Accounting Test 2

Exam Chapters 3,4,7 Student: ___________________________________________________________________________

1. Which of the following is the correct formula to compute the predetermined overhead rate? A. Estimated total units in the allocation base divided by estimated total manufacturing overhead costs. B. Estimated total manufacturing overhead costs divided by estimated total units in the allocation base. C. Actual total manufacturing overhead costs divided by estimated total units in the allocation base. D.Estimated total manufacturing overhead costs divided by actual total units in the allocation base.

2. Which of the following would probably be the least appropriate allocation base for allocating overhead in a highly automated manufacturer of specialty valves? A. Machine-hours B. Power consumption C. Direct labor-hours D. Machine setups

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4. Daguio Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $224,580. At the end of the year, actual direct labor-hours for the year were 18,200 hours, manufacturing overhead for the year was underapplied by $12,100, and the actual manufacturing overhead was $219,580. The predetermined overhead rate for the year must have been closest to: A. $11. 40 per machine-hour B. $12. 34 per machine-hourC. $12. 06 per machine-hour D. $10. 53 per machine-hour

5. Crinks Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 11,200 hours and the total estimated manufacturing overhead was $259,840. At the end of the year, actual direct labor-hours for the year were 10,800 hours and the actual manufacturing overhead for the year was $254,840. Overhead at the end of the year was: A. $4,280 overapplied B. $9,280 overapplied C. $9,280 underapplied D. $4,280 underapplied

6.Washtenaw Corporation uses a job-order costing system. The following data are for last year: Washtenaw applies overhead using a predetermined rate based on direct labor-hours. What predetermined overhead rate was used last year? A. $3. 55 per direct labor-hour B. $3. 25 per direct labor-hour C. $3. 08 per direct labor-hour D. $3. 36 per direct labor-hour

7. A company should use process costing, rather than job order costing, if: A. production is only partially completed during the accounting period. B. the product is manufactured in batches only as orders are received.C. the product is composed of mass-produced homogeneous units. D. the product goes through several steps of production.

8. Which of the following characteristics applies to process costing, but does not apply to job order costing? A. The need for averaging. B. The use of equivalent units of production. C. Separate, identifiable jobs. D. The use of predetermined overhead rates.

9. The cost of beginning inventory under the weighted-average method is: A. added in with current period costs in determining costs per equivalent unit for a given period. B. gnored in determining the costs per equivalent unit for a given period. C. considered separately from costs incurred during the current period. D. subtracted from current period costs in determining costs per equivalent unit for a given period.

10. The Nichols Company uses the weighted-average method in its process costing system. The company recorded 29,500 equivalent units for conversion costs for November in a particular department. There were 6,000 units in the ending work in process inventory on November 30, 75% complete with respect to conversion costs.

The November 1 work in process inventory consisted of 8,000 units, 50% complete with respect to conversion costs. A total of 25,000 units were completed and transferred out of the department during the month. The number of units started during November in the department was: A. 24,500 units B. 23,000 units C. 27,000 units D. 21,000 units

11. Diston Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 18,000 units in its beginning work in process inventory that were 30% complete with respect to conversion costs.

The conversion cost in this beginning work in process inventory was $44,820. An additional 90,000 units were started into production during the month. There were 21,000 units in the ending work in process inventory of the Welding Department that were 10% complete with respect to conversion costs. A total of $677,970 in conversion costs were incurred in the department during the month. What would be the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places. ) A. $8. 112 B. $8. 300 C. $7. 533 D. $6. 108

12.Sanchez Corporation uses the weighted-average method in its process costing system. The Fitting Department is the second department in its production process. The data below summarize the department’s operations in March. The Fitting Department’s cost per equivalent unit for conversion cost for March was $8. 66. How much conversion cost was assigned to the units transferred out of the Fitting Department during March? A. $480,630 B. $450,320 C. $444,258 D. $510,940

13. Designing a new product is an example of (an): A. Unit-level activity. B. Batch-level activity. C. Product-level activity. D. Organization-sustaining activity.

14. McCaskey Corporation uses an activity-based costing system with the following three activity cost pools: The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs: The distribution of resource consumption across activity cost pools is given below: The activity rate for the Fabrication activity cost pool is closest to: A. $1. 65 per machine-hour B. $4. 00 per machine-hour C. $0. 0 per machine-hour D. $2. 40 per machine-hour

15. Christiansen Corporation uses an activity-based costing system with the following three activity cost pools: The Other activity cost pool is used to accumulate costs of idle capacity and organization-sustaining costs. The company has provided the following data concerning its costs: The distribution of resource consumption across activity cost pools is given below: The activity rate for the Order Processing activity cost pool is closest to: A. $676 per order B. $780 per order C. $560 per order D. $312 per order

16.Bossie Corporation uses an activity-based costing system with three activity cost pools. The company has provided the following data concerning its costs and its activity based costing system: How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool? A. $196,333 B. $209,000 C. $310,000 D. $155,000

17. Spendlove Corporation has provided the following data from its activity-based costing system: The company makes 430 units of product S78N a year, requiring a total of 1,120 machine-hours, 40 orders, and 30 inspection-hours per year.

The product’s direct materials cost is $49. 81 per unit and its direct labor cost is $12. 34 per unit. The product sells for $129. 90 per unit. According to the activity-based costing system, the product margin for product S78N is: A. $4,116. 50 B. $29,132. 50 C. $6,180. 50 D. $5,161. 30

18. Wecker Corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Data concerning two products appear below: How much overhead cost would be assigned to Product V09X using the activity-based costing system? A. 157. 87 B. $91,722. 47 C. $10,385. 22 D. $5,485. 50

19. The balance in the Work in Process account equals: A. the balance in the Finished Goods inventory account. B. the balance in the Cost of Goods Sold account. C. the balances on the job cost sheets of uncompleted jobs. D. the balance in the Manufacturing Overhead account.

20. Overapplied manufacturing overhead occurs when: A. applied overhead exceeds actual overhead. B. applied overhead exceeds estimated overhead. C. actual overhead exceeds estimated overhead. D. budgeted overhead exceeds actual overhead.

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