Accounting 9th Edition Hoggett Test Bank Full Chapter PDF

Accounting 9th Edition Hoggett Test
Bank
Visit to download the full and correct content document:
https://testbankdeal.com/download/accounting-9th-edition-hoggett-test-bank/
Testbank
to accompany
Accounting
9th Edition
by
John Hoggett, Lew Edwards,

John Medlin, Keryn Chalmers, Andreas
Hellmann, Claire Beattie & Jodie Maxfield
Prepared by
Peter Hall
© John Wiley & Sons Australia, Ltd 2015

Testbank to accompany Accounting 9e
Chapter 8: Accounting for manufacturing
Multiple-choice questions
1. Which of these statements is not correct?
a. An expense is the consumption or loss of resources that will result in a decrease

in equity.
b. A cost that provides future economic benefits is treated as an asset.
*c. To accountants the terms cost and expense always mean the same thing.
d. Many costs eventually become expenses.
Correct answer: c
Learning objective 8.1 ~ explain three ways in which costs are used by management for decision
making.
2. For which purposes do product costs need to be calculated by a manufacturer?
Inventory Profit Management decision-

valuation determination making
*a. Yes Yes Yes
b. Yes No Yes
c. No Yes Yes
d. No No Yes
Correct answer: a
making.
3. How many of the following are reasons why managers need information on
manufacturing costs?
• Inventory valuation
• Profit determination
• Evaluation of past performance
• Pricing
a. 1
b. 2
*c. 3
d. 4
Correct answer: c
making.
© John Wiley and Sons Australia, Ltd 2015 8.2

Chapter 8: Accounting for Manufacturing
4. Although the terms cost and expense are often used synonymously there is a
difference between them. A cost can be an asset or an expense whereas an expense is:
*a. the consumption or loss of resources that will result in a decrease in equity.
b. where the future economic benefits have not expired.
c. used to run the business.
d. paid out in cash.
Correct answer: a
making.
5. Work in process inventory is:
a. raw materials that have not been paid for.

*b. product that has been partly processed.
c. inventory that is subject to a legal dispute.
d. work that is in the planning process.
Correct answer: b
making.
6. Which of the following statements is correct?
a. Manufacturing overhead costs are treated as period costs rather than product
cost.
*b. Product costs are included in inventory until the product is sold.
c. For a retailer all costs and expenses are treated as period costs.
d. Finished goods inventory includes also includes the cost of raw materials.
Correct answer: b
Learning objective 8.2 ~ explain the nature of manufacturing operations.
7. Costs which are not directly required to produce a product but are expensed in the
income statement in the period in which they are incurred are called:
a. product costs.
b. other costs.
*c. period costs.
d. fixed costs.
Correct answer: c
8. Product costs are integral to the production of a product and are expensed in the period
in which the:

*a. related units are sold.

b. related units are produced.
c. costs are paid.
d. costs are incurred.
Correct answer: a
9. Which of these is an example of a period cost?
a. Direct materials
b. Production supervisor’s salary
*c. Sales salaries
d. Factory rent
Correct answer: c
10. Which of these is not a product cost:
a. factory power.
b. wages of factory workers.
c. material used in production.
*d. advertising of a new product.
Correct answer: d
11. Which of these is an example of a product cost?
a. Telephone expense
*b. Assembly line worker’s wages
c. Depreciation of office furniture
d. Interest expense
Correct answer: b
12. How many of these inventory accounts are maintained by a manufacturer?

• Stock of raw materials
• Stock of work in process
• Stock of finished goods

a. 0
b. 1
c. 2
*d. 3
Correct answer: d
13. Raw materials inventory is:
*a. stock of materials purchased for conversion into saleable goods.

b. stock of supplies.
c. stock of partly finished goods.
d. materials that have been scrapped.
Correct answer: a
14. Which of the following statements concerning product and period costs is incorrect?
a. The basis of the distinction between product and period costs is the timing of
the recognition of an expense in the income statement.
*b. Service businesses have both period and product costs.
c. Product costs are included in the cost of inventories until the products are sold.
d. Period costs are not directly required to produce the product.
Correct answer: b
Feedback: Service businesses have period costs but no product costs.
15. Which of these would normally be classified as direct materials?
Sheet metal used Lubricants used on Plastic used

in making tractors production machinery in making
calculators
a. Yes Yes Yes
*b. Yes No Yes
c. No Yes No
d. No No Yes
Correct answer: b
Learning objective 8.3 ~ define and identify the three manufacturing cost elements — direct
materials, direct labour and factory overhead.
16. Which of the following statements is correct?

*a. Items such as glue, nails and screws become part of the finished product but are
usually classified as factory overhead.
b. The cost of collecting debts from customers is classified as part of factory
overhead.
c. Power used for factory lighting and heating is classified as a period cost.
d. Absorption costing splits up factory costs into product and period costs.
Correct answer: a
17. Issues that must be resolved in accounting for factory overhead are all of the following
except:
a. the allocation of common costs between activities.

