Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Accounting 2 > Exam 2 > Flashcards

Exam 2 Flashcards

1
Q

Which of the following items would not be classified as direct material for an automobile manufacturer?

A

Screws

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Which of the following items would not be classified as direct material for Dole food company?

A

Stainless steel pots

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Which of the following would be classified as direct material for a furniture manufacture?

A

Wood

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Which of the following expenses are reported on the income statement as expenses when they are incurred?

A

Period costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Which of the following types of cost is not related to inventory?

A

Period costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Direct materials are sometimes referred to as

A

Raw materials

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Direct labor costs include all of the following except

A

Supervisors who oversee the production process

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Which of the following is not an indirect material?

A

Office supplies by Human Resources

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

The three components of product cost include

A

Direct material, direct labor, overhead

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Which of the following is not classified as a variable product cost?

A

Sales commissions

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

When direct materials are used which of the following accounts increase?

A

Work in process inventory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

When indirect materials are used which of the following accounts increases?

A

Finished goods inventory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Which of the following is not included in the schedule of cost of goods manufactured?

A

Direct materials in inventory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Which of the following is an example of direct labor for Dole food company?

A

Fruit picker

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Which of the following is an example of direct labor for Toyota motor company?

A

Assembly line worker

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Direct labor is considered a

A

Variable cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Which of the following is not classified as a direct labor cost?

A

Wages of the store manager at Starbucks

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Which of the following is not a common application base for calculating the predetermined overhead rate?

A

Administrative costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

At the beginning of the year, managers at king industries estimated $420,000 in manufacturing overhead, 20,000 direct labor hours, and 50,000 machine hours. Actual manufacturing costs at the end of the year were $425,000 in manufacturing overhead, 22,000 direct labor hours and 47,000 machine hours. If overhead is applied based on direct labor hours, what is the predetermined overhead rate for the coming year?

A

$21.00 per direct labor hour

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

At the beginning of the year, managers at king industries estimated $400,000 in manufacturing overhead. 20,000 direct labor hours and 50,000 machine hours. Actual manufacturing costs at the end of the year were $425,000 in manufacturing overhead, 22,000 direct labor hours and 47,000 machine hours. If overhead is applied based on direct labor hours, how much overhead was applied during the year?

A

$440,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Jensen Fly fishing shop applies overhead at a rate of five dollars per direct labor hour. At the end of the month, the company had accumulated 7000 direct labor hours and incurred $38,000 in manufacturing overhead. Manufacturing overhead was

A

$3,000 underapplied

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

The predetermined overhead rate is calculated as

A

Budgeted total manufacturing overhead divided by budgeted activity level of application base

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

During an accounting period, any factoring overhead is applied to work in process using

A

A predetermined overhead rate

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Any cost that a company incurs to acquire Rall materials and convert them to finish goods ready for sale is referred to as

A

Manufacturing costs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Gough’s manufacturing had under applied overhead totaling $5000 during the period. To dispose of this under applied overhead Gough should

A

Increase the cost of goods sold by $5,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

When a company purchased materials for use in the production process, the cost of those materials as recorded in which of the following accounts?

A

Raw materials inventory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Work in process inventory increases when

A

Raw materials are used

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Work in process inventory decreases when

A

Products are finished

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

When products are completed which of the following accounts is increased?

A

Finished goods inventory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
30
Q

When products are completed, which of the following accounts is decreased?

A

Work in process inventory

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
31
Q

If the beginning balance in Rome materials inventory is $5000 the ending balance is $3500, and $60,000 was the amount transferred to work in process inventory, what is the amount of materials purchased during the period?

A

$58,500

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
32
Q

If the beginning balance in Rome materials inventory is $5000, the ending balance is $3500, and $60,000 was purchased, what is the amount of materials transferred to work in process inventory during the period?

A

$61,500

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
33
Q

If the ending balance and roll materials inventory is $3500, $60,000 was purchased, and $61,500 was transferred to work in process inventory during the period, what was the amount in beginning inventory?

