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Which of the following would be most likely to use process

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Which of the following would be most likely to use process costing?
A. A custom furniture manufacturer.
B. An auto body repair shop.
C. A law firm.
D. A lawn fertilizer manufacturer.

2. Which of the following systems provides for a separate record of the cost of each particular quantity of product that passes through the factory?
A. Job order cost system
B. General cost system
C. Replacement cost system
D. Process cost system

3. The source of the data for debiting Work-in-Process for direct materials is the:
A. purchase order
B. purchase requisition
C. materials requisition
D. receiving report

4. In a job order cost accounting system, the entry to record the flow of direct materials into production is:
A. debit Work in Process, credit Materials
B. debit Materials, credit Work in Process
C. debit Factory Overhead, credit Materials
D. debit Work in Process, credit Supplies

5. The entry to record direct labor costs into production in a job order cost accounting system is:
A. debit Factory Overhead, credit Work in Process
B. debit Finished Goods, credit Wages Payable
C. debit Work in Process, credit Wages Payable
D. debit Factory Overhead, credit Wages Payable

6. The recording of the jobs shipped and customers billed would include a credit to: XXXXX
B. Cash
C. Finished Goods
D. Cost of Goods Sold

7. All of the following are examples of activity bases except:
A. salaries of supervisors
B. quality inspections of products
C. number of machine setups
D. raw materials storage

8. 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

9. For which of the following businesses would a process cost system be appropriate?
A. Auto repair service
B. Paint manufacturer
C. Specialty printer
D. Custom furniture manufacturer

10. 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 cost of units completed during the period were:
A. $117,000
B. $143,400
C. $121,000
D. $127,450

11. Lombardi Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 1 during the period for direct labor is:
A. Work in Process--Department 1 60,000
Wages Payable 60,000
B. Wages Payable 125,000
Work in Process--Department 1 125,000
C. Work in Process--Department 1 125,000
Wages Payable 125,000
D. Wages Payable 60,000
Work in Process--Department 1 60,000

12. Lombardi Company manufactures a single product by a continuous process, involving three production departments. The records indicate that direct materials, direct labor, and applied factory overhead for Department 1 were $100,000, $125,000, and $150,000, respectively. The records further indicate that direct materials, direct labor, and applied factory overhead for Department 2 were $50,000, $60,000, and $70,000, respectively. In addition, work in process at the beginning of the period for Department 1 totaled $75,000, and work in process at the end of the period totaled $60,000. The journal entry to record the flow of costs into Department 1 during the period for applied overhead is:
A. Factory Overhead--Department 1 150,000
Work in Process--Department 1 150,000
B. Work in Process--Department 1 125,000
Factory Overhead--Department 1 125,000
C. Work in Process--Department 1 70,000
Factory Overhead--Department 1 70,000
D. Work in Process--Department 1 150,000
Factory Overhead--Department 1 150,000

13. The debits to Work in Process--Assembly Department for April, together with data concerning production, are as follows:


April 1, work in process:
Materials cost, 3,000 units $ 7,500
Conversion costs, 3,000 units,
2/3 completed 6,000
Materials added during April, 10,000 units 26,000
Conversion costs during April 31,000
Goods finished during April, 11,500 units ---
April 30 work in process, 1,500 units,
1/2 completed ---


All direct materials are placed in process at the beginning of the process and the average cost method is used to cost inventories. The materials cost per equivalent unit (to the nearest cent) for April is:
A. $2.60
B. $2.58
C. $3.02
D. $2.26

14. 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. Of the $12,500, $8,000 was for material and $4,500 was for conversion costs. 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. If the average cost method is used the material cost per unit (to the nearest cent) would be:
A. $2.04
B. $1.59
C. $1.91
D. $2.00

15. For purposes of analysis, mixed costs are generally:
A. classified as fixed costs
B. classified as variable costs
C. classified as period costs
D. separated into their variable and fixed cost components

16. Phipps Co. sells two products, Arks and Bins. Last year, Phipps sold 12,000 units of Arks and 28,000 units of Bins. Related data are:




Product Unit Selling
Price Unit Variable
Cost Unit Contribution
Margin
Arks $120 $80 $40
Bins 80 60 20


What was Phipps Co.'s overall unit variable cost?
A. $140
B. $ 70
C. $ 66
D. $ 60

17. Cost-volume-profit analysis cannot be used if which of the following occurs?
A. Costs cannot be properly classified into fixed and variable costs
B. The total fixed costs change
C. The per unit variable costs change
D. Per unit sales prices change

18. A business operated at 100% of capacity during its first month and incurred the following costs:


Production costs (10,000 units):
Direct materials $ 90,000
Direct labor 120,000
Variable factory overhead 140,000
Fixed factory overhead 50,000 $400,000
Operating expenses:
Variable operating expenses $ 65,000
Fixed operating expenses 25,000 90,000


If 800 units remain unsold at the end of the month, what is the amount of inventory that would be reported on the absorption costing balance sheet?
A. $32,000
B. $28,000
C. $33,200
D. $34,000

19. A formal written statement of management's plans for the future, expressed in financial terms, is a:
A. gross profit report
B. responsibility report
C. budget
D. performance report

20. McCabe Manufacturing Co.'s static budget at 8,000 units of production includes $40,000 for direct labor and $4,000 for electric power. Total fixed costs are $23,000. At 9,000 units of production, a flexible budget would show:
A. variable costs of $49,500 and $25,875 of fixed costs
B. variable costs of $44,000 and $23,000 of fixed costs
C. variable costs of $49,500 and $23,000 of fixed costs
D. variable and fixed costs totaling $75,375

21. Management accountants usually provide for a minimum cash balance in their cash budgets for which of the following reasons:
A. stockholders demand a minimum cash balance
B. it is an important way of effectively managing cash
C. it provides a safety buffer for variations in estimates
D. to have funds available for major capital expenditures

22. Standards that represent levels of operation that can be attained with reasonable effort are called:
A. theoretical standards
B. ideal standards
C. variable standards
D. normal standards

23. The standard costs and actual costs for direct materials for the manufacture of 2,500 actual units of product are as follows:


Standard Costs
Direct materials 2,500 kilograms @ $8

Actual Costs
Direct materials 2,600 kilograms @ $8.75



The amount of the direct materials quantity variance is:
A. $875 favorable
B. $800 unfavorable
C. $800 favorable
D. $875 unfavorable

24. The following data is given for the Walker Company:
Budgeted production............................................... 1,000 units
Actual production.......................................................980 units
Materials:
Standard price per lb.......................................................$2.00
Standard pounds per completed unit.................................12
Actual pounds purchased and used in production.........11,800
Actual price paid for materials..................................$23,000
Labor:
Standard hourly labor rate.....................................$14 per hour
Standard hours allowed per completed unit...............4.5
Actual labor hours worked.....................................4,560
Actual total labor costs........................................$62,928
Overhead:
Actual and budgeted fixed overhead.....................$27,000
Standard variable overhead rate.........................$3.50 per standard labor hour
Actual variable overhead costs...........................$15,500
Overhead is applied on standard labor hours.

The direct labor rate variance is:
A. 912U
B. 912F
C. 2100U
D. 2100F

25. The following data is given for the Walker Company:
Budgeted production............................................... 26,000 units
Actual production.......................................................27,500 units
Materials:
Standard price per oz......................................................$6.50
Standard ounces per completed unit.................................8
Actual ounces purchased and used in production.........228,000
Actual price paid for materials..................................$1,504,800
Labor:
Standard hourly labor rate.....................................$22 per hour
Standard hours allowed per completed unit...............6.6
Actual labor hours worked.....................................183,000
Actual total labor costs........................................$4,020,000
Overhead:
Actual and budgeted fixed overhead.....................$1,029,600
Standard variable overhead rate.........................$24.50 per standard labor hour
Actual variable overhead costs...........................$4,520,000
Overhead is applied on standard labor hours.