*b. the allocation of product costs.
c. the assignment of service department costs to production departments.
d. how to assign factory overhead costs as product costs.
Correct answer: b
18. As manufacturing overhead costs cannot be traced to products a method must be

developed for assigning them to products. Common bases for assignment are all of the
following except:
a. direct labour cost.

b. direct labour hours.
c. machine hours.
*d. direct labour hours plus direct machine hours.
Correct answer: d
19. If projected factory overhead is $360 000 p.a. and projected direct labour hours are 60
000 hours p.a., the overhead application rate is:
a. $60 000.
*b. $6 per direct labour hour.
c. $360 000.
d. $0.60 per direct labour hour.
Correct answer: b

20. What is the correct order in which the flow of costs in a manufacturing organisation
occurs?
i. Charge raw materials, direct labour and factory overhead to work in process
ii. Purchase stocks of raw materials
iii. Transfer finished goods to cost of sales
iv. Transfer finished goods to stock of finished goods
a. i, ii, iii, iv
b. ii, i, iii, iv
*c. ii, i, iv, iii
d. ii, iii, i, iv
Correct answer: c
21. Direct material costs plus direct labour costs are known as:
*a. prime costs.

b. conversion costs.
c. fixed costs.
d. period costs.
Correct answer: a
22. Applying overhead to products means:
a. passing on the overhead costs to customers in the price charged.

*b. assigning the overhead on a basis that closely relates it to the work performed.
c. directly tracing the overhead to products.
d. calculating the total overhead cost.
Correct answer: b
23. If expected factory overhead costs are $600 000 and expected direct labour hours are
40 000, what is the overhead application rate per direct labour hour?
*a. $15
b. $150
c. $0.66

d. $66
Correct answer: a
24. Direct labour costs plus factory overhead costs are known as:
a. prime costs.
*b. conversion costs.
c. direct costs.
d. variable costs.
Correct answer: b
25. A clothing manufacturer has a production department where the clothing is produced
and two other departments, a warehouse and a general office, which are known as:
a. auxiliary departments.
b. minor departments.
*c. service departments.
d. training departments.
Correct answer: c
26. Costs can be classified into those that are traceable to products and those that are non-
traceable. The costs of raw materials that are directly and economically traceable as
an integral part of a product, are called:
*a. direct materials costs.

b. direct labour costs.
c. factory overhead costs.
d. cost of sales.
Correct answer: a
27. For a manufacturer all factory costs that are not directly traceable to products are
classed as:

a. indirect materials.
b. period costs.
*c. factory overhead.
d. variable costs.
Correct answer: c
28. In calculating product costs the wages paid to employees whose time can be directly
traced to products are classified as:
a. indirect labour costs.

*b. direct labour costs.
c. factory overhead.
d. fixed costs.
Correct answer: b
29. Indirect materials and indirect labour incurred by the factory are classed as:
*a. factory overhead.

b. fixed costs.
c. administrative expenses.
d. period costs.
Correct answer: a
30. Direct material costs do not include small items that it is uneconomical to trace to
products. Which of the following would not be included as a direct materials cost for
a furniture manufacturer?
a. Wood
b. Materials
*c. Glue
d. Handles
Correct answer: c

31. The costs of the two service departments, maintenance and quality control, that
provide support for the production departments are classed as:
*a. factory overhead.

b. selling expenses.
c. administrative expenses.
d. finance expenses.
Correct answer: a
32. If the overhead application rate is $10 per direct labour hour and 120 direct labour
hours are used in printing a text book how much overhead is included in the total
production cost of the book?
a. $10
b. $120
*c. $1200
d. $12 000
Correct answer: c
Feedback: $1200 of overhead will be included in the total production cost of the book = 120
hours x $10 per hour.
33. If total fixed costs are $25 000 what is the per unit overhead cost for R Co if 5000
units are produced? Assume units of production are used as the basis for applying
overhead to product.
a. $50
*b. $5
c. $0.50
d. $0.05
Correct answer: b
Feedback: $5 = $25 000/5000 units.
34. Variable costs:
a. remain constant in total regardless of the level of output.

b. increase per unit as output increases.
c. decrease per unit as output decreases.
*d. remain constant per unit regardless of the level of output.

Correct answer: d
Learning objective 8.4 ~ explain the basic nature of absorption costing and a cost allocation
based on cost behaviour.
35. Accounting standard IAS 2/AASB 102:
a. only allows the use of direct costing for external financial reporting purposes.
b. allows the use of direct costing and absorption costing for external financial
reporting purposes.
*c. only allows the use of absorption costing for external financial reporting
purposes.
d. does not allow the use of either direct costing or absorption costing for external
financial reporting purposes.
Correct answer: c
36. The true statement in relation to direct costing is:
a. it only recognised direct materials as a product cost.

