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Question 1 Escau Company Is a wholesale distributor that uses activity-based costing for all of its overhead costs

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Question 1

Escau Company Is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity-based costing system:

Overhead costs:
Wages and salaries	$380,000
Other Expenses	100,000
Total	$480,000

 

Distribution of Resource Consumption:

		Activity Cost Pools
	Filling Orders	Customer Support	Other		Total
Wages and salaries	30%	60%	10%		100%
Other expenses	35%	45%	20%		100%

 

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.  The activity measures for the activity cost pools for the year are as follows

Activity Cost Pool	Activity
Filling order	3,000 orders
Customer Support	20 customers

 

What would be the total overhead cost per order according to the activity-based costing system, rounded to the nearest whole cent? In other words, what would be the overall activity rate for the Filling Orders activity cost pool?

Multiple Choice

O $49.67.

O $56.00

O $48.00

O $52.00

Question 2

Escau Company Is a wholesale distributor that uses activity-based costing for all of its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity-based costing system:

Overhead costs:
Wages and salaries	$380,000
Other Expenses	100,000
Total	$480,000

 

Distribution of Resource Consumption:

		Activity Cost Pools
	Filling Orders	Customer Support	Other		Total
Wages and salaries	30%	60%	10%		100%
Other expenses	35%	45%	20%		100%

 

The "Other" activity cost pool consists of the costs of idle capacity and organization-sustaining costs.  The activity measures for the activity cost pools for the year are as follows

Activity Cost Pool	Activity
Filling order	3,000 orders
Customer Support	20 customers

 

What would be the total overhead cost per order according to the activity-based costing system, rounded to the nearest whole cent? In other words, what would be the overall activity rate for the Filling Orders activity cost pool?

Multiple Choice

$13,650

$10,800

$14,400.

$12.600

 

Question   67

Costs Incurred at which of the following activity levels should NOT be allocated to products for decision-making purposes?

O Multiple Choice 

O Unit-level activities.

O Organization-sustaining activities

O Batch-level activities.

O Product-level activities

 

Question 66

What is a duration driver?

Multiple Choice

O An activity measure that is used for the life of an activity-based costing system.

O An activity measure that is used for the life of the company.

O A measure of the amount of time required to perform an activity.

O A simple count of the number of times an activity occurs.

 

Question 65

Which of the following activity levels is an example of the clerical activity associated with processing purchase orders to produce an order for a standard product,

Multiple Choice

 O Product-level activity

O Batch-level activity.

O Unit-level activity

O Organization-sustaining activity

 

Question 64

Worker recreational facilities are examples of costs that would ordinarily be considered to be incurred at which of the following activity levels? Multiple Choice

O Organization-sustaining activity.

O Product-level activity

O Unit-level activity.

O Batch-level activity

 

Question

Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device for the mining industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May

	Units
Beginning work in process inventory	16,000
Started into production during May	100,000
Completed during May	92,000
Ending work in process inventory	24,000

 

The beginning work-in-process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work-in-process inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows:

 

	Materials	Conversion
Beginning work-in-process inventory	$54,560	$35,560
Costs incurred during May	$468,000	$574,040

               

Using the weighted-average method, the total cost of the units in ending work-in-process inventory is closest to which of the following?

Required information

O $154,800

O $86,400

O $153,960

O $156,960

 

Question 63

Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device for the mining industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May

	Units
Beginning work in process inventory	16,000
Started into production during May	100,000
Completed during May	92,000
Ending work in process inventory	24,000

 

The beginning work-in-process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work-in-process inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows:

 

	Materials	Conversion
Beginning work-in-process inventory	$54,560	$35,560
Costs incurred during May	$468,000	$574,040

               

Using the weighted-average method, the total cost of the units in ending work-in-process inventory is closest to which of the following?

°Required information

O $6.41

O $6.00

O $5.65

0 $5.83

Question 62

Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device for the mining industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May

	Units
Beginning work in process inventory	16,000
Started into production during May	100,000
Completed during May	92,000
Ending work in process inventory	24,000

 

The beginning work-in-process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work-in-process inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows:

 

	Materials	Conversion
Beginning work-in-process inventory	$54,560	$35,560
Costs incurred during May	$468,000	$574,040

               

Using the weighted-average method, the total cost of the units in ending work-in-process inventory is closest to which of the following?

