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Managerial Accounting : Currency Conversion, Overheads, Inventory (17 Problems)

1) Quintal imports a desk from a French manufacturer for sale in its chain of U.S stores. The cost of a desk to Quintal is 2,000 Euros. What is the dollar cost of one of these desks if the exchange rate is currently 1.117 Euros per U.S dollar? (round to the nearest cent)
A) $1,117.00 (B) $1,254.46 (C) 1790.51 (D) some other amount

2) Troy Corporation purchase bicycles from a British manufacturer at a price of 35,000 British pounds on November 15,2005,with payment due in 60 days. Using the following exchange rates compute the gain or loss from the currency fluctuations that Troy should recognize in 2005 and 2006.

Nov 15,2005 $1.70 per British pound
Dec 31,2005 $1.75 per British pound
Jan 15,2006 $ 1.73 per British pound

A) $1,750 losss in 2005;$700 gain in 2006 (B)No gain or loss in 2005; $1,050 loss in 2006 (C) $1,750 gain in 2005; $700 loss in 2006(D) no gain or loss in 2005; $1,050 gain in 2006

3) If the exchange rate for foreign currency (stated in dollars) has risen, a dollar will purchase:
A) an increase amount of that foreign currency (B) an unchanged amount of that foreign currency (C) a smaller amount of that foreign currency (D) an undetermined amount of that foreign currency

4) Red Rose, Inc. sold American fashions to Japanese company at a price of 3 million yen. On the sale date, the exchange rate was $0.100 per Japanese yen, But when Red Rose received payment form its customer, the exchange rate was $.0103 per Japanese yen. When the foreign receivable was collected, Red Rose:
A)Credited Sales for $900 (B) Debited Cash for $30,000 (C) Credit Gains on Fluctuation of Foreign Currency for $900 (D)Debited loss on Fluctuation of Foreign Currency for $900

5) Determine the amount of manufacturing overhead given the following infomation;
a. Depreciation on a factory building $1,200
b. Telephone expense in factory office 375
c. Telephone expense in sales showroom 425
d. Factory foreman's salary 2,500
e. Maintenance for factory 400
f. Maintenance for sales showroom 340

A) $2,005 (B)$4,900 (C) $4,475 (D)$5,270

Use the following to answer question 6-9

The following information has been taken from the perpetual inventory system of Regal MFG. Co. for the month ended September 30:
Purchases of direct materials $67,000
Direct Material used 65,000
Direct labor cost assigned to production 35,000
Manufacturing overhead cost incurred 55,000

Balance in inventory SEPT 30 SEPT 1

Materials $? $55,000
Work in process 30,000 40,000
Finished Goods 83,000 71,000

6) Refer to the above data. The total amount of inventory to be included in Regal's September 30 balance seet amount to:
A)$215,000 (B) $122,000 (C) $170,000 (D) Some other amount

7) Refer to the above data . Total manufacturing cost charged (Debited) to work in process during September amount to:
A)$195,000 (B) $155,000 (C) $165,000 (D) some other amount.

8) Refer to the above data The cost of finished goods manfactured in Sept is
A)$138,000 (B) $165,000 (C) $153,000(D)some other amount

9)Refer to the above data The cost of goods sold in Sept is
A) $165,000 (B) $140,000 (C)$153,000 (D)some other amount

10) As units are completed, their cost is transferred from the work in Process Inventory accounts to the Finished Goods Inventory account.
A) True (B) False

11) The principal difference between managerial accounting and financial accounting is that managerial accounting infomation is
A) Prepared by managers (B) Intended primarily for the use by decision makers inside the business organization(C) Prepared in accordance with a set of accounting principle developed by the institute of Certified Managerial Accountants. (D) Oriented toward measuring solvency rather than profitability.

12) Amounts debited to the Work in Process Inventory account may best be describes as;
A) Direct materials purchased , direct labor cost paid and payments for items classified as manufacturing overhead.(B) The cost of finished goods manufacturing during the period.(C Total manufacturing cost charged to production (D) The cost of goods sold

Use the following to answer question 13-15

Packard Construction applies overhead to its projects at a rate of $100 per direct labor hour. Laborers are paid an average rate of $25 per hour. The seaside Apartment project was charged a total of $450,000 in direct materials and $150,000 in direct labors cost

13) Refer to the information above. Overhead applied to the Seaside Apartment projects amounted to:
A) $1,500,000(B) $1,200,000 (C) $600,000 (D) Some other amount

14) Refer to the information above. The journal entry to transfer the completed Seaside Apartment projects to Packard Finished goods inventory would includes:
A) A debit to the Finished Goods Inventory accounts of $600,000
(B) A debit to the Finished Goods Inventory accounts of $1,200,000 (C) A debit to the Finished Goods Inventory accounts of $750,000(D) A credit to work in Process Inventory amount of $750,000

15) Refer to the information above. The journal entry made by Packard to record the sales of the Seaside Apartment projects to Tessa Development company for $3,200,000 would includes:
A)A debit to sale of $1,200,000 (B)A debits to cost of goods sold of $1,200,000. (C) a credit to finished goods Inventory of $600,000(D) a debit to finished goods Inventory of $600,000

16) An Activity base is said to be a "driver'' of overhead cost when the activity base
A) Is independent of the amount of overhead cost incurred. (B) Results in an overhead application rate greater than 100% (C) Is a causal factor in the amount of overhead cost incurred (D) Is the largest of the various types of expenditures classified as manufacturing overhead

17) Which of the following is not a commonly used cost accounting system?
A) Manufacturing yield costing (B) Job order costing (C) Process costing (D) ABC

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Solution Summary

Currency Conversion, Overheads, Inventory are investigated. Explanations are provided.

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