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Exam 19: Cost Concepts and Cost Allocation

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Question 41

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Which of the following results in a predetermined overhead rate?

A) Estimated overhead divided by estimated units produced
B) Estimated overhead divided by actual direct labor hours
C) Actual units produced divided by estimated overhead
D) Estimated direct labor dollars divided by estimated overhead

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Question 42

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The amount computed for cost of goods manufactured should be the same as the amount transferred from the materials inventory, direct labor, and overhead accounts into the Work in Process Inventory account.

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Question 43

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Both product costs and period costs could appear on the income statement.

Use the information below for the year ended December 31, 20xx, to prepare the statement of cost of goods manufactured.

Which of the following is not a product cost?

Use the information below for the year ended December 31, 20xx, to prepare the statement of cost of goods manufactured. $\begin{array}{lrr}\text { Inventories } & \text { Beginning } & \text { Ending } \\\text { Materials inventory } & \$ 41,000 & \$ 51,000 \\\text { Work in process inventory } & 62,000 & 78,000 \\\text { Direct materials purchased } & & 258,000 \\\text { Total direct labor costs } & & 372,000 \\\text { Total indirect labor costs } & & 67,000 \\\text { Utilities } & & 41,000 \\\text { Depreciation } & &54,000 \\\text { Small tools } & &5,000 \\\text { Factory insurance } & &3,000 \\\text { Factory supervision } & & 66,000 \\\text { Miscellaneous overhead costs } && 11,000\end{array}$

Which of the following is not an example of indirect materials?

Some period costs can be found in inventory accounts on the balance sheet.

The cost of goods manufactured decreases which of the following accounts?

The job order cost card reflects the product cost per unit.

A single predetermined overhead rate is most appropriately used to assign overhead costs when a company produces a diverse set of products.

Depreciation on factory equipment is a value-adding cost.

Which of the following documents initiates the purchasing of materials?

Product costs for a manufacturing company consist of direct materials, direct labor, and overhead.

In a manufacturing environment, costs of materials initially flow

The following information was taken from the cost records of the Krameer Company: $\begin{array}{rr} \text { Estimated overhead } & \$ 180,000 \\\text { Actual overhead } & \$ 178,000 \\\text { Estimated direct labor hours } & 24,000 \\\text { Actual direct labor hours } & 25,000 \\\end{array}$ If overhead is applied based on direct labor hours, the company's overapplied or underapplied overhead was

All manufacturing costs that are assigned to completed (but unsold) products should be classified as

As the management accountant for Bynami Enterprises, Inc., you have been asked to prepare a statement of cost of goods manufactured at the end of the first quarter. Account balances at that time were as follows: $\begin{array}{|lr|}\hline \text { Materials inventory, January 1, 20xx } & \$ 510,500 \\\text { Work in process inventory, January 1, 20xx } & 697,300 \\\text { Finished goods inventory, January 1, 20xx } & 701,200 \\\text { Direct materials purchased during the quarter } & 1,105,400 \\\text { Direct labor costs } & 154,800 \\\text { Depreciation expense, plant and equipment } & 16,200 \\\text { Plant supervisors' salaries } & 50,600 \\\text { Insurance expense, plant and equipment } & 1,100 \\\text { Utilities expense, plant } & 4,000 \\\text { Indirect labor costs } & 16,800 \\\text { Manufacturing supplies expense } & 3,400 \\\text { Small tools expense } & 1,500 \\\hline\end{array}$ March 31 inventories were as follows: materials, $540,200; work in process, $795,400; and finished goods, $604,100. Prepare the statement of cost of goods manufactured for the first quarter of 20xx.

When a company calculates its product unit cost using estimated costs, it is using which cost measurement method?

Sugar is an indirect cost in the manufacture of candy.