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Select the best answer.
1. Fog Company, which uses labor hours to apply overhead to manufacturing, may have increased amounts of underapplied overhead at month-end if:
A) suppliers of direct materials have an across-the-board price increase.
B) the company terminates two production supervisors.
C) employees are hit hard with a widespread outbreak of the flu.
D) direct laborers are granted a wage increase.
E) outlays for advertising expenditures are increased.
2. The follwing information was provided for Rollins Company for the year just ended:
Beginning Work-in-Process inventory $ 150,750
Ending Work-in-Process inventory 140,475
Total Manufacturing Costs 325,000
Gross Margin 150,000
How much were the cost of goods manufactured for the year?
E) None of the above.
3. The completion of production would require a company to:
A) increase Finished-Goods Inventory and decrease Work-in-Process Inventory.
B) increase Work-in-Process Inventory and decrease Finished-Goods Inventory.
C) add direct labor to Work-In-Process Inventory.
D) add direct materials, direct labor, and manufacturing overhead to Work-in-Process Inventory.
E) add direct materials to Finished-Goods Inventory.
4. Which of the following organizations would be most likely to adopt a process cost system?
B) Accounting firm.
C) Chemical manufacturer.
D) Custom home builder.
E) All of the above companies would be likely to adopt a process cost system.
5. Job cost systems:
A) are appropriate for companies that produce a homogeneous product on a continuous basis.
B) are used to accumulate costs for each unit produced.
C) are appropriate for companies that produce a large number of units in a standardized batch.
D) are no longer used by manufacturing companies.
E) none of the above.
6. Which of the following manufacturers would most likely use job-order costing?
A) Chemical manufacturers.
B) Microchip processors.
C) Custom-furniture manufacturers.
D) Gasoline refiners.
E) Fertilizer manufacturers.
7. As production takes place, all manufacturing costs are added to the:
A) Work-in-Process Inventory account.
B) Manufacturing Overhead Inventory account.
C) Cost-of-Goods-Sold account.
D) Finished-Goods Inventory account.
E) Production Labor account.
8. The salary of the president of a manufacturing company would be classified as which of the following?
A) Manufacturing overhead.
B) Direct labor.
C) Direct material.
D) Period cost.
E) Sunk cost.
9. In a job costing system, product costs are accumulated on a:
A) Certified Management Accountant's Official Statement of Costs.
B) job cost report.
C) balance sheet.
D) departmental report.
E) product cost report.
10. Paper used by a law or accounting firm in the normal course of business, is considered a(n):
A) job-order process cost.
B) a manufacturing cost.
C) an indirect cost.
D) abnormal spoilage cost.
E) normal spoilage cost.
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