Principles of Cost Accounting, 16th Edition solutions manual and test bank Edward J. Vanderbeck
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- ISBN-13: 9781133187868
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1. The business
entity that converts purchased raw materials into finished goods by using
labor, technology, and facilities is a:
*a. Manufacturer.
b. Merchandiser.
c. Service business.
d. Not-for-profit service agency.
2. The business
entity that purchases finished goods for resale is a:
a. Manufacturer.
*b. Merchandiser.
c. Service business.
d. For-profit service business.
3. The type of
merchandiser who purchases goods from the producer and sells them to shops that
sell them to the consumer is a:
a. Manufacturer.
b. Retailer.
*c. Wholesaler.
d. Service business.
4. Examples of
service businesses include:
*a. Airlines, architects, and hair stylists.
b. Department stores, poster shops, and wholesalers.
c. Aircraft producers, home builders, and machine tool makers.
d. None of these are correct.
5. ISO 9000 is a
set of international standards for:
a. determining the selling price of a product.
b. cost control.
*c. quality management.
d. planning,
6. Unit cost
information is important for making all of the following marketing decisions except:
a. Determining the selling price of a product.
b. Bidding on contracts.
*c. Determining the amount of advertising needed to promote the product.
d. Determining the amount of profit that each product earns.
7. The process
of establishing objectives or goals for the firm and determining the means by
which they will be met is:
a. controlling.
b. analyzing profitability.
*c. planning.
d. assigning responsibility.
8. Control is
the process of monitoring the company’s operations to determine whether the
company’s objectives are being achieved. Effective control is achieved
through all of the following except:
a. periodically measuring and comparing company results.
b. assigning responsibility for costs to employees responsible for those
costs.
*c. constantly monitoring employees to ensure they do exactly as they are
told.
d. taking necessary corrective action when variances warrant doing so.
9. Dan Louis is
the supervisor of the Assembly Department of Wiggerman Corporation. He
has control over and is responsible for manufacturing costs traced to the
department. The Assembly Department is an example of a(n):
*a. cost center.
b. inventory center.
c. supervised work center.
d. worker’s center.
10. Which of the
following items of cost would be least
likely to appear on a performance report based on responsibility accounting for
the supervisor of an assembly line in a large manufacturing situation?
a. Direct labor
b. Indirect materials
*c. Selling expenses
d. Repairs and maintenance
11. Which of the
following items of cost would be least
likely to appear on a performance report based on responsibility accounting for
the supervisor of an assembly line in a large manufacturing situation?
a. Direct labor
*b. Supervisor's salary
c. Materials
d. Repairs and maintenance
12.
Responsibility accounting would most likely hold a manager of a manufacturing
unit responsible for:
a. cost of raw materials.
*b. quantity of raw materials used.
c. the number of units ordered.
d. amount of taxes incurred.
13. Which of the
following statements best describes a characteristic of a performance report
prepared for use by a production line department head?
*a. The costs in the report should include only those controllable by the
department head.
b. The report should be stated in dollars rather than in physical units so
the department head knows the financial magnitude of any variances.
c. The report should include information on all costs chargeable to the
department, regardless of their origin or control.
d. It is more important that the report be precise than timely.
14. A budget:
a. is a monthly financial statement issued to a company’s lenders.
*b. is management’s operating plan expressed in units and dollars.
c. documents the production department’s schedule.
d. is the basis for the annual sales forecast.
