Exam 1 Review (

8/12/2019 Exam 1 Review (

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AMIS 212 Managerial Accounting

This set of 20 questions, taken from prior examinations, covers topics inChapters 1, 2, 3, and 4.

The purpose of sample multiple choice questions is to acquaint you ith thestyle and su!stance of typical exam questions over this material.

"lease !e a are that#

1. multiple choice format questions are only one of many resourcesavaila!le to prepare for testin$ events % readin$ text!ook chapters andorkin$ throu$h chapter examples, studyin$ the end&of&chapter reviepro!lem and accompanyin$ solution, and revie in$ assi$ned home orkitems and the pu!lished solutions may !e more po erful methods toincrease your understandin$ of the topics covered in the course.

2. the exam questions used this quarter ill !e similar !ut different fromthese example questions % understandin$ the main concepts in eachchapter is critical to success on the testin$ events' remem!erin$ asample question may !e of some help !ut the format of a question on thesame topic often differs renderin$ memory a distant second choice tounderstandin$.

The (uestions#

). Scheney Company uses the weighted-average method in its process costing system. Thecompany's wor in process inventory on March !1 consisted o" 2#$### units. The units inthe ending wor in process inventory were 1##% complete with respect to materials and% complete with respect to la or and overhead. I" the cost per e(uivalent unit "orMarch was )2.*# "or materials and )+.&* "or la or and overhead$ the total cost in theMarch !1 wor in process inventory was,

*+ )1#1$*##. + )11 $*##. C+ )& $*##. -+ )1+*$###.

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se the follo in$ to ans er questions /&10#

4und Company applies manu"acturing overhead to 5o s using a predetermined overhead rate o"&*% o" direct la or cost. Any under- or overapplied overhead cost is closed out to Cost o" 6oodsSold at the end o" the month. 7uring March$ the "ollowing transactions were recorded y thecompany,

/. The alance on March 1 in the 8aw Materials inventory account was,

*+ ) $*##. + )&$*##. C+ )9$*##. -+ ) $*##.

. The entry to dispose o" the under- or overapplied overhead cost "or the month wouldinclude,

*+ a credit o" )2$### to the Manu"acturing :verhead account.+ a de it o" )*$### to the Manu"acturing :verhead account.C+ a credit o" )2$### to Cost o" 6oods Sold.-+ a de it o" )*$### to the Cost o" 6oods Sold.

10. The Cost o" 6oods Manu"actured "or March was,

*+ ) !$###. + ) 1$*##. C+ ) $*##. -+ )*9$*##.

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8aw materials ;all direct materials


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se the follo in$ to ans er questions 11&14#

@ar er Corporation uses the weighted-average method in its process costing system. This month$the eginning inventory in the "irst processing department consisted o" !## units. The costs and

percentage completion o" these units in eginning inventory were,

The ending inventory was *% complete with respect to materials and 2#% complete withrespect to conversion costs.

11. The cost per e(uivalent unit "or materials "or the month in the "irst processing departmentis closest to,

*+ )2*.* + )2 .!* C+ )2*. * -+ )2 . *

12. ow many units are in ending wor in process inventory in the "irst processingdepartment at the end o" the monthB

*+ # + 9## C+ +## -+ $ ##

13. >hat are the e(uivalent units "or conversion costs "or the month in the "irst processingdepartmentB

*+ $ +# + $# C+ 9$+## -+ 1+#

14. The total cost trans"erred "rom the "irst processing department to the ne0t processingdepartment during the month is closest to,

*+ )+&*$22& + )+9*$### C+ )+ 2$# -+ )*1!$+

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Cost

PercentComplete

Materials costs ............. )&$+## *%Conversion costs ..........

)+$9##

**%

A total o" 9$1## units were started and $# units were trans"erred to the second processing department during the month. The "ollowing costs were incurred in the"irst processing department during the month,

Materials costs ........... )2+#$!##Conversion costs ........ )2+2$+##


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1 . The property ta0es on the "actory uilding "or a manu"acturer would e an e0ample o",

Prime Cost Conversion Cost

*+ es es+ Do DoC+ es Do-+ Do es

1). arsons Co. uses a predetermined overhead rate ased on direct la or hours to applymanu"acturing overhead to 5o s. 4ast year arsons incurred )2*#$### in actualmanu"acturing overhead cost. The Manu"acturing :verhead account showed thatoverhead was overapplied in the amount o" )12$### "or the year. I" the predeterminedoverhead rate was ) .## per direct la or hour$ how many hours were wor ed during theyearB

