Originally Posted by
Um
The following costing and financial information refers to Bahrain and Saudi Corporation for the year of 2009;
Sales Revenues 2,105,000
Raw Material Inventory (1 January 2009) 89,000
Raw Material Inventory (31 December 2009) 59,000
Purchases of Raw Material during the year 731,000
Direct Labor Cost 474,000
Selling and Administration Expenses 200,000
Indirect Labor Costs 150,000
Depreciation of Administration building 69,000
Property Tax on Factory 90,000
Depreciation on Factory building 125,000
Income Tax expense 25,000
Indirect Material used 45,000
Depreciation on Factory Equipments 60,000
Insurance on Factory and Equipments 40,000
Utilities for Factory 70,000
Work in Process Inventory (1 January 2009) 0
Work in Process Inventory(31 December 2009) 40,000
Finished Goods Inventory (1 January 2009) 35,000
Finished Goods Inventory (31 December 2009) 40,000
Manufacturing overhead Applied 577,500
1) the Manufacturing overhead cost is Over or under applied by;
A. $3,000 under applied.
B. $67,500 over applied.
C. $2,500 under applied.
D. $71,500 under applied.
E. None of the Above.
2) the Company PRIME COST is;
A. $1,815,000
B. $1,385,000
C. $761,000
D. $1,235,000
E. None of the Above.
3) the Company Conversion Cost is;
A. $1,815,000
B. $1,385,000
C. $1,054,000
D. $1,235,000
4) If the Company management policy is to close the over or under applied overhead cost into Cost of Goods sold, which of the following journal entry is correct?
A. Dr Manufacturing overhead applied 577,500
Dr Cost of goods sold 3,000
Cr Manufacturing overhead actual 580,000
B. Dr Manufacturing overhead applied 577,500
Dr Cost of goods sold 2,500
Cr Manufacturing overhead actual 580,000
C. Dr Manufacturing overhead Actual 577,500
Dr Cost of goods sold 2,500
Cr Manufacturing overhead actual 580,000
D. None of the Above.
5) What is the Company Net Income for the year 2009?
A. $38,500
B. $107,500
C. $$635,00
D. None of the above.
6) What is the Company cost of goods manufactured?
A. $1,855,000
B. $1,775,000
C. $1,844,000
D. $1,815,000
E. None of the above.
7) What is the company cost of goods sold?
A. $1,775,000
B. $1,810,000
C. $1,772,500
D. $1,770,000
E. None of the above.
8) In a job order cost accounting system, which account would be debited when raw material is transferred into production?
A. Finished Goods Inventory
B. Work in Process Inventory
C. Factory Overhead
D. Raw Materials Inventory
9) In a job order cost accounting system, which account would be credited when time tickets related to a specific job are recorded?
A. Payroll (Wages)
B. Factory Overhead
C. Finished Goods Inventory
D. Goods in Process Inventory
10) The predetermined overhead rate is $12.20 per direct labor hour. Job 213 required 420 direct labor hours of which 300 hours were incurred during the current accounting period. How much overhead should be applied to Job 213 during the current accounting period?
A. $1,464
B. $5,142
C. $3,660
D. $5,124
11) Which of the following about job cost sheets is not true?
A. Job cost sheets contain only prime costs
B. Job cost sheets contain actual amounts of factory overhead
C. Job cost sheets relate to accounting periods, not individual jobs
D. Job cost sheet contain only conversion costs
E. All of the above
12) Job G34 was unfinished at the end of the accounting period. The total cost assigned to the job is $48,000 of which $12,000 is direct material. Factory overhead is allocated to goods in process at 125% of direct labor cost. What was the amount of direct labor charged to Job G34?
A. $12,000
B. $16,000
C. $36,000
D. Cannot be determined from information given
13) In which of the following would there not be a difference between financial and managerial accounting?
A. Users of the information
B. Usefulness of the information in making decisions
C. Flexibility of practices
D. Purpose of the information
14) Because of changes in the global market place, firms have adopted certain business practices, innovations and philosophies to be able to remain competitive. Which of the following is not one of these business practices or philosophies?
A. Total quality management (TQM)
B. Just-in-time (JIT) manufacturing
C. Mass production
D. Continuous improvement
15) A cost that does not change in proportion to changes in production volume is called which of the following?
A. Fixed cost
B. Controllable cost
C. Sunk cost
D. Variable cost
16) A variable cost is a cost that is classified by which of the following?
A. Its traceability
B. Its controllability
C. Its relevance
D. Its behavior
17) Which of the following is the characteristic that differentiate a sunk cost from other costs?
A. Its behavior
B. Its controllability
C. Its relevance
D. Its traceability
18) A period cost is a cost that is classified by which of the following?
A. Its behavior
B. Its function
C. Its traceability
D. Its relevance
19) Which of the following costs is not capitalized as an inventory cost?
A. Direct material
B. Factory (manufacturing) overhead
C. Direct labor
D. Commissions paid to the sales staff
E. Property taxes on the factory
20) A firm that manufactures wood furniture will classify which of the following as a direct material?
A. Wood used in building the furniture
B. Glue used in assembly
C. Utilities costs of the cutting and sanding departments
D. Wages of workers in the sanding department
E. Depreciation on the factory building
21) A firm had beginning finished goods inventory of $50,000, cost of goods manufactured of $187,500, a gross margin of 200,000, and sales of $350,000. What value was assigned to the ending finished goods inventory?