Multiple Choice

O $4.12

O $4.50

O $4.60

O $5.03

 

Question 61

Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device for the mining industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May

	Units
Beginning work in process inventory	16,000
Started into production during May	100,000
Completed during May	92,000
Ending work in process inventory	24,000

 

The beginning work-in-process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work-in-process inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows:

 

	Materials	Conversion
Beginning work-in-process inventory	$54,560	$35,560
Costs incurred during May	$468,000	$574,040

                               

Using the weighted-average method, the total cost of the units in ending work-in-process inventory is closest to which of the following?

0 $157.000

O $153.200

O $154,800

O $155,300

 

 

Question 60

Kimbeth Manufacturing makes Dust Density Sensors (DDS), a safety device for the mining industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May

	Units
Beginning work in process inventory	16,000
Started into production during May	100,000
Completed during May	92,000
Ending work in process inventory	24,000

 

The beginning work-in-process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work-in-process inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows:

 

	Materials	Conversion
Beginning work-in-process inventory	$54,560	$35,560
Costs incurred during May	$468,000	$574,040

 

(Appendix 6A) Using the FIFO method, the cost per equivalent unit of materials for May is closest to which of the following?

Multiple Choice

O $4.50

O $4.60

O $4.80

O $4.12

 

Question : 59

Lucas Company uses the weighted-average method in its process costing system. The company adds materials at the beginning' of the process in the Forming Department, which is the first of two stages in its production process. Information concerning operations in the Forming Department in October follows.

Materials

 

	Units	Cost
Work in process on October 1	6,000	$3,000
Units started during October	50,000	$25,560
Units completed and transferred next Department during October	44,000

 

What was the materials cost of work in process on October 31?

Multiple Choice

O $5,520

O $3,060

O $6,000

O $6,120

 

Question 58

Department 2 is the second of three sequential processes. All materials are added at the beginning of processing in Department 2. During October, Department 2 reported the following data:

	Number of Units	Conversion costs percentage complete
Units started	60,000
Completed and transferred	50,000
Work in progress, October 1	26,0000	60%
Work in progress, October 31	36,000	20%

 

Costs for October	Transferred In	Materials	Conversion Costs
Work in Progress, October 1	$45,000	$25,000	$54,000
Added during the month	81,000	115,000	315,000

The company uses the weighted-average method in its process costing system. To the nearest cent, what is the cost per equivalent unit on the production report for conversion costs?

O $6.45

O $ 6.30

O $7.38

O $5.51

 

Question -57

Huffer Company uses the weighted-average method in its process costing system. The following information pertains to Processing Department D for the month of May

	Number of units	Cost of materials
Beginning work in process	30,000	$11,000
Started in May	80,000	$36,000
Units Completed	85,000
Ending work in Progress	25,000

 

All materials are added at the beginning of the process. Which of the following costs is closest to the cost per equivalent unit t materials?

Multiple Choice

O $0.43

O $0.45                                                                                                                     

O $0.59

O $0.55

 

Question 56

Baker Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 8,000 units in its beginning work-in-process inventory that were 90% complete with respect to conversion costs. An additional 95,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 11,000 units in the ending work-in-process inventory of the Assembly Department that were 90% complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Assembly Department for the month?

Multiple Choice

0 92,000 units.

0 94,700 units.

0 101,900 units.

0 98,000 units.

 

Question 55

 (Appendix 6A) Carson Company uses the FIFO method in its process costing system. The Assembly Department started the month with 6,000 units in its beginning work-in-process inventory; 20% of the units were complete with respect to conversion costs. An additional 74,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. Of the 8,000 units in the ending work-in-process inventory of the Assembly Department, 60% were complete with respect to conversion costs. What were the equivalent units of production for conversion costs in the Assembly Department for the month?

Multiple Choice

O 76,000 units.

O 75,600 units.

O 72,000 units.

O 76,800 units.

 

Question 54

(Appendix 6A) Which of the following statements referring to a production report is not correct? Multiple Choice

O The quantity schedule deals with physical units, not whole units.

O The equivalent units in the ending work-in-process inventory will be different if the weighted-average method is used than it will be if the FIFO method is used.

O The total "Costs to be accounted for" must equal the total cost of the units completed and transferred out, plus the cost of the ending work-in-process inventory.

O The total of the "Units to be accounted for" will equal the total of the "Units accounted for."

 

Question 53

Assume that there is no beginning work-in-process inventory, and the ending work-in-process inventory is 50% complete with respect to conversion costs. What would be the number of equivalent units of production with respect to conversion costs under the weighted-average method?

Multiple Choice

O Less than the units completed.

O Less than the units started during the period.

O The same as the units completed.

O The same as the units started during the period.

