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80 Questions on Business Communication and Reports with Answers | BCOM 2285, Study notes of Introduction to Business Management

Georgia College & State University (GCSU)Introduction to Business Management

Acct 2 Material Type: Notes; Class: Business Comm and Reports; Subject: Business Communications; University: Georgia College & State University; Term: Spring 2013;

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Acct 2 Exam Ch. 16, 17, & 17A
1) Which of the following is not one of the key standards of ethical practice published by the IMA?
a) Competence
b) Environmental Sensitivity
c) Integrity
d) Confidentiality
2) Which of the following is not part of manufacturing overhead for producing a computer?
a) Manufacturing plant property taxes
b) Manufacturing plant utilities
c) Depreciation on delivery trucks
d) Insurance on plant and equipment
3) The following information pertains to bright toy company’s operating activities for 2012. The
company sells light box toys and sold 10,000 units in 2012.
i) Purchases $126,000
ii) Selling and administrative Expenses $90,000
iii) Merchandise Inventory 1/1/2012 $14,000
iv) Merchandise Inventory 12/31/2012 $10,000
v) Sales Revenue $250,000
What is the cost of goods sold for 2012?
a. $104,000
b. $124,000
c. $130,000
d. $140,000
4) The following information pertains to Bright Toy Company’s operating activities for 2012. The
company sells light box toys and sold 10,000 units in 2012
Purchases $126,000
Selling and Administrative Expenses $90,000
Merchandise Inventory 1/1/2012 $14,000
Merchandise Inventory 12/31/2012 $10,000
Sales Revenue $250,000
What is the operating income for 2012?
a. $250,000
b. $140,000
c. $30,000
d. $90,000
5) In computing cost of goods sold, which of the following is the manufacture’s equivalent to the
merchandiser’s purchases?
a) Total manufacturing costs to account
b) Direct materials used
c) Total manufacturing costs incurred during the period
d) Cost of Goods manufactured
6) Manufacturing overhead includes which of the following?
a) Indirect labor and indirect materials
b) Salaries of salesman
c) Direct materials and direct labor
d) Delivery costs to ship goods to customers
7) Wright Company reports production costs for 2012 as follows:
i) Direct Materials used $375,000
ii) Direct Labor incurred $250,000
iii) Manufacturing overhead incurred $400,000
iv) Operating Expenses $145,000
How much are Wright Company’s inventoriable product costs for 2012?
(a) $925,000
(b) $605,000
(c) $975,000
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Acct 2 Exam Ch. 16, 17, & 17A

  1. Which of the following is not one of the key standards of ethical practice published by the IMA? a) Competence b) Environmental Sensitivity c) Integrity d) Confidentiality
  2. Which of the following is not part of manufacturing overhead for producing a computer? a) Manufacturing plant property taxes b) Manufacturing plant utilities c) Depreciation on delivery trucks d) Insurance on plant and equipment
  3. The following information pertains to bright toy company’s operating activities for 2012. The company sells light box toys and sold 10,000 units in 2012. i) Purchases $126, ii) Selling and administrative Expenses $90, iii) Merchandise Inventory 1/1/2012 $14, iv) Merchandise Inventory 12/31/2012 $10, v) Sales Revenue $250, What is the cost of goods sold for 2012? a. $104, b. $124, c. $130, d. $140,
  4. The following information pertains to Bright Toy Company’s operating activities for 2012. The company sells light box toys and sold 10,000 units in 2012 Purchases $126, Selling and Administrative Expenses $90, Merchandise Inventory 1/1/2012 $14, Merchandise Inventory 12/31/2012 $10, Sales Revenue $250, What is the operating income for 2012? a. $250, b. $140, c. $30, d. $90,
  5. In computing cost of goods sold, which of the following is the manufacture’s equivalent to the merchandiser’s purchases? a) Total manufacturing costs to account b) Direct materials used c) Total manufacturing costs incurred during the period d) Cost of Goods manufactured
  6. Manufacturing overhead includes which of the following? a) Indirect labor and indirect materials b) Salaries of salesman c) Direct materials and direct labor d) Delivery costs to ship goods to customers
  7. Wright Company reports production costs for 2012 as follows: i) Direct Materials used $375, ii) Direct Labor incurred $250, iii) Manufacturing overhead incurred $400, iv) Operating Expenses $145, How much are Wright Company’s inventoriable product costs for 2012? (a) $925, (b) $605, (c) $975,

