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23 Aug
2019

Marple Company inadvertently | Good Grade Guarantee!

1. In computing its predetermined overhead rate, Marple Company inadvertently left its indirect labor costsout of the computation. This oversight will cause:A. Manufacturing Overhead to be overapplied.B. The Cost of Goods Manufactured to be understated.C. The debits to the Manufacturing Overhead account to be understated.D. The ending balance in Work in Process to be overstated.2. Which of the following is the correct formula to compute the predetermined overhead rate?A. Estimated total units in the allocation base divided by estimated total manufacturing overhead costs.B. Estimated total manufacturing overhead costs divided by estimated total units in the allocation base.C. Actual total manufacturing overhead costs divided by estimated total units in the allocation base.D. Estimated total manufacturing overhead costs divided by actual total units in the allocation base.3. Which of the following would probably be the least appropriate allocation base for allocating overheadin ahighly automated manufacturer of specialty valves?A. Machine-hoursB. Power consumptionC. Direct labor-hoursD. Machine setups4. What document is used to determine the actual amount of direct labor to record on a job cost sheet?A. Time ticketB. Payroll registerC. Production orderD. Wages payable account5. A proper journal entry to close overapplied manufacturing overhead to Cost of Goods Sold would be:A.B.C.D.MANAGERIAL ACCOUNTING – X122 MID-TERM
2 OF 27Solum Manufacturing Corporation has a traditional costing system in which it applies manufacturingoverheadto its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company hastwoproducts, V47Q and K41P, about which it has provided the following data:V47Q K41PDirect materials per unit $27.50 $62.10Direct labor per unit $15.60 $52.00Direct labor-hours per unit
0.60
2.00
Annual production 40,000 15,000The company’s estimated total manufacturing overhead for the year is $2,449,440 and the company’sestimated total direct labor-hours for the year is 54,000.The company is considering using a variation of activity-based costing to determine its unit product costsforexternal reports. Data for this proposed activity-based costing system appear below:Activity & Activity Measures Estimated Overhead CostAssembling products (DLHs)Preparing batches (batches)
$ 918,000397,440
Product support (product variations) 1,134,000Total $2,449,440Expected ActivityV47Q K41P TotalDLHs 24,000 30,000 54,000Batches 1,458 1,026 2,484Product variations 2,592 1,188 3,780
6. The unit product cost of product K41P under the company’s traditional costing system is closest to:A. $204.82B. $68.70
C. $182.80D. $114.107. The unit product cost of product V47Q under the activity-based costing system is closest to:A. $53.30B. $70.32C. $43.10D. $78.57Diltex Farm Supply is located in a small town in the rural west. Data regarding the store’s operationsfollow:Sales are budgeted at $200,000 for November, $220,000 for December, and $210,000 for January.Collections are expected to be 70% in the month of sale, 27% in the month following the sale, and 3%uncollectible.The cost of goods sold is 62% of sales.The company desires to have an ending merchandise inventory at the end of each month equal to 50% ofthenext month’s cost of goods sold. Payment for merchandise is made in the month following the purchase.Other monthly expenses to be paid in cash are $22,500.Monthly depreciation is $19,000.Ignore taxes.MANAGERIAL ACCOUNTING – X122 MID-TERM3 OF 27Statement of Financial PositionOctober 31AssetsCash $
16,000
Accounts receivable (net of allowance for uncollectible accounts)Merchandise inventory
76,000
71,500
Property, plant & equipment (net of $536,000 accumulated depreciation)Total assets $1,119,500Liabilities & Stockholders’ Equity
956,000
Accounts payable $ 147,000Common stockRetained earnings
840,000132,500
Total Liabilities & Stockholders’ equity $1,119,5008. Expected cash collections in December are:A. $67,400B. $148,000C. $207,400D. $208,0009. The cost of December merchandise purchases would be:A. $143,150B. $78,150C. $139,900D. $152,90010. December cash disbursements for merchandise purchases would be:A. $127,200B. $58,950C. $123,950D. $120,70011. The difference between cash receipts and cash disbursements for December would be:A. $16,900B. $54,800C. $38,400D. $45,60012. The net income for December would be:A. $47,400B. $29,500C. $54,500