A

$5,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
34
Q

Spikes Sports Manufacturing Company uses a job order costing system to account for its production of specialty golf accessories. On May 31 the company reported the following balances in its inventory accounts: $45,000 in Rome materials, $25,000 in work in process, and $15,000 in finished goods. On May 31, the total of all open job order cost sheet would be

A

$25,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
35
Q

Direct material standard specify both

A

Quantity and price

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
36
Q

Julie Finn is preparing the materials purchases budget for the second quarter. The production manager has provided the following production budget information: January 60,000 units, February 50, 5000 units, March 50,000 units. Each unit requires 5 gallons of direct materials, and Julie wants to maintain an ending inventory equal to 15% of the next months production needs. how many gallons will Julie budget to purchase in February?

A

271,250

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
37
Q

Stacey Pierce is preparing a direct labor budget. Her sales budget shows total sales units of 15,000 in sales dollars of $45,000. The direct materials purchases but it shows materials to be purchased of 25,000 units and budgeted purchases cost of $18,750. The production budget indicate a total of 25,000 units to be produced. Standard direct labor hours per unit is $.50 and the standard average wage rate is $10. What is the budget a direct labor cost?

A

$125,000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
38
Q

James worm in is preparing a direct labor budget. His sales budget shows total sales Units of 15,000 in sales dollars of $18,750. They direct materials purchases budget shows materials we purchase of 15,000 units and budgeted purchases cost of $3750. The production budget indicates a total of 12,000 units to be produced. Standard direct labor hours per unit is .30 and the standard average wage rate is $80. What is the budgeted direct labor cost?

A

$28,800

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
39
Q

Myers Company is preparing the role materials ending inventory budget. Which of the following items will Myers not need to complete the budget?

A

Actual production

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
40
Q

To determine the cash payments for direct materials during a period, companies prepare a

A

Cash payment for materials budget.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
41
Q

The standard cost of direct material is there

A

Standard price of direct material x standard quantity of direct material inputs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
42
Q

The difference in standard price and standard cost of direct material is that

A

Standard price is the amount paid to obtain one unit of material from a vendor; standard cost is the amount to produce one unit of product

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
43
Q

The calculation for the standard direct labor cost is

A

Standard wage rate per direct labor hour X standard quantity of direct labor hours.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
44
Q

The time needed to produce one unit of product is referred to as

A

The direct labor quantity standard

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
45
Q

Assume ABC Corporation expect to incur a total of $1,025,000 in overhead costs and $820,000 in direct labor costs. Actual overhead cost incurred totaled $1,050,000 an actual direct labor cost totaled $800,100. ABC’s predetermined overhead rate is nearest

A

125% of direct labor cost

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
46
Q

Budgetary slack is also referred to as

A

Budgetary padding

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
47
Q

Which the following is not a consequence of budgetary slack?

A

Those who implemented the budget may engage in undesirable behavior because they did have input into setting the budget.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
48
Q

Sarah speed requested $120,000 in her budget to cover salary expenses. However Sarah realistically expect to spend $110,000 on salaries. This is an example of

A

Budgetary slack

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
49
Q

The predetermined Overhead rate is calculated by

A

Dividing the budgeted total manufacturing overhead by the budgeted activity level

50
Q

A collection of smaller by chance that leads to pro forma financial statements is referred to as the

A

Master budget

51
Q

The master budget process usually begins with the

A

Sales budget

52
Q

Which of the following items would most likely differ on the cash budget and the budgeted income statement?

A

Bad debt expense

53
Q

Which of the following items were most likely differ on the cash budget and the budgeted income statement

A

Depreciation expense

54
Q

Which of the following is not a component of the cash budget

A

Reconciliation of beginning and ending cash

55
Q

To determine the cash payments for direct materials during a period, companies prepare a

A

Cash payment for materials budget.

56
Q

Which of the following does not appear in the other cash disbursements section of the cash budget

A

Depreciation on factory equipment

57
Q

A company is preparing it’s cash budget for the first quarter of the year. It has $1000 in cash at the beginning of the period. Cash sales for the quarter our budgeted at $30,000. Selling and administrative expenses are budgeted at $8000, which includes $2000 depreciation. Cash expenses are paid in the month incurred. Cash payment for inventory purchases are budgeted at $25,000. Desired cash balance on March 31 is $5000. How much financing will the company need during the quarter?

A

$5,000

58
Q

The company is preparing it’s cash by give her the first quarter of the year. It has $1000 in cash at the beginning of the period. Cash sales for the quarter our budgeted at $180,000. Selling administrative expenses are budgeted at $58,000, which includes 12,000 depreciation. Cash expenses are paid in the month incurred. Cash payment for inventory purchases are budgeted at $135,000. That is Ira cash balance on March 31 is $10,000. How much financing with the company need during the quarter?

