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| 1 | |
The system where the cost of the job or the service is obtained by assigning costs to a unique, individual job or service is called: |
| | A) | process costing |
| | B) | job costing |
| | C) | activity-based costing |
| | D) | operation costing |
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| 2 | |
Browne Company has no work in process or finished goods inventories at the close of business on December 31 of the previous year. The balances in Browne’s accounts as at December 31 of the current year are as follows:
Cost of goods sold | $3 550 000 | Selling and administrative | $800 000 | Sales revenue | $5 550 000 | Actual manufacturing overhead | $680 000 | Applied manufacturing overhead | $600 000 |
If Browne Company writes off over or underapplied manufacturing overhead to the cost of goods sold, the net profit before taxes for the current year is: |
| | A) | $1 070 000 |
| | B) | $1 280 000 |
| | C) | $1 120 000 |
| | D) | $2 000 000 |
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| 3 | |
Scarlett Company uses a job costing system and an overhead application rate of 120 percent of direct labour cost ($s). Job 22 is charged with direct materials of $24 000 and manufacturing overhead of $9000. Job 23 has direct materials of $2400 and direct labour cost of $6500. The amount of direct labour charged to Job 22 is: |
| | A) | $6500 |
| | B) | $7800 |
| | C) | $7500 |
| | D) | $5417 |
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| 4 | |
Grey Company has two departments- Processing and Packaging - and uses a job costing system. Grey applies overhead in Processing based on machine hours, and in Packaging on direct labour cost. The following information is available:
| Processing | Packaging | Budgeted machine hours | 10000 | 2000 | Budgeted direct labour cost | $80000 | $20000 | Budgeted manufacturing overhead | $150000 | $40000 | Actual manufacturing overhead | $165000 | $35000 |
Product X requires 6 machine hours in the Processing Department and the budgeted direct labour cost of Product X in the Packaging Department is $5. Product X is budgeted to use $25 of direct materials. The predetermined manufacturing overhead application rate per machine hour for the Processing Department is: |
| | A) | $20 |
| | B) | $16.50 |
| | C) | $15 |
| | D) | $2.0625 |
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| 5 | |
Grey Company has two departments - Processing and Packaging - and uses a job costing system. Grey applies overhead in Processing based on machine hours, and in Packaging on direct labour cost. The following information is available:
| Processing | Packaging | Budgeted machine hours | 10000 | 2000 | Budgeted direct labour cost | $80000 | $20000 | Budgeted manufacturing overhead | $150000 | $40000 | Actual manufacturing overhead | $165000 | $35000 |
Product X requires 6 machine hours in the Processing Department, and the budgeted direct labour cost of Product X in the Packaging Department is $5. Product X is budgeted to use $25 of direct materials. The manufacturing cost per unit of Product X is: |
| | A) | 200% |
| | B) | 50% |
| | C) | 57.14% |
| | D) | 187.5% |
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| 6 | |
Grey Company has two departments - Processing and Packaging - and uses a job costing system. Grey applies overhead in Processing based on machine hours, and in Packaging on direct labour cost. The following information is available:
| Processing | Packaging | Budgeted machine hours | 10000 | 2000 | Budgeted direct labour cost | $80000 | $20000 | Budgeted manufacturing overhead | $150000 | $40000 | Actual manufacturing overhead | $165000 | $35000 |
Product X requires 6 machine hours in the Processing Department and the budgeted direct labour cost of Product X in the Packaging Department is $5. Product X is budgeted to use $25 of direct materials. The manufacturing overhead applied to Product X in the Processing Department is: |
| | A) | $120 |
| | B) | $99 |
| | C) | $90 |
| | D) | $12.375 |
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| 7 | |
Grey Company has two departments - Processing and Packaging - and uses a job costing system. Grey applies overhead in Processing based on machine hours, and in Packaging on direct labour cost. The following information is available:
| Processing | Packaging | Budgeted machine hours | 10000 | 2000 | Budgeted direct labour cost | $80000 | $20000 | Budgeted manufacturing overhead | $150000 | $40000 | Actual manufacturing overhead | $165000 | $35000 |
Product X requires 6 machine hours in the Processing Department and the budgeted direct labour cost of Product X in the Packaging Department is $5. Product X is budgeted to use $25 of direct materials. The manufacturing overhead applied to Product X in the Packaging Department is: |
| | A) | $10 |
| | B) | $8.75 |
| | C) | $2.50 |
| | D) | $2.88 |
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| 8 | |
Grey Company has two departments - Processing and Packaging - and uses a job costing system. Grey applies overhead in Processing based on machine hours, and in Packaging on direct labour cost. The following information is available:
| Processing | Packaging | Budgeted machine hours | 10000 | 2000 | Budgeted direct labour cost | $80000 | $20000 | Budgeted manufacturing overhead | $150000 | $40000 | Actual manufacturing overhead | $165000 | $35000 |
Product X requires 6 machine hours in the Processing Department, and the budgeted direct labour cost of Product X in the Packaging Department is $5. Product X is budgeted to use $25 of direct materials. The manufacturing cost per unit of Product X is: |
| | A) | $125 |
| | B) | $130 |
| | C) | $115 |
| | D) | $120 |
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| 9 | |
The costing system that traces all production costs to process or departments, and averages them across all products produced is called: |
| | A) | process costing |
| | B) | job costing |
| | C) | activity-based costing |
| | D) | operation costing |
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| 10 | |
Simple process costing, where there are no work in process inventories and products are identical in their consumption of direct material and production processes, is appropriate for businesses that: |
| | A) | produce a single product or a range of very similar products and have no work in process inventories |
| | B) | complete production at the end of each day and have no work in process inventories |
| | C) | have work in process inventory levels and costs that are reasonably stable from one period to next |
| | D) | all of the given answers |
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