D. $35,500MANAGERIAL ACCOUNTING – X122 MID-TERM4 OF 2713. The cash balance at the end of December would be:A. $127,300B. $26,400C. $111,300D. $66,80014. The accounts receivable balance, net of uncollectible accounts, at the end of December would be:A. $81,400B. $112,800C. $59,400D. $53,400Balmforth Products, Inc. makes and sells a single product called a Bik. It takes three yards of Material A tomake one Bik. Budgeted production of Biks for the next five months is as follows:February 14,500 unitsMarch 11,900 unitsApril 14,000 unitsMay 15,500 unitsJune 12,600 unitsThe company wants to maintain monthly ending inventories of Material A equal to 20% of the followingmonth’s production needs. On January 31, this target had not been attained since only 2,000 yards ofMaterialA were on hand. The cost of Material A is $0.80 per yard. The company wants to prepare a Direct MaterialsPurchases Budget.15. The total cost of Material A to be purchased in February is:A. $49,792B. $47,492C. $44,032
D. $38,91216. The desired ending inventory of Material A for the month of March is:A. 9,300 yardsB. 7,140 yardsC. 3,100 yardsD. 8,400 yards17. The total needs (i.e., production requirements plus desired ending inventory) of Material A for themonthof May are:A. 46,500 yardsB. 54,060 yardsC. 55,200 yardsD. 47,640 yardsMANAGERIAL ACCOUNTING – X122 MID-TERM5 OF 27Carpon Lumber sells lumber and general building supplies to building contractors in a medium-sized towninMontana. Data regarding the store’s operations follow:Sales are budgeted at $350,000 for November, $340,000 for December, and $330,000 for January.Collections are expected to be 55% in the month of sale, 44% in the month following the sale, and 1%uncollectible.The cost of goods sold is 75% of sales.The company desires to have an ending merchandise inventory equal to 60% of the next month’s cost ofgoods sold. Payment for merchandise is made in the month following the purchase.Other monthly expenses to be paid in cash are $21,100.Monthly depreciation is $19,000.Ignore taxes.Statement of Financial PositionOctober 31Assets
Cash $
13,000
Accounts receivable (net of allowance for uncollectible accounts)Inventory
82,000
153,000
Property, plant & equipment (net of $598,000 accumulated depreciation) 1,138,000Total assets $1,386,000Liabilities & Stockholders’ EquityAccounts payableCommon stockRetained earnings
257,000600,000529,000
Total Liabilities & stockholders’ equity $1,386,00018. The net income for December would be:A. $60,500B. $38,000C. $41,500D. $55,60019. The cash balance at the end of December would be:A. $15,300B. $44,700C. $57,700D. $66,80020. The accounts receivable balance, net of uncollectible accounts, at the end of December would be:A. $146,100B. $149,600C. $77,600D. $295,700MANAGERIAL ACCOUNTING – X122 MID-TERM6 OF 2721. For a lamp manufacturing company, the cost of the insurance on its vehicles that deliver lamps tocustomers is best described as a:
A. prime cost.B. manufacturing overhead cost.C. period cost.D. differential (incremental) cost of a lamp.22. Manufacturing overhead consists of:A. all manufacturing costs.B. indirect materials but not indirect labor.C. all manufacturing costs, except direct materials and direct labor.D. indirect labor but not indirect materials.23. Which of the following should NOT be included as part of manufacturing overhead at a company thatmakes office furniture?A. Sheet steel in a file cabinet made by the company.B. Manufacturing equipment depreciation.C. Idle time for direct labor.D. Taxes on a factory building.24. Conversion cost consists of which of the following?A. Manufacturing overhead cost.B. Direct materials and direct labor cost.C. Direct labor cost.D. Direct labor and manufacturing overhead cost.25. The advertising costs that Pepsi incurred to air its commercials during the Super Bowl can best bedescribed as a:A. variable cost.B. fixed cost.C. product cost.D. prime cost.26. Each of the following would be a period cost except:A. the salary of the company president’s secretary.