A

$3,000

59
Q

Johnson equipment: The controller has determined that the company collects credit sale as follows: 60% in the month of sale, 35% in the first month after sale, and 5% in the second month after sale. How much cash will be collected from customers in March?

A

$376,500

60
Q

London Manufacturing Company: The controller has determined that the company collects credit sales as follows: 60% in the month of sale, 30% in the first month after sale, 5% in the second month after sale, and 5% is expected to be uncollectible. How much cash should be collected from customers in March?

A

$373,500

61
Q

If the actual cost of direct materials is $10 per unit what was the unit cost of the direct material is $11,

A

The direct materials price variance will be favorable

62
Q

Backyard creations purchase 7000 feet of copper tubing at a price of $2.70 per foot and used 7200 feet during the period. The standard price of the copper tubing was $2.50 per foot. What is backyard creations in direct materials price variance for the period?

A

$1,400 unfavorable

63
Q

Backyard creations purchased 7200 feet of copper tubing at a price of $2.60 per foot and used 7500 feet during the period. The standard price of the copper tubing was $2.70 per foot. What is backyard creations direct materials price variance for the period?

A

$720 favorable

64
Q

If a company uses more direct labor hours than the standard allowed, the result is

A

A reduction in operating income

65
Q

The sales volume variance is the difference between

A

The static budget and the flexible budget

66
Q

The direct materials quantity variance is calculated using which of the three amounts?

A

Actually quantity used, standard quantity allowed for actual production, standard price paid

67
Q

The algebraic equation for the direct materials quantity variance is

A

Direct materials quantity variance = SP x (AQused - SQ)

68
Q

Why is the direct materials price variance basement quality of materials purchased, but that direct materials quantity variance on the quantity of material to use?

A

Managers need to isolate variances and take corrective action as soon as possible

69
Q

Which of the following is not used in the calculation of the direct labor rate?

A

Standard hours worked

70
Q

The algebraic equation for the direct labor rate variance is

A

Direct labor rate variance = AQ x (AP-SP)

71
Q

The direct materials price variance is calculated using which the three amount?

A

Actual quantity purchased, actual price paid, standard price paid

72
Q

The algebraic equation for the direct materials price variance is

A

AQpurch x (AP-SP)

73
Q

The standard number of direct labor hours used in calculating the direct labor efficiency variance is based on

A

The actual number of finished units produced

74
Q

The variable overhead spending variance is calculated as

A

Actual cost x (actual quantity x standard price)

75
Q

The variance that captures the effect of efficient use of the activity based on the coast of variable overhead is the

A

Variable overhead efficiency variance

76
Q

The variable overhead efficiency variance is calculated as

A

Standard price x (actual quantity x standard quantity )

77
Q

With activity-based costing, the goal is to

A

Develop a product cost that capture the amount of each resource consumed by the activities performed to produce a specific product.

78
Q

Which the following is not a step in implementing an activity-based costing system?

A

Calculating predetermined overhead rates

79
Q

Calculating the activity rate is similar to the calculation of the

A

Predetermined overhead rate

80
Q

Assume that the activity cost is $93,000, predetermined total overhead is $120,000, actual overhead is $98,000, and the company has three product lines, the activity rate is

A

$31,000 per product line

81
Q

The firm produces and sells two products, standard and deluxe. The following information relates to set up cost of $180,000. Activity-based costing with allocate which of the following amounts of set up cost to each unit?

A

$50 standard $63 deluxe

82
Q

Which of the following might be a reason the allocating overhead under an activity based approach might have less manufacturing overhead allocated to the products?

A

The general overhead cost pool is not allocated to products under activity-based costing

83
Q

In an activity-based costing system, which of the following is not a category in which activities are classified?

A

Factory level

84
Q

Activities that support the products or services a company provides is classified as a

A

Product level activity

85
Q

Activities that are required to provide productive capacity of the keep the business in operation are

A

Organization level activities

86
Q

Which of the following is not a product or service related activity

A

Customer level

87
Q

Which of the following is a product or service related activity?

A

Batch level

88
Q

Which of the following would be considered a batch level activity?

A

Machine set up

89
Q

Product level activities are also referred to as

A

Product sustaining activities

90
Q

Which of the following would be considered a batch level activity?

