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Potts Company uses a job costing system

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1. Which of the following is NOT an objective of management accounting?
A) To provide information to business managers to assist them in planning for their business
B) To provide information to business managers to assist them in controlling their business
C) To provide information to shareholders to assist them with their investment decisions
D) To assist business managers with respect to providing a return to the owners of the business

2. A company used $35,000 of direct materials, incurred $73,000 in direct labor cost, and $114,000 in manufacturing overhead costs during the period. If beginning and ending work in process inventories were $28,000 and $21,000 respectively. What is the cost of goods manufactured?
A) $250,000
B) $229,000
C) $215,000
D) $222,000

3. Which costing system would better account for a unique individual product?
A) Product costing system
b) Job order costing system
c) Process costing system
d) variable costing system

4 Savard corporation reported the following:
- Raw material purchases totaling 100,000
- Raw material inventory increased 5,000
- Direct labor costs incurred totaled 150,000
- Total factory overhead was 225,000
- Work in process increased 20,000
- Indirect labor was 7,000
- Finished goods increased 40,000
- Sales salaries were 75,000

How much was Savard’s cost of goods manufactured?

a) 497,000
b) 490,000
c) 450,000
d) 457,000

5. The following information was obtained from Sizzler Company:
• Advertising costs: $7,900
• Indirect labor: $9,000
• Direct Labor: $31,000
• Indirect materials: $7,200
• Direct materials: $47,000
• Factory utilities: $3,000
• Factory repair and maintenance : $700
• Factory janitorial costs: $1,900
• Manufacturing equipment depreciation: $1,600
• Delivery vehicle depreciation: $790
• Administrative wages and salaries: $19,000
How much were Sizzler's period costs?

A) $27,690
B) $7,900
C) $19,790
D) $19,000

6. Based on the information on #5, How much was Sizzler's factory overhead?
A) $24,190
B) $1,600
C) $23,400
D) $3,600

7. Your company sends you to a conference on a new accounting rule, and you skip the afternoon session to go sightseeing. Which IMA guideline has been violated?
a. Competence
b. Confidentiality
c. Objectivity
d. Integrity

8. Which of the following would be debited to record direct labor costs actually incurred?
a) work in process
b) b) Finished goods inventory
c) manufacturing wages
d) manufacturing overhead

9. The entry to transfer direct labor and indirect labor costs from manufacturing wages into production includes a debit to which of the following?
A) manufacturing overhead and work in process inventory
B) finished goods inventory
C) manufacturing overhead
D) finished goods inventory and work in process inventory

10. The Hemingway Company uses a job order costing system. In April, material
requisitions of $44,000 were issued (direct materials, $40,000) and materials purchases of both direct and indirect materials totaled $56,600. The ending balance in materials inventory was $18,400. What was the beginning raw materials balance?

$5,800
$31,000
$25,600
$22,400

11. Potts Company uses a job costing system and had the following data available for 2009.
Materials purchased on account $75,000
Materials requisitioned (includes $2,000 of indirect materials) $43,000
Direct labor incurred $75,000
Manufacturing overhead incurred $95,000
Cost of goods completed $226,750
Cost of goods sold $138,000
Beginning materials inventory $15,000
Beginning work in process inventory $32,000
Beginning finished goods inventory $31,000
Predetermined manufacturing overhead rate
(as a percent of direct labor cost) 125%

The journal entry to record the total materials placed into production would include which of the following?
A) Debit to work in process for $41,000
B) Debit to work in process for $43,000
C) Credit to manufacturing overhead for $2,000
D) Debit to manufacturing overhead for $41,000

12. Based on the information on Question 11, what is the balance in work in process inventory at December 31, 2009 for Potts Company?

A) $15,000
B) $17,000
C) $16,500
D) $15,500

13. What is total quality management?
A) A philosophy of supplying customers with superior products and services
B) An exchange of information with suppliers and customers to create efficient and effective processes
C) A software system that integrates a company's functions, departments and data into a single system
D) A system which speeds the transformation of raw materials into finished products.

14. Opague Corporation uses a job costing system. The work in process inventory balance on December 31, 2009, consists of Job No. 120, which has a balance of $19,000. Job No. 120 has been charged with manufacturing overhead of $5,100. Opaque allocates manufacturing overhead at a predetermined rate of 85% of direct labor cost. What was the amount of direct materials charged to Job No. 120?
A) $5,900
B) $7,565
C) $7,900
D) $7,000

15. how is the predetermined manufacturing overhead rate used to allocate manufacturing overhead calculated?
a) by multiplying the total estimated manufacturing overhead costs by the total estimated quantity of allocation base
b) by dividing the total estimated manufacturing overhead costs by the total actual quantity of the allocation base
c) by dividing the total estimated quantity of allocation base by the total estimated manufacturing overhead costs
d) by dividing the total estimated manufacturing overhead costs by the total estimated quantity of allocation base

16. Daniel Company's manufacturing overhead account showed a $4,500 overallocated balance at the end of 2005. Actual overhead incurred was $95,000. Other accounts showed the following balances:

Materials inventory $10,000
Work in process inventory $30,000
Finished goods inventory $45,000
Cost of goods sold $275,000

What will be the ending balance in cost of goods sold after allocating the proper amount of the manufacturing overhead?
A) $270,500
B) $279,500
C) $266,000
D) $284,000

17. Door company estimated manufacturing overhead costs for 20X6 at $378,000. The predetermined manufacturing overhead rate was based on 105,000 estimated direct labor hours. Actual direct labor hours for 20X6 totaled 110,000. The manufacturing overhead showed debit entries totaling $394,000. For the year, was overhead over allocated or under allocated and by how much?

a) 2,000 under allocated
b) 16,000 under allocated
c) 16,000 over allocated
d) 2,000 over allocated

18. Lakeside Company estimated manufacturing overhead costs for 2012 at $378,000, based on 180,000 estimated direct labor hours. Actual direct labor hours for 2012 totaled 195,000. The manufacturing overhead account
contains debit entries totaling $391,500. The manufacturing overhead for 2012 was:
A) $31,500 underallocated.
B) $31,500 overallocated.
C) $18,000 underallocated.
D) $18,000 overallocated

19. JC Manufacturing produces products that use a variety of components. Which of the following cost drivers would be the MOST applicable for assigning material handling costs to the finished products?
A) Direct labor hours
B) Direct labor cost
C) Number of units produced
D) Number of components used

20. Which of the following is MOST likely to be the cost driver for the packaging and shipping activity?
A) Number of components
B) Number of orders
C) Hours of testing
D) Number of setups

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