Q: Which formula correctly calculates the predetermined overhead rate when overhead is applied using machine hours?

$$\text{Predetermined Overhead Rate} = \frac{\text{Estimated Total Overhead}}{\text{Estimated Machine Hours}}$$

Q: Salt & Buttery, Inc. incurs $$800 direct materials, 16 $$per hour direct labor, and $20 per hour overhead for 7 labor hours. What is the total cost of the Morris Lest party?

$$800 + (16 \times 7) + (20 \times 7) = 1$$,028$

Q: Soles for Souls, Inc. completed 5,000 shoes. Direct materials per shoe $$3, direct labor per shoe 2$$, allocated overhead $2,000. What is the cost of goods manufactured?

$$5,000 \times (3+2) + 2,000 = 27$$,000$

Q: Which equation best represents the calculation for cost of goods sold?

$$\text{COGS} = \text{Beginning Finished Goods Inventory} + \text{Cost of Goods Manufactured} - \text{Ending Finished Goods Inventory}$$

Question 1

Which of the following is primarily a function of managerial accounting?

Accepted Answer

Providing information to internal decision makers for planning and control.

Question 2

Deja Brew Company reported the following for the year: Beginning Work-in-Process Inventory $$63,500, Ending Work-in-Process Inventory 58$$,200, Finished Goods Inventory Beginning $$36,600, Finished Goods Inventory Ending 36$$,500, Cost of Goods Manufactured $391,200. Calculate the cost of goods sold for the year.

Accepted Answer

$391,300

Question 3

Which formula correctly calculates the predetermined overhead rate when overhead is applied using machine hours?

Accepted Answer

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

Question 4

Obi Wan Pierogi, Inc. estimates 60,000 machine hours and $600,000 manufacturing overhead for the year. If Job #123 uses 9,500 machine hours, how much overhead is applied?

Accepted Answer

$$195,000$$

Question 5

Shoes Wisely, Inc. estimates $81,000 manufacturing overhead and 16,000 machine hours. During the year, 14,000 machine hours were used. How much overhead was allocated?

Accepted Answer

$$71,000$$

Question 6

Salt & Buttery, Inc. incurs $$800 direct materials, 16 $$per hour direct labor, and $20 per hour overhead for 7 labor hours. What is the total cost of the Morris Lest party?

Accepted Answer

$$800 + (16 	imes 7) + (20 	imes 7) = 1$$,028$

Question 7

Which of the following costs is a period cost?

Accepted Answer

Corporate headquarters' rent

Question 8

Boris' Car Loft, Inc. incurred $$30,000 factory worker wages, 800$$,000 CFO salary, $$80,000 factory rent, 70$$,000 factory materials, and $200,000 corporate headquarters' rent. What is the total product cost?

Accepted Answer

$$180,000$$

Question 9

Which of the following companies is most likely to use process costing?

Accepted Answer

Dupont Chemicals

Question 10

In the flow of direct material costs, which account is debited first when materials are purchased?

Accepted Answer

Raw Materials Inventory

Question 11

Which of the following is a characteristic of financial accounting reports?

Accepted Answer

Reports are mandatory and must follow GAAP.

Question 12

Soles for Souls, Inc. completed 5,000 shoes. Direct materials per shoe $$3, direct labor per shoe 2$$, allocated overhead $2,000. What is the cost of goods manufactured?

Accepted Answer

$$5,000 	imes (3+2) + 2,000 = 27$$,000$

Question 13

Miss Take erroneously recorded $10,000 of product costs as period costs. Sixty percent of inventory has been sold. Which is correct?

Accepted Answer

Cost of Goods Sold is overstated by $6,000

Question 14

Which of the following is NOT a characteristic of managerial accounting?

Accepted Answer

Reports are mandatory and must follow GAAP.

Question 15

Frying Dutchman, Inc. had $$8,000 beginning WIP, incurred 30$$,000 factory wages, $$30,000 direct materials, 20$$,000 allocated utilities, $$30,000 allocated rent, and 200$$,000 sales commissions. Ending WIP is $5,000. What is the cost of goods manufactured?

Accepted Answer

$$93,000$$

Question 16

Which of the following is considered a product cost and classified as manufacturing overhead?

Accepted Answer

The salary of the accounting manager

Question 17

Which equation best represents the calculation for cost of goods sold?

Accepted Answer

$$	ext{COGS} = 	ext{Beginning Finished Goods Inventory} + 	ext{Cost of Goods Manufactured} - 	ext{Ending Finished Goods Inventory}$$

Question 18

Which of the following is NOT included in total product cost?

Accepted Answer

Sales commissions

Question 19

A company has $$15,000 beginning inventory, 10$$,000 purchases, and $17,000 ending inventory. What is the cost of goods sold?

Accepted Answer

$$8,000$$

Step-by-Step Guidance for Financial Accounting and Managerial Accounting Study Questions

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