b. it is sometimes called adaptable costing.
c. it treats all costs as period costs.
*d. it only recognises as product costs those factory costs that vary with
production.
Correct answer: d
37. Which of these is an example of a fixed cost?
*a. Factory rental

b. Factory bonuses linked to the level of production
c. Packaging costs
d. Raw materials
Correct answer: a
38. Costs that remain constant in total (over the relevant range) as the volume of
production changes are known as:

a. indirect costs.
b. direct costs.
c. variable costs.
*d. fixed costs.
Correct answer: d
39. Variable costs:
a. remain constant in total regardless of the level of output.

b. increase per unit as output increases.
c. decrease per unit as output decreases.
*d. remain constant per unit regardless of the level of output.
Correct answer: d
40. If total fixed costs are $250 000 what is the per unit overhead cost for Maxima Ltd if
50 000 units are produced? Assume units of production are used as the basis for
applying overhead to product.
a. $50
*b. $5
c. $0.50
d. $0.05
Correct answer: b
41. A fixed cost is one that:
a. is the same per unit of production regardless of volume.

*b. remains constant in total within the relevant production range.
c. increases on a per unit basis as volume increases.
d. does not rise as inflation changes.
Correct answer: b
42. What type of business would calculate cost of sales in the income statement as stock
of finished goods at start + purchases – stock of finished goods at end?

a. A carpet factory
b. manufacturer private school
c. A lawyer
*d. A shoe shop
Correct answer: d
Learning objective 8.5 ~ identify the essential differences in the financial statements for retail
and manufacturing entities and prepare a cost of goods manufactured statement.
43. What type of business would calculate cost of sales in the income statement as stock
of finished goods at start + purchases – stock of finished goods at end?
a. A service business
b. A manufacturer
*c. A retailer
d. A non-profit organisation
Correct answer: c
44. What is the statement prepared by a manufacturer to calculate the cost of the goods
manufactured called?
a. Statement of cost of sales

b. Income statement
c. Gross profit statement
*d. Cost of goods manufactured statement
Correct answer: d
45. In a manufacturing organisation the transfer from the work in process inventory account
to the finished goods inventory account represents:
a. work in process at the end of the period.

b. total manufacturing costs incurred for the period.
*c. cost of goods finished during the period.
d. cost of sales.
Correct answer: c

46. Assume direct materials, direct labour and factory overhead for the period total $700
000. If work in process at the start is $55 000 and work in process at the end is $40
000, what is the cost of goods manufactured?
a. $700 000
b. $735 000
c. $685 000
*d. $715 000
Correct answer: d
Feedback: $715 000 = $700 000 + $55 000 – $40 000.
47. The format for the cost of goods manufactured statement is direct materials + direct
labour + factory overhead + __________ – work in process at end.
a. Indirect materials
*b. Work in process at start
c. Indirect materials
d. Indirect labour
Correct answer: b
48. Assume Coburg Heaters issued $50 500 of direct materials to production, total direct
labour costs were $30 000 and total overhead costs were $30 000. If work in process
at the start was $10 000 and work in process at the end was $12 000, what is the total
cost of goods manufactured for the period?
a. $50 500
b. $80 500
c. $110 500
*d. $108 500
Correct answer: d
Fedback: $108 500 = $50 500 + $30 000 + $30 000 + $10 000 - $12 000.
49. Any increase in unit product cost must result in a decreased profit margin if the
selling price of the product cannot be:
a. measured.
b. decreased.
*c. increased.

d. calculated.
Correct answer: c
50. For a manufacturer, if cost of goods manufactured is $652 000, stock of finished
goods at start is $40 000 and stock of finished goods at end is $36 000, calculate the
cost of sales.
a. $728 000
b. $648 000
*c. $656 000
d. Cannot be calculated with the information available
Correct answer: c
51. Calculate product cost per unit.

Direct materials per unit $50
Direct labour per unit $30
Factory overhead applied at 50% of direct labour cost
a. $50
b. $80
*c. $95
d. $105
Correct answer: c
Feedback: $50 + $30 + $15
52. When preparing a cost of goods manufactured statement from the following
information, what is the total cost of goods manufactured?
Direct materials $6
Advertising expenses 3
Indirect labour 1
Indirect materials 5
Direct labour 2
Other manufacturing overhead 3
a. $23
b. $20
*c. $17
d. $16

Correct answer: c
Feedback: $6 + $1 + $5 + $2 + $3
53. These figures have been extracted from the trial balance of ABC Ltd for June 2014:
Direct materials $5 000
Light and power factory 14 000
Freight outwards 2 000
Office salaries 11 000
Depreciation on factory plant 6 000
Directors' fees 7 000
Salesmen's commission 8 000
Factory wages - direct 30 000
- indirect 10 000
There was no opening or closing work in process. What are total factory overhead
expenses?
a. $35 000
*b. $30 000
c. $60 000
d. $20 000
Correct answer: b
Feedback: $14 000 + $6000 + $10 000
54. Kid Gloves Manufacturing reports the following information for the year. Determine the
cost of finished goods manufactured.
Work in process 1 January $7 000

