FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 11: Product Costing in Service and Manufacturing Entities

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 61

Multiple Choice

Review LaterAdd Note

Review Later

Ringgold Company had beginning finished goods of $36,000. During the period, the company produced goods that cost $150,000. If the ending balance in the Finished Goods Inventory account was $24,000, the amount of cost of goods sold was:

A) $162,000.
B) $150,000.
C) $138,000.
D) none of these.

E) B) and D)
F) B) and C)

Correct Answer

verified

Show Answer

Question 62

Multiple Choice

Review LaterAdd Note

Review Later

Guest Corporation estimated that total overhead cost would be $23,000 for the current year, but actual overhead costs were $25,500; as a result, Guest spent $2,500 more than expected for overhead cost. This type of variance is known as a(n) :

A) material variance.
B) activity variance.
C) volume variance.
D) spending variance.

E) A) and C)
F) None of the above

Correct Answer

verified

Show Answer

Question 63

Multiple Choice

Review LaterAdd Note

Orlando Company paid $700 cash for production workers' wages. How does this transaction affect the financial statements? $\begin{array}{|l|c|c|c|c|c|c|c|c|c|c|c|}\hline &{\text { Assets }} && = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } \\\hline \text { Cash } & + & \text { WIP Inv. } & & & & & & & & & \\\hline\end{array}$

Herald Company paid $2,800 cash for production supplies. The recognition of this event will:

Oakland Company paid $200 cash for various manufacturing overhead costs, not before recorded. How does this transaction affect the financial statements? $\begin{array} { | l | l | l | l | l | l | l | l | l | l | } \hline { \text { Assets } } & = & \text { Liab. } & + & \text { Equity } & \text { Rev. } & - & \text { Exp. } & = & \text { Net Inc. } \\\hline \text { Cash } & + & \text { Mfg. } \mathrm { OH } & & & & & & & \\\hline\end{array}$

For a manufacturing business, cost of indirect materials is first recorded in the:

Lake Manufacturing estimated its product costs and production volume for the upcoming year by quarter as follows: The company expects a significant increase in volume in the fourth quarter due to holiday sales. The company does not expect overhead costs, which are predominately fixed, to vary with production volume or to vary significantly from previous years. Selling prices are established using a cost plus pricing strategy where cost is the product's estimated quarterly cost. However, the company finds the wide variations in short-term unit cost difficult to use. Specifically, unit cost fluctuations complicate pricing decisions and many other decisions where cost is a consideration.Required: 1) Compute the company's expected cost per unit for each quarter of the year.2) How would you suggest that overhead costs be estimated to solve the company's unit cost problem? Calculate the unit cost per quarter based on your recommendation.

Describe the basic differences between absorption and variable costing. Why are managers sometimes motivated to produce too much inventory when income is computed under an absorption costing system?

Cost of goods sold must be determined prior to computing cost of goods manufactured.

Company X manufactures 3-ring notebooks. All of the following are considered indirect costs except:

Describe the conflict between the need for cost information to make managerial decisions and the timing of the availability of actual cost data. How do companies resolve this conflict?

Product costs are reported on the income statement above gross margin.

Describe the schedule of cost of goods manufactured and sold. What information does it include, and how is it used?

The cost of direct materials flow through all of the following accounts except:

The work in process account is debited when production workers are paid.

Recording depreciation on manufacturing equipment will:

The accounting records for Moss Manufacturing Company included the following cost information relating to its first year of operations: Assume the company produced 10,000 units of inventory and sold 6,000 of these units for $196,000. What amount of finished goods will be reported on the balance sheet at the end of the year under variable costing? $\begin{array} { | l | c r | } \hline \text { Direct materials } & \$ & 60,000 \\\hline \text { Direct labor } & \$ & 80,000 \\\hline \text { Fixed manufacturing overhead } & \$ & 100,000 \\\hline \text { Variable manufacturing overhead } & \$ & 20,000 \\\hline\end{array}$

Applied overhead costs are recorded as decreases in the manufacturing overhead account.

Purchasing production supplies for cash is a(n) :

Cost of goods sold is equal to the cost of goods: