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Cost of ending inventory, wages for a foreman, cost of goods sold

I just want to make sure I understand these questions.

Thanks a big one.

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1. Management accounting practices:
a. are more restrictive than financial accounting practices. b. focus on the business as a single unit. c. must be objective in nature. d. do not necessarily use standard accounting systems. e. all of the above.

2. The cost of ending inventory for a manufacturing firm can be calculated using:
a. beginning inventory and cost of goods available for sale. b. cost of goods sold and cost of goods available for sale. c. purchases and cost of goods available for sale. d. beginning merchandise inventory and purchases. e. none of the above.

3. The wages of a shop floor foreman are accounted for in:
a. direct material costs. b. direct labor costs. c. manufacturing overhead. d. direct manufacturing costs.

4. A firm has a beginning Finished Goods Inventory of $40,000, ending Finished Goods Inventory of $18,000; beginning Work in Process Inventory of $12,000, ending Work in Process Inventory of $20,000; and a cost of goods manufactured of $50,000. The cost of goods sold is:
a. $50,000 b. $64,000
c. $72,000 d. not calculable without additional information.

5. Please answer THE NEXT 2 questions using the following information:
A firm determines the following account totals: direct labor costs - $87,700; ending balance of Work in Process Inventory - $11,000; selling and administrative expenses - $22,450; total factory overhead - $67,000; cost of direct materials used - $83,670; beginning Work in Process Inventory - $9,700.
Total cost of Work in Process is:
a. $238,370 b. $248,070 c. $260,820 d. $270,520

6. The cost of goods manufactured is:
a. $237,070 b. $239,670 c. $259,520 d. $262,120

7.Which of the following is not associated with an activity-based costing system?
a. cost drivers b. cost pools c. plant-wide overhead rates d. multiple allocation bases

8. A job order costing system:
a. measures costs for each completed job rather than for set time periods. b. is used when goods are made in a continuous process. c. groups manufacturing costs by department or work center. d. provides end-of-period values for the Cost of Goods Sold account. e. both a and d. f. all of the above.

9. Predetermined overhead rates:
a. are developed from estimates of manufacturing overhead costs. b. apply a portion of manufacturing overhead cost to the product as it moves through the production process.
c. are recorded in the Finished Inventory Control account. d. are not included as part of normal budgeting of operations. e. both a and b. f. all of the above.

10. At the end of an accounting period the Manufacturing Overhead account has a credit balance of $2,200; overhead had been applied to all jobs. We can conclude that applied overhead:
a. exceeded actual overhead. b. was less than actual overhead. c. was misallocated. d. was not predetermined.

11. Please answer THE NEXT 2 questions using the following information.
An engineering firm incurs the following costs on a project up to June 30th: Beginning balances:
Project design - $ 2,400
Installation - $38,800
Cleanup and service - $ 4,150
The project is completed in July, with the following costs incurred: design labor - $1,200; installation materials and supplies - $2,650; direct labor - $7,180; service costs - $1,470.
Job costs are categorized as direct materials, direct labor, and service overhead; costs are categorized as design, installation, and service costs.
If service overhead charges for installation costs are 60% of direct labor costs, and the charge for project design is 25% of design labor costs, total installation costs are:
a. $45,758 b. $48,630 c. $52,938 d. $53,238

12. If the contract is a cost-plus contract with a 20% profit guarantee, then total contract revenue is:
a. $61,389.60 b. $62,458 c. $69,420 d. $74,949.60

13. A specific job, #176, requires $600 of materials from Dept. 1 and $850 of materials from Dept. 2; $320 and $120 labor dollars from Dept. 1 and Dept. 2, respectively; 8 and 30 machine hours from Dept.1 and Dept. 2, respectively; and 40 and 10 direct labor hours from Dept. 1 and Dept. 2, respectively. The predetermined overheard rate is based on direct labor dollars in department 1, and on machine hours in department 2. At the beginning of the year following estimates were generated for departments 1 and 2, respectively,: factory overhead: $50,000, $75,000; machine hours: 6,250, 12,500; direct labor ($): $40,000, $37,500; direct labor (hours): 5,000, 3,125. The total cost of job #176 is:
a. $1,890 b. $2,470 c. $2,446 d. $2,530.50

14. When computing the manufacturing cost per equivalent unit, the FIFO process costing method considers:
a. current costs only. b. current costs plus beginning Work in Process Inventory costs. c. current costs plus ending Work in Process Inventory costs. d. current costs minus ending Work in Process Inventory costs.