 

Question 52

(Appendix 6A) All production costs have been steadily rising in the Donner Company for several periods, and the company maintains large work-in-process inventories. What is the Donner Company's cost per equivalent unit, as computed using the FIFO method?

Multiple Choice

0 Lower than that computed under the weighted-average method.

0 The same as that computed under the weighted-average method.

0 Higher than that computed under the weighted-average method

0 It could be the lower than, the same as, or higher than computed under the weighted-average method.

 

Question 51

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company:

	Raw Materials				Accounts Payable
Beg Bal	4,000	20,000				18,000	1
1	18,000					4,000	5
	Work in Progress				Finished Goods
Beg Bal	8,000	50,000	7	Beg Bal	17,000
2	12,000			7	50,000
4	15,000			End Bal	12,000
6	28,000
	Manufacturing Overhead				Wages & Salaries Payable
2	8,000	50,000	7			6,000	Beg Bal
3	12,000					30,000	4
4	5,000
5	4,000
	Manufacturing Overhead				Cost of goods sold
4	10,000
	Accumulated Amortization (Factory)
		90,000	Beg Bal
		12,000	3

 

 

At the end of the year, the company closes out the balance in the Manufacturing Overhead account to Cost of Goods Sold

 

O $55,000

O $50,000

O $63,000

O $27,000

 

Question 50

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company

                Work in Progress                                                              Finished Goods                

Beg Bal 8,000     50,000   7              Beg Bal 17,000                  

2              12,000                                   7              50,000                  

4              15,000                                   End Bal 12,000                  

6              28,000                                                                                  

                                                                                                               

                Manufacturing Overhead                                                             Wages & Salaries Payable                            

2              8,000     50,000   7                                              6,000     Beg Bal

3              12,000                                                                   30,000   4

4              5,000                                                                                    

5              4,000                                                                                    

                                                                                                               

                Manufacturing Overhead                                                             Cost of goods sold                          

4              10,000                                                                                  

                                                                                                               

                Accumulated Amortization (Factory)                                                                                      

                                90,000   Beg Bal                                                

                                12,000   3                                                             

At the end of the year, the company close out the balance in the manufacturing overhead account to cost of Goods sold.

O $55,000

O$50,000

O$2,000

O$13,000

 

Question 49

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company

Raw Materials                                                                                   Account Payable

Beg Bal 4,000                                      20,000                                                                   18,000  (1)

                18,000                                                                                                                   4,000    (5)

Work in Progress                                                              Finished Goods                

Beg Bal 8,000     50,000   7              Beg Bal 17,000                  

2              12,000                                   7              50,000                  

4              15,000                                   End Bal 12,000                  

6              28,000                                                                                  

                                                                                                               

                Manufacturing Overhead                                                             Wages & Salaries Payable                            

2              8,000     50,000   7                                              6,000     Beg Bal

3              12,000                                                                   30,000   4

4              5,000                                                                                    

5              4,000                                                                                    

                                                                                                               

                Manufacturing Overhead                                                             Cost of goods sold                          

4              10,000                                                                                  

                                                                                                                                                                                Accumulated Amortization (Factory)                                                                                             

                90,000   Beg Bal                                 3                                                             

12,000

At the end of the year, the company close out the balance in the manufacturing overhead account to cost of Goods sold.

What is the coast of direct materials used?

O $15,000

O $20,000

O $11,000

O $12,000

 

Question 48

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company

Raw Materials                                                                                   Account Payable

Beg Bal 4,000                                      20,000                                                                   18,000  (1)

                18,000                                                                                                                   4,000    (5)

Work in Progress                                                              Finished Goods                

Beg Bal 8,000     50,000   7              Beg Bal 17,000                  

2              12,000                                   7              50,000                  

4              15,000                                   End Bal 12,000                  

6              28,000                                                                                  

                                                                                                               

                Manufacturing Overhead                                                             Wages & Salaries Payable                            

2              8,000     50,000   7                                              6,000     Beg Bal

3              12,000                                                                   30,000   4

4              5,000                                                                                    

5              4,000                                                                                    

                                                                                                               

                Manufacturing Overhead                                                             Cost of goods sold                          

4              10,000                                                                                  

                                                                                                                                                                                Accumulated Amortization (Factory)                                                                                             

                90,000   Beg Bal                                 3                                                             

12,000

At the end of the year, the company close out the balance in the manufacturing overhead account to cost of Goods sold.

What is the manufacturing overhead applied?

