AC505 Week 2 Quiz answers

AC505 Week 2 Quiz

  1. (TCO 2) Bubba’s Crawfish Processing Company uses a traditional overhead allocation based on direct labor hours. For the current year overhead is estimated at $2,250,000 and direct labor hours are budgeted at 415,000 hours. Actual overhead was $2,200,000 and actual direct labor hours worked were 422,000.

 

(a) Calculate the predetermined overhead rate.

(b) Calculate the overhead applied.

(c) Determine the amount of overhead that is over/underapplied.

 

  1. (TCO 2) Thibodeaux Limousine Corporation is trying to determine a predetermined manufacturing overhead. Estimated overhead for the upcoming year is $776,000. Budgeted machine hours are 105,000 hours, and budgeted labor hours are 17,500 hours at a rate of $10.00 per hour. Compute the predetermined overhead rate based on:

 

(a) Direct labor dollars

(b) Direct labor hours

(c) Machine hours

 

  1. (TCO 1) List and briefly describe four of the five differences between managerial accounting and financial accounting

 

  1. (TCO 2)The following information is available for Sappy’s Surgical Shears for the fiscal year ending December 31, 20XX.

 

Beginning balance in Finished Goods  $  17,000

Ending balance in Finished Goods  15,200

Beginning balance in Work in Process 2,500

Ending balance in Work in Process 1,836

Selling expenses  123,000

General and administrative expenses    89,000

Direct material cost  54,500

Direct labor cost  66,000

Manufacturing overhead 21,400

Sales  385,000

 

Prepare a schedule of cost of goods manufactured.

 

  1. (TCO 2) Match each of the following six terms with the phrase that most closely describes it. Each answer below may be used only once.

 

______  1.  activity-based costing

______  2.   cost of goods available for sale

______  3.   period costs

______  4.   process costing system

______  5.   just-in-time system

______  6.   work in process

 

(A) Costs assigned to the goods produced; also known as manufacturing costs

(B) Materials costs that are not traced directly to products produced

(C) System that seeks to minimize Raw Materials Inventory and Work in Process Inventory

(D) Cost of items that are completed and transferred from Work in Process Inventory to Finished Goods Inventory

(E) Costs that are identified with accounting periods rather than with goods produced

(F) Actual overhead is greater than overhead that has been applied to products

(G) Method of assigning overhead costs that uses multiple allocation bases

(H) System that uses job-order sheets to collect costs for each individual job

(I) Cost of all materials and parts that are directly traced to the items produced

(J) Beginning balance in the Finished Goods Inventory plus cost of goods manufactured

(K) Overhead applied to products is greater than the actual overhead costs incurred

(L) Used by companies that produce large quantities of identical items

(M) Cost of all manufacturing activities other than direct material and direct labor

(N) Inventory account that contains the cost of goods that are only partially completed

  1. (TCO 2) Far Out Ceramics makes custom macaroni tile and applies job-order costing. The following information relates to the fiscal year ending December 31, 20XX.

Beginning balance in Raw Materials Inventory  $  12,500

Purchases of raw material  189,000

Ending balance in Raw Materials Inventory  14,300

Beginning balance in Work in Process  24,500

Ending balance in Work in Process  23,100

Direct labor cost  89,700

Manufacturing overhead applied  66,200

Actual manufacturing overhead 64,100

Beginning balance in Finished Goods  28,900

Ending balance in Finished Goods  24,300

Sales  432,000

Selling expenses  120,000

General and administrative expenses  86,000

How much is cost of goods sold?

  1. (TCO 2) Match each of the six following terms with the phrase that most closely describes it. Each answer may be used only once.

_____  1. Direct costs

_____  2. Fixed costs

_____  3. Incremental costs

_____  4. Economic Resource Planning system

_____  5. Noncontrollable costs

_____  6. Opportunity costs

(A) Costs that increase or decrease in total in response to increases or decreases in the level of business activity

(B) Costs that are directly traceable to a product, activity, or department

(C) Costs that a manager can influence

(D) The difference in costs between decision alternatives

(E) Costs incurred in the past that are not relevant to present decisions

(F) Costs that cannot be influenced by a manager

(G) Financial plans prepared by management accountants

(H) Value of the benefits foregone when one decision alternative is selected over another

(I) Costs that cannot be directly traced to a product, activity, or department or are not worth tracing

(J) Costs that do not change in total with changes in the level of business activity

(K) These systems prepare a master production systems and all the support across the company.

(L) Allows companies and suppliers to share information to improve efficiency in getting inputs.

(M) Allows customer data analysis and support, often in online format for customers.

  1. (TCO 3) The Marinade Department began the period with 150,000 units. During the period the department received another 180,000 units from the prior department and at the end of the period 112,000 units remained which were 17% complete. How much are equivalent units in The Marinade Department’s work in process inventory at the end of the period?

(TCO 3)  The Franc Zeppo Venture manufactures a product that goes through two processing departments.  Information relating to the activity in the first department during  April is given below :

Work in process, April 1:  50,000 units (80% completed for materials and 60% completed for conversion.

Work in process, April 30:  45,000 units (70% completed for materials and 60% completed for conversion.

The department started 380,000 units into production during the month and transferred 385,000 completed units to the next department.

Compute and calculate the equivalent units of production for the first department for April, assuming the company uses the weighted-average method of accounting for units and costs.

 

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