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| 1 | |
Sid Gupta, a pricing analyst with a large, multinational automotive manufacturer, is investigating the longer-term (strategic) profitability of the replacement vehicle for the current medium-sized family sedan. When undertaking this analysis he should include: |
| | A) | manufacturing costs plus marketing costs |
| | B) | manufacturing costs plus downstream costs |
| | C) | manufacturing costs plus upstream costs |
| | D) | manufacturing costs plus upstream and downstream costs |
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| 2 | |
Bronwyn Stephens is the corporate accountant responsible for preparing the external financial reports for H.J. Roberts Australia Limited. Currently she is preparing the financial statements for year-end and she has the following balances recorded in the general ledger system: Ending balance, Raw materials inventory | $1 800 000 | Selling and Administrative costs | 650 000 | Research and Development costs | 350 000 | Delivery costs | 95 000 | Raw materials procurement costs | 850 000 | Advertising costs | 120 000 | Ending balance, Work in process inventory | 9 200 000 | Cost of goods manufactured | 35 400 000 | Cost of goods sold | 37 200 000 | Promotion costs | 95 000 | Warranty costs | 450 000 | Customer service officers salaries | 520 000 | Ending balance, finished goods inventory | 2 400 000 | Design engineering costs | 450 000 | Product recall costs | 1 350 000 | Sales revenue | 85 000 000 |
What are balances for the inventories that Bronwyn should report in the balance sheet? |
| | A) | Raw materials inventory, $1 800 000; Cost of Goods Manufactured, $35 400 000; Work in process inventory, $9 200 000. |
| | B) | Raw materials inventory, $1 800 000; Cost of Goods Manufactured, $35 400 000; Finished goods inventory, $2 400 000. |
| | C) | Raw materials inventory, $1 800 000; Cost of Goods Manufactured, $35 400 000; Work in process inventory, $9 200 000; Finished goods inventory, $2 400 000. |
| | D) | Raw materials inventory, $1 800 000; Work in process inventory, $9 200 000; Finished goods inventory, $2 400 000. |
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| 3 | |
Bronwyn Stephens is the corporate accountant responsible for preparing the external financial reports for H.J. Roberts Australia Limited. Currently she is preparing the financial statements for year-end and she has the following balances recorded in the general ledger system:
Ending balance, Raw materials inventory | $1 800 000 | Selling and Administrative costs | 650 000 | Research and Development costs | 350 000 | Delivery costs | 95 000 | Raw materials procurement costs | 850 000 | Advertising costs | 120 000 | Ending balance, Work in process inventory | 9 200 000 | Cost of goods manufactured | 35 400 000 | Cost of goods sold | 37 200 000 | Promotion costs | 95 000 | Warranty costs | 450 000 | Customer service officers salaries | 520 000 | Ending balance, finished goods inventory | 2 400 000 | Design engineering costs | 450 000 | Product recall costs | 1 350 000 | Sales revenue | 85 000 000 |
What is the gross profit that Bronwyn should report in the income statement? |
| | A) | $49 600 000. |
| | B) | $47 800 000. |
| | C) | $44 670 000. |
| | D) | $41 870 000. |
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| 4 | |
Bronwyn Stephens is the corporate accountant responsible for preparing the external financial reports for H.J. Roberts Australia Limited. Currently she is preparing the financial statements for year-end and she has the following balances recorded in the general ledger system: Ending balance, Raw materials inventory | $1 800 000 | Selling and Administrative costs | 650 000 | Research and Development costs | 350 000 | Delivery costs | 95 000 | Raw materials procurement costs | 850 000 | Advertising costs | 120 000 | Ending balance, Work in process inventory | 9 200 000 | Cost of goods manufactured | 35 400 000 | Cost of goods sold | 37 200 000 | Promotion costs | 95 000 | Warranty costs | 450 000 | Customer service officers salaries | 520 000 | Ending balance, finished goods inventory | 2 400 000 | Design engineering costs | 450 000 | Product recall costs | 1 350 000 | Sales revenue | 85 000 000 |
What is the net profit that Bronwyn should report in the income statement? |
| | A) | $49 600 000. |
| | B) | $46 800 000. |
| | C) | $44 670 000. |
| | D) | $42 870 000. |
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| 5 | |
As production takes place all manufacturing costs, including direct material, direct labour and manufacturing overhead are charged (debited) to the: |
| | A) | raw materials inventory account |
| | B) | work in process inventory account |
| | C) | finished goods inventory account |
| | D) | cost of goods sold account |
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| 6 | |
As raw materials are purchased, they are charged (debited) to the: |
| | A) | raw material inventory account |
| | B) | work in process inventory account |
| | C) | finished goods inventory account |
| | D) | cost of goods sold account |
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| 7 | |
When valuing inventory, Australian accounting standards require: |
| | A) | the capitalisation of upstream costs |
| | B) | the capitalisation of upstream and downstream costs |
| | C) | upstream costs to be expensed in the period in which they were incurred |
| | D) | upstream and downstream costs to be expensed in the period in which they were incurred |
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| 8 | |
Jason Zammit, a recently appointed trainee accountant, has been assigned the task of accounting for manufacturing overhead for a large multinational manufacturing organisation. Jason seems to have forgotten what he learned in his management accounting studies at university and asks you the following question: What is manufacturing overhead? |
| | A) | Manufacturing overhead includes direct materials, indirect materials, direct labour and indirect labour. |
| | B) | Manufacturing overhead is easily traced to products. |
| | C) | Manufacturing overhead includes all selling and administration costs. |
| | D) | Manufacturing overhead consists of a heterogeneous pool of indirect production costs, such as indirect material, indirect labour, electricity and gas costs, equipment depreciation and insurance and council rates paid for the factory. |
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| 9 | |
Jason Zammit a recently appointed trainee accountant has been assigned the task of accounting for manufacturing overhead for a large multinational manufacturing organisation. Jason is reading information contained in the general ledger for the past three months and he asks you the following question: When I am looking at the right side (credit side) of the manufacturing overhead account, what do these credits represent? You reply with the correct answer which is: |
| | A) | the right side (credit side) of the manufacturing overhead account represents the actual manufacturing overhead costs incurred throughout the accounting period, in this case the past three months |
| | B) | the right side (credit side) of the manufacturing overhead account represents the manufacturing overhead applied to work in process inventory over the past three months |
| | C) | the right side (credit side) of the manufacturing overhead account represents the underapplied manufacturing overhead |
| | D) | the right side (credit side) of the manufacturing overhead account represents the overapplied manufacturing overhead |
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| 10 | |
Neville’s Gnomes Pty Ltd manufactures decorative garden items. The company incurred the following costs to produce job number 33 which consisted of 1 000 Collingwood footy gnomes: Material requisitions numbers 40-45: $8400 <BR>
Direct labour: 420 hours @ $10 per hour <BR>
Manufacturing overhead: applied on the basis of direct labour hours at an application rate of $18 per direct labour hour Job number 33 was completed during the year and the company sold 800 Collingwood footy gnomes. Determine the correct balances in each of the accounts at year-end. |
| | A) | Work in process inventory $4032; finished goods inventory $16 128. |
| | B) | Finished goods inventory $20 160. |
| | C) | Work in process inventory $4032; cost of goods sold $16 128. |
| | D) | Finished goods inventory $4032; cost of goods sold $16 128. |
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