chap. 5,6,7,8 – Flashcards
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Which of the following statements is true?
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The job cost sheet is subsidiary to the work in process account
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The ending balance of which of the following accounts is calculated by summing the totals of the open (unfinished) job-order cost sheets?
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Work in Process
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In a normal costing system, the cost of a job includes
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actual direct materials, actual direct labor, and estimated (applied) overhead
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The predetermined overhead rate equals
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estimated overhead divided by estimated activity level for a period
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The job-order cost sheet is a subsidiary account to
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Work in Process
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Applied overhead is
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an important part of normal costing.
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The overhead variance is overapplied if
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actual overhead is less than applied overhead
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Which of the following is typically a process-costing firm?
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Paint manufacturer
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When materials are requisitioned for use in production in a job-order costing firm, the cost of materials is added to the
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work in process account.
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When a job is completed, the total cost of the job is
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added to the finished goods account.
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The costs of a job are accounted for on the
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job-order cost sheet.
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Wilson Company has a predetermined overhead rate of $5 per direct labor hour. The job-order cost sheet for Job 145 shows 500 direct labor hours costing $10,000 and materials requisitions totaling $17,500. Job 145 had 1,000 units completed and transferred to Finished Goods. What is the cost per unit for Job 145?
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$30
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Process costing works well whenever
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homogeneous products pass through a series of processes and receive similar amounts of materials, labor, and overhead.
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Job-order costing works well whenever
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heterogeneous products pass through a series of processes and receive different doses of materials, labor, and overhead.
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Sequential processing is characterized by
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a pattern where partially completed units must pass through one process before they can be worked on in later processes.
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To record the transfer of costs from a prior process to a subsequent process, the following entry would be made:
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debit Work in Process (subsequent department) and credit Work in Process (prior department).
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The costs transferred from a prior process to a subsequent process are
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a. treated as another type of materials cost for the receiving department. b. referred to as transferred-in costs (for the receiving department). c. referred to as the cost of goods transferred out (for the transferring department). *All of these are correct
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During the month of May, the grinding department produced and transferred out 2,800 units. EWIP had 840 units, 50% complete. There was no BWIP. The equivalent units of output for May are
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3,220.
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The mixing department incurred $56,000 of manufacturing costs during the month of September. The department transferred out 2,500 units and had 625 units in EWIP, 40% complete. There was no BWIP.
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$20.36.
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A batch-level driver is consumed by a product each and every time that
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a batch of products is produced.
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Which of the following is a non unit-level driver?
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Setup hours
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The first stage of ABC entails the assignment of
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resource costs to individual activities.
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The receiving department employs one worker, who spends 75% of his time on the receiving activity and 25% of his time on inspecting products. His salary is $40,000. The amount of cost assigned to the receiving activity is
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30,000.
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Which of the following is a true statement about activity-based customer costing?
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Customer diversity requires multiple drivers to trace costs accurately to customers.
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The second stage of ABC entails the assignment of
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activity costs to products or customers.
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Interview questions are asked to determine
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a. what activities are being performed. b. who performs the activities. c. the relative amount of time spent on each activity by individual workers. d. possible activity drivers for assigning costs to products. e. All of these choices are correct. *all correct
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Assume that the moving activity has an expected cost of $80,000. Expected direct labor hours are 20,000, and expected number of moves is 40,000. The best activity rate for moving is
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$2 per move.
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Which of the following is a true statement about activity-based supplier costing?
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Suppliers can affect many internal activities of a firm and significantly increase the cost of purchasing.
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This year, Lambert Company will ship 1,500,000 pounds of goods to customers at a cost of $1,200,000. If a customer orders 10,000 pounds and produces $200,000 of revenue (total revenue is $20 million), the amount of shipping cost assigned to the customer by using ABC would be
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8,000 ($0.80 per pound shipped).
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lambert Company has two suppliers: Deming and Leming. The cost of warranty work due to defective components is $2,000,000. The total units repaired under warranty average 100,000, of which 90,000 have components from Deming and 10,000 have components from Leming. Select the items true statement(s) below.
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A. Components purchased from Leming cost $200,000 more than their purchase price. b. Components purchased from Deming cost $1,800,000 more than their purchase price. c. Components from Leming appear to be of higher quality. d. All of these choices are true. D is correct
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A forklift and its driver used for moving materials are examples of
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activity inputs
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Which of the following are nonvalue-added activities?
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a. Moving goods b. Storing goods c. Inspecting finished goods d. Reworking a defective product ALL
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Suppose that a company is spending $60,000 per year for inspecting, $30,000 for purchasing, and $40,000 for reworking products. A good estimate of nonvalue-added costs would be
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100,000
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The cost of inspecting incoming parts is most likely to be reduced by
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activity elimination.
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Thom Company produces 60 units in 10 hours. The cycle time for Thom
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is 10 minutes per unit.
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Thom Company produces 60 units in 10 hours. The velocity for Thom
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is 6 units per hour.
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Striving to produce the same activity output with lower costs for the input used is concerned with which of the following dimensions of activity performance?
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Efficiency
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Which of the following is a quality prevention cost?
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a. Quality planning b. Supplier evaluation and selection c. Quality audits d. Field trials e. All of these choices are correct.**
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Which of the following is an appraisal cost (quality)?
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Manager of an inspection team
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Which of the following is an internal failure cost (quality)?
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c. Retesting
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Which of the following is an external failure cost (quality)?
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Lost sales
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n a segmented income statement, which of the following statements is true?
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Segment margin is equal to contribution margin less direct fixed expenses.
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The EOQ for Part B-22 is 2,500 units, and four orders are placed each year. The total annual ordering cost is $1,200. Which of the following is true?
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The total carrying cost is $1,200.
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Which of the following is a reason for carrying inventory?
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a. To prevent production delays and manufacturing facility shutdowns. b. To hedge against future price increases. c. To take advantage of discounts. d. To satisfy customer demand. e. All of these choices are correct.**
