week 2 multiple choice

1. Companies that use process costing systems

generally produce large quantities of identical items.

trace costs to specific items produced.

accumulate costs by completed products rather than by departments.

all of these answer choices are correct.

2. A job-order costing system is most likely to be used by a

soft-drink bottler.

breakfast cereal manufacturer.

paint manufacturer.

caterer.

3. Product costs

are also called period costs.

are considered an asset until the finished goods are sold.

become an expense in the period the costs are incurred.

all of these answer choices are correct.

4. Which of the following is a period cost?

Rent on a factory machine

Maintenance on production equipment

Indirect labor

Janitorial costs for the corporate office

5. Current Attempt in Progress

For the list of product manufacturers below, indicate whether a job-cost system or a process-cost system would be most appropriate.

a.		Chemicals processor		select an option                                                           Job-cost SystemProcess-cost System
b.		Paint manufacturer		select an option                                                           Job-cost SystemProcess-cost System
c.		Law firm		select an option                                                           Job-cost SystemProcess-cost System
d.		Producer of molds used by other manufacturing firms to shape their products		select an option                                                           Job-cost SystemProcess-cost System
e.		Dog food producer		select an option                                                           Job-cost SystemProcess-cost System
f.		Custom home builder		select an option                                                           Job-cost SystemProcess-cost System

6. Current Attempt in Progress

Pukalani Manufacturing Company expects annual manufacturing overhead to be $798,000. The company also expects 57,000 direct labor hours costing $1,330,000 and machine run time of 26,600 hours. Calculate predetermined overhead allocation rates based on direct labor hours, direct labor cost, and machine time.  (Round direct labor cost to 2 decimal places, e.g. 15.25 and all other answers to 0 decimal places, e.g. 5,275.)

		Direct labor hours		Direct labor cost		Machine time
Predetermined overhead allocation		$enter a dollar amount rounded to 0 decimal places		$enter a dollar amount rounded to 2 decimal places		$enter a dollar amount rounded to 0 decimal places

7. Current Attempt in Progress

Elkhardt Company is a steel fabricator, and job 325 consists of producing 500 steel supports for Foress Company. Overhead is applied on the basis of direct labor hours, using a predetermined overhead rate of $35 per hour. Direct costs associated with Job 325 are: direct materials, $26,000; direct labor, 250 hours at $16 per hour. Calculate the cost of Job 325.

Cost of Job 325		$enter a dollar amount for Job 325

8. Current Attempt in Progress

During August the Benton Paint Company completed 88,940 cans of paint. At the beginning of August, the company had 922 units that were 75 percent complete with respect to material and 50 percent complete with respect to conversion costs. During the month, the company started production of 93,650 units. How many units were in Work in Process at the end of August?

Work in Process

enter a number of cans in work in process

cans

9. Current Attempt in Progress

The balance in beginning Work in Process at Kennel Rubber Company for direct labor was $137,300. During the month of March, an additional $692,540 of direct labor was incurred, and 31,800 pounds of rubber were produced. At the end of March, 10,700 pounds of rubber were in process and the units were 40 percent complete. At the start of March, the company had 5,800 pounds of rubber that were 30 percent complete. Calculate the cost per equivalent unit for labor, assuming that labor is added uniformly throughout the production process.  (Round answer to 2 decimal places, e.g. 25.26.)

Cost per equivalent unit

$enter the cost per equivalent unit amount in dollars

per pound

10. Current Attempt in Progress

In each case below, fill in the missing amount.

(a)

Case #1		Work in Process, October 1		5,390	gallons
		Units started during October		enter a dollar amount	gallons
		Units completed during October		13,660	gallons
		Work in Process, October 31		2,400	gallons

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