B. the cost of a general accounting office.C. depreciation of a machine used in manufacturing.D. sales commissions.27. Which of the following costs is an example of a period rather than a product cost?A. Depreciation on production equipment.B. Wages of salespersons.C. Wages of production machine operators.D. Insurance on production equipment.MANAGERIAL ACCOUNTING – X122 MID-TERM7 OF 2728. At an activity level of 9,300 machine-hours in a month, Nooner Corporation’s total variable productionengineering cost is $761,300 and its total fixed production engineering cost is $154,008. What would be thetotal production engineering cost per unit, both fixed and variable, at an activity level of 9,200 machinehoursin a month? Assume that this level of activity is within the relevant range.A. $98.60B. $99.67C. $99.49D. $99.1429. Jumpst Corporation uses the cost formula Y = $3,000 + $0.30X for the maintenance cost in DepartmentB,where X is machine-hours. The August budget is based on 20,000 hours of planned machine time.Maintenance cost expected to be incurred during August is:A. $6,600B. $9,000C. $9,300D. $9,60030. Blore Corporation reports that at an activity level of 7,000 units, its total variable cost is $512,000 anditstotal fixed cost is $76,650. What would be the total cost, both fixed and variable, at an activity level of7,500
units? Assume that this level of activity is within the relevant range.A. $625,221B. $623,121C. $617,160D. $609,09931. Given the cost formula Y = $15,000 + $5X, total cost at an activity level of 6,000 units would be:A. $28,000B. $20,000C. $60,000D. $45,00032. At a volume of 10,000 units, Company P incurs $40,000 in factory overhead costs, including $10,000 infixed costs. Assuming that this activity is within the relevant range, if volume increases to 12,000 units,Company P would expect to incur total factory overhead costs of:A. $46,000B. $44,000C. $40,000D. $42,00033. At an activity level of 4,400 units in a month, Goldbach Corporation’s total variable maintenance andrepaircost is $313,000 and its total fixed maintenance and repair cost is $93,104. What would be the totalmaintenance and repair cost, both fixed and variable, at an activity level of 4,600 units in a month? Assumethat this level of activity is within the relevant range.A. $392,495B. $420,331C. $415,980D. $426,736MANAGERIAL ACCOUNTING – X122 MID-TERM8 OF 2734. Which of the following methods of analyzing mixed costs can be used to estimate an equation for themixed cost?
High-Low Least-SquareA. Yes YesB. Yes NoC. No YesD. No No35. Which of the following would be classified as a prevention cost on a quality cost report?A. Lost sales arising from a reputation for poor quality.B. Final product testing and inspection.C. Net cost of spoilage.D. Quality data gathering, analysis, and reporting.36. Which of the following would be classified as a prevention cost on a quality cost report?A. Systems development.B. Disposal of defective products.C. Returns and allowances arising from quality problems.D. Supervision of testing and inspection activities.37. Which of the following would be classified as an appraisal cost on a quality cost report?A. Liability arising from defective products.B. Supervision of testing and inspection activities.C. Technical support provided to suppliers.D. Debugging software errors.38. Which of the following would be classified as an appraisal cost on a quality cost report?A. Rework labor and overhead.B. Lost sales arising from a reputation for poor quality.C. Net cost of scrap.D. Depreciation of test equipment.39. Which of the following would be classified as an internal failure cost on a quality cost report?A. Supplies used in testing and inspection.B. Final product testing and inspection.
C. Net cost of scrap.D. Depreciation of test equipment.40. Which of the following would be classified as an internal failure cost on a quality cost report?A. Cost of field servicing and handling complaints.B. Rework labor and overhead.C. Supervision of testing and inspection activities.D. Final product testing and inspection.41. Which of the following would be classified as an external failure cost on a quality cost report?A. Quality training.B. Systems development.C. Repairs and replacements beyond the warranty period.D. Quality engineering.MANAGERIAL ACCOUNTING – X122 MID-TERM9 OF 2742. Which of the following would be classified as an external failure cost on a quality cost report?A. Net cost of scrap.B. Product recalls.C. Rework labor and overhead.D. Downtime caused by quality problems.43. Greater internal failure costs as a result of appraisal activities generally result in less:A. prevention costs.B. appraisal costs.C. external failure costs.D. all of the above.44. Quality costs:A. relate only to the manufacturing process.B. should be focused on appraisal activities.C. are minimized by having a team of well-trained quality control inspectors.D. cut across departmental lines and often are not accumulated and reported to management.
