Question 21

Leahy Manufacturing Company reported the following year-end information:

Beginning finished goods inventory

$52,000

Beginning work in process inventory

26,000

Direct labor

300,000

Ending finished goods inventory

60,000

Ending work in process inventory

20,000

Manufacturing overhead

180,000

Raw materials used

260,000

Raw materials purchased

275,000

Leahy Manufacturing Company's cost of goods manufactured for the year is

Select one:

a. $746,000.

b. $740,000.

c. $738,000.

d. $734,000.

Question 22

Cost of goods manufactured in a manufacturing company is analogous to which of the following in a merchandising company?

Select one:

a. Cost of goods purchased.

b. Cost of goods available for sale.

c. Beginning inventory.

d. Ending inventory.

Question 23

Employee time sheets showed that direct labor was $30,000 and indirect labor was $2,000. The entry to record the assignment of labor costs to jobs includes a

Select one:

a. Debit to Work in Process for $30,000.

b. Credit to Factory Labor Expense for $32,000.

c. Credit to Manufacturing Overhead for $2,000.

d. Debit to Work in Process for $32,000.

Question 24

Annual predetermined overhead rates are used to allocate manufacturing overhead because

Select one:

a. a company may be faced with large seasonal variations in overhead costs not related to the level of production.

b. management typically must make decisions involving unit costs before actual overhead costs are known.

c. most overhead cost items cannot be traced directly to the particular jobs.

d. All of these choices are correct statements.

Question 25

Linden Company expected its manufacturing costs for 2014 to be $300,000 of overhead, $500,000 of materials, and $200,000 in labor. Linden applied overhead using a predetermined rate based upon direct labor costs. Actual production required overhead costs of $310,000, $525,000 in materials used, and $220,000 in labor. All of the goods were completed. How much is overhead under- or overapplied?

Select one:

a. $20,000 overapplied

b. $55,000 underapplied

c. $10,000 underapplied

d. $10,000 overapplied

Question 26

The purpose of job order costing is

Select one:

a. to calculate total and unit manufacturing costs of products.

b. to attach selling costs to products.

c. to calculate under- or over-applied manufacturing overhead.

d. to determine the period costs.

Question 27

If Manufacturing Overhead is over-applied for the period, then it is likely that the pre-adjusted balance of

Select one:

a. Cost of Goods Sold is overstated.

b. Work-in-Process Inventory is understated.

c. Finished Goods Inventory is correctly stated.

d. Raw Materials Inventory is overstated.

Question 28

Which best describes the flow of overhead costs in an activity-based costing system?

Select one:

a. Overhead costs -> activity cost pools cost drivers-> products

b. Overhead costs -> direct labor cost or hours -> products

c. Overhead costs -> products

d. Overhead costs -> products -> activity cost pools.

Question 29

Which of the following is true of activity-based costing?

Select one:

a. It is particularly advantageous when the final products vary in their production complexity.

b. It uses the same allocation bases as traditional costing.

c. It is less costly to use.

d. It is particularly advantageous when there is only one product or service.

Question 30

Just-in-time processing requires

Select one:

a. that suppliers of the company be able to deliver on short notice exact quantities of raw materials.

b. a constant build-up of finished goods inventory just in case unexpected or rush orders are received.

c. that the quality control system be eliminated so that production is completed without interruption.

d. that raw materials for the period are stored in one central receiving warehouse.