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When selecting a method of inventory costing,a company must consider all of the following except:


A) federal and state income tax regulations.
B) current economic conditions.
C) the flow of materials.
D) its rate of inventory turnover.

E) A) and B)
F) A) and C)

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In a period of rising prices,the use of which of the following cost flow methods would result in the highest tax liability?


A) LIFO
B) FIFO
C) Weighted average cost
D) Moving average cost

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

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Expected annual usage of a particular raw material is 180,000 units,and standard order size is 12,000 units.The invoice cost of each unit is $300,and the cost to place one purchase order is $80.Assuming the company does not maintain safety stock,the average inventory is:


A) 10,000 units.
B) 7,500 units.
C) 15,000 units.
D) 6,000 units.

E) A) and D)
F) A) and C)

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What is the objective of the economic order quantity (EOQ) model for inventory?


A) To minimize order costs or carrying costs,whichever are higher
B) To minimize order costs or carrying costs and maximize the rate of inventory turnover
C) To minimize the total order costs and carrying costs over a period of time
D) To order sufficient quantity to economically meet the next period's demand

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

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Which of the following is not true about backflush costing?


A) Different companies may choose different trigger points.
B) Production costs are attached to products as they move through work in process.
C) A single account is used for raw and in-process materials because materials are issued to production when received from the supplier.
D) Direct labor is usually insignificant in a highly automated system,so is not cost effective to account for it separately.

E) A) and B)
F) A) and C)

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During March,Hart Company incurred the following costs on Job 122 for the manufacture of 200 motors: During March,Hart Company incurred the following costs on Job 122 for the manufacture of 200 motors: Assume the rework costs are to be spread over all jobs that go through the production cycle.What is the journal entry needed to record the rework costs? A) Work in Process 550 Materials 100 Payroll 180 Factory Overhead 270 ​ B) Materials 100 Payroll 180 Factory Overhead 270 Work in Process 550 ​ C) Factory Overhead 550 Materials 100 Payroll 180 Factory Overhead 270 ​ D) Spoiled Goods Inventory 550 Work in Process 550 Assume the rework costs are to be spread over all jobs that go through the production cycle.What is the journal entry needed to record the rework costs?


A) Work in Process 550 Materials 100
Payroll 180
Factory Overhead 270
​
B) Materials 100 Payroll 180
Factory Overhead 270
Work in Process 550
​
C) Factory Overhead 550 Materials 100
Payroll 180
Factory Overhead 270
​
D) Spoiled Goods Inventory 550 Work in Process 550

E) C) and D)
F) A) and C)

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The Beaches Company uses metal grates when assembling appliances.Information as to balances on hand,purchases,and requisitions of the grates is given in the following table. The Beaches Company uses metal grates when assembling appliances.Information as to balances on hand,purchases,and requisitions of the grates is given in the following table. If a perpetual inventory record of the metal grates is maintained on a FIFO basis,the September 6 issue will consist of: A) 15 units @ $2.80,120 units @ $3.10 and 30 units @ $3.34. B) 75 units @ $2.80 and 90 units @ $3.10. C) 165 units @ $3.10. D) 75 units @ $3.10 and 90 units @ $3.34. If a perpetual inventory record of the metal grates is maintained on a FIFO basis,the September 6 issue will consist of:


A) 15 units @ $2.80,120 units @ $3.10 and 30 units @ $3.34.
B) 75 units @ $2.80 and 90 units @ $3.10.
C) 165 units @ $3.10.
D) 75 units @ $3.10 and 90 units @ $3.34.

E) B) and C)
F) A) and B)

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The inventory method which results in the most recent cost being assigned to cost of goods sold is:


A) First-in,first-out.
B) Last-in,first-out.
C) Last-in,last-out.
D) Moving average.

E) All of the above
F) A) and B)

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The following data pertains to Western Company's materials inventory: The following data pertains to Western Company's materials inventory: What is Western Company's EOQ? A) 4,000 pounds B) 800 pounds C) 400 pounds D) 200 pounds What is Western Company's EOQ?


A) 4,000 pounds
B) 800 pounds
C) 400 pounds
D) 200 pounds

E) A) and D)
F) A) and C)

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The personnel involved in the physical control of materials includes all of the following except the:


A) Purchasing agent.
B) Receiving clerk.
C) Cost accountant.
D) Production department supervisor.

E) A) and B)
F) B) and D)

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All of the following methods may be used to account for the revenue from scrap sales except:


A) Credit Factory Overhead,if the scrap cannot be identified with a specific job.
B) Credit Materials,if the scrap would have been able to be recycled.
C) Credit Work in Process,if the scrap is identified with a specific job.
D) Credit Scrap Revenue,which is included in the "Other Income" section of the income statement.