The direct labor time variance is:
A. 6,000F
B. 6,000U
C. 33,000U
D. 33,000F

26. Income from operations for Division B is $150,000, total service department charges are $400,000 and operating expenses are $2,266,000. What are the revenues for Division B?
A. $550,000
B. $3,216,000
C. $2,816,000
D. $2,666,000

27. What is the term used to describe expenses that are incurred for the benefit of a specific department?
A. Indirect expenses
B. Margin expenses
C. Departmental expenses
D. Direct expenses

28. The following financial information was summarized from the accounting records of Block Corporation for the current year ended December 31:


Software
Division Hardware
Division Corporate
Total
Cost of goods sold $47,200 $30,720
Direct operating expenses 27,200 20,040
Net sales 95,000 64,000
Interest expense $ 2,040
General overhead 18,160
Income tax 4,700


The gross profit for the Software Division is:
A. $47,800
B. $20,600
C. $13,240
D. $33,280

29. A factor in determining the rate of return on investment--the ratio of sales to invested assets--is called:
A. profit margin
B. indirect margin
C. investment turnover
D. cost ratio

30. Materials used by Bristol Company in producing Division C's product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 30,000 units of material are transferred, with no reduction in Division A's current sales. How much would Division C's income from operations increase?
A. $0
B. $90,000
C. $15,000
D. $60,000

31. Materials used by Bristol Company in producing Division C's product are currently purchased from outside suppliers at a cost of $10 per unit. However, the same materials are available from Division A. Division A has unused capacity and can produce the materials needed by Division C at a variable cost of $8.50 per unit. A transfer price of $9.50 per unit is negotiated and 30,000 units of material are transferred, with no reduction in Division A's current sales. How much would Bristol's total income from operations increase?
A. $45,000
B. $120,000
C. $60,000
D. $150,000

32. A business is considering a cash outlay of $500,000 for the purchase of land, which it could lease for $40,000 per year. If alternative investments are available which yield a 21% return, the opportunity cost of the purchase of the land is:
A. $105,000
B. $ 40,000
C. $ 65,000
D. $ 8,400

33. What cost concept used in applying the cost-plus approach to product pricing includes only total manufacturing costs in the "cost" amount to which the markup is added?
A. Variable cost concept
B. Total cost concept
C. Product cost concept
D. Opportunity cost concept

34. Mendoza Corporation uses the product cost concept of product pricing. Below is cost information for the production and sale of 45,000 units of its sole product. Mendoza desires a profit equal to a 10.8% rate of return on invested assets of $900,000.


Fixed factory overhead cost $72,000.00
Fixed selling and administrative costs 45,000.00
Variable direct materials cost per unit 4.50
Variable direct labor cost per unit 7.65
Variable factory overhead cost per unit 2.25
Variable selling and administrative cost per unit .90


The unit selling price for the company's product is:
A. $17.73
B. $15.75
C. $22.05
D. $20.06

35. Niva Co. Manufactures three products: Bales; Tales and Wales. The selling prices are: 55; 78; and 32 respectively. The variable costs for each product are: 20; 50; and 15, respectively. Each product must go through the same processing in a machine that is limited to 2,000 hours per month. Bales take 7 hours to process, Tales take 4 hours, and Wales take 1 hour. What is the contribution margin per machine hour for Tales?
A. $7
B. $5
C. $28
D. $35

36. The method of analyzing capital investment proposals that divides the estimated average annual income by the average investment is:
A. cash payback method
B. net present value method
C. internal rate of return method
D. average rate of return method

37. An analysis of a proposal by the net present value method indicated that the present value of future cash inflows exceeded the amount to be invested. Which of the following statements best describes the results of this analysis?
A. The proposal is desirable and the rate of return expected from the proposal exceeds the minimum rate used for the analysis.
B. The proposal is desirable and the rate of return expected from the proposal is less than the minimum rate used for the analysis.
C. The proposal is undesirable and the rate of return expected from the proposal is less than the minimum rate used for the analysis.
D. The proposal is undesirable and the rate of return expected from the proposal exceeds the minimum rate used for the analysis.

