. An example of a direct cost for a service provided by an accounting firm, such as a tax return, would be:
depreciation on computer system
labor of staff accountant who prepared the return
labor of file clerk who filed copies of return
paper on which return is printed
2. In a manufacturing environment, an indirect cost such as ______would usually be allocated to a cost object.
utilities
raw materials
labor of employees who operate manufacturing equipment
labor of administrative secretaries
3. Job order costing:
can only be used in manufacturing
records the flow of costs for each customer
allocates an equal amount of cost to each unit made during a time period
is commonly used when each unit of output is identical
4. A job cost sheet details the:
direct materials purchased and paid
direct labor costs incurred
indirect labor costs incurred
actual support costs incurred
5. In a job order costing system, a manufacturing firm typically uses a cost driver rate to estimate the ______used for a job.
direct materials
direct labor
manufacturing support costs
total costs
6. The normal cost of support activities includes:
costs of resources committed to the particular activity
amounts for additional overtime payments
allowances for idle time
All of the above are correct.
7. For each cost pool, a(n) ______is identified that is the primary factor causing support costs to increase during the accounting period.
activity
job
level
process
8. The predetermined support cost driver rate is calculated using ______support costs.
actual
allocated
direct
estimated
9.
The following information applies to Questions 9 and 10.
Rupe Company has two departments: Machining and Assembly. The following estimates are for the coming year:
MachiningAssembly
Direct labor hours30,00040,000
Machine hours150,000200,000
Manufacturing Support costs$600,000$800,000
A single predetermined manufacturing cost driver rate based on total plant direct labor hours is:
$ 4 per direct labor hour
$10 per direct labor hour
$20 per direct labor hour
$40 per direct labor hour.
10. A predetermined manufacturing cost driver rate for the Machining Department based on the number of machine hours in that department is:
$ 4 per machine hour
$10 per machine hour
$20 per machine hour
$40 per direct labor hour.
11.
The following information applies to Questions 11 and 12.
For 2005, Alex’s Animal Supply Manufacturing uses a normal job order costing system. The accounting records contain the following information:
•Estimated manufacturing support (overhead) costs $100,000
•Actual manufacturing support (overhead) costs $120,000
•Estimated machine hours 20,000
•Actual machine hours 25,000.
•The only cost driver is machine hours.
Using normal job order costing, the 2005 predetermined manufacturing support cost driver rate is:
$4.00 per machine hour
$4.80 per machine hour
$5.00 per machine hour
$6.00 per machine hour
12. Using normal job order costing, the amount of manufacturing support costs allocated to jobs during 2005 is:
$150,000
$125,000
$120,000
$100,000
13.
The following information applies to Questions 13 and 14.
Wisconsin Electronics has received an order for 1,000 specially designed TV/VCR combinations. The following standards were compiled for this order:
Direct materials:
Part #123 - $25 per TV/VCR
Part #456 - $50 per TV/VCR
Direct labor:
2.0 hours per TV/VCR at $15 per hour
Manufacturing support:
$40 per direct labor hour
The estimated direct labor cost for this order is:
$30,000
$40,000
$80,000
$115,000
14. The estimated manufacturing support cost assigned to this order totals:
$30,000
$40,000
$80,000
$115,000
15. Each cost pool:
utilizes a separate cost driver rate
is a subset of total labor costs
can be associated with several normal levels of activity
All of the above are correct.
16. In job order costing, the optimum number of cost pools is ______.
one
more than one
1,000
none
17. Different products consume different proportions of manufacturing support costs because of differences in all of the following
product design
product size
setup time
sales prices
18. Conversion costs:
include all the factors of production
include direct materials
in process costing are usually considered to be added evenly throughout the production process
Both (b) and (c) are correct.
19. Costing systems that are used for the costing of like or similar units of products in mass production are called:
inventory-costing systems
job order costing systems
process-costing systems
conversion costing systems
20. Which of the following manufactured products would use process costing?
polo shirts imprinted with individualized logos
picnic packs containing ketchup, mustard, and relish
customized boats used for racing
handmade stained-glass lamps for recreational rooms
21. Which one of the following statements is false?
In a job order costing system, individual jobs use different quantities of production resources.
In a process-costing system, each unit uses approximately the same amount of resources.
An organization that manufactures several types of cereal would use a job order costing system.
A corporation whose sole business activity is processing the customer deposits of several banks would use a process-costing system.