.

5 points

QUESTION 10

Cost allocation involves
Identifying an appropriate cost driver.
calculating an allocation rate for the cost to be allocated.
multiplying the allocation rate by the weight or amount of the cost driver.
all of these.

5 points

QUESTION 11

At the beginning of the year, Roach Company expected to incur $54,000 of overhead costs in producing 6,000 units of product. The direct material cost is $20 per unit of product. Direct labor cost is $30 per unit. During January, 500 units were produced. The total cost of the units made in January was:
$4,500
$29,500
$25,000
$354,000

5 points

QUESTION 12

Firms in the _________ business are most likely to use a process-costing system
automobile repair
dental
petroleum
construction

5 points

QUESTION 13

Match each of the following terms with its correct definition:
-
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
job-order costing system
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
Process-costing system
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
overapplied overhead
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
plantwide overhead rate
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
predetermined overhead rate
-
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
job-order cost sheet
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
overhead variance
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
applied overhead
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
actual cost system
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
Time Ticket
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
materials requisition form
-
A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
underapplied overhead
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
normal cost sytem
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
direct materials
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A.
B.
C.
D.
E.
F.
G.
H.
I.
J.
K.
L.
M.
N.
O.
manufacturing overhead
A.This form is filled out by each employee every day.
B.The job order number, or name, head this form.
C.An approach that assigns the actual costs of direct materials and direct labor to products but uses a predetermined rate to assign overhead costs
D.A costing system in which costs are collected and assigned to units of production for each individual job
E.An overhead rate computed using estimated data
F.This form asks for the type, quantity, and unit price of direct materials.
G.A costing system that accumulates production costs by process or by department for a given period of time
H.Indirect materials, indirect labor, and other costs related to manufacturing that cannot be easily to traced to a specific job
I.Overhead assigned to production using predetermined rates
J.The amount by which actual overhead exceeds applied overhead
K.Materials that can be easily and cost-effectively traced to a specific job
L.The difference between actual overhead and applied overhead
M.A single overhead rate calculated using all estimated overhead for a factory divided by the estimated activity level across the entire factory
N.An approach that assigns actual costs of direct materials, direct labor, and overhead to products
O.The amount by which applied overhead exceeds actual overhead

15 points

QUESTION 14

Which type of cost poses the most problems in using an actual cost system?
selling and administrative
overhead
direct labor
direct materials

5 points

QUESTION 15

Which of the following is NOT on a time ticket?
cost of materials
employee's wage rate
hours worked on each job
employee's name

5 points

QUESTION 16

Which of the following costs would be classified as an indirect cost for a company that produces lawn mowers?
assembly labor
depreciation on equipment used to produce the lawnmowers
wheels used in the lawn mowers
none of these

5 points

QUESTION 17

During its first year of operations, Beta Company paid $16,000 for direct materials and $17,000 in wages for production workers. Lease payments and utilities on the production facilities amounted to $7,000. General, selling, and administrative expenses were $6,000. The company produced 5,000 units and sold 4,000 units for $15.00 a unit. The average cost to produce one unit is which of the following amounts?
$9.20
$8.00
$11.50
$10.00

5 points

QUESTION 18

Which of the following statements is true?
Neither direct nor indirect costs are easily traced to a cost object.
Indirect costs can be traced easily to a cost object, but direct costs cannot be.
Both direct and indirect costs can easily be traced to a cost object.
Direct costs can easily be traced to a cost object; indirect costs cannot be