Work in process 31 December 10 000
Finished goods inventory 1 January 5 000
Finished goods inventory 31 December 6 000
Direct materials used 3 000
Direct labour 2 000
Factory overhead 2 000
Selling expenses 3 000
General and administrative expenses 4 000
*a. $4000
b. $3000
c. $5000
d. $6000
Correct answer: a

Feedback: $7000 – $10 000 + $3000 + $2000 + $2000

55. Mega Manufacturing’s accounting records provide the following information. What is
the business direct material cost for the period?
Cost of goods manufactured is $35 000

Ending work in process is $11 500
Manufacturing overhead is $12 700
Direct labour is $8 900
Beginning work in process is $7 500
*a. $17 400

b. $13 400
c. $9400
d. $6400
Correct answer: a
Feedback: $35 000 + $11 500 – $12 700 – $8900 – $7500
56. 2013 2014

Finished goods inventory $20 000 $10 000
Work in process inventory 5 000 10 000
Raw materials inventory 10 000 15 000
Purchases of raw materials 13 000
Cost of goods manufactured 50 000
The cost of raw materials transferred to production in 2014 is:
*a. $8000.
b. $10 000.
c. $13 000.
d. $18 000.
Correct answer: a
Feedback: $10 000 + $13 000 – $15 000
57. Before the application of overhead costs Chrome & Steel Ltd has the following costs
traced to production:
Direct materials Direct labour
Charged to production $50 000 $40 000

Assuming that overhead is applied at the rate of 80% of direct labour cost what is the
amount of inventory finished for the period (assume no work in process)?
a. $50 000
b. $90 000
*c. $122 000
d. $130 000
Correct answer: c
Feedback: $50 000 + $40 000 + OH $32 000
58. For March 2014

Finished goods purchases $ 5 000
Cost of goods manufactured 50 000
Sales 100 000
Inventories 1 Mar 14 31 Mar 14

Raw materials $10 000 $18 000
Work in process 25 000 32 000
Finished goods 80 000 90 000
Gross profit for the month of March 2014 is:
a. $50 000.
b. $60 000.
*c. $55 000.
d. $45 000.
Correct answer: c
Feedback: $100 000 – [$5000 + $50 000 + $80 000 – $90 000]
59. In relation to the cost of goods manufactured report which is not a correct statement?
a. The ending work in process is subtracted to obtain the cost of completed goods
manufactured for the period.
*b. Cost of goods manufactured is transferred to the cost of sales account.
c. It is prepared to calculate the cost of goods completed in the period.
d. The total of direct materials, direct labour and factory overhead represent the
manufacturing costs for the period.
Correct answer: b

60. In the general ledger the accounts used to determine the cost of goods manufactured
are closed to the manufacturing summary account which is then closed to the:
*a. income summary account.

b. cost of sales account.
c. gross profit account.
d. profit account.
Correct answer: a
Learning objective 8.6 ~ apply the additional accounts and accounting procedures required
for a manufacturing entity, including the completion of a worksheet.
61. For a manufacturer a periodic inventory system has many limitations and deficiencies.
These limitations____________ the number of products and producing departments.
a. decrease with
*b. increase with
c. are unaffected by
d. are equal to
Correct answer: b
62. Which of these is a not a limitation of the use of a periodic inventory system by a
manufacturer?
a. Costing information is not available before the end of the accounting period.
b. A physical stocktake is necessary before costing information can be
determined.
c. The costing information contains estimations and approximations.
*d. The method is more costly to implement than the perpetual method.
Correct answer: d
63. Which of the following statements is incorrect?
a. Today, with automation and computerisation, factory overhead costs are often
a higher proportion of total manufacturing costs than direct labour costs.
b. A manufacturing entity using a periodic inventory system must rely on the
judgement of the accountant and/or the production manager to estimate the
value of ending work in process.
*c. An overhead application rate is an historical rate.

d. The direct labour rate per unit of output is constant but total direct labour costs
increase with an increase in the level of production.
Correct answer: c
64. Which of the following statements concerning sustainable manufacturing is correct?
a. Manufacturing in a sustainable way always involves higher manufacturing costs.

*b. Recycling can occur within the production process or at the end of the product’s
useful life.
c. Businesses in Australia have little interest in sustainable manufacturing.
d. Businesses that operate sustainably make less profit than businesses that ignore
sustainability.
Correct answer: b
Learning objective 8.7 ~ explain how designing for sustainability contributes to minimising and
controlling manufacturing costs.
65. Sustainable manufacturing is of importance to how many of these groups?

i. Management
ii. Government
iii. Customers
iv. Public at large
a. 1
b. 2
c. 3
*d. 4
Correct answer: d
Learning objective 8.7 ~ explain how designing for sustainability contributes to minimising and
controlling manufacturing costs.