*+ 29$&*# hours + !#$2*# hours C+ !1$2*# hours -+ !2$&*# hours

1 . In a 5o -order cost system$ the application o" manu"acturing overhead usually would erecorded as a de it to,

*+ Einished 6oods inventory. C+ >or in rocess inventory.+ Cost o" 6oods Sold. -+ Manu"acturing :verhead.

se the follo in$ to ans er question 1 #

Cory Company produces re"rigerators. /ach re"rigerator contains a small thermostat that costs)*. 7uring Fune$ ## thermostats were drawn "rom the supply room and installed in re"rigeratorsthat were in the production process. Seventy percent o" these units were completed andtrans"erred into "inished goods warehouses. :" the units completed$ twenty percent were stillunsold at the end o" the month. There were no eginning inventories.

1 . The cost o" thermostats in wor in process at the end o" the month would e,

*+ )9##. + )2$+##. C+ )2$1##. -+ )!$###.

23. The process o" ensuring that the plan is eing "ollowed is called,

*+ directing. + decision ma ing. C+ controlling. -+ planning.

24. In a 5o order cost system using predetermined manu"acturing overhead rates$ indirectmaterials issued into production usually are recorded as an increase in,

*+ Einished 6oods inventory. C+ Manu"acturing :verhead.+ 8aw Materials inventory. -+ >or in rocess inventory.

2 . 7uring the month o" Fuly$ Mc/lroy Company's direct la or cost totaled )! $### anddirect la or cost was #% o" prime cost. I" total manu"acturing costs during Fuly were) *$###$ the manu"acturing overhead was,

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*+ )2+$###. + ) #$###. C+ )2*$###. -+ )+9$###.

2). /(uivalent units "or a process costing system using the weighted-average method would e e(ual to,

*+ units started during the period plus e(uivalent units in the ending wor in processinventory.

+ units completed during the period plus e(uivalent units in the ending wor in processinventory.

C+ units completed during the period less e(uivalent units in the eginning inventory$ plus e(uivalent units in the ending wor in process inventory.

-+ units completed during the period and trans"erred out.

30. The Collins Company uses predetermined overhead rates to apply manu"acturingoverhead to 5o s. The predetermined overhead rate is ased on materials cost in 7ept. Aand on machine hours in 7ept. @. At the eginning o" the year$ the company made the"ollowing estimates,

>hat predetermined overhead rates would e used in 7ept A and 7ept @$ respectivelyB

*+ 1+#% and )+. # + &1% and )+. # C+ &1% and )+.## -+ 1+#% and )+.##

32. A company should use process costing$ rather than 5o order costing$ i",*+ the product is composed o" mass-produced homogeneous units.+ the product goes through several steps o" production.C+ production is only partially completed during the accounting period.-+ the product is manu"actured in atches only as orders are received.

34. 4ast month a manu"acturing company had the "ollowing operating results,

>hat was the cost o" goods manu"actured "or the monthB

*+ )+92$### + )+**$### C+ )+29$### -+ )++2$###

3 . Stover Company uses the weighted-average method in its process costing system.In"ormation concerning 7epartment A "or the month o" Fune "ollows,

/0am 1 ractice 3uestions age *

Dept A Dept BMaterials cost ..................... ) *$### )+2$###Manu"acturing overhead ........ 91$### + $###7irect la or hours................... $### 1#$###Machine hours............ ............ !$### 12$###


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M a t e r i a l sU n i t s C o s t s

> o r i n p r o c e s s $ ' e g i n n i n g . . . . . . . 1 & $ # # # ) 1 2 $ # #S t a r t e d i n F u n e . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 $ # # # - 9 $ & # #= n i t s c o m p l e t e d . . . . . . . . . . . . . . . . . . . . . . . . . * $ # # #> o r i n p r o c e s s $ e n d i n g . . . . . . . . . . . . . 1 + $ # # #

/nding >I is 1##% complete as to materials and #% complete as to conversion. Thecost per e(uivalent unit "or materials costs is closest to,

*+ )#. 9. + )#.9&. C+ )1.#1. -+ )#. !.

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The *ns ers#

. @

. 79. A

1#. 711. 712. A1!. A1+. A1*. 71 . 71&. C19. A2!. C2+. C2*. C2 . @!#. 7!2. A!+. C!*. 7

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Exam 1 Review (