45. In classifying the costs of quality, which of the following is considered an internal failure cost?A. The cost of inspections.B. The cost of rework.C. The cost of technical support provided to suppliers.D. The cost of processing warranty claims.E. The cost of statistical process control.46. An example of an internal failure cost is:A. maintenance.B. inspection.C. rework.D. product recalls.Eade Company’s quality cost report is to be based on the following data:Systems development $32,000Final product testing & inspection $13,000Quality data gathering, analysis & reporting $12,000Net cost of scrap $60,000Returns arising from quality problems $60,000Depreciation of testing equipment $56,000Rework labor & overhead $18,000Test & inspection of incoming materials $40,000Product recalls $36,000
47. What would be the total prevention cost appearing on the quality cost report?A. $44,000B. $46,000C. $50,000D. $42,000MANAGERIAL ACCOUNTING – X122 MID-TERM10 OF 27
48. What would be the total appraisal cost appearing on the quality cost report?A. $60,000B. $109,000C. $100,000D. $87,00049. What would be the total internal failure cost appearing on the quality cost report?A. $57,000B. $78,000C. $83,000D. $124,00050. What would be the total external failure cost appearing on the quality cost report?A. $286,000B. $96,000C. $137,000D. $133,00051. In a job-order costing system, direct labor cost is ordinarily debited to:A. Manufacturing Overhead.B. Cost of Goods Sold.C. Finished Goods.D. Work in Process.52. The balance in the Work in Process account equals:A. the balance in the Finished Goods inventory account.B. the balance in the Cost of Goods Sold account.C. the balances on the job cost sheets of uncompleted jobs.D. the balance in the Manufacturing Overhead account.53. Martinez Aerospace Company uses a job-order costing system. The direct materials for Job #045391werepurchased in July and put into production in August. The job was not completed by the end of August. Atthe
end of August, in what account would the direct material cost assigned to Job #045391 be located?A. Raw materials inventoryB. Work in process inventoryC. Finished goods inventoryD. Cost of goods manufactured54. Which terms will make the following statement true? When manufacturing overhead is overapplied, theManufacturing Overhead account has a __________ balance and applied manufacturing overhead is greaterthan __________ manufacturing overhead.A. debit, actualB. credit, actualC. debit, estimatedD. credit, estimatedMANAGERIAL ACCOUNTING – X122 MID-TERM11 OF 2755. Which of the following is correct with respect to closing out overapplied manufacturing overhead toCostof Goods Sold versus closing it out to Cost of Goods Sold and Finished Goods and Work in Processinventories?A. The balance in the Work in Process account after allocation will be higher if the overappliedmanufacturingoverhead is closed out by allocating it to all appropriate accounts.B. The balance in the Work in Process account after allocation will be the same under either method.C. Net operating income will be higher if all of the overapplied manufacturing overhead is closed out toCost ofGoods Sold.D. Cost of Goods Sold will be lower if the overapplied manufacturing overhead is closed out by allocatingit tothe inventory accounts as well as to Cost of Goods Sold.Carter Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of themost recent year, the company based its predetermined overhead rate on total estimated overhead of$135,850. Actual manufacturing overhead for the year amounted to $145,000 and actual machine-hourswere
5,660. The company’s predetermined overhead rate for the year was $25.11 per machine-hour.56. The predetermined overhead rate was based on how many estimated machine-hours?A. 6,120B. 5,750C. 6,331D. 5,41057. The applied manufacturing overhead for the year was closest to:A. $134,104B. $147,472C. $142,123D. $138,05658. The overhead for the year was:A. $2,377 overappliedB. $1,131 underappliedC. $1,131 overappliedD. $2,377 underapplied59. The management of Griswell Corporation would like to investigate the possibility of basing itspredetermined overhead rate on activity at capacity. The company’s controller has provided an example toillustrate how this new system would work. In this example, the allocation base is machine-hours and theestimated amount of the allocation base for the upcoming year is 39,000 machine-hours. In addition,capacityis 45,000 machine-hours and the actual level of activity for the year is 41,000 machine-hours. All of themanufacturing overhead is fixed and is $702,000 per year. For simplicity, it is assumed that this is theestimated manufacturing overhead for the year as well as the manufacturing overhead at capacity. It isfurtherassumed that this is also the actual amount of manufacturing overhead for the year. If the company bases itspredetermined overhead rate on capacity, by how much was manufacturing overhead underapplied oroverapplied?A. $74,880 Overapplied
