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ACG 3301 Spring 2011 Exam 1 Review Sec B51

1.An opportunity cost is:A.the difference in total costs which results from selecting one alternative instead of another.B.the benefit forgone by selecting one alternative instead of another.C.a cost which may be saved by not adopting an alternative.D.a cost which may be shifted to the future with little or no effect on current operations.

Lavell Corporation reported the following data for the month of February:

79.The total manufacturing cost for February was:A.$174,000B.$171,000C.$70,000D.$108,000

AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: MeasurementBloom's: ApplicationLearning Objective: 4Learning Objective: 5Level: MediumLavell Corporation reported the following data for the month of February:

80.The cost of goods manufactured for February was:A.$171,000B.$174,000C.$183,000D.$159,000

AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: MeasurementBloom's: ApplicationLearning Objective: 4Learning Objective: 5Level: MediumLavell Corporation reported the following data for the month of February:

81.The cost of goods sold for February was:A.$225,000B.$134,000C.$184,000D.$127,000

AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: MeasurementBloom's: ApplicationLearning Objective: 4Learning Objective: 5

55.The following inventory balances relate to Bharath Manufacturing Corporation at the beginning and end of the year:

Bharath's cost of goods sold was $653,000. What was Bharath's cost of goods manufactured?A.$660,000B.$670,000C.$682,000D.$689,000

Goods available for sale = Cost of goods sold + Finished goods inventory, endingGoods available for sale = $653,000 + $36,000 = $689,000Finished goods inventory, beginning + Cost of goods manufactured= Goods available for sale$29,000 + Cost of goods manufactured = $689,000Cost of goods manufactured = $689,000 - $29,000 = $660,000

AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: MeasurementBloom's: Application

5.Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 8,000 units and of Product B is 6,000 units. There are three activity cost pools, with estimated total cost and expected activity as follows:

The cost per unit of Product A under activity-based costing is closest to:A.$2.40B.$3.90C.$10.59D.$6.60

Calculation of Overhead Costs to Product A:

Cost Per Unit:Product A = $52,800.00 ( 8,000 units = $6.60 per unit

17.Park Company uses the weighted-average method in its process costing system. The Molding Department is the second department in its production process. The data below summarize the department's operations in January.

The accounting records indicate that the conversion cost that had been assigned to beginning work in process inventory was $40,484 and a total of $213,890 in conversion costs were incurred in the department during January. The cost per equivalent unit for conversion costs for January in the Molding Department is closest to:A.$4.823B.$4.186C.$4.650D.$4.590

7.In job-order costing, all of the following statements are correct with respect to labor time and cost except:A.time tickets are kept by employees showing the amount of work on specific jobs.B.the job cost sheet for a job will contain all direct labor charges to that particular job.C.labor cost that can be traced to a job only with a great deal of effort is treated as part of manufacturing overhead.D.a machine operator performing routine annual maintenance work on a piece of equipment would charge the maintenance time to a specific job.

8.Vex Corporation manufactures a variety of products. In the past, Vex had been using a traditional overhead allocation system based on machine hours. For the current year, Vex decided to switch to an activity-based costing system using machine hours and the number of inspections as measures of activity. Information on these measures of activity and related overhead rates for the current year is as follows:

Job #812 for the current year required 15 machine hours and 2 inspections. Would this job have been overcosted or undercosted under the traditional system and by how much?A.undercosted by $36B.undercosted by $44C.overcosted by $80D.undercosted by $80

Estimated overhead = Estimated activity ( Predetermined rate$520,000 = (50,000 ( $8) + (3,000 ( $40)

Traditional overhead rate = Estimated overhead ( Estimated machine hours$10.40 = $520,000 ( 50,000

Traditional overhead allocation = Traditional overhead rate ( Actual machine hours$156 = $10.40 ( 15

Activity-based costing overhead allocation = (Actual machine hours ( Predetermined overhead rate) + (Number of inspections ( Predetermined overhead rate)$200 = (15 ( $8) + (2 ( $40)

The traditional system allocates $156 of overhead whereas the activity-based costing system allocates $200 of overhead; therefore the traditional system undercosted the job by $44.

11.The Assembly Department started the month with 59,000 units in its beginning work in process inventory. An additional 274,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 21,000 units in the ending work in process inventory of the Assembly Department. How many units were transferred to the next processing department during the month?A.333,000B.236,000C.354,000D.312,000

12.Lucas Company uses the weighted-average method in its process costing system. The company adds materials at the beginning of the process in the Forming Department, which is the first of two stages in its production process. Information concerning operations in the Forming Department in October follows:

What was the materials cost of work in process at October 31?A.$3,060B.$5,520C.$6,000D.$6,120

13.Dewey Company uses the weighted-average method in its process costing system. The first processing department, the Welding Department, started the month with 15,000 units in its beginning work in process inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $19,200. An additional 86,000 units were started into production during the month. There were 13,000 units in the ending work in process inventory of the Welding Department that were 60% complete with respect to conversion costs. A total of $575,360 in conversion costs were incurred in the department during the month. The cost per equivalent unit for conversion costs is closest to:A.$5.812B.$6.206C.$6.400D.$6.690

AACSB: AnalyticAICPA BB: Critical ThinkingAICPA FN: MeasurementBloom's: ApplicationLearning Objective: 2Learning Objective: 3Level: Medium12.Ismail Corporation uses the FIFO method in its process costing system. The first processing department, the Forming Department, started the month with 21,000 units in its beginning work in process inventory that were 10% complete with respect to conversion costs. The conversion cost in this beginning work in process inventory was $6,090. An additional 98,000 units were started into production during the month and 95,000 units were completed and transferred to the next processing department. There were 24,000 units in the ending work in process inventory of the Forming Department that were 30% complete with respect to conversion costs. A total of $269,269 in conversion costs were incurred in the department during the month. What would be the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)A.$2.900B.$2.748C.$2.690D.$2.314

16.Kets Corporation uses the FIFO method in its process costing system. Operating data for the Enameling Department for the month of May appear below:

What were the equivalent units for conversion costs in the Enameling Department for May?A.83,190B.80,600C.83,800D.84,400