Accounting multiple choice

1. Jasper Corporation

Jasper Corporation incurred the following costs which includes salaries and wages in April:

Salesperson's salaries

$32,000

Factory maintenance

$25,000

Factory insurance

10,000

Administrative utilities

4,000

Factory supervisor salary

30,000

Administrative supplies

1,500

Advertising

10,000

Delivery truck insurance

5,000

Factory machine operator

22,000

Factory machine depreciation

5,500

Direct materials used

30,000

Receptionist salary

17,500

Refer to the Jasper Corporation information above. Total period costs are:

a. $65,000

b. $60,000

c. $38,000

d. $70,000

2. Companies allocate service department costs to other departments for all of the following reasons except:

a. to improve decisions concerning how to use scarce resources.

b. to hold departments that consume the resources accountable for the services they consume.

c. to provide more accurate product cost information.

d. to determine what the salary of service department employees should be.

3. Which of the following is a disadvantage of lean production and just-in-time (JIT) manufacturing systems?

a. Increased customer delivery time

b. Increased product defects

c. Decreased flexibility of manufacturing facilities

d. Increased reliance on fewer suppliers

4. Bost Products Inc.

Bost Products Inc. manufactures plastic products and uses process costing to account for the cost of products manufactured. All product costs are added evenly throughout the production process. The following information was available for the plastic department for the month of December:

Number 20,000

of units

Production

Costs

Beginning work-in-process (60% complete)

$ 72,000

Units started in the current period

300,000

1,809,000

Ending work-in-process (35% complete)

10,000

Refer to the Bost Products Inc. information above. If Bost uses the first-in, first-out (FIFO) method of computing equivalent units and assigning product costs, what is the cost of the ending work-in-process inventory for December?

Select one:

a. $39,000

b. $21,000

c. $20,335

d. $20,790

5. Which of the following types of employees would most likely have their wage be classified as direct labor?

a. Factory maintenance worker

b. Factory supervisor

c. Managerial accountant

d. Assembly-line factory worker

6. Lean production is focused on eliminating waste associated with all of the following except

a. moving products farther than required.

b. down time caused by people waiting for work to do.

c. providing excessive customer service.

d. over-processing a product.

7. Which of the following is a product cost?

a. Insurance on factory machinery

b. Insurance on delivery trucks

c. Lease expense on office computer

d. Advertising costs

8. Which of the following statements is true regarding the weighted-average method of process costing?

a. It assumes that there are an equal number of units in beginning and ending inventories.

b. It assumes that the units in beginning inventory were started into production during the current period.

c. It assumes that the units in beginning inventory were finished last in the current period.

d. It assumes that the units in beginning inventory were the same percentage complete as the units in ending inventory.

9. Which of the following types of employees would most likely have their wage be classified as indirect labor?

a. Factory supervisor

b. Managerial accountant

c. Salesperson

d. Machine operator

10. Which of the following statements is true regarding process costing?

a. Product costs are tracked and assigned to each job.

b. Product costs are tracked to particular departments and then assigned evenly to the products that pass through each department.

c. There should not be any beginning or ending work-in-process inventory.

d. The units produced by a processing department should all be different in some way or another.

11. Which of the following would be classified as a service department?

a. The bottling department of a soft drink manufacturer.

b. The painting department of an automobile manufacturer.

c. The accounting department of a manufacturing company.

d. The claims processing department of an insurance company.

12. Jasper Corporation

Jasper Corporation incurred the following costs which includes salaries and wages in April:

Salesperson's salaries

$32,000

Factory maintenance

$25,000

Factory insurance

10,000

Administrative utilities

4,000

Factory supervisor salary

30,000

Administrative supplies

1,500

Advertising

10,000

Delivery truck insurance

5,000

Factory machine operator

22,000

Factory machine depreciation

5,500

Direct materials used

30,000

Receptionist salary

17,500

Refer to the Jasper Corporation information above. Total product costs are:

Select one:

a. $132,500

b. $154,500

c. $122,500

d. $127,500

13. Lee Manufacturing uses process costing. The following information is available for the current year:

Number of units in beginning inventory

2,000

Number of units started in the current period

10,000

Number of units available in the current period

12,000

Number of units in ending inventory

(1,600)

Number of units completed in the current period

10,400

If Lee uses the FIFO method of process costing, which units are assumed to be the first ones finished during the year?

Select one:

a. The 1,600 units in ending inventory

b. The 10,000 units that were started in the current period

c. The 2,000 units in beginning inventory

d. The 12,000 units that were available in the current period

14. Which of the following is an example of a manufacturing overhead cost?

a. Supplies used by administrative staff.

b. Supplies used by a salesperson.

c. Materials easily traced to a specific product.

d. Lubricants used by factory maintenance workers.

15. A "manufacturing cell" is defined as:

a. grouping of all the machinery and equipment that are needed to make a product being available in one area of the factory.

b. restructuring of the factory so that the companies are able to manufacture products quickly.

c. an area in the warehouse where similar raw materials are grouped together.

d. grouping of all the factories that are engaged in manufacturing similar products.