In most business organizations, the chief management ...



In most business organizations, the chief management accountant is called the:

A) chief accounting officer

B) controller

C) chairman of the board

D) chief executive officer

2. The controller's staff often consists of several management accountants. All of the following would most likely be on the controller's staff EXCEPT:

A) general accountants

B) budgets and budget analysts

C) investments and shareholder relations managers

D) cost accountants

3. Which of the following is not a characteristic of useful managerial accounting reports?

A) Accuracy

B) GAAP

C) historical and estimated data

D) reports prepared as needed

4. What term is used to refer to the cost of changing direct materials into a finished manufactured product?

A) Factory overhead cost

B) Period cost

C) Conversion cost

D) Direct labor cost

5. What is the purpose of the Statement of Cost of Goods Manufactured?

A) to determine the ending materials inventory

B) to determine the ending work in process inventory

C) to determine the amounts transferred to finished goods

D) all of the answers are true

6. Job order costing and process costing are

A) pricing systems.

B) cost accounting systems.

C) cost flow systems.

D) inventory tracking systems.

7. Which of the following would most likely be a product cost?

A) Salary of VP of sales.

B) Advertising for a particular product.

C) Drill bits for a drill press used in the plant assembly area.

D) Salary of the company receptionist.

8. The basis for recording direct and indirect labor costs incurred is a summary of the period's:

A) job order cost sheets

B) time tickets

C) employees' earnings records

D) clock cards

9. At the end of July, the first month of the current fiscal year, the factory overhead account had a debit balance. Which of the following describes the nature of this balance and how it would be reported on the interim balance sheet?

A) Overapplied, deferred credit

B) Underapplied, deferred debit

C) Underapplied, deferred credit

D) Overapplied, deferred debit

10. Each account in the cost ledger is called a:

A) finished goods sheet

B) stock record

C) materials requisition

D) job cost sheet

11. The recording of the application of factory overhead costs to jobs would include a credit to:

A) Factory Overhead

B) Wages Payable

C) Work in Process

D) Cost of Goods Sold

12. The recording of the jobs completed would include a debit to:

A) Factory Overhead

B) Finished Goods

C) Work in Process

D) Cost of Goods Sold

13. For the manufacturing business, inventory which is in the process of being manufactured is referred to as:

A) supplies inventory

B) work in process inventory

C) finished goods inventory

D) direct materials inventory

14. Which of the following is the correct formula to calculate the predetermined factory overhead rate?

A) Estimate total factory overhead costs divided by estimated activity base.

B) Actual total factory overhead costs divided by estimated activity base.

C) Estimate total factory overhead costs divided by actual activity base.

D) Actual total factory overhead costs divided by actual activity base.

15. The materials requisition is used to

A) release materials from the storeroom to the factory

B) release finished goods to the shipping department

C) record the acquisition of materials from a vendor

D) record and electronically transmit materials data in place of a receiving report

16. Job cost sheets can provide information to managers for all but the following:

A) cost impact of materials changes

B) cost impact of continuous improvement in the manufacturing process

C) cost impact of materials price or direct labor rate changes over time

D) utilities, managerial salaries, and depreciation of computers in the corporate office

17. Which of the following entries would probably not be found on the books of a service provider?

A) Debit Work in Process; credit Materials

B) Debit Work in Process; credit Wages Payable

C) Debit Work in Process; credit Overhead

D) Debit Cost of Services; credit Work in Process

18. Which of the following is not characteristic of a process cost system.

A) The system may use several work in process inventory accounts.

B) Manufacturing costs are groups by department rather than by jobs.

C) The system accumulates costs per job.

D) The system emphasizes time periods rather than the time it takes to complete a job.

19. Which of the following entities would probably use a process costing system?

A) A custom boat builder

B) A custom furniture manufacturer

C) A one of a kind jewelry creator

D) An oil refinery.

20. The four steps necessary to determine the cost of goods completed and the ending inventory valuation in a process cost system are:

1. allocate costs to transferred and partially completed units

2. determine the units to be assigned costs

3. determine the cost per equivalent unit

4. calculate equivalent units of production

The correct ordering of the steps is:

A) 2, 4, 3, 1

B) 4, 2, 3, 1

C) 2, 3, 4, 1

D) 2, 3, 1, 4

21. Department S had no work in process at the beginning of the period. 12,000 units of direct materials were added during the period at a cost of $84,000, 9,000 units were completed during the period, and 3,000 units were 30% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $49,500 and factory overhead was $9,900.

The total conversion costs for the period were:

A) $59,400

B) $49,500

C) $143,400

D) $9,900

22. Department J had no work in process at the beginning of the period, 18,000 units were completed during the period, 2,000 units were 30% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period (Assuming the company uses FIFO):

Direct materials (20,000 at $4) $ 80,000

Direct labor 102,300

Factory overhead 37,200

Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the departmental work in process inventory at the end of the period?

A) $4,500

B) $23,000

C) $6,900

D) $12,500

23. Which of the following is not a use of the cost of production report?

A) To help managers control operations.

B) To help managers isolate problems.

C) To project production.

D) To help managers to improve operations.

24. Which of the following best describes the effect on direct labor when management adopts a just-in-time environment?

A) Workers typically perform one function.

B) The environment becomes more labor intensive.

C) Each employee runs a single machine.

D) Workers are often cross-trained to perform more than one function.

25. Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710.

The number of equivalent units of production for the period for materials if the average cost method is used to cost inventories was:

A) 15,650

B) 18,000

C) 17,250

D) 17,700

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