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cost accounting

cost accounting

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This document is a review of cost accounting with the syllabus patterned with the book of Raiborn.
This document is a review of cost accounting with the syllabus patterned with the book of Raiborn.

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Published by: Carl Angelo E. Cupay on May 24, 2011
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01/09/2015

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Cost Accounting QE
 ___ 1 McCoy Company has the following information available for October when 3,500 units were produced (round answersto the nearest dollar).Standards:Material 3.5 pounds per unit @ $4.50 per poundLabor 5.0 hours per unit @ $10.25 per hourActual:Material purchased 12,300 pounds @ $4.25Material used 11,750 pounds17,300 direct labor hours @ $10.20 per hourWhat is the labor rate variance?a. $875 F b. $865 F c. $865 U d. $875 U ___ 2 Western Co. has total budgeted fixed costs of $72,000. Actual production of 5,500 units resulted in a $6,000unfavorable volume variance. What normal capacity was used to determine the fixed overhead rate?a. 5,000 b. 5,500 c. 6,000 d. Cannot be determined without further information. ___ 3 The term "relevant range" as used in cost accounting means the range over whicha. costs may fluctuate. b. cost relationships are valid. c. production may vary. d. relevant costs are incurred. ___ 4 Which of the following is not a valid method for determining product cost?a. arbitrary assignment b. direct measurement c. systematic allocation d. cost-benefit measurement ___ 5 Denver Enterprises recently used 14,000 labor hours to produce 7,500 completed units. According to manufacturingspecifications, each unit is anticipated to take two hours to complete. The company's actual payroll cost amounted to$158,200. If the standard labor cost per hour is $11, Denver's labor efficiency variance is:A. $11,000U. B. $11,000F. C. $11,300U. D. $11,300F. E. none of the above. ___ 6 The following July information is for Marley Company:Standards:Material 3.0 feet per unit @ $4.20 per footLabor 2.5 hours per unit @ $7.50 per hourActual:Production 2,750 units produced during the monthMaterial 8,700 feet used; 9,000 feet purchased @ $4.50 per footLabor 7,000 direct labor hours @ $7.90 per hour(Round all answers to the nearest dollar.)What is the material price variance (calculated at point of purchase)?a. $2,700 U b. $2,700 F c. $2,610 F d. $2,610 U ___ 7 Benchmarking allows a company toa. identify its strengths and weaknesses. b. imitate those ideas that are readily transferable.c. improve on methods in use by others. d. all of the above.
 
 ___ 8 Which of the following journal entries definitely contains an error?A. Raw-Material Inventory 200,000Direct-Material Price Variance 5,000Accounts Payable 205,000B. Raw-Material Inventory 38,000Direct-Material Price Variance 2,000Accounts Payable 36,000C. Raw-Material Inventory 156,000Direct-Material Price Variance 8,000Work-in-Process Inventory 148,000D. Work-in-Process Inventory 67,000Direct-Material Quantity Variance 3,000Raw-Material Inventory 70,000E. Work-in-Process Inventory 79,000Direct-Material Quantity Variance 4,000Raw-Material Inventory 75,000 ___ 9 At the end of the last fiscal year, Roberts Company had the following account balances:Overapplied overhead $ 6,000Cost of Goods Sold $980,000Work in Process Inventory $ 38,000Finished Goods Inventory $ 82,000If the most common treatment of assigning overapplied overhead were used, the final balance in Cost of Goods Sold is:a. $974,000. b. $974,660. c. $985,340. d. $986,000. ___ 10 Value reflects the ability of a product toa. provide the best quality at any price.b. have all possible product and service characteristics.c. meet the majority of a customer's needs at the lowest possible price.d. have the longest technical or service life and the best warranty. ___ 11 Injection Molding, Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, directmaterials and conversion costs. Each product must pass through Department A and Department B. Direct materials areadded at the beginning of production. Conversion costs are allocated evenly throughout production.Data for Department A for February 2010 are:Work in process, beginning inventory,40% converted 200 unitsUnits started during February 600 unitsWork in process, ending inventory: 100 units30% complete as to conversion costs100% complete as to materialsWhat were the equivalent units of direct materials and conversion costs, respectively, at the end of February? AssumeInjection Molding, Inc., uses the weighted-average process costing method.a. 800, 730 b. 800, 800 c. 800, 700 d. 600, 500
 
 ___ 12 Forrest Company uses a standard cost system for its production process and applies overhead based on direct laborhours. The following information is available for August when Forrest made 4,500 units:Standard:DLH per unit 2.50Variable overhead per DLH $1.75Fixed overhead per DLH $3.10Budgeted variable overhead $21,875Budgeted fixed overhead $38,750Actual:Direct labor hours 10,000Variable overhead $26,250Fixed overhead $38,000Using the one-variance approach, what is the total overhead variance?a. $6,062.50 U b. $3,625.00 U c. $9,687.50 U d. $6,562.50 U ___ 13 Which of the following is not a step in benchmarking procedures?a. analyze the "positive gap"b. engage in continuous improvementc. analyze the "negative gap"d. identify "best-in-class" companies ___ 14 The following March information is available for Scott Manufacturing Company when it produced 2,100 units:Standard:Material 2 pounds per unit @ $5.80 per poundLabor 3 direct labor hours per unit @ $10.00 per hourActual:Material 4,250 pounds purchased and used @ $5.65 per poundLabor 6,300 direct labor hours at $9.75 per hourWhat is the material quantity variance?a. $275 F b. $290 F c. $290 U d. $275 U ___ 15 A criticism of variable costing for managerial accounting purposes is that ita. is not acceptable for product line segmented reporting.b. does not reflect cost-volume-profit relationships.c. overstates inventories.d. might encourage managers to emphasize the short term at the expense of the long term. ___ 16 The addition or removal of product or service characteristics to satisfy additional needs, especially price, reflect the ________ of a product or service.a. Value b. Grade c. Quality d. Durability ___ 17 An all-inclusive definition of quality views it as the ability of products/services toa. only meet internal design specifications.b. meet the customer's stated or implied needs.c. be produced using all value-added production activities.d. be produced with no rework costs. ___ 18 Broadly speaking, cost accounting can be defined as a(n)a. external reporting system that is based on activity-based costs.b. system used for providing the government and creditors with information about a company's internal operations.c. internal reporting system that provides product costing and other information used by managers in performing theirfunctions.d. internal reporting system needed by manufacturers to be in compliance with Cost Accounting Standards Boardpronouncements.

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