(d) $1,025,

  1. Which of the following accounts does a manufacturing company, but not a service company, have? a) Advertising expense b) Salary Payable c) Cost of Goods sold d) Retained earnings
  2. Which of the following costs would appear on the income statements for both a merchandiser and a manufacturer? a) Direct labor b) Cost of goods manufactured c) Direct Materials d) Operating expenses
  3. Selected data for Young Company for 2012 is presented below: i) Direct Labor Incurred $30, ii) Indirect labor incurred $21, iii) Factory depreciation $5, iv) Factory utilities $7, v) Indirect materials used $2, vi) Direct materials used $12, vii) Property, taxes on factory building $3, viii) Sales Commission $8, What is the manufacturing overhead? (a) $47, (b) $50, (c) $38, (d) $46,
  4. World-class businesses use which of these systems to integrate all of the company’s world-wide functions, departments, and data into a single system. a) Cost Standards b) Enterprise resource planning c) Just-in-time management d) Items a, b, and c are correct
  5. Which of the following is a characteristic of a service company? a) It transforms raw materials into finished goods. b) It makes a product c) It does not have tangible products intended for sale d) It has a single category of inventory
  6. Management is accountable to its suppliers and vendors in which of the following ways? a) Providing products to customers that are safe and free of defects b) Repaying loans in a timely manner c) Providing a return on the owner’s shareholders’ investment d) Making timely payments and complying with contract terms
  7. A management accountant who avoids conflicts of interest meets the ethical standard of a) Confidentiality. b) Competence. c) Credibility. d) Integrity.
  8. What is total quality management? a) A philosophy of supplying customers with superior products and services b) An exchange of info with suppliers and customers to create efficient and effective processes c) A software system that integrates a company’s functions, departments, and data into single system d) A system which speeds the transformation of raw materials into finished products
  9. Which of the following correctly describes the term cost driver? a) The inflation rate which causes costs to rise b) The initial purchase price of direct materials

c) Manufacturing overhead d) Materials inventory

  1. A process costing system is useful in which of the following circumstances? a) Providing specialized services b) Production of unique products c) Production of multiple products in separate batches d) Mass production of a single type of product
  2. Under allocated manufacturing overhead costs are always the result of which of the following situations? a) Allocated overhead costs are less than actual overhead costs. b) Actual overhead costs are less than allocated overhead costs c) Actual overhead costs are greater than estimated overhead costs d) Estimated over head costs are greater than actual overhead costs
  3. When is the predetermined manufacturing overhead rate for a given production year calculated? a) At the end of the production year b) Before the production year begins c) After each job is completed d) At the mid-point of the production year
  4. Which of the following would be included in the journal entry to record the requisition of direct materials? a) Debit to Cost of good sold b) Debit to Work in process inventory c) Debit to finished goods inventory d) Debit to Materials Inventory
  5. The journal entry to record the incurrence of $1,500 of direct labor and $200 of indirect labor includes which of the following? a) Debit to Manufacturing overhead for $1, b) Debit to Work in process inventory for $1,500 and debit to Finished goods for $ c) Debit to Work in process inventory for $1, d) Debit to Work in process for $1,500, debit to manufacturing overhead for $
  6. In a process costing system, the entry to record the use of direct materials in production would include which of the following? a) Debit to Work in Process Inventory b) Debit to Materials Inventory c) Debit to Finished Goods Inventory d) Credit to Finished Goods Inventory
  7. The entry to record a $24,000 transfer from the assembly Department to Finishing Department would include which of the flowing? a) Debit to Work in Process Inventory – Assembly b) Debit to Finished Goods Inventory c) Credit to Work in Process Inventory – Assembly d) Credit to Materials Inventory
  8. During the period, 50,000 units were completed, and 3.600 units were still in the inventory at the end of the period. If the ending work in process inventory was 75% complete as to direct materials and 25% complete as to conversion costs, the equivalent units for direct materials under the weighted- average method would be what amount? a) 45, b) 47, c) 48, d) 52,
  9. Beginning work process is 900 units, units completed and transferred out in October are 3,200 units, and ending work in process is 500 units. What are units started into production in October? a) 2, b) 2, c) 3, d) 3,
  1. Conversion costs consist of which of the following? a) Direct materials and direct labor b) Direct labor and manufacturing overhead c) Direct materials and manufacturing overhead d) Product costs and period costs
  2. The Lloyd Company uses a process costing system. There were no units in beginning work in process, 1,400 were started, and 1,000 units were completed and transferred out. The units at the end of the period were 60% complete regarding materials and 40% complete regarding conversion. The cost of materials added during the current period amounted to $31,944; the cost of conversion added during the current period amounted to $30,016. What are the equivalent units for materials? a) 1, b) 1, c) 1, d) 1,
  3. Refer to Question 36. What are the equivalent units for conversion costs? a) 1, b) 1, c) 1, d) 1,
  4. Refer to Question 36. What is the cost per equivalent unit for materials? a) $22. b) $22. c) $24. d) $25.
  5. Refer to Question 36. What is the cost per equivalent unit for conversion costs? a) $22. b) $23. c) $25. d) $25.
  6. In a process costing system, the number of Work in Process Inventory accounts is equal to what amount? a) The number of products sold b) The number of production departments c) The number used in a job order costing system d) The number of products sold
  7. Evanston Manufacturing Company reported the following information for the year 2012: i) Number of units produced 4, ii) Number of units sold 5, iii) Cost of goods manufactured $460, iv) Cost of goods sold $488, v) Sales revenue $1,260, vi) Gross profit $771, vii) Operating expense $724, What was the unit product cost (cost to make one unit of product)? (Please round to the nearest cent.) (a) $87. (b) $262. (c) $93. (d) $96.
  8. The following information was obtained from Fizz Company: i) Advertising costs: $9, ii) Indirect labor: $11, iii) CEO’s salary: $49, iv) Direct Labor: $41, v) Indirect Materials: $7, vi) Direct Materials: $61,

a) $140, b) $126, c) $104, d) $130,

  1. The following information pertains to Bright toy Company’s operating activities for 2012. The company sells toy boxes and sold 10,000 units in 2012. (i) Purchases $126, (ii) Selling and Administrative Expenses 90, (iii) Merchandise inventory, 1/1/2012 14, (iv) Merchandise inventory, 12/31/2012 10, (v) Sales Revenue 250, What is the gross profit for 2012? a) $120, b) $130, c) $140, d) $136,
  2. The following information pertains to Bright toy Company’s operating activities for 2012. The company sells toy boxes and sold 10,000 units in 2012. (i) Purchases $126, (ii) Selling and Administrative Expenses 90, (iii) Merchandise inventory, 1/1/2012 14, (iv) Merchandise inventory, 12/31/2012 10, (v) Sales Revenue 250, What is the gross profit percentage? a) 48% b) 56% c) 36% d) 100%
  3. Managerial Accounting includes the controlling function. Which of the following items would be part of the controlling function of a business’s managerial accounting? a) Comparing actual performance to previously budgeted amounts b) Creating detailed budgets c) Devising marketing and production plans d) Setting product prices
  4. Which of the following most accurately describes the term cost/benefit analysis? a) Considering whether employees should be entitled to certain fringe benefits b) Calculating the cost of holding fundraising benefits for charity c) Considering whether the cost of products exceeds the market-selling price d) Considering whether the cost of calculating certain types of information provides a commensurate economic benefit
  5. Which of the following describes a system in which suppliers deliver materials at the time they are needed and finished units are completed when customer orders need to be filled? a) Supply chain management b) Just-in-time (JIT) c) Enterprise resource planning d) Total quality management
  6. What is the name given to software systems that can integrate all of a company’s worldwide functions, departments, and data into a single system? a) Total quality management b) Enterprise resource planning c) E-Commerce d) Just-in-time inventory management
  7. You did not understand what the term accrual meant and failed to accrue the interest due at the end of the year on the company’s bonds. Which IMA guideline has been violated? a) Integrity b) Confidentiality

c) Competence d) Objectivity

  1. Which of the following is an industry that would use a process coasting system rather than a job order costing system? a) Custom furniture manufacturer b) Music production studio c) Paint manufacturer d) Home remodeling contractor
  2. A job order costing system is useful in which of the following circumstances? a) Mass production of a commodity b) Manufacturing multiple products in separate batches c) Continuous flow production of a single product d) Manufacturing a product in a multi-step flow of production
  3. Which of the following would be included in the journal entry to record the incurrence of indirect labor costs? a) Debit to manufacturing overhead b) Debit to wages payable c) Debit to finished goods inventory d) Debit to Work in process inventory
  4. The journal entry to issue $500 of direct materials and $30 of indirect materials to production includes which of the following? a) Debit to work in process for $500 and debit to Finished goods for $ b) Debit to manufacturing overhead for $ c) Debit to work in process for $500 and debit to manufacturing overhead for $ d) Debit to work in process inventory for $
  5. Specialty Wood Products Company had the following manufacturing labor costs last month: Woodworkers’ wages $100, Indirect laborers’ wages $20, Maintenance personnel wages $10, What is the journal entry to record the incurrence of these wages? a) Work in process inventory 100, Manufacturing overhead 30, Wages payable 130, b) Work in process inventory 130, Wages payable 130