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

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The data used to calculate the order point include all of the following except:


A) the costs of placing an order.
B) the rate at which the material will be used.
C) the estimated time interval between the placement and receipt of an order.
D) the estimated minimum level of inventory needed to protect against stockouts.

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

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The Bisset Corporation uses Raw Material A in a manufacturing process.Information as to balances on hand,purchases,and requisitions of Raw Material A is given in the following table. Raw Material A The Bisset Corporation uses Raw Material A in a manufacturing process.Information as to balances on hand,purchases,and requisitions of Raw Material A is given in the following table. Raw Material A If a perpetual inventory record of Raw Material A is maintained on a FIFO basis,200 units on hand on August 18 will consist of: A) 100 units @ $1.40,80 units @ $1.55 and 20 units @ $1.62. B) 100 units @ $1.55 and 100 units @ $1.62. C) 150 units @ $1.62 and 50 units @ $1.55. D) 200 units @ $1.55. If a perpetual inventory record of Raw Material A is maintained on a FIFO basis,200 units on hand on August 18 will consist of:


A) 100 units @ $1.40,80 units @ $1.55 and 20 units @ $1.62.
B) 100 units @ $1.55 and 100 units @ $1.62.
C) 150 units @ $1.62 and 50 units @ $1.55.
D) 200 units @ $1.55.

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

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A receiving report would include all of the following information except:


A) What the shipment contained.
B) The purchase order number.
C) The customer.
D) The date the materials were received.

E) C) and D)
F) A) and D)

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In a backflush accounting system,a single account is used for the following:


A) Work in process and finished goods inventories.
B) Finished goods inventories and cost of goods sold.
C) Factory overhead and raw materials.
D) Labor and overhead.

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

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The following accounts are maintained by the Sprague Manufacturing Company in its general ledger: Materials,Work in Process,Factory Overhead,and Accounts Payable.The materials account had a debit balance of $40,000 on November 1.A summary of material transactions for November shows: The following accounts are maintained by the Sprague Manufacturing Company in its general ledger: Materials,Work in Process,Factory Overhead,and Accounts Payable.The materials account had a debit balance of $40,000 on November 1.A summary of material transactions for November shows: a.Prepare journal entries to record the materials transactions. b.Post the journal entries to T-accounts. c.What is the balance of the materials account on November 30? a.Prepare journal entries to record the materials transactions. b.Post the journal entries to T-accounts. c.What is the balance of the materials account on November 30?

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blured image (b)
Materials Accounts Payable
Bal.40,0...

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The following data refer to various annual costs relating to the inventory of a single-product company that requires 10,000 units per year: The following data refer to various annual costs relating to the inventory of a single-product company that requires 10,000 units per year: What is the annual carrying cost per unit? A) $ .21 B) $ .29 C) $ .34 D) $ .44 What is the annual carrying cost per unit?


A) $ .21
B) $ .29
C) $ .34
D) $ .44

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

Correct Answer

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Wiggins,Inc.uses sulfuric acid in a manufacturing process.Information as to balances on hand,purchases,and requisitions of acid is given in the following table. Wiggins,Inc.uses sulfuric acid in a manufacturing process.Information as to balances on hand,purchases,and requisitions of acid is given in the following table. If a perpetual inventory record of Raw Material A is maintained on a LIFO basis,the 20,000 units in inventory at July 18 will consist of: A) 5,000 units @ $.72 and 15,000 units @ $.65. B) 10,000 units @ $.60 and 10,000 units @ $.65. C) 2,000 units @ $.72,8,000 units @ $.65 and 10,000 units @ $.60. D) 10,000 units @ $.50,6,000 units @ $.65 and 4,000 units @ $.72. If a perpetual inventory record of Raw Material A is maintained on a LIFO basis,the 20,000 units in inventory at July 18 will consist of:


A) 5,000 units @ $.72 and 15,000 units @ $.65.
B) 10,000 units @ $.60 and 10,000 units @ $.65.
C) 2,000 units @ $.72,8,000 units @ $.65 and 10,000 units @ $.60.
D) 10,000 units @ $.50,6,000 units @ $.65 and 4,000 units @ $.72.

E) A) and C)
F) A) and B)

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Under a backflush accounting system,the following entry is made when products are completed:


A) Debit-Finished Goods Credit-Work In Process
B) Debit-Cost of Goods Sold Credit-Raw and In Process
Credit-Conversion Costs
C) Debit-Finished Goods Credit-Raw and In Process
Credit-Conversion Costs
D) Debit-Cost of Goods Sold Credit-Finished Goods

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

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The inventory method which results in the prices paid for the earliest purchases being assigned to inventory on hand at the end of the period is:


A) First-in,first-out.
B) Last-in,first-out.
C) Last-in,last-out.
D) Moving average.

E) B) and D)
F) None of the above

Correct Answer

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