Question 1

Which of the following costs would be classified as both a Manufacturing Overhead (MOH) and a Conversion Cost?

Accepted Answer

Factory supervisor's salary

Question 2

A company incurs the following costs: $$5,000 for direct materials, 3$$,000 for direct labor, and $2,000 for factory rent. What is the total Prime Cost?

Accepted Answer

$8,000

Question 3

Which journal entry correctly records the allocation of manufacturing overhead to a job?

Accepted Answer

Debit Work in Process, Credit Manufacturing Overhead

Question 4

A company uses a predetermined overhead rate of $12 per direct labor hour. If Job 101 used 50 direct labor hours, what amount of overhead should be allocated to Job 101?

Accepted Answer

$600

Question 5

After completing a job, which journal entry records the transfer of costs from Work in Process to Finished Goods?

Accepted Answer

Debit Finished Goods, Credit Work in Process

Question 6

Which of the following is NOT included in the calculation of Cost of Goods Manufactured (COGM)?

Accepted Answer

Selling expenses

Question 7

Given the following data: Beginning WIP = $$10,000, Direct Materials Used = 5$$,000, Direct Labor = $$3,000, Manufacturing Overhead = 2$$,000, Ending WIP = $$4,000. What is the Cost of Goods Manufactured (COGM)?

$$	ext{COGM} = 	ext{Beginning WIP} + 	ext{DM Used} + 	ext{DL} + 	ext{MOH} - 	ext{Ending WIP}$

Accepted Answer

$16,000

Question 8

In a production cost report, the calculation for equivalent units of production (EUP) for materials is:

$$	ext{EUP} = 	ext{Units transferred out} + (	ext{Ending WIP} 	imes 	ext{Percent complete})

If 800 $$units were transferred out and ending WIP is 200 units at 60% complete, what is the EUP for materials?

Accepted Answer

920

Question 9

A company has the following costs in Department A: Beginning Inventory = $$2,000, Costs Added = 8$$,000, Units Transferred Out = $$5,000, Ending Inventory = 1$$,000. What is the total cost transferred to Department B?

Accepted Answer

$9,000

Question 10

Which of the following best describes the flow of costs in a manufacturing company?

Accepted Answer

Raw Materials → Work in Process → Finished Goods → Cost of Goods Sold

Question 11

A company uses a single plantwide overhead allocation rate based on machine hours. Total estimated overhead is $$120,000 and total estimated machine hours are 30,000. What is the predetermined overhead rate?

$$	ext{Predetermined OH Rate} = \frac{	ext{Total Estimated OH}}{	ext{Total Estimated Machine Hours}}$

Accepted Answer

$4.00 per machine hour

Question 12

If a company uses activity-based costing (ABC) and has the following activity rates: Setup = $$50 per setup, Assembly = 2 $$per direct labor hour. Job 202 required 3 setups and 100 direct labor hours. What is the total overhead allocated to Job 202?

Accepted Answer

$350

Question 13

Which of the following statements is TRUE regarding activity-based costing (ABC) compared to traditional costing?

Accepted Answer

ABC assigns overhead based on multiple activities, while traditional costing uses a single allocation base.

Question 14

A company has two products, A and B. Under traditional costing, both products are allocated overhead at $$5 per unit. Under ABC, Product A is allocated 3 $$per unit and Product B $8 per unit. What does this suggest?

Accepted Answer

Product B consumes more overhead activities than Product A.

Question 15

Which of the following costs is a period cost?

Accepted Answer

Administrative salaries

Question 16

A company records the sale of a completed job for $$10,000. The cost of the job was 7$$,000. Which journal entries are required?

Accepted Answer

Debit Accounts Receivable $$10,000, Credit Sales Revenue 10$$,000; Debit Cost of Goods Sold $$7,000, Credit Finished Goods 7$$,000

Question 17

Which of the following is a conversion cost?

Accepted Answer

Direct labor

Question 18

A company has the following costs: Direct Materials = $$6,000, Direct Labor = 4$$,000, Manufacturing Overhead = $$2,000. What is the total Conversion Cost?

$$	ext{Conversion Cost} = 	ext{Direct Labor} + 	ext{Manufacturing Overhead}$

Accepted Answer

$6,000

Question 19

Which cost would be classified as both a product cost and a prime cost?

Accepted Answer

Direct materials

Cost Classification, Job Costing, Process Costing, and Overhead Allocation in Financial Accounting

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