15. Which of the following statements is FALSE?
a. A process cost system is used by companies that produce large amounts of similar products.
b. The number of equivalent units is determined from the total units started and completed during the period plus an amount representing the work done on partially completed products in both beginning and ending Work in Process Inventories.
c. Process costing requires that costs incurred be assigned to specific job orders. d. In a process cost system, the product unit cost is the sum of the cost elements added in all departments.
e. All of the above statements are TRUE.

16. Given a production process in which 1500 units were started during the period and the ending Work in Process Inventory was 500 units (60% complete as to conversion costs), the equivalent unit production as to conversion costs for the month (assume no beginning Work in Process Inventory) would be:
a. 1300 b. 1500 c. 1000 d. 2000

17. Use the following information to answer THE NEXT 2 questions.
For January, a firm's equivalent units of production for materials and conversion costs are 20,000 and 16,000, respectively. The total cost of materials used during the month is $64,000, and conversion costs are $80,000. Materials costs and conversion costs in the beginning Work in Process Inventory totaled $12,000 and $16,000, respectively. Ending Work in Process Inventory is 4,000 units, 100% complete as to materials and 20% complete as to conversion costs. (The firm uses the average costing approach).
The cost per equivalent unit as to materials is:
a. $1.20 b. $7.60 c. $3.80 d. $5.70

18. The cost per equivalent unit as to conversion costs is:
a. $ 2.00 b. $12.00 c. $ 8.00 d. $ 6.00

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QUESTIONS

1. Management accounting practices:
a. are more restrictive than financial accounting practices. b. focus on the business as a single unit. c. must be objective in nature. d. do not necessarily use standard accounting systems. e. all of the above.
2. The cost of ending inventory for a manufacturing firm can be calculated using:
a. beginning inventory and cost of goods available for sale. b. cost of goods sold and cost of goods available for sale. c. purchases and cost of goods available for sale. d. beginning merchandise inventory and purchases. e. none of the above.
3. The wages of a shop floor foreman are accounted for in:
a. direct material costs. b. direct labor costs. c. manufacturing overhead. d. direct manufacturing costs.
4. A firm has a beginning Finished Goods Inventory of $40,000, ending Finished Goods Inventory of $18,000; beginning Work in Process Inventory of $12,000, ending Work in Process Inventory of $20,000; and a cost of goods manufactured of $50,000. The cost of goods sold is:
a. $50,000 b. $64,000
c. $72,000 d. not calculable without additional information.
5. Please answer THE NEXT 2 questions using the following information:
A firm determines the following account totals: direct labor costs - $87,700; ending balance of Work in Process Inventory - $11,000; selling and administrative expenses - $22,450; total factory overhead - $67,000; cost of direct materials used - $83,670; beginning Work in Process Inventory - $9,700.
Total cost of Work in Process is:
a. $238,370 b. $248,070 c. $260,820 d. $270,520
6. The cost of goods manufactured is:
a. $237,070 b. $239,670 c. $259,520 d. $262,120
7.Which of the following is not associated with an activity-based costing system?
a. cost drivers b. cost pools c. plant-wide overhead rates d. multiple allocation bases
8. A job order costing system:
a. measures costs for each completed job rather than for set time periods. b. is used when goods are made in a continuous process. c. groups manufacturing costs by department or work center. d. provides end-of-period values for the Cost of Goods Sold account. e. both a and d. f. all of the above.

9. Predetermined overhead rates:
a. are developed from estimates of manufacturing overhead costs. b. apply a portion of manufacturing overhead cost to the product as it moves through the production process.
c. are recorded in the Finished Inventory Control account. d. are not included as part of normal budgeting of operations. e. both a and b. f. all of the above.
10. At the end of an accounting period the Manufacturing Overhead account has a credit balance of $2,200; overhead had been applied to all jobs. We can conclude that applied overhead:
a. exceeded actual overhead. b. was less than actual overhead. c. was misallocated. d. was not predetermined.
11. Please answer THE NEXT 2 questions using the ...

Solution Summary

Cost of ending inventory, wages for a foreman and cost of goods sold are examined.

$2.19