Student ID: 21188324 Exam: 061681RR - The Costing of Products and Services When you have completed your exam and reviewed your answers, click Submit Exam. Answers will not be recorded until you hit Submit Exam. If you need to exit before completing the exam, click Cancel Exam. Questions 1 to 20: Select the best answer to each question. Note that a question and its answers may be split across a page break, so be sure that you have seen the entire question and all the answers before choosing an answer. The following data (in thousands of dollars) have been taken from the accounting records of Karlana 1. The net operating income for the year (in thousands of dollars) was A. $180. B. $40. C. $410. D. $110. 2. An operation costing system is A. identical to a job-order costing system, except that actual manufacturing overhead costs are traced to units of product. B. the same as a job-order system, except that direct materials costs are accounted for in the same way as in process costing. C. identical to a process-costing system, except that actual manufacturing overhead costs are traced to units of product. D. the same as a process-costing system, except that direct materials costs are accounted for in the same way as in job-order costing.
The following data (in thousands of dollars) have been taken from the accounting records of Karlana 3. The cost of goods sold for the year (in thousands of dollars) was A. $500. B. $540. C. $650. D. $670. 4. Assume there's no beginning work-in-process inventory and that the ending work-in-process inventory is 100% complete with respect to materials costs. The number of equivalent units with respect to materials costs under the weighted-average method is A. the same as the number of units completed. B. less than the number of units put into production. C. the same as the number of units put into production. D. less than the number of units completed. 5. The Sarbanes-Oxley Act of 2002 contains all of the following provisions except which one? A. Severe penalties are established for altering or destroying documents that may eventually be used in an official proceeding. B. The audit committee of the board of directors of a company must hire, compensate, and terminate the public accounting firm that audits the company's financial reports. C. A CFO must be a CPA or CMA. D. Both the CEO and CFO must certify in writing that their company's financial statements and accompanying disclosures fairly represent the results of operations. 6. Which person would occupy a line position in a department store? I. Sales manager II. Manager, furniture department III. Manager, advertising department IV. Manager, personnel department A. I, II, III, IV B. Only I and II
C. Only I D. Only I, II, III 7. Melillo Corporation has provided data concerning the company's manufacturing overhead account for the month of October. Prior to the closing of the overapplied or underapplied balance to cost of goods sold, the total of the debits to the manufacturing overhead account was $67,000, and the total of the credits to the account was $57,000. Which statement is true? A. Actual manufacturing overhead for the month was $67,000. B. Manufacturing overhead for the month was overapplied by $10,000. C. Manufacturing overhead applied to work in process for the month was $67,000. D. Manufacturing overhead transferred from finished goods to cost of goods sold during the month was $57,000. The Lee Company uses a job-order costing system. The following data were recorded for June: Job Number June 1 Work in Process Inventory Added During June---- Direct Materials Direct Labor 235 $2,500 $600 $400 236 $1,500 $800 $1,000 237 $1,000 $1,200 $1,750 238 $800 $1,500 $2,250 Overhead is charged to production at 80% of direct materials cost. Jobs 235, 237, and 238 were completed during June and transferred to finished goods. Jobs 235 and 238 have been delivered to customers. 8. Lee Company's work-in-process inventory balance on June 30 was A. $9,450. B. $3,300. C. $4,100. D. $3,940. 9. Which situation always results in underapplied overhead? A. Actual overhead is greater than applied overhead. B. Estimated overhead is greater than actual overhead. C. Actual overhead is less than applied overhead. D. Estimated overhead is less than actual overhead.
The following data (in thousands of dollars) have been taken from the accounting records of Karlana 10. The cost of the raw materials used in production during the year (in thousands of dollars) was A. $160. B. $40. C. $120. D. $180. 11. Becky works on the assembly line of a manufacturing company where she installs a component part for one of the company's products. She's paid $16 per hour for regular time, and time and a half for all work in excess of 40 hours per week. Becky's employer offers fringe benefits that cost the company $3 for each hour of employee time (both regular and overtime). During a given week, Becky works 42 hours but is idle for 3 hours due to material shortages. The company treats all fringe benefits relating to direct labor as added direct labor cost and the remainder as part of manufacturing overhead. The allocation of Becky's wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be which of the following? A. Direct Labor: $672 / Manufacturing Overhead: $142 B. Direct Labor: $688 / Manufacturing Overhead: $126 C. Direct Labor: $624 / Manufacturing Overhead: $190 D. Direct Labor: $741 / Manufacturing Overhead: $73 12. Freeman Company uses a predetermined overhead rate based on direct-labor hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated manufacturing overhead would be $150,000 and direct-labor hours would be 10,000. The actual figures for the year were $186,000 for manufacturing overhead and 12,000 direct-labor hours. The cost records for the year will show A. overapplied overhead of $6,000. B. underapplied overhead of $30,000. C. overapplied overhead of $30,000. D. underapplied overhead of $6,000.
The following data (in thousands of dollars) have been taken from the accounting records of Karlana 13. The cost of goods manufactured (finished) for the year (in thousands of dollars) was A. $530. B. $460. C. $520. D. $500. Sanker Inc. has provided the following data for the month of August. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month. Work In Process Finished Goods Cost of Goods Sold Manufacturing overhead for the month was overapplied by $5,000. The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts. 14. The work-in-process inventory at the end of August after allocation of any underapplied or overapplied overhead for the month is closest to Total Direct materials $2,790 $7,680 $18,240 $28,710 Direct labor 9,700 19,200 45,600 74,500 Manufacturing overhead applied 5,440 8,000 18,560 32,000 Total $17,930 $34,880 $82,400 $135,210 A. $17,267. B. $17,080. C. $18,780.
D. $18,593. 15. In September, one of the processing departments at Shenkel Corporation had a beginning work-inprocess inventory of $25,000 and an ending work-in-process inventory of $18,000. During the month, the cost of units transferred out from the department was $304,000. In the department's cost reconciliation report for September, the total cost accounted for would be A. $619,000. B. $322,000. C. $644,000. D. $43,000. Abis Corporation uses the weighted-average method in its process-costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were Cost Percent Complete Material costs $6,000 50% Conversion costs $9,900 30% A total of 9,200 units were started, and 8,200 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Cost Material costs $113,900 Conversion costs $322,500 The ending inventory was 80% complete with respect to materials and 20% complete with respect to conversion costs. Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that's the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. 16. What are the equivalent units for conversion costs for the month in the first processing department? A. 8,560 B. 8,200 C. 10,000 D. 360 17. Which of the following is not one of the five steps in the lean-thinking model discussed in the text? A. Organize work arrangements around the flow of the business process. B. Create a pull system that responds to customer orders. C. Identify the business process that delivers value.
D. Automate the business process. 18. Cost of goods manufactured will usually include A. some period costs as well as some product costs. B. only direct labor and direct materials costs. C. only costs incurred during the current period. D. some costs incurred during the prior period as well as costs incurred during the current period. 19. When would the direct method and the step-down method of service department cost allocation result in identical allocations being made to the operating departments? A. The only time is when there is just one service department. B. That can happen only if there's an equal amount of service departments and operating departments. C. The only time is when all costs in the service departments are fixed costs. D. That can happen if there is only one service department or, if the company has more than one service department, if all the costs in those departments are fixed costs. 20. Assume there's no beginning work-in-process inventory and the ending work-in-process inventory is 70% complete with respect to conversion costs. Under the weighted-average method, the number of equivalent units of production with respect to conversion costs would be A. the same as the units started during the period. B. the same as the units completed. C. less than the units started during the period. D. less than the units completed. End of exam