B. $62,400 OverappliedC. $62,400 UnderappliedD. $74,880 UnderappliedMANAGERIAL ACCOUNTING – X122 MID-TERM12 OF 27The management of Bow Corporation would like to investigate the possibility of basing its predeterminedoverhead rate on activity at capacity. The company’s controller has provided an example to illustrate howthisnew system would work. In this example, the allocation base is machine-hours and the estimated amount ofthe allocation base for the upcoming year is 54,000 machine-hours. In addition, capacity is 68,000machinehours and the actual level of activity for the year is 53,100 machine-hours. All of themanufacturing overheadis fixed and is $2,129,760 per year. For simplicity, it is assumed that this is the estimated manufacturingoverhead for the year as well as the manufacturing overhead at capacity. It is further assumed that this isalsothe actual amount of manufacturing overhead for the year. A number of jobs were worked on during theyear,one of which was Job E82X. This job required 100 machine-hours.60. If the company bases its predetermined overhead rate on capacity, the predetermined overhead rate isclosest to:A. $41.92B. $31.32C. $39.44D. $40.1161. If the company bases its predetermined overhead rate on capacity, the amount of manufacturingoverheadcharged to the job E82X is closest to:A. $4,010.85B. $3,672.00C. $3,132.00D. $4,192.4462. If the company bases its predetermined overhead rate on capacity, by how much was manufacturing
overhead underapplied or overapplied?A. $466,668 UnderappliedB. $466,668 OverappliedC. $35,496 OverappliedD. $35,496 UnderappliedWendy works on the assembly line of a manufacturing company where she installs a component part foroneof the company’s products. She is paid $20 per hour for regular time and time and a half for all work inexcessof 40 hours per week.63. Wendy works 45 hours during a week in which there was no idle time. The allocation of Wendy’s wagesforthe week between direct labor cost and manufacturing overhead cost would be:Direct Labor Manufacturing OverheadA. $800 $150B. $950 $0C. $875 $75D. $900 $5064. Which of the following characteristics applies to process costing, but does not apply to job ordercosting?A. The need for averaging.B. The use of equivalent units of production.C. Separate, identifiable jobs.D. The use of predetermined overhead rates.MANAGERIAL ACCOUNTING – X122 MID-TERM13 OF 2765. The cost of beginning inventory under the weighted-average method is:A. added in with current period costs in determining costs per equivalent unit for a given period.B. ignored in determining the costs per equivalent unit for a given period.C. considered separately from costs incurred during the current period.D. subtracted from current period costs in determining costs per equivalent unit for a given period.
66. The Nichols Company uses the weighted-average method in its process costing system. The companyrecorded 29,500 equivalent units for conversion costs for November in a particular department. There were6,000 units in the ending work in process inventory on November 30, 75% complete with respect toconversioncosts. The November 1 work in process inventory consisted of 8,000 units, 50% complete with respect toconversion costs. A total of 25,000 units were completed and transferred out of the department during themonth. The number of units started during November in the department was:A. 24,500 unitsB. 23,000 unitsC. 27,000 unitsD. 21,000 units67. The Assembly Department started the month with 14,000 units in its beginning work in processinventory.An additional 296,000 units were transferred in from the prior department during the month to beginprocessing in the Assembly Department. There were 14,000 units in the ending work in process inventoryofthe Assembly Department.How many units were transferred to the next processing department during the month?A. 293,000B. 310,000C. 324,000D. 296,00068. Diston Company uses the weighted-average method in its process costing system. The first processingdepartment, the Welding Department, started the month with 18,000 units in its beginning work in processinventory that were 30% complete with respect to conversion costs. The conversion cost in this beginningwork in process inventory was $44,820. An additional 90,000 units were started into production during themonth. There were 21,000 units in the ending work in process inventory of the Welding Department thatwere10% complete with respect to conversion costs. A total of $677,970 in conversion costs were incurred in thedepartment during the month.
What would be the cost per equivalent unit for conversion costs for the month? (Round off to three decimalplaces.)A. $8.112B. $8.300C. $7.533D. $6.108MANAGERIAL ACCOUNTING – X122 MID-TERM14 OF 2769. Hardouin Company uses the weighted-average method in its process costing system. The firstprocessingdepartment, the Welding Department, started the month with 22,000 units in its beginning work in processinventory that were 20% complete with respect to conversion costs. The conversion cost in this beginningwork in process inventory was $23,320. An additional 97,000 units were started into production during themonth and 101,000 units were completed in the Welding Department and transferred to the next processingdepartment. There were 18,000 units in the ending work in process inventory of the Welding Departmentthatwere 40% complete with respect to conversion costs. A total of $529,380 in conversion costs were incurredinthe department during the month.What would be the cost per equivalent unit for conversion costs for the month? (Round off to three decimalplaces.)A. $5.300B. $5.458C. $4.603D. $5.10870. Scheney Company uses the weighted-average method in its process costing system. The company’swork inprocess inventory on Mar…

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