docx - 2019-04-09T012835.675

Question 1 Correct 5.00 points out of 5.00 Flag question Question text Continuous improvement: Select one: a. Encourages employees to maintain established business practices. b. Strives to preserve acceptable levels of performance. c. Rejects the notion of "good enough."  d. Is not applicable to most businesses. e. Is possible only in service businesses. Feedback correct   AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: 2 Medium Learning Objective: 01-C6 Describe trends in managerial accounting. Topic: Trends in Managerial Accounting The correct answer is: Rejects the notion of "good enough." Question 2 Correct 5.00 points out of 5.00 Flag question Question text A management concept based on an understanding of the changing wants and needs of customers, and which leads to flexible product designs and production processes, is called: Select one: a. Continuous improvement. b. Customer orientation.  c. Just-in-time. d. Theory of constraints. e. Total quality management. Feedback correct   AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-C6 Describe trends in managerial accounting. Topic: Trends in Managerial Accounting The correct answer is: Customer orientation. Question 3 Correct 5.00 points out of 5.00 Flag question Question text An employee is dissatisfied with the resolution of an ethical conflict with his supervisor at his place of employment. According to the Institute of Management Accountants, the employee's next step should be to Select one: a. contact the IMA. b. contact the next level of management who is not involved in the ethical conflict.  c. make the president of the company aware of the ethical conflict. d. report the incident to the State Board of Accountancy. e. resign from the company. Feedback correct   AACSB: Ethics AICPA: BB Legal AICPA: FN Risk Analysis Blooms: Understand Difficulty: 2 Medium Learning Objective: 01-C1 Explain the purpose and nature of, and the role of ethics in, managerial accounting. Topic: Purpose of Managerial Accounting The correct answer is: contact the next level of management who is not involved in the ethical conflict. Question 4 Correct 5.00 points out of 5.00 Flag question Question text A direct cost is a cost that is: Select one: a. Identifiable as controllable. b. Traceable to the company as a whole. c. Does not change with the volume of activity. d. Traceable to a single cost object.  e. Traceable to multiple cost objects. Feedback correct   AACSB: Analytical Thinking AICPA: BB Resource Management AICPA: FN Measurement Blooms: Remember Difficulty: 2 Medium Learning Objective: 01-C2 Describe accounting concepts useful in classifying costs. Topic: Cost Classification The correct answer is: Traceable to a single cost object. Question 5 Correct 5.00 points out of 5.00 Flag question Question text Products that have been completed and are ready to be sold by the manufacturer are called: Select one: a. Finished goods inventory.  b. Work in Process inventory. c. Raw materials inventory. d. Cost of goods sold. e. Factory supplies. Feedback correct   AACSB: Analytical Thinking AICPA: BB Resource Management AICPA: FN Measurement Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-C4 Explain how balance sheets and income statements for manufacturing, merchandising, and service companies differ. Topic: Balance Sheet The correct answer is: Finished goods inventory. Question 6 Correct 5.00 points out of 5.00 Flag question Question text Goods a company acquires to use in making products are called: Select one: a. Cost of goods sold. b. Raw materials inventory.  c. Finished goods inventory. d. Work in Process inventory. e. Conversion costs. Feedback correct   AACSB: Analytical Thinking AICPA: BB Resource Management AICPA: FN Measurement Blooms: Remember Difficulty: 1 Easy Learning Objective: 01-C4 Explain how balance sheets and income statements for manufacturing, merchandising, and service companies differ. Topic: Balance Sheet The correct answer is: Raw materials inventory. Question 7 Correct 5.00 points out of 5.00 Flag question Question text Using the information below, calculate gross profit for the period. Beginning Raw Materials Inventory $25,000 Ending Direct Materials Inventory $30,000 Beginning Work in Process Inventory $55,000 Ending Work in Process Inventory $64,000 Beginning Finished Goods Inventory $80,000 Ending Finished Goods Inventory $67,000 Cost of Goods Sold for the period $540,000 Sales revenues for the period $1,254,000 Operating expenses for the period $232,000 Select one: a. $714,000.  b. $482,000. c. $1,022,000. d. $187,000. e. $727,000. Feedback Gross Profit = Sales - Cost of Goods Sold; Gross Profit = $1,254,000 - $540,000 = $714,000   question #142 AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 01-P1 Compute cost of goods sold for a manufacturer and for a merchandiser. Topic: Income Statement The correct answer is: $714,000. Question 8 Correct 5.00 points out of 5.00 Flag question Question text The following information pertains to the Frameworks Corporation for May. Calculate the cost of goods sold for the period: Beginning Finished Goods Inventory $19,500 Ending Finished Goods Inventory $18,000 Cost of Goods Manufactured $126,800 Select one: a. $164,300. b. $126,800. c. $125,300. d. $146,300. e. $128,300.  Feedback Cost of Goods Sold = Beginning Finished Goods Inventory + Cost of Goods Manufactured - Ending Finished Goods Inventory Cost of Goods Sold = $19,500 + $126,800 - $18,000 = $128,300   question #140 AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 01-P2 Prepare a schedule of cost of goods manufactured and explain its purpose and links to financial statements. Topic: Schedule of Cost of Goods Manufactured The correct answer is: $128,300. Question 9 Correct 5.00 points out of 5.00 Flag question Question text Using the information below, compute the raw materials inventory turnover: Raw Materials Used $121,600 Beginning Raw Materials Inventory $18,000 Ending Raw Materials Inventory $20,200 Select one: a. 6.76. b. 6.02. c. 54.0. d. 60.6. e. 6.37.  Feedback Raw materials inventory turnover = Raw materials used/Average raw materials inventory Raw materials inventory turnover = $121,600/[($18,000 + $20,200/2] Raw materials inventory turnover = $121,600/$19,100 = 6.37   question #151 AACSB: Analytical Thinking AICPA: BB Resource Management AICPA: FN Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 01-A1 Assess raw materials inventory management using raw materials inventory turnover and days' sales in raw materials inventory. Topic: Raw Materials Inventory Turnover and Days' Sales The correct answer is: 6.37. Question 10 Incorrect 0.00 points out of 5.00 Flag question Question text If overapplied or underapplied overhead is material, it should be disposed of by allocating it to: Select one: a. Cost of goods sold and finished goods inventory.  b. Finished goods inventory and work in process inventory. c. work in process inventory, finished goods inventory, and cost of goods sold. d. work in process inventory. e. Raw materials inventory, work in process inventory, and finished goods inventory. Feedback correct   AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-P4 Determine adjustments for overapplied and underapplied factory overhead. Topic: Underapplied or Overapplied Overhead The correct answer is: work in process inventory, finished goods inventory, and cost of goods sold. Question 11 Correct 5.00 points out of 5.00 Flag question Question text Marshall Enterprises charged the following amounts of overhead to jobs during the year: $20,000 to jobs still in process, $60,000 to jobs completed but not sold, and $120,000 to jobs finished and sold. At year-end, Marshall Enterprise's Factory Overhead account has a credit balance of $5,000, which is not a material amount. What entry should Marshall make at year-end? Select one: a. No entry is needed. b. Debit Factory Overhead $5,000; credit Cost of Goods Sold $5,000.  c. Debit Cost of Goods Sold $5,000; credit Factory Overhead $5,000. d. Debit Factory Overhead $5,000; credit Work in Process Inventory $5,000. e. Debit Factory Overhead $5,000; credit Finished Goods Inventory $5,000. Feedback correct   AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 02-P4 Determine adjustments for overapplied and underapplied factory overhead. Topic: Underapplied or Overapplied Overhead The correct answer is: Debit Factory Overhead $5,000; credit Cost of Goods Sold $5,000. Question 12 Correct 5.00 points out of 5.00 Flag question Question text Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials. What is the ending Raw Materials Inventory balance for March? Select one: a. $46,000 b. $11,000 c. $33,000  d. $24,000 e. $9,000 Feedback Beginning RM $22,000 + RM Purchased $165,000 - Direct RM used $141,000 - Indirect RM used $13,000 = $33,000 Ending RM Balance   AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 02-P1 Describe and record the flow of materials costs in job order costing. Topic: Materials Cost Flows and Documents The correct answer is: $33,000 Question 13 Correct 5.00 points out of 5.00 Flag question Question text If a company applies overhead to production with a predetermined overhead rate, a credit balance in the Factory Overhead account at the end of the period means that: Select one: a. The bookkeeper has made an error because the debits don't equal the credits. b. The balance will be carried forward to the next period as an overhead cost. c. Actual overhead incurred was less than the overhead amount applied to production.  d. The overhead was underapplied for the period. e. Actual overhead was greater than the overhead amount applied to production. Feedback correct   AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-P4 Determine adjustments for overapplied and underapplied factory overhead. Topic: Underapplied or Overapplied Overhead The correct answer is: Actual overhead incurred was less than the overhead amount applied to production. Question 14 Correct 5.00 points out of 5.00 Flag question Question text Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The journal entry to record the application of factory overhead to production is: Select one: a. Debit Work in Process Inventory $225,000; credit Factory Overhead $225,000. b. Debit Work in Process Inventory $165,000; credit Factory Overhead $165,000.  c. Debit Factory Payroll $150,000; credit Work in Process Inventory $150,000. d. Debit Factory Overhead $165,000; credit Work in Process Inventory $165,000. e. Debit Work in Process Inventory $165,000; credit Factory Payroll $165,000. Feedback $110,000 * 1.5 = $165,000   AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 02-P3 Describe and record the flow of overhead costs in job order costing. Topic: Overhead Cost Flows and Documents The correct answer is: Debit Work in Process Inventory $165,000; credit Factory Overhead $165,000. Question 15 Correct 5.00 points out of 5.00 Flag question Question text Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The total manufacturing costs added during the period are: Select one: a. $440,000.  b. $470,000. c. $500,000. d. $570,000. e. $540,000. Feedback $165,000 + $110,000 + ($110,000 * 1.5) = $440,000   AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 02-P1 Describe and record the flow of materials costs in job order costing. Learning Objective: 02-P2 Describe and record the flow of labor costs in job order costing. Learning Objective: 02-P3 Describe and record the flow of overhead costs in job order costing. Topic: Materials Cost Flows and Documents The correct answer is: $440,000. Question 16 Incorrect 0.00 points out of 5.00 Flag question Question text Minstrel Manufacturing uses a job order costing system. During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of $150,000, paid in cash, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead application rate of 150% of direct labor cost. Minstrel's beginning and ending Work in Process Inventory are $15,500 and $27,000 respectively. Compute the cost of product transferred to Finished Goods Inventory: Select one: a. $558,500. b. $440,000.  c. $413,000. d. $428,500. e. $415,000. Feedback $165,000 + $110,000 + ($110,000 * 1.5) + 15,500 - $27,000 = $428,500   AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 02-P3 Describe and record the flow of overhead costs in job order costing. Topic: Overhead Cost Flows and Documents The correct answer is: $428,500. Question 17 Correct 5.00 points out of 5.00 Flag question Question text When factory payroll costs for labor are allocated in a job cost accounting system: Select one: a. Factory Payroll is debited and Work in Process Inventory is credited. b. Work in Process Inventory and Factory Overhead are debited and Factory Payroll is credited.  c. Cost of Goods Manufactured is debited and Direct Labor is credited. d. Direct Labor and Indirect Labor are debited and Factory Payroll is credited. e. Work in Process Inventory is debited and Factory Payroll is credited. Feedback correct   AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Understand Difficulty: 2 Medium Learning Objective: 02-P2 Describe and record the flow of labor costs in job order costing. Topic: Labor Cost Flows and Documents The correct answer is: Work in Process Inventory and Factory Overhead are debited and Factory Payroll is credited. Question 18 Incorrect 0.00 points out of 5.00 Flag question Question text During March, the production department of a process operations system completed and transferred to finished goods 25,000 units that were in process at the beginning of March and 110,000 that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to conversion. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to conversion. Compute the number of equivalent units with respect to both materials and conversion respectively for March using the FIFO method. Select one: a. 165,000; 165,000. b. 135,000; 119,000. c. 140,000; 130,250. d. 165,000; 144,000.  e. 144,000; 144,000. Feedback Equivalent Units   DM Conversion Units to complete BGIP         Direct materials 25,000 * 0% 0     Conversion 25,000 * 45%   11,250 Units started and completed   110,000 110,000 Units in EGIP         Direct materials 30,000 * 100%  30,000     Conversion 30,000 * 30%      9,000 Equivalent units   140,000 130,250   question #141 AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-C4 Appendix 03A-Describe accounting for production activity and preparation of a process cost summary using FIFO. Topic: FIFO Method of Process Costing The correct answer is: 140,000; 130,250. Question 19 Correct 5.00 points out of 5.00 Flag question Question text Using conversion cost per equivalent unit is appropriate for many business that use process costing because: Select one: a. Direct materials and direct labor are usually entered into the production process at the same rate. b. All manufacturing costs are entered into the production process in the same period. c. Equivalent cost per unit is not sufficient measurement of production activity. d. The weighted average method of calculating equivalent units requires it. e. Direct labor and factory overhead enter the production process at the same rate.  Feedback correct   AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-C2 Define and compute equivalent units and explain their use in process costing. Topic: Equivalent Units of Production The correct answer is: Direct labor and factory overhead enter the production process at the same rate. Question 20 Correct 5.00 points out of 5.00 Flag question Question text A company that applies process costing is most frequently characterized by: Select one: a. Low standardization and high production volume. b. Custom orders and mass production. c. Repetitive production and unique products. d. Repetitive production and low production volume. e. Similar products and high production volume.  