15. Joshua
Company prepares monthly performance reports for each department. The
budgeted amounts of wages for the Finishing Department for the month of August
and for the eight-month period ended August 31 were $12,000 and $100,000,
respectively. Actual wages paid through July were $91,500, and wages for
the month of August were $11,800. The month and year-to-date variances,
respectively, for wages on the August performance report would be:
a. $200 F; $8,500 F
*b. $200 F; $3,300 U
c. $200 U; $3,300 U
d. $200 U; $8,500 F
16. The January
performance report for cab no. 52 of Teri’s Taxi Service was as follows:
Expense
|
Budgeted
|
Actual
|
Variance
|
Driver’s wages
|
$2,000
|
$1,800
|
$200 F
|
Gasoline
|
300
|
270
|
30 F
|
Maintenance
|
200
|
400
|
200 U
|
Insurance
|
100
|
110
|
10 U
|
Total
|
$2,600
|
$2,580
|
$ 20 F
|
(A) Possible reason(s) for the variance in the driver’s wages could be:
a. A new driver was assigned to cab no. 52 on January 5, replacing one who
retired after 30 years of service.
b. The cab was in the shop for repairs for a few days.
c. Business was slow so cab no. 52 was idled for two days.
*d. All of the above are possible reasons.
17. As a result
of recent accounting scandals involving companies such as Enron and World Com,
the Sarbanes-Oxley Act of 2002 was written to protect shareholders of public
companies by improving
a. management accounting.
*b. corporate governance.
c. professional competence.
d. the corporate legal process.
18. Which of the
following is not a key element of
the Sarbanes Oxley Act to improve corporate governance?
a. The establishment of the Public Company Accounting Oversight Board
b. Requiring a company’s annual report to contain an internal control
report that includes management’s opinion on the effectiveness of internal
control
c. Severe criminal penalties for retaliation against “whistleblowers”
*d. Requiring that the company’s performance reports are prepared in
accordance with generally accepted accounting principles
19. Cost
accounting differs from financial accounting in that financial accounting:
*a. Is mostly concerned with external financial reporting.
b. Is mostly concerned with individual departments of the company.
c. Provides the additional information required for special reports to
management.
d. Puts more emphasis on future operations.
20. Taylor Logan
is an accountant with the Tanner Corporation. Taylor’s duties include
preparing reports that focus on both historical and estimated data needed to
conduct ongoing operations and do long-range planning. Taylor is a(n)
a. certified financial planner.
*b. management accountant.
c. financial accountant.
d. auditor.
21. The
following data were taken from Mansfield Merchandisers on January 31:
Merchandise inventory, January 1
|
$ 90,000
|
Sales salaries
|
35,000
|
Merchandise inventory, January 31
|
65,000
|
Purchases
|
560,000
|
What was the Cost of goods sold in January?
*a. $585,000
b. $650,000
c. $620,000
d. $535,000
22. Umberg
Merchandise Company’s cost of goods sold last month was $1,350,000. the
Merchandise Inventory at the beginning of the month was $250,000 and there was
$325,000 of Merchandise Inventory at the end of the month. Umberg’s
merchandise purchases were:
a. $1,350,000
b. $1,275,000
*c. $1,425,000
d. $1,675,000
23. Ashley Corp.
had finished goods inventory of $50,000 and $60,000 at April 1 and April 30,
respectively, and cost of goods manufactured of $175,000 in April. Cost
of goods sold in April was:
*a. $165,000
b. $175,000
c. $185,000
d. $225,000
24. The balance
in Post Industries’ Finished Goods account at December 30 was $425,000.
Its December cost of goods manufactured was $1,350,000, its total manufacturing
costs were $1,500,000 and its cost of goods sold in December was
$1,455,000. What was the balance in Post’s Finished Goods at December 1?
a. $380,000
b. $320,000
c. $470,000
*d. $530,000
25. Inventory
accounts for a manufacturer include all of the following except:
*a. Merchandise Inventory.
b. Finished Goods.
c. Work in Process.
d. Materials.
26. For a
manufacturer, the total cost of manufactured goods completed but still on hand
is:
a. Merchandise Inventory.
*b. Finished Goods.
c. Work in Process.
d. Materials.
27. For a
manufacturer, manufacturing costs incurred to date for goods in various stages
of production, but not yet completed
is:
a. Merchandise Inventory.
b. Finished Goods.
*c. Work in Process.
d. Materials.
28. For a
manufacturer, the cost of all materials purchases and on hand to be used in the
manufacturing process is:
a. Merchandise Inventory.
b. Finished Goods.
c. Work in Process.