38. The expected average rate of return for a proposed investment of $4,800,000 in a fixed asset, using straight line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $12,000,000 is:
A. 25%
B. 18%
C. 40%
D. 12.5%

39. The present value factor for an annuity of $1 is determined using which of the following formulas?
A. Amount to be invested/Annual average net income
B. Annual net cash flow/Amount to be invested
C. Annual average net income/Amount to be invested
D. Amount to be invested/Annual net cash flow

40. All of the following qualitative considerations may impact upon capital investments analysis except:
A. time value of money
B. employee morale
C. the impact on product quality
D. manufacturing flexibility

41. Below is a table for the present value of $1 at Compound interest.

Year 6% 10% 12%
1 .943 .909 .893
2 .890 .826 .797
3 .840 .751 .712
4 .792 .683 .636
5 .747 .621 .567

Below is a table for the present value of an annuity of $1 at compound interest.

Year 6% 10% 12%
1 .943 .909 .893
2 1.833 1.736 1.69
3 2.673 2.487 2.402
4 3.465 3.17 3.037
5 4.212 3.791 3.605


Using the tables above, if an investment is made now for $20,000 that will generate a cash inflow of $8,000 a year for the next 4 years, what would be the net present value (rounded to the nearest dollar) of the investment, (assuming an earnings rate of 12%)?
A. $20,352
B. $352
C. $24,296
D. $4,296

42. Hoskins Co. uses a plant-wide factory overhead rate based on direct labor hours. Overhead costs would be overcharged to which of the following departments?
A. A labor-intensive department
B. A capital-intensive department
C. A materials-intensive department
D. None of the above

43. Which of the following is an example of value-added time?
A. Processing time
B. Wait time during inspection
C. Wait time in inventory
D. Both B and C

44. Preferred stock issued in exchange for land would be reported in the statement of cash flows in:
A. the cash flows from financing activities section
B. the cash flows from investing activities section
C. a separate schedule
D. the cash flows from operating activities section

45. A statement of cash flows would not disclose the effects of which of the following transactions?
A. stock dividends declared
B. bonds payable exchanged for capital stock
C. purchase of treasury stock
D. capital stock issued to acquire fixed assets

46. A company purchases equipment for $29,000 cash. This transaction should be shown on the statement of cash flows under:
A. investing activities
B. financing activities
C. noncash investing and financing activities
D. operating activities

47. A building with a book value of $ 45,000 is sold for $50,000 cash Using the indirect method, this transaction should be shown on the statement of cash flows as follows:
A. an increase of $45,000 from investing activities
B. an increase of $50,000 and a deduction from net income of $5,000
C. an increase of $50,000 from investing activities
D. an increase of $45,000 from investing activities and an addition to net income of $5,000

48. On the statement of cash flows, the cash flows from financing activities section would include:
A. receipts from the sale of investments
B. payments for the acquisition of investments
C. receipts from a note receivable
D. receipts from the issuance of capital stock

49. The relationship of $225,000 to $125,000, expressed as a ratio, is:
A. 2.0 to 1
B. 1.8 to 1
C. 1.5 to 1
D. .56 to 1

50. A company with working capital of $400,000 and a current ratio of 2.5 pays a $75,000 short-term liability. The amount of working capital immediately after payment is:
A. $475,000
B. $325,000
C. $400,000
D. $75,000
Submitted: 4 years ago.
Category: Homework
Expert:  Manal Elkhoshkhany replied 4 years ago.

Hello bryan

 

Please advise your deadline for this

 

thank you

Customer: replied 4 years ago.

12/20/09

6pm

Expert:  Manal Elkhoshkhany replied 4 years ago.

Oh that is plenty of time

 

Ok, I will post the solutions as soon as I am done (probably in a couple of hours)

Customer: replied 4 years ago.

All right well i'm heading to bed its 2200 hrs here on the east coast. But will check tomorrow morning when i get up and pay you.

 

thanks

Expert:  Manal Elkhoshkhany replied 4 years ago.

You have a deal

 

Good night :)

Expert:  Manal Elkhoshkhany replied 4 years ago.
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