accounting

MBAA

517 Managerial Accounting Student:______________

1.

Taurus Company has set various goals, and management is now taking appropriate action to ensure that the firm achieves these goals. One such action is to reduce outlays for overhead, which have exceeded budgeted amounts. Which of the following functions best describes this process?   

A. 

Decision making.

B. 

Planning.

C. 

Coordinating.

D. 

Controlling.

E. 

Organizing.

 2.

Which of the following is not an objective of managerial accounting? 

A. 

Providing information for decision making and planning.

B. 

Assisting in directing and controlling operations.

C. 

Maximizing profits and minimizing costs.

D. 

Measuring the performance of managers and subunits.

E. 

Motivating managers toward the organization's goals.

3.

The accounting records of Georgia Company revealed the following costs: direct materials used, $250,000; direct labor, $425,000; manufacturing overhead, $375,000; and selling and administrative expenses, $220,000. Georgia's product costs total:   

A. 

$1,050,000.

B. 

$830,000.

C. 

$895,000.

D. 

$1,270,000.

E. 

None of the other answers are correct.

  4.

Costs that are expensed when incurred are called: 

A. 

product costs.

B. 

direct costs.

C. 

inventoriable costs.

D. 

period costs.

E. 

indirect costs.

5.

The accounting records of Reynolds Corporation revealed the following selected costs: Sales commissions, $65,000; plant supervision, $190,000; and administrative expenses, $185,000. Reynolds's period costs total: 

A. 

$250,000.

B. 

$440,000.

C. 

$375,000.

D. 

$255,000.

E. 

$185,000.

6.

Selling and administrative expenses would likely appear on the balance sheet of:   A. The Gap

.

B. 

Texas Instruments.

C. 

Turner Broadcasting System.

D. 

All of these firms.

E. 

None of these firms.

7.

Pruitt Company has developed an integrated system that coordinates the flow of all goods, services, and information into and out of the organization, working with raw material vendors as well as customers to improve service and reduce costs. The firm is said to be using: 

A. 

participative management.

B. 

top-down management.

C. 

strategic cost management.

D. 

supply chain management.

E. 

management by objectives (MBO).

8.

The assignment of direct labor cost to individual jobs is based on:   

A. 

an estimate of the total time spent on the job.

B. 

actual total payroll cost divided equally among all jobs in process.

C.

estimated total payroll cost divided equally among all jobs in process.

D. 

the actual time spent on each job multiplied by the wage rate.

E. 

the estimated time spent on each job multiplied by the wage rate.

9.

22.

Summers Corporation recently used $75,000 of direct materials and $9,000 of indirect materials in production activities. The journal entries reflecting these transactions would include:   

A. 

a debit to Manufacturing Overhead for $9,000.

B. 

a debit to Manufacturing Overhead for $84,000.

C. 

a debit to Raw-Material Inventory for $75,000.

D. 

a debit to Work-in-Process Inventory for $84,000.

E. 

a credit to Manufacturing Overhead for $9,000.

10.

The following information relates to October: Production supervisor's salary: $3,500 Factory maintenance wages: 250 hours at $10 per hour The journal entry to record the preceding information is: 

A. 

B. 

C. 

D. 

E. 

11.

Hamilton, which uses a process-costing system, had a balance in its Work-in-Process account of $68,000 on January 1. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hamilton should make a journal entry on December 31 that includes:   

A. 

a debit to Cost of Goods Sold for $432,000.

B. 

a credit to Finished-Goods Inventory for $432,000.

C. 

a credit to Work-in-Process Inventory for $432,000.

D. 

a debit to Finished-Goods Inventory for $86,000.

E. 

a credit to Work-in-Process Inventory for $86,000.

12.

Hammett has a single production department, and uses a process-costing system. The balance in its Work-in-Process account on January 1 was $68,000. The account was charged with direct materials, direct labor, and manufacturing overhead of $450,000 throughout the year. If a review of the accounting records determined that $86,000 of goods were still in production at year-end, Hammett should make a journal entry on December 31 that includes:   

A. 

a debit to Cost of Goods Sold for $432,000.

B. 

a debit to Finished-Goods Inventory for $432,000.

C. 

a debit to Work-in-Process Inventory for $432,000.

D. 

a debit to Finished-Goods Inventory for $86,000.

E. 

a credit to Work-in-Process Inventory for $86,000.

13.

Lester Corporation had 8,200 units of work in process on November 1. During November, 26,800 units were started and as of November 30, 7,900 units remained in production. How many units were completed during November?   

A. 

16,100.

B. 

26,500.

C. 

27,100.

D. 

42,800.

E. 

None of the other answers are correct.

14.

Kentucky Corporation uses a process-cost accounting system. The company adds direct materials at the start of its production process; conversion cost, on the other hand, is incurred evenly throughout manufacturing. The firm has no beginning work-in-process inventory; its ending work in process is 40% complete. Which of the following sets of percentages would be used to calculate the correct number of equivalent units in the ending work-in-process inventory?   

A. 

Materials, 40%; conversion cost, 40%.

B. 

Materials, 40%; conversion cost, 100%.

C. 

Materials, 100%; conversion cost, 40%.

D. 

Materials, 100%; conversion cost, 60%.

E. 

Materials, 100%; conversion cost, 100%.

15.

Willingham uses a process-costing system for its single product, which is manufactured from Material X and Material Y. X and Y are introduced to the product as follows: Material X: Added at the beginning of manufacturing Material Y: Added at the 75% stage of completion The company started and completed 40,000 units during the period, and had an ending work-in-process inventory amounting to 8,000 units, 20% complete. Which of the following choices correctly expresses the total equivalent units of production for Material X and Material Y?    

A. 

Choice A

B. 

Choice B

C. 

Choice C

D. 

Choice D

E. 

Choice E

16.

Many traditional costing systems:   

A. 

trace manufacturing overhead to individual activities and require the development of numerous activity-costing rates.

B. 

write off manufacturing overhead as an expense of the current period.

C. 

combine widely varying elements of overhead into a single cost pool.

D. 

use a host of different cost drivers (e.g., number of production setups, inspection hours, orders processed) to improve the accuracy of product costing.

E. 

produce results far superior to those achieved with activity-based costing.

17.

In an activity-based costing system, materials receiving would typically be classified as a: 

A. 

unit-level activity.

B. 

batch-level activity.

C. 

product-sustaining activity.

D. 

facility-level activity.

E. 

period-level activity.

18.

Alamo's customer service department follows up on customer complaints by telephone inquiry. During a recent period, the department initiated 7,000 calls and incurred costs of $203,000. If 2,940 of these calls were for the company's wholesale operation (the remainder were for the retail division), costs allocated to the retail division should amount to:   

A. 

$0.

B. 

$29.

C. 

$85,260.

D. 

$117,740.

E. 

$203,000.

19.

Mastel Company has a variable selling cost. If sales volume increases, how will the total variable cost and the variable cost per unit behave?      

A. 

Choice A

B. 

Choice B

C. 

Choice C

D. 

Choice D

E. 

Choice E

20.

What type of cost exhibits the behavior shown below?      

A. 

Variable cost.

B. 

Fixed cost.

C. 

Semivariable cost.

D. 

Step-variable cost.

E. 

Mixed cost.

21.

A review of Parrish Corporation's accounting records found that at a volume of 90,000 units, the variable and fixed cost per unit amounted to $8 and $4, respectively. On the basis of this information, what amount of total cost would Parrish anticipate at a volume of 85,000 units?   

A. 

$1,020,000.

B. 

$1,040,000.

C. 

$1,060,000.

D. 

$1,080,000.

E. 

None of the other answers is correct.