A

Quality tests

91
Q

Assume that activity cost total is $180,000. The company produced an average of 40 units per batch and the number of batches produce is 9000. Calculate the activity rate

A

$20 per batch

92
Q

ANW manufacturing uses an activity-based costing system for it’s cutting department. The activity cost total is $148,000. The number of cats is the cost driver. We couldn’t department processed a total of 9000 batches with an average cuts per batch of six and the total cuts of 46,250. What is the activity rate for the cutting department?

A

$3.20 per cut

93
Q

Which of the following is formula for calculating the activity rate in an activity-based costing system?

A

Activity cost pool resources divided by activity driver

94
Q

In implementing an activity-based costing system, after all the activities have been identified and the appropriate level of detail selected, activities are combined into activity cost pools based on their

A

Cost drivers

95
Q

Which of the following would be most appropriate cost driver for the purchasing department?

A

Number of orders places

96
Q

Organizational level activity:

A

Activities required to provide productive capacity and to keep the business in operation.

97
Q

Customer level activity:

A

Activities are performed for specific customers.

98
Q

Cost that has Been in carried in the past is referred to as

A

A sunk cost

99
Q

Which of the following would not be relevant cost in a special order of expensive clocks

A

Direct labor

100
Q

In making the decision about whether to accept a special order for pianos, which of the following costs should be considered?

A

Relevant costs to produce the pianos

Relevant costs to sell the pianos

101
Q

If a special order is being considered when the product sells for $10 and relevant costs are $6 to produce a unit and $2 to sell the unit, which of the following decisions is the most likely to be chosen?

A

Accept the order if the sales price is $8 or more

102
Q

The costs that should be included in an outsourcing decision are the:

A

Relevant costs.

103
Q

The costs that should be included in an outsourcing decision are the:

A

Relevant costs

104
Q

Given The following data, what is the total relevant cost of internal production of 2000 products?

A

$40,000

105
Q

If the unit cost of direct materials for $20, direct labor is $12, variable overhead is two dollars, avoidable fixed cost or $6000, unavoidable fixed cost or $5000 and sunk costs are $9000, what is the total relevant cost for three of your products?

A

$16,200

106
Q

Given the following data what is the total relevant cost of internal production of 50 units?

A

$1,800

107
Q

Costs such as rent and the production manager salary or examples of which type of costs?

A

Non differential costs

108
Q

Which of the following would not be relevant cost on a special order of expensive clocks?

A

Fixed overhead

109
Q

Which of the following costs would not be relevant in deciding whether to except a special order?

A

Both a and b
Direct material
Variable overhead

110
Q

In making the decision about whether to except a special order for pianos, which of the following car should be considered?

A

Relevant costs to produce the pianos
Relevant costs to sell the pianos
Both a and b

111
Q

If a special order results in a positive contribution margin of eight dollars from the contribution margin for regular orders is $15, which of the following decisions is most likely to be chosen?

A

Accept the order

112
Q

Have a special order is being considered when the product sells for $10 and the relevant costs are six dollars to produce a unit and two dollars to sell the unit, which the following decisions is the most likely to be chosen?

A

Accept the order if the sales price is $8 or more

113
Q

Which of the following is not relive it in the decision to except a special order?

A

Depreciation on factory equipment

114
Q

Cough that has it been on. In the past is referred to as

A

A sunk cost

115
Q

Sunk costs are classified as

A

Irrelevant

116
Q

Depreciation on a factory machine is an example of which of the following types of cost?

A

Sunk cost

117
Q

When a company is outsourcing a process, resources are freed up so they can be put to another use. The alternative use is considered to be

A

An opportunity cost

118
Q

When choosing between alternatives, the contribution margin of the next best alternative is called

A

Opportunity cost

119
Q

The cost that should be included in an outsourcing decisions are the

A

Relevant costs

120
Q

If the unit cost of direct materials of $20, direct labor is $12, variable overhead is two dollars, avoidable fixed costs are $6000, unavoidable fixed costs are $5000 and some costs are $9000, what is the total relevant cost for three at your products?

A

$16,200

121
Q

Given the following data, what is the total relevant cost of internal production of 50 units?

A

$1,800

122
Q

Given the following data, what is the total relevant cost of internal production of 2000 products?

A

$40,000

Accounting 2 (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions