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CSU - ACCT 222 - Chapter2/4 - Study Guide

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CSU - ACCT 222 - Chapter2/4 - Study Guide

School: Cleveland State University
Department: Accounting
Course: Managerial Accounting
Professor: Mary Rose
Term: Fall 2016
Tags:
Name: Chapter2/4
Description: CHAPTER 2/4 in class quiz
Uploaded: 12/22/2016
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Join more than 18,000+ college students at Cleveland State University who use StudySoup to get ahead
School: Cleveland State University
Department: Accounting
Course: Managerial Accounting
Professor: Mary Rose
Term: Fall 2016
Tags:
Name: Chapter2/4
Description: CHAPTER 2/4 in class quiz
Uploaded: 12/22/2016
6 Pages 213 Views 170 Unlocks
  • Better Grades Guarantee
  • 24/7 Homework help
  • Notes, Study Guides, Flashcards + More!

Unformatted text preview: 2a. How do you know? UH; .. 3. Which expenses are mixed? \ 3a. How do you know? A ‘ 14. The equation for a straight line (Y=a+bX) can be used to express the relationship between a mixed cost and the level of activity. Next to each of these components, describe what it means: Yié?‘v CHAPTER 2 1. For which situations below would an organization be more likely to use a process costing system of rather than a job—order costing system? i" A paper mill that processes wood pulp into large rolls of paper A shop that restore old cars to "showroom" quality A framing shop that builds picture frames to order for individual customers A masonry company that builds brick walls, bulkheads, and walkways designed by architects ‘\ .0 .0 905? 2. Which of the following companies would be most likely to use a process costing system? A. A shipbuilder B. A furniture manufacturer C. A law firm (Kl). A utility producing natural gas 3. Departmental overhead rates are generally preferred to plant wide overhead rates when: The activities of the various departments in the plant are not homogenous B. The activities of the various departments in the plant are homogeneous C. Most of the overhead costs are fixed D. All departments in the plant are heavily automated 4. A properjournal entry to record issuing raw materials to be used on a job would be 5. A. Finished Goods XXX Raw Materials XXX Raw Materials XXX Work In Process XXX Work in Process XXX Raw Materials XXX Raw Materials XXX Finished Goods XXX in computing its predetermined overhead rate, Brady Company included its factory insurance cost twice. This error will result in: A. The ending balance of Finished Goods to be understated B. (C; D. The credits to the Manufacturing Overhead account to be understated The Cost of Goods Manufactured to be overstated The Net Operating income to be overstated On the Schedule of Cost of Goods Manufactured, the final Cost of Goods Manufactured figure represents A. B. C D. x... The amount of cost charged to Work in Process during the period The amount of cost transferred from Finished Goods to Cost of Goods Sold during the period . The amount of cost placed into production during the period The amount of Cost of Goods completed during the current year whether they were started before or during the current year Chelm Music Corporation manufactures violins, violas, cellos, and fiddles and uses a job order costing system. What account should Chelm debit when the workers who carve the wood for the instruments have earned their pay? W905? Direct Labor ‘ Work in Process Manufacturing Overhead Salaries and Waged Receivable Salaries and Wages Expense 8. What account should Chelm debit when the production manager has earned her salary? Direct Labor Work in Process , Manufacturing Overhead Salaries and Waged Receivable Salaries and Wages Expense r" .055 .00 .> 9. What is one of the accounts the Chelm should credit when Goods are sold? " . Direct Labor Work in Process Manufacturing Overhead Salaries and Waged Receivable Salaries and Wages Expense .m .0 o .0953; 10. CR Corporation has the following estimated costs for the next year Direct materials $4000 Direct labor $20,000 Rent on factory building $15,000 at Sales salaries $25,000 I r Q9 Depreciation on factory equipment $8,000 ix Indirect labor $10,000 .1, Production supervisor’s salary $12,000 ,‘ CR Corporation estimates the 29,000 labor hours will be worked during the year. If overhead is applied on the basis of direct labor hours, the overhead rate per hour will be (A. $2.25 . $3.25 C. $3.45 D. $4.70 ‘rk .?. 44 .v a a Q" 9 .\\__J 11. Collins Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. The following information applies to the Corporation for the current year Direct labor hours: V Estimated for the year 24,000 ‘l?l ‘ * \ 1 Actual hours worked 19,500 Direct labor cost: Estimated for the year $300,000 1 Actual cost incurred $210,000 1 . Manufacturing Overhead: " _. .7 I J V », Estimated for the year $240,000 Pg ‘- Actual cost incurred $185,000 The manufacturing overhead cost for the current year will be A. $17,000 overapplied \Byl $17,000 underapplied C. $55,000 overapplied D. $55,000 underapplied ‘ \ . a, . 12. Smallwood Corporation has provided the following data concerning manufacturing overhead forJanuary Actual manufacturing overhead incurred $64,000 Manufacturing overhead applies to Work in Process $59,000 The Corporation’s Cost of Goods Sold was $223,000 prior to closing out its Manufacturing Overhead account. The Corporation closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true A. Manufacturing Overhead for the month was overapplied by $5,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $228,000 B. Manufacturing Overhead for the month was underapplied by $5,000,- Cost of Goods Sold after closing out the Manufacturing Overhead account is $218,000 (C. Manufacturing Overhead for the month was underapplied by $5,000; Cost of Goods " Sold after closing out the Manufacturing Overhead account is $228,000 D. Manufacturing Overhead for the month was overapplied by $5,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $218,000 -~...‘. 13. Caber Corporation applies manufacturing overhead on the basis of machine hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $60,600. Actual manufacturing overhead for the year amounted to $59,000 and actual machine hours were 5,900. The company's predetermined overhead rate for the year was $10.10 per machine hour The predetermine overhead rate was based on how many estimated machine hours? A. 5,783 (a: 6,000 ' ‘42} if» .. ‘C’. 5,900 \X. ‘ ‘ D. 5,842 if; g ' 14. Tondre Inc. has provided the following data for the month of July: Inventories: Beginning Ending Work in Process $23,000 $21,000 Finished Goods $26,000 $35,000 Additional information: Direct materials $56,000 Direct labor cost $91,000 Manufacturing Overhead cost incurred $58,000 Manufacturing Overhead Cost applied to Work in Process $61,000 The Cost of Goods Manufactured for July is: A. $210,000 3‘." $205,000 C. $208,000 D. $207,000 .. §a 15. Parker Company uses a job costing system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor hours. Last year manufacturing overhead and direct labor hours were estimated at $50,000 and 20,000 hours respectively, for the year. In June, Job #461 was completed. Material costs on the job totaled $4,000 and labor costs totaled $1,500 at $5 per hour. At the end of the year, it was determined that the company worked 24,000 direct labor hours for the year and incurred $54,000 in actual manufacturing overhead costs. Job #461 contained 100 units. Determine the unit product cost that would appear on the job cost sheet. x-‘ '4/ Assume the product sells for $100 per unit. What is the Gross Margin per unit? CHAPTER 3 The company currently uses a traditional costing method in which Overhead is applied to products based solely on direct labor hours. 1. Compute the company’s predetermined overhead rate under this traditional costing method.

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