Feedback correct   AACSB: Communication AICPA: BB Industry AICPA: FN Decision Making Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-C1 Explain process operations and the way they differ from job order operations. Topic: Process Operations The correct answer is: Similar products and high production volume. Question 21 Correct 5.00 points out of 5.00 Flag question Question text A production department's output for the most recent month consisted of 8,000 units completed and transferred to the next stage of production and 5,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method. Select one: a. 6,500 units. b. 9,000 units. c. 13,000 units. d. 5,500 units. e. 10,500 units.  Feedback Units completed and transferred to next stage 8,000 units Units in ending Work in Process inventory (5,000 * 50% complete)  2,500 units   10,500 units   question #84 AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 03-C2 Define and compute equivalent units and explain their use in process costing. Topic: Equivalent Units of Production The correct answer is: 10,500 units. Question 22 Incorrect 0.00 points out of 5.00 Flag question Question text Which of the following is the best explanation for why it is necessary to calculate equivalent units of production in a process costing environment? Select one: a. In most manufacturing environments, it is not possible to conduct a physical count of units.  b. Companies often use a combination of a process costing and job order costing systems. c. In most process costing systems, direct materials are added at the beginning of the process while conversion costs are added evenly throughout the manufacturing process. d. All of the work to make a unit 100% complete and ready to move to the next stage of production or to finished goods inventory may not have been completed in a single time period. e. In most cases, there is no difference between physical units and equivalent units of production. Feedback correct   AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Understand Difficulty: 2 Medium Learning Objective: 03-C2 Define and compute equivalent units and explain their use in process costing. Topic: Equivalent Units of Production The correct answer is: All of the work to make a unit 100% complete and ready to move to the next stage of production or to finished goods inventory may not have been completed in a single time period. Question 23 Correct 5.00 points out of 5.00 Flag question Question text A company uses the weighted-average method for inventory costing. At the end of the period, 22,000 units were in the ending Work in Process inventory and are 100% complete for materials and 75% complete for conversion. The equivalent costs per unit are materials, $2.65 and conversion $5.35. Compute the cost that would be assigned to the ending Work in Process inventory for the period. Select one: a. $146,575.  b. $176,000. c. $87,725. d. $93,775. e. $132,000. Feedback Ending Work in Process Direct materials 22,000 * 100% * $2.65 $58,300 Conversion 22,000 * 75% * $5.35    88,275 Total cost assigned   $146,575   question #146 AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 03-C3 Describe accounting for production activity and preparation of a process cost summary using weighted average. Topic: Process Costing The correct answer is: $146,575. Question 24 Correct 5.00 points out of 5.00 Flag question Question text During December, the production department of a process operations system completed and transferred to finished goods a total of 65,000 units of product. At the end of March, 15,000 additional units were in process in the production department and were 80% complete with respect to materials. The beginning inventory included materials cost of $57,500 and the production department incurred direct materials cost of $183,000 during December. Compute the direct materials cost per equivalent unit for the department using the weighted-average method. Select one: a. $3.70. b. $2.38. c. $2.82. d. $3.12.  e. $4.79. Feedback EUP and cost per EUP   DM Completed and transferred 65,000 * 100% 65,000 Ending Work in Process       Direct materials 15,000 * 80%    12,000 Equivalent units      77,000 Costs of beginning inventory   $57,500 Costs incurred this period    183,000 Total costs   $240,500 Cost per equivalent unit $240,500/77,000 $3.12   question #131 AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 2 Medium Learning Objective: 03-C2 Define and compute equivalent units and explain their use in process costing. Learning Objective: 03-C3 Describe accounting for production activity and preparation of a process cost summary using weighted average. Topic: Equivalent Units of Production Topic: Process Costing The correct answer is: $3.12. Question 25 Correct 5.00 points out of 5.00 Flag question Question text A production department's output for the most recent month consisted of 10,000 units completed and transferred to the next stage of production and 10,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. There were 1,000 units in beginning Work in Process inventory, and they were 70% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method. Select one: a. 10,000 units. b. 10,300 units. c. 15,000 units.  d. 15,300 units. e. 10,700 units. Feedback Units completed and transferred to next stage 10,000 units Units in ending Work in Process inventory (10,000 * 50% complete)  5,000 units   15,000 units   question #83 AACSB: Analytical Thinking AICPA: BB Industry AICPA: FN Measurement Blooms: Apply Difficulty: 3 Hard Learning Objective: 03-C2 Define and compute equivalent units and explain their use in process costing. Topic: Equivalent Units of Production The correct answer is: 15,000 units.