Multiple Choice

O $27,000

O $36,000

O $29,000

O $28,000

 

Question 47

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company

Raw Materials                                                                                   Account Payable

Beg Bal 4,000                                      20,000                                                                   18,000  (1)

                18,000                                                                                                                   4,000    (5)

Work in Progress                                                              Finished Goods                

Beg Bal 8,000     50,000   7              Beg Bal 17,000                  

2              12,000                                   7              50,000                  

4              15,000                                   End Bal 12,000                  

6              28,000                                                                                  

                                                                                                               

                Manufacturing Overhead                                                             Wages & Salaries Payable                            

2              8,000     50,000   7                                              6,000     Beg Bal

3              12,000                                                                   30,000   4

4              5,000                                                                                    

5              4,000                                                                                    

                                                                                                               

                Manufacturing Overhead                                                             Cost of goods sold                          

4              10,000                                                                                  

                                                                                                                                                                                Accumulated Amortization (Factory)                                                                                             

                90,000   Beg Bal                                 3                                                             

12,000

At the end of the year, the company close out the balance in the manufacturing overhead account to cost of Goods sold.

What is the cost of goods sold (after adjustment for under or over applied overhead)?

O $51,000

O $56,000

O $55,000

O$54,000

 

Question 46

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company

Raw Materials                                                                                   Account Payable

Beg Bal 4,000                                      20,000                                                                   18,000  (1)

                18,000                                                                                                                   4,000    (5)

Work in Progress                                                              Finished Goods                

Beg Bal 8,000     50,000   7              Beg Bal 17,000                  

2              12,000                                   7              50,000                  

4              15,000                                   End Bal 12,000                  

6              28,000                                                                                  

                                                                                                               

                Manufacturing Overhead                                                             Wages & Salaries Payable                            

2              8,000     50,000   7                                              6,000     Beg Bal

3              12,000                                                                   30,000   4

4              5,000                                                                                    

5              4,000                                                                                    

                                                                                                               

                Manufacturing Overhead                                                             Cost of goods sold                          

4              10,000                                                                                  

                                                                                                                                                                                Accumulated Amortization (Factory)                                                                                             

                90,000   Beg Bal                                 3                                                             

12,000

At the end of the year, the company close out the balance in the manufacturing overhead account to cost of Goods sold.

What is the cost of goods manufactured?

O $55,000

O $50,000

O $61,000

O $56,000

 

Question 45

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company

Raw Materials                                                                                   Account Payable

Beg Bal 4,000                                      20,000                                                                   18,000  (1)

                18,000                                                                                                                   4,000    (5)

Work in Progress                                                              Finished Goods                

Beg Bal 8,000     50,000   7              Beg Bal 17,000                  

2              12,000                                   7              50,000                  

4              15,000                                   End Bal 12,000                  

6              28,000                                                                                  

                                                                                                               

                Manufacturing Overhead                                                             Wages & Salaries Payable                            

2              8,000     50,000   7                                              6,000     Beg Bal

3              12,000                                                                   30,000   4

4              5,000                                                                                    

5              4,000                                                                                    

                                                                                                               

                Manufacturing Overhead                                                             Cost of goods sold                          

4              10,000                                                                                  

                                                                                                                                                                                Accumulated Amortization (Factory)                                                                                             

                90,000   Beg Bal                                 3                                                             

12,000

At the end of the year, the company closes out the balance in the manufacturing overhead account to cost of goods sold.

What is the indirect labour cost?

O $12,000

O $35,000

O $5,000

O $15,000

 

Question 44

Manufacturing overhead is over applied for the year by $3,000. The unadjusted cost of goods sold is $360,000. Closing manufacturing overhead into the cost of goods sold will result in which of the following?

Multiple Choice

O Adjusted cost of goods sold of $363.000

O A credit balance in manufacturing overhead of 06.000.

O Adjusted cost of goods sold of $357,000.

O Adjusted cost of goods sold of $360,000.

 

Question 43

Dowan Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. During the year, Dowan Company incurred $156,600 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was underapplied by $12,600 for the year if the predetermined overhead rate is $6.00 per direct labour-hour, how many hours did the company work during the year?

Multiple Choice

O 24,000 hours.

O 28,200 hours.

O 26 000 hours.

O 25,000 hours.

 

Question 42

In a Job-order costing system, when a job remains Incomplete at the end of a period, how is the amount of overhead cost that has been applied to that job treated?

Multiple Choice

O It is closed out to Cost of Goods Sold

O It is deducted on the Income Statement as over applied overhead.

O It is transferred to Finished Goods.

O It is a pan of the ending balance of the Work in Process inventory account.