A. $150,000
B. $100,000
C. $237,500
D. $ 87,500
22) A firm had beginning finished goods inventory of $7,500, ending finished goods inventory of $10,000, and a cost of goods sold of $40,000. What was the cost of goods manufactured?
A. $30,000
B. $32,500
C. $40,000
D. $42,500
23) A firm had $70,000 in direct materials, $120,000 of direct labor and factory overhead was $110,000. The beginning goods in process inventory was $25,000 and the ending goods in process inventory was $15,000. Which of the following is true?
A. Conversion costs are $190,000
B. Prime costs are $180,000
C. Cost of goods manufactured is $310,000
D. Cost of goods manufactured is $290,000
24) Which of the following lines is the best match between cost and cost driver? Cost/Activity Cost Driver
A. Materials handling = Number of units of requisitioned materials
B. Quality inspection = Number of units sold
C. Equipment depreciation = Number of units sold
D. Indirect labor for setups = Number of machines
25) Sales are $900,000. Ending finished goods are $60,000. The cost of goods sold is $600,000. Cost of goods manufactured is $614,000. What is beginning finished goods?
A. $46,000
B. $60,000
C. $74,000
D. $88,000
E. None of the above
26) Direct materials cost is $80,000. Direct labor cost is $60,000. Factory overhead is $90,000. Beginning Work in process is $15,000. Ending work in process is $25,000. Beginning finished goods inventory is $32,000, ending finished goods inventory is $27,000. What is cost of goods sold?
A. $210,000
B. $215,000
C. $220,000
D. $225,000
E. $230,000
27) Manufacturing costs are also known as product costs. Which of the following best describes those costs which are considered to be manufacturing costs?
A. Direct labor and factory overhead.
B. Direct materials and direct labor.
C. Direct materials, direct labor, and factory overhead.
D. Direct materials, direct labor, factory overhead, and some of administrative overhead.
28) Which of the following best describe Activity based costing system?
A. A system that accumulate overhead cost for each activities of the area being costed, and then assign the cost of activates to the product based a specific cost drivers.
B. A system that allocates direct costs to each activities within the company based on a predetermined over head rate.
C. A system that allocates overhead costs to production based on a predetermined over head rate.
D. A system that accumulate overhead cost for each activities of the area being costed.
29) Factory overhead includes all manufacturing costs except direct material and direct labor. Which of the following items would not be considered to be a factory overhead cost?
A. Indirect labor.
B. Repair and maintenance expenditures on factory machinery.
C. Repainting the corporate office building.
D. Small expenditures pertaining to items like rags, screws, adhesives, etc., used in the production process.
E. None of the above.
30) What is the validity of the following statements?
(1) Activity-based costing is not particularly relevant for service industry businesses.
(2) Activity-based costing is an alternative to full costing.
A. (1)True (2) True
B. (1)True(2) False
C. (1)False (2) True
D. (1)False (2) False
31) In activity-based costing, overhead costs are allocated into:
A. Cost groups.
B. Cost pools.
C. Cost accounts.
D. Cost centers.
32) What is the validity of the following statements?
(1) Activity-based costing sees overheads as rendering a service to cost units.
(2) Activity-based costing views direct labor hours as the most important cost driver.
A. (1)True (2) True
B. (1)True (2) False
C. (1)False (2) True
D. (1)False (2) False
33) Which of the following classified as period cost a car manufacturing company?
A. Material cost.
B. Steel cost.
C. Financial manager wages.
D. Indirect wages.
34) With the job order cost system a credit balance in the Factory Overhead account at the end of an accounting period would indicate:
A. That an error in the job cost system has occurred.
B. That the company lost money during the period.
C. The presence of under applied overhead.
D. The presence of over applied overhead.
35) Which of the following staff classified as line position?
A. Factory Forman.
B. Auditor working in an audit firm.
C. Material handling worker.
D. All of the above.
36) Activities that cause costs to be incurred refer to?
A. Activity based costing (ABC)
B. Direct cost.
C. Cost behavior.
D. Cost drivers.
Questions from 40 to 43 are based on the following Case;
VIVA Beach Golf Equipments Inc. manufactures Golf Tools and Equipments, the company incurred several costs items.
From the Point view of Cost classification, answer the following Questions;
37) Metal cost used in Golf clubs is classified as:
A. Variable, product, direct labor, and Manufacturing.
B. Direct Labor, Variable, and Product.
C. Manufacturing, Product, Direct Material and Variable.
D. Manufacturing overhead, Product, Direct Material and Variable.
38) Cost of Natural Gas used to heat factory is classified as;
A. Variable, Period, Direct Material and Manufacturing.
B. Fixed, Period, Direct Material and Manufacturing.
C. Variable, Product, Direct Material and Manufacturing.
D. None of the above.
39) Depreciation on the Word Processing equipments used by the company president secretary is classified as;
A. Period, Fixed, Administrative.
B. Product, Variable, Administrative.
C. Period, manufacturing overhead, Administrative.
D. Period, Fixed, Manufacturing.
40) Salary of the Plant Manager is classified as;
A. Variable, manufacturing overhead, Product. Direct Labor.
B. Fixed, Manufacturing overhead, Product. Direct Labor.
C. Fixed, Manufacturing overhead, Product. Manufacturing overhead.
D. None of the above.