Another random document with
no related content on Scribd:
produced no other interest than would have arisen from the appearance of a
gull, or any other aquatic bird.
[9] When the steward was informed of his sentence, he asked Comstock
how long a time he would give him to make his peace with God?
—"Fourteen seconds!" was the reply.
[10] Tamon, High Chief.
[11] Called the Reef Chain Tide Islands.
[12] Lay witnessed the execution of a man during his residence at the
Mulgraves. I do not remember the nature of his offence. He was not bound,
or in any way confined; but, after it was determined that he should die,
several men attacked him with spears and stones. He fought desperately to
the last, although his situation was altogether hopeless, freely bestowing
upon his enemies the epithets of cowards and murderers. Even when he
could no longer resist, his spirit was unconquered,—and he breathed his
last, with expressions of scorn and hatred on his lips.
[13] Lay frequently saw the people, who performed the execution I have
mentioned in a former note, throw away portions of their food, as an
offering to the spirit of him they had slain.
[14] Crimacu, as it is pronounced by the natives. The missionaries write his

name Karaimoku.
*** END OF THE PROJECT GUTENBERG EBOOK JOURNAL OF A
CRUISE OF THE UNITED STATES SCHOONER DOLPHIN,
AMONG THE ISLANDS OF THE PACIFIC OCEAN; AND A VISIT
TO THE MULGRAVE ISLANDS, IN PURSUIT OF THE MUTINEERS
OF THE WHALESHIP GLOBE ***
Updated editions will replace the previous one—the old editions will
be renamed.
Creating the works from print editions not protected by U.S.

copyright law means that no one owns a United States copyright in
these works, so the Foundation (and you!) can copy and distribute it
in the United States without permission and without paying copyright
royalties. Special rules, set forth in the General Terms of Use part of
this license, apply to copying and distributing Project Gutenberg™
electronic works to protect the PROJECT GUTENBERG™ concept
and trademark. Project Gutenberg is a registered trademark, and
may not be used if you charge for an eBook, except by following the
terms of the trademark license, including paying royalties for use of
the Project Gutenberg trademark. If you do not charge anything for
copies of this eBook, complying with the trademark license is very
easy. You may use this eBook for nearly any purpose such as
creation of derivative works, reports, performances and research.
Project Gutenberg eBooks may be modified and printed and given
away—you may do practically ANYTHING in the United States with
eBooks not protected by U.S. copyright law. Redistribution is subject
to the trademark license, especially commercial redistribution.
START: FULL LICENSE

THE FULL PROJECT GUTENBERG LICENSE
PLEASE READ THIS BEFORE YOU DISTRIBUTE OR USE THIS WORK
To protect the Project Gutenberg™ mission of promoting the free

distribution of electronic works, by using or distributing this work (or
any other work associated in any way with the phrase “Project
Gutenberg”), you agree to comply with all the terms of the Full
Project Gutenberg™ License available with this file or online at
www.gutenberg.org/license.
Section 1. General Terms of Use and

Redistributing Project Gutenberg™
electronic works
1.A. By reading or using any part of this Project Gutenberg™
electronic work, you indicate that you have read, understand, agree
to and accept all the terms of this license and intellectual property
(trademark/copyright) agreement. If you do not agree to abide by all
the terms of this agreement, you must cease using and return or
destroy all copies of Project Gutenberg™ electronic works in your
possession. If you paid a fee for obtaining a copy of or access to a
Project Gutenberg™ electronic work and you do not agree to be
bound by the terms of this agreement, you may obtain a refund from
the person or entity to whom you paid the fee as set forth in
paragraph 1.E.8.
1.B. “Project Gutenberg” is a registered trademark. It may only be

used on or associated in any way with an electronic work by people
who agree to be bound by the terms of this agreement. There are a
few things that you can do with most Project Gutenberg™ electronic
works even without complying with the full terms of this agreement.
See paragraph 1.C below. There are a lot of things you can do with
Project Gutenberg™ electronic works if you follow the terms of this
agreement and help preserve free future access to Project
Gutenberg™ electronic works. See paragraph 1.E below.
1.C. The Project Gutenberg Literary Archive Foundation (“the
Foundation” or PGLAF), owns a compilation copyright in the
collection of Project Gutenberg™ electronic works. Nearly all the
individual works in the collection are in the public domain in the
United States. If an individual work is unprotected by copyright law in
the United States and you are located in the United States, we do
not claim a right to prevent you from copying, distributing,
performing, displaying or creating derivative works based on the
work as long as all references to Project Gutenberg are removed. Of
course, we hope that you will support the Project Gutenberg™
mission of promoting free access to electronic works by freely
sharing Project Gutenberg™ works in compliance with the terms of
this agreement for keeping the Project Gutenberg™ name
associated with the work. You can easily comply with the terms of
this agreement by keeping this work in the same format with its
attached full Project Gutenberg™ License when you share it without
charge with others.
1.D. The copyright laws of the place where you are located also
govern what you can do with this work. Copyright laws in most
countries are in a constant state of change. If you are outside the
United States, check the laws of your country in addition to the terms
of this agreement before downloading, copying, displaying,
performing, distributing or creating derivative works based on this
work or any other Project Gutenberg™ work. The Foundation makes
no representations concerning the copyright status of any work in
any country other than the United States.
1.E. Unless you have removed all references to Project Gutenberg:
1.E.1. The following sentence, with active links to, or other

immediate access to, the full Project Gutenberg™ License must
appear prominently whenever any copy of a Project Gutenberg™
work (any work on which the phrase “Project Gutenberg” appears, or
with which the phrase “Project Gutenberg” is associated) is
accessed, displayed, performed, viewed, copied or distributed:
This eBook is for the use of anyone anywhere in the United
States and most other parts of the world at no cost and with
almost no restrictions whatsoever. You may copy it, give it away
or re-use it under the terms of the Project Gutenberg License
included with this eBook or online at www.gutenberg.org. If you
are not located in the United States, you will have to check the
laws of the country where you are located before using this
eBook.
1.E.2. If an individual Project Gutenberg™ electronic work is derived

from texts not protected by U.S. copyright law (does not contain a
notice indicating that it is posted with permission of the copyright
holder), the work can be copied and distributed to anyone in the
United States without paying any fees or charges. If you are
redistributing or providing access to a work with the phrase “Project
Gutenberg” associated with or appearing on the work, you must
comply either with the requirements of paragraphs 1.E.1 through
1.E.7 or obtain permission for the use of the work and the Project
Gutenberg™ trademark as set forth in paragraphs 1.E.8 or 1.E.9.
1.E.3. If an individual Project Gutenberg™ electronic work is posted

with the permission of the copyright holder, your use and distribution
must comply with both paragraphs 1.E.1 through 1.E.7 and any
additional terms imposed by the copyright holder. Additional terms
will be linked to the Project Gutenberg™ License for all works posted
with the permission of the copyright holder found at the beginning of
this work.
1.E.4. Do not unlink or detach or remove the full Project

Gutenberg™ License terms from this work, or any files containing a
part of this work or any other work associated with Project
Gutenberg™.
1.E.5. Do not copy, display, perform, distribute or redistribute this

electronic work, or any part of this electronic work, without
prominently displaying the sentence set forth in paragraph 1.E.1 with
active links or immediate access to the full terms of the Project
Gutenberg™ License.
1.E.6. You may convert to and distribute this work in any binary,
compressed, marked up, nonproprietary or proprietary form,
including any word processing or hypertext form. However, if you
provide access to or distribute copies of a Project Gutenberg™ work
in a format other than “Plain Vanilla ASCII” or other format used in
the official version posted on the official Project Gutenberg™ website
(www.gutenberg.org), you must, at no additional cost, fee or expense
to the user, provide a copy, a means of exporting a copy, or a means
of obtaining a copy upon request, of the work in its original “Plain
Vanilla ASCII” or other form. Any alternate format must include the
full Project Gutenberg™ License as specified in paragraph 1.E.1.
1.E.7. Do not charge a fee for access to, viewing, displaying,

performing, copying or distributing any Project Gutenberg™ works
unless you comply with paragraph 1.E.8 or 1.E.9.
1.E.8. You may charge a reasonable fee for copies of or providing

access to or distributing Project Gutenberg™ electronic works
provided that:
• You pay a royalty fee of 20% of the gross profits you derive from
the use of Project Gutenberg™ works calculated using the
method you already use to calculate your applicable taxes. The
fee is owed to the owner of the Project Gutenberg™ trademark,
but he has agreed to donate royalties under this paragraph to
the Project Gutenberg Literary Archive Foundation. Royalty
payments must be paid within 60 days following each date on
which you prepare (or are legally required to prepare) your
periodic tax returns. Royalty payments should be clearly marked
as such and sent to the Project Gutenberg Literary Archive
Foundation at the address specified in Section 4, “Information
about donations to the Project Gutenberg Literary Archive
Foundation.”
• You provide a full refund of any money paid by a user who

notifies you in writing (or by e-mail) within 30 days of receipt that
s/he does not agree to the terms of the full Project Gutenberg™
License. You must require such a user to return or destroy all
copies of the works possessed in a physical medium and
discontinue all use of and all access to other copies of Project
Gutenberg™ works.
• You provide, in accordance with paragraph 1.F.3, a full refund of

any money paid for a work or a replacement copy, if a defect in
the electronic work is discovered and reported to you within 90
days of receipt of the work.
• You comply with all other terms of this agreement for free
distribution of Project Gutenberg™ works.
1.E.9. If you wish to charge a fee or distribute a Project Gutenberg™

electronic work or group of works on different terms than are set
forth in this agreement, you must obtain permission in writing from
the Project Gutenberg Literary Archive Foundation, the manager of
the Project Gutenberg™ trademark. Contact the Foundation as set
forth in Section 3 below.
1.F.
1.F.1. Project Gutenberg volunteers and employees expend

considerable effort to identify, do copyright research on, transcribe
and proofread works not protected by U.S. copyright law in creating
the Project Gutenberg™ collection. Despite these efforts, Project
Gutenberg™ electronic works, and the medium on which they may
be stored, may contain “Defects,” such as, but not limited to,
incomplete, inaccurate or corrupt data, transcription errors, a
copyright or other intellectual property infringement, a defective or
damaged disk or other medium, a computer virus, or computer
codes that damage or cannot be read by your equipment.
1.F.2. LIMITED WARRANTY, DISCLAIMER OF DAMAGES - Except

for the “Right of Replacement or Refund” described in paragraph
1.F.3, the Project Gutenberg Literary Archive Foundation, the owner
of the Project Gutenberg™ trademark, and any other party
distributing a Project Gutenberg™ electronic work under this
agreement, disclaim all liability to you for damages, costs and
expenses, including legal fees. YOU AGREE THAT YOU HAVE NO
REMEDIES FOR NEGLIGENCE, STRICT LIABILITY, BREACH OF
WARRANTY OR BREACH OF CONTRACT EXCEPT THOSE
PROVIDED IN PARAGRAPH 1.F.3. YOU AGREE THAT THE
FOUNDATION, THE TRADEMARK OWNER, AND ANY
DISTRIBUTOR UNDER THIS AGREEMENT WILL NOT BE LIABLE
TO YOU FOR ACTUAL, DIRECT, INDIRECT, CONSEQUENTIAL,
PUNITIVE OR INCIDENTAL DAMAGES EVEN IF YOU GIVE
NOTICE OF THE POSSIBILITY OF SUCH DAMAGE.
1.F.3. LIMITED RIGHT OF REPLACEMENT OR REFUND - If you

discover a defect in this electronic work within 90 days of receiving it,
you can receive a refund of the money (if any) you paid for it by
sending a written explanation to the person you received the work
from. If you received the work on a physical medium, you must
return the medium with your written explanation. The person or entity
that provided you with the defective work may elect to provide a
replacement copy in lieu of a refund. If you received the work
electronically, the person or entity providing it to you may choose to
give you a second opportunity to receive the work electronically in
lieu of a refund. If the second copy is also defective, you may
demand a refund in writing without further opportunities to fix the
problem.
1.F.4. Except for the limited right of replacement or refund set forth in
paragraph 1.F.3, this work is provided to you ‘AS-IS’, WITH NO
OTHER WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR ANY PURPOSE.
1.F.5. Some states do not allow disclaimers of certain implied

warranties or the exclusion or limitation of certain types of damages.
If any disclaimer or limitation set forth in this agreement violates the
law of the state applicable to this agreement, the agreement shall be
interpreted to make the maximum disclaimer or limitation permitted
by the applicable state law. The invalidity or unenforceability of any
provision of this agreement shall not void the remaining provisions.
1.F.6. INDEMNITY - You agree to indemnify and hold the
Foundation, the trademark owner, any agent or employee of the
Foundation, anyone providing copies of Project Gutenberg™
electronic works in accordance with this agreement, and any
volunteers associated with the production, promotion and distribution
of Project Gutenberg™ electronic works, harmless from all liability,
costs and expenses, including legal fees, that arise directly or
indirectly from any of the following which you do or cause to occur:
(a) distribution of this or any Project Gutenberg™ work, (b)
alteration, modification, or additions or deletions to any Project
Gutenberg™ work, and (c) any Defect you cause.
Section 2. Information about the Mission of

Project Gutenberg™
Project Gutenberg™ is synonymous with the free distribution of
electronic works in formats readable by the widest variety of
computers including obsolete, old, middle-aged and new computers.
It exists because of the efforts of hundreds of volunteers and
donations from people in all walks of life.
Volunteers and financial support to provide volunteers with the

assistance they need are critical to reaching Project Gutenberg™’s
goals and ensuring that the Project Gutenberg™ collection will
remain freely available for generations to come. In 2001, the Project
Gutenberg Literary Archive Foundation was created to provide a
secure and permanent future for Project Gutenberg™ and future
generations. To learn more about the Project Gutenberg Literary
Archive Foundation and how your efforts and donations can help,
see Sections 3 and 4 and the Foundation information page at
www.gutenberg.org.
Section 3. Information about the Project

Gutenberg Literary Archive Foundation
The Project Gutenberg Literary Archive Foundation is a non-profit
501(c)(3) educational corporation organized under the laws of the
state of Mississippi and granted tax exempt status by the Internal
Revenue Service. The Foundation’s EIN or federal tax identification
number is 64-6221541. Contributions to the Project Gutenberg
Literary Archive Foundation are tax deductible to the full extent
permitted by U.S. federal laws and your state’s laws.
The Foundation’s business office is located at 809 North 1500 West,

