1. Presented is selected information from Till’s April income statement and statement of cost of goods manufactured. Use T-accounts to determine the beginning balance of finished goods inventory on April 1.
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Cost of goods sold $230,000
Cost of goods manufactured $210,000
Ending finished goods inventory, April 30 $40,000
$80,000
$20,000
$60,000
$40,000
- 2.
If a company accumulated $45,000 of actual overhead but applied $48,000 of overhead into work in process, we would conclude
That overhead was incorrectly applied to WIP. |
That overhead was over-applied by $3,000. |
That overhead was under-applied by $3,000. |
That overhead should have been expensed instead of included in WIP. |
3.
Which of the following refers to goods that are produced by a manufacturing company and ready to sell?
supplies inventory |
materials inventory |
work in process inventory |
finished goods inventory |
4. Period costs are classified as inventory until sold and are then expensed as Cost Of Goods Sold.
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True/False
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5. Absorption costing is the idea that all manufacturing overhead should be treated as a period cost and expensed immediately.
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True/False
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6.
Conversion costs are
The combined costs of converting raw materials to finished goods. |
The overhead costs associated with processing a product. |
The direct labor costs associated with processing a product. |
All the costs that go into the manufacturing of a product (DM, DL and OH). |
7.
A company requisitioned $40,000 of materials during the year and incurred direct labor charges of $50,000. If the company began the year with a work-in-process inventory balance of $15,000 and applied overhead of $60,000, what is the ending balance of work-in-process inventory assuming no goods were moved to finished goods inventory for the year?
$150,000 |
$165,000 |
$135,000 |
$85,000 |
8. A company that produces products in “batches” as ordered would most likely use a job order costing system.
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True/False
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9.
Which of the following is NOT a characteristic of product costs?
The costs go into inventory until the product is sold and then the expense flows through Cost of Goods Sold |
They include items such as raw materials, direct labor and manufacturing overhead costs |
They may include overhead costs allocated using a predetermined rate |
These costs get recognized as expenses immediately as incurred |
10.
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Estimated machine hours used to set the predetermined overhead rate were 68,000, while actual hours were 64,000 for the period. Estimated (budgeted) overhead was $142,800. Assuming the company used a predetermined overhead rate, how much overhead was applied for the year?
$142,800
$134,400
$151,725
$136,500