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Multiple Choice Quiz
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1
Which of the following statements is true?
A)A product-costing system accumulates the costs incurred in the production process.
B)A retailer would not incur product cost.
C)Information produced by a product-costing system is used only for internal decision making.
D)All of the above are true
E)Only A and B are true
2
A product-costing system is needed for which of the following?
A)Financial accounting
B)Managerial accounting
C)Cost management
D)Report to interested organizations
E)All of the above
3
The typical inventories carried by a manufacturer include which of the following?
A)Raw-materials inventory, work-in-process inventory, and merchandise.
B)Raw-materials inventory, work-in-process inventory, and finished-goods inventory.
C)Office supplies inventory, work-in-process inventory, and merchandise.
D)Raw-materials inventory, finished-goods inventory, and cost of goods sold.
E)None of the above
4
Which of the following businesses is most likely to use a job order costing system?
A)Kodak when it produces its TRI-X 400 black and white film used by professional photographers.
B)Nabisco when it produces Oreo brand sandwich cookies for retail grocery chains.
C)Disney Animation Studios when it produces Tangled an animated feature scheduled to be released in November of 2010.
D)All of the above businesses would use a job order costing system.
E)None of the above
5
Which of the following is used to accumulate the costs of direct material, direct labor, and manufacturing overhead costs for a particular job or batch?
A)Bill of materials
B)Material requisition form
C)Job-cost record
D)Purchase order
E)Purchase requisition
6
Which of the following is a source document?
A)Bill of materials
B)Material requisition form
C)Job-cost records
D)Both (B) and (C)
E)Both (A) and (C)
7
The volume-based cost driver is machine hours, which have been budgeted for 100,000 hours. Actual machine hours ended up being 105,000. Budgeted manufacturing-overhead costs for the year were $150,000 while actual overhead costs ended up being $160,000. Calculate the predetermined overhead rate.
A)$0.95 per machine hour
B)$1.42 per machine hour
C)$1.60 per machine hour
D)$1.50 per machine hour
E)$1.52 per machine hour
8
In a job-order costing system, which account would be debited when recording the cost of goods manufactured in a particular period?
A)Work-in-Process Inventory
B)Raw-Material Inventory
C)Finished-Goods Inventory
D)Cost of Goods Manufactured
E)Cost of Goods Sold
9
Time records for the two-week pay period total $34,500, of which $31,000 can be charged to specific jobs. The required accounting entry will include a debit for $3,500 to which of the following accounts?
A)Work-in-Process Inventory
B)Manufacturing Overhead
C)Wages Payable
D)Indirect Labor
E)Wages Expense
10
Job 196 was charged $45,000 for direct materials and $20,000 for direct labor. The total charges to the job-cost record for Job 196 were $105,000. What was the manufacturing overhead application rate as a percentage of direct-labor dollars?
A)50%
B)75%
C)100%%
D)150%
E)200%
11
Consider the following:
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Assuming the use of a normal cost system, what is the cost of goods manufactured that would be reported in a schedule of cost of goods manufactured?
A)$1,168,000
B)$1,152,000
C)$1,136,000
D)$1,164,000
E)$1,166,000
12
Consider the following:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch3_12.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (20.0K)</a>
What is the adjusted cost of goods sold shown on the schedule of cost of goods sold, assuming no proration of underapplied or overapplied overhead?
A)$400,000
B)$386,000
C)$396,000
D)$412,000
E)$232,000
13
Consider the following schedule for allocating rent expense on the basis of square footage:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch3_13.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (22.0K)</a>
The rent expense was $42,000 and there was no beginning or ending balance in Work-in-Process Inventory. Using a two-stage cost allocation process, what was the amount of rent charged to each unit of production of Department A if the Maintenance and Purchasing departments spend 60% of their time, respectively, performing maintenance and purchasing supplies for Department A?
A)$1.925
B)$0.315
C)$1.89
D)$2.10
E)$2.925
14
Consider the following annual budgeted overhead for a service industry:
<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg::::/sites/dl/free/9352606310/856414/ch3_14.jpg','popWin', 'width=NaN,height=NaN,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (12.0K)</a>
Budgeted professional labor is $200,000. One of the firm's professionals completed work and the customer was billed $45,000 for the professional's labor, $2,000 for materials, and an appropriate amount of overhead. Using a predetermined overhead rate based on the relationship of budgeted overhead and professional labor, what was the total amount of the billing?
A)$230,000
B)$105,750
C)$107,750
D)$110,450
E)$47,000
15
Gull Outboards is a manufacturer of outboard motors for recreational boaters. Gull buys all of its raw materials on account from Roth Materials Company. Gull has provided you with the following summarized account activity for the year ended 12/31/2008:
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Given the above account activity what was the amount of direct materials placed in to production during 2008?
A)$250,000
B)$350,000
C)$500,000
D)$600,000
E)$700,000





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