Salt Lake City, UT 84116, (801) 596-1887. Email contact links and up
to date contact information can be found at the Foundation’s website
and official page at www.gutenberg.org/contact
Section 4. Information about Donations to

the Project Gutenberg Literary Archive
Foundation
Project Gutenberg™ depends upon and cannot survive without
widespread public support and donations to carry out its mission of
increasing the number of public domain and licensed works that can
be freely distributed in machine-readable form accessible by the
widest array of equipment including outdated equipment. Many small
donations ($1 to $5,000) are particularly important to maintaining tax
exempt status with the IRS.
The Foundation is committed to complying with the laws regulating

charities and charitable donations in all 50 states of the United
States. Compliance requirements are not uniform and it takes a
considerable effort, much paperwork and many fees to meet and
keep up with these requirements. We do not solicit donations in
locations where we have not received written confirmation of
compliance. To SEND DONATIONS or determine the status of
compliance for any particular state visit www.gutenberg.org/donate.
While we cannot and do not solicit contributions from states where

we have not met the solicitation requirements, we know of no
prohibition against accepting unsolicited donations from donors in
such states who approach us with offers to donate.
International donations are gratefully accepted, but we cannot make

any statements concerning tax treatment of donations received from
outside the United States. U.S. laws alone swamp our small staff.
Please check the Project Gutenberg web pages for current donation
methods and addresses. Donations are accepted in a number of
other ways including checks, online payments and credit card
donations. To donate, please visit: www.gutenberg.org/donate.
Section 5. General Information About Project

Gutenberg™ electronic works
Professor Michael S. Hart was the originator of the Project
Gutenberg™ concept of a library of electronic works that could be
freely shared with anyone. For forty years, he produced and
distributed Project Gutenberg™ eBooks with only a loose network of
volunteer support.
Project Gutenberg™ eBooks are often created from several printed

editions, all of which are confirmed as not protected by copyright in
the U.S. unless a copyright notice is included. Thus, we do not
necessarily keep eBooks in compliance with any particular paper
edition.
Most people start at our website which has the main PG search
facility: www.gutenberg.org.
This website includes information about Project Gutenberg™,

including how to make donations to the Project Gutenberg Literary
Archive Foundation, how to help produce our new eBooks, and how
to subscribe to our email newsletter to hear about new eBooks.

Accounting 9th Edition Hoggett Test Bank Full Chapter PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Accounting 9th Edition Hoggett Test Bank Full Chapter PDF

Uploaded by

Copyright:

Available Formats

Accounting 9th Edition Hoggett Test

John Hoggett, Lew Edwards,

© John Wiley & Sons Australia, Ltd 2015

Chapter 8: Accounting for manufacturing

a. An expense is the consumption or loss of resources that will result in a decrease

2. For which purposes do product costs need to be calculated by a manufacturer?

Inventory Profit Management decision-

© John Wiley and Sons Australia, Ltd 2015 8.2

5. Work in process inventory is:

a. raw materials that have not been paid for.

6. Which of the following statements is correct?

© John Wiley and Sons Australia, Ltd 2015 8.3

*a. related units are sold.

9. Which of these is an example of a period cost?

10. Which of these is not a product cost:

11. Which of these is an example of a product cost?

12. How many of these inventory accounts are maintained by a manufacturer?

© John Wiley and Sons Australia, Ltd 2015 8.4

13. Raw materials inventory is:

*a. stock of materials purchased for conversion into saleable goods.

15. Which of these would normally be classified as direct materials?

Sheet metal used Lubricants used on Plastic used

16. Which of the following statements is correct?

© John Wiley and Sons Australia, Ltd 2015 8.5

a. the allocation of common costs between activities.

18. As manufacturing overhead costs cannot be traced to products a method must be

a. direct labour cost.

© John Wiley and Sons Australia, Ltd 2015 8.6

*a. prime costs.

22. Applying overhead to products means:

a. passing on the overhead costs to customers in the price charged.

© John Wiley and Sons Australia, Ltd 2015 8.7

*a. direct materials costs.

© John Wiley and Sons Australia, Ltd 2015 8.8

a. indirect labour costs.

*a. factory overhead.

© John Wiley and Sons Australia, Ltd 2015 8.9

*a. factory overhead.

34. Variable costs:

a. remain constant in total regardless of the level of output.

© John Wiley and Sons Australia, Ltd 2015 8.10

35. Accounting standard IAS 2/AASB 102:

36. The true statement in relation to direct costing is:

a. it only recognised direct materials as a product cost.

37. Which of these is an example of a fixed cost?

*a. Factory rental

© John Wiley and Sons Australia, Ltd 2015 8.11

39. Variable costs:

a. remain constant in total regardless of the level of output.

41. A fixed cost is one that:

a. is the same per unit of production regardless of volume.

© John Wiley and Sons Australia, Ltd 2015 8.12

a. Statement of cost of sales

a. work in process at the end of the period.

© John Wiley and Sons Australia, Ltd 2015 8.13

© John Wiley and Sons Australia, Ltd 2015 8.14

51. Calculate product cost per unit.

© John Wiley and Sons Australia, Ltd 2015 8.15

Work in process 1 January $7 000

© John Wiley and Sons Australia, Ltd 2015 8.16

Feedback: $7000 – $10 000 + $3000 + $2000 + $2000

Cost of goods manufactured is $35 000

*a. $17 400