*d. Materials.
29. In the
financial statements, Materials should be categorized as:
a. Revenue.
b. Expenses.
*c. Assets.
d. Liabilities.
30. A(n)
__________ requires estimating inventory balances during the year for interim
financial statements and shutting down operations to count all inventory items
at the end of the year.
*a. periodic inventory system
b. inventory control account
c. perpetual inventory system
d. inventory cost method
31. Witt
Company, like most manufacturers, maintains a continuous record of purchases,
materials issued into production and balances of all goods in stock, so that
inventory valuation data is available at any time. This is an
example of a(n)
*a. perpetual inventory system.
b. inventory control account.
c. periodic inventory system.
d. inventory cost method.
32. Which of the
following is most likely to be considered an indirect material in the
manufacture of a sofa?
a. Lumber
*b. Glue
c. Fabric
d. Foam rubber
33. The Macke
Company’s payroll summary showed the following in November:
Sales department salaries
|
$10,000
|
Supervisor salaries
|
20,000
|
Assembly workers’ wages
|
25,000
|
Machine operators’ wages
|
35,000
|
Maintenance workers’ wages
|
15,000
|
Accounting department salaries
|
5,000
|
What is the amount that would be included in direct labor in November?
a. $25,000
*b. $60,000
c. $95,000
d. $120,000
34. The wages of
which of the following employees would not
be included in the product cost for a manufacturer of custom-built home
cooking appliances?
*a. shipping clerk
b. appliance body welder
c. factory janitor
d. shop floor supervisor
35. The Shiplett
Company’s payroll summary showed the following in November:
Supervisors’ salaries
|
$40,000
|
Legal department salaries
|
10,000
|
Maintenance workers’ wages
|
30,000
|
Machine operators’ wages
|
70,000
|
Assembly workers’ wages
|
50,000
|
Sales department salaries
|
20,000
|
What is the amount that would be included in factory overhead in November?
a. $240,000
b. $190,000
*c. $70,000
d. $30,000
36. Factory
overhead includes:
a. Indirect labor but not indirect materials.
b. Indirect materials but not indirect labor.
c. All manufacturing costs, except indirect materials and indirect labor.
*d. All manufacturing costs, except direct materials and direct labor.
37. A typical
factory overhead cost is:
a. Freight out.
b. Stationery and printing.
*c. Depreciation on machinery and equipment.
d. Postage.
38. Factory
overhead would include:
a. Wages of office clerk.
b. Sales manager’s salary.
*c. Supervisor’s salary.
d. Tax accountant’s salary.
39. The term
"prime cost" refers to:
a. The sum of direct labor costs and all factory overhead costs.
*b. The sum of direct material costs and direct labor costs.
c. All costs associated with manufacturing other than direct labor costs
and direct material costs.
d. Manufacturing costs incurred to produce units of output.
40. The
following data are from Burton Corporation, a manufacturer, for the month of
September:
Direct materials used
|
$135,000
|
Supervisors’ salaries
|
6,000
|
Machine operators’ wages
|
200,000
|
Sales office rent and utilities
|
22,000
|
Machine depreciation
|
35,000
|
Secretary to the Chief Executive Officer salary
|
3,000
|
Factory insurance
|
15,000
|
Compute the prime costs.
a. $344,000
b. $135,000
*c. $335,000
d. $256,000
41. The term
"conversion costs" refers to:
*a. The sum of direct labor costs and all factory overhead costs.
b. The sum of direct material costs and direct labor costs.
c. All costs associated with manufacturing other than direct labor costs.
d. Direct labor costs incurred to produce units of output.
42. The
following data are from Baker Company, a manufacturer, for the month of
October:
Machine operators’ wages
|
$100,000
|
Supervisors’ salaries
|
3,000
|
Factory insurance
|
7,500
|
Secretary to the Chief Executive Officer salary
|
1,500
|
Machine depreciation
|
17,500
|
Sales office rent and utilities
|
11,000
|
Direct materials used
|
67,500
|
Compute the conversion costs.
a. $167,500
b. $104,500
c. $140,500
*d. $128,000
43. Payroll is
debited and Wages Payable is credited to:
a. Pay the payroll taxes.
*b. Record the payroll.
c. Pay the payroll.
d. Distribute the payroll.
44. Which of the
following is not a cost that is
accumulated in Work in Process?
a. Direct materials
*b. Administrative expense
c. Direct labor
d. Factory overhead
45. The entry to
record depreciation of the production equipment would be:
a. Debit - Depreciation Expense - Equipment
Credit - Accumulated Depreciation - Equipment
Credit - Accumulated Depreciation - Equipment
b. Debit - Depreciation Expense - Equipment
Credit - Factory Overhead
Credit - Factory Overhead
*c. Debit - Factory Overhead
Credit - Accumulated Depreciation - Equipment
Credit - Accumulated Depreciation - Equipment
d. Debit - Work-in-Process
Credit - Accumulated Depreciation - Equipment
Credit - Accumulated Depreciation - Equipment
46. At a certain
level of operations, per unit costs and selling price are as follows:
manufacturing costs, $50; selling and administrative expenses, $10; selling
price, $80. Given this information, the mark-on percentage to
manufacturing cost used to determine selling price must have been:
a. 40 percent.
*b. 60 percent.
c. 33 percent.
d. 25 percent.
47. Arnold
Furniture Company produced 4,000 chairs in July. The manufacturing costs
were:
Direct materials
|
$25,000
|
Direct labor
|
11,000
|
Factory overhead
|
12,000
|
Selling expense
|
5,000
|
Administrative expense
|
6,000
|
The cost per tent is:
a. $14.75.
*b. $12.00.
c. $9.00.
d. $6.25.
48. Mountain
Company produced 20,000 blankets in June to be sold during the holiday
season. The manufacturing costs were:
Direct materials
|
$125,000
|
Direct labor
|
55,000
|
Factory overhead
|
60,000
|
Management has decided that the mark-on percentage necessary to cover the product’s share of selling and administrative expenses and to earn a satisfactory profit is 30%. The selling price per blanket should be:
a. $12.00.
*b. $15.60.
c. $23.60.
d. $31.20.
49. The
statement of costs of goods manufactured shows:
a. Office supplies used in accounting office.
*b. Deprecation of factory building.
c. Salary of sales manager.
d. Rent paid on finished goods warehouse.
50. Selected
data concerning the past fiscal year's operations (000's omitted) of the
Stanley Manufacturing Company are presented below:
INVENTORIES
|
||
Beginning
|
Ending
|
|
Materials
|
$ 90
|
$ 85
|
Work in process
|
50
|
65
|
Finished goods
|
100
|
90
|
Other data:
|
||
Direct materials used
|
$365
|
|
Total manufacturing costs charged to
production during the year (includes direct materials,
direct labor, and factory overhead)
|
680 |
|
Cost of goods available for sale
|
765
|
|
Selling and general expenses
|
250
|
|
Assuming Stanley does not use indirect materials, the cost of materials purchased during the year amounted to:
a. $455.
b. $450.
c. $365.
*d. $360.
51. Selected
data concerning the past fiscal year's operations (000's omitted) of Kraig
Fabricators are presented below:
INVENTORIES
|
||
Beginning
|
Ending
|
|
Materials
|
$180
|
$ 170
|
Work in process
|
100
|
130
|
Finished goods
|
200
|
180
|
Other data:
|
||
Direct materials used
|
$ 730
|
|
Total manufacturing costs charged to
production during
the year (includes direct materials, direct labor, and factory overhead) |
1,360 |
|
Cost of goods available for sale
|
1,530
|
|
Selling and general expenses
|
500
|
|
The cost of goods manufactured during the year was:
a. $1,410.
*b. $1,330.
c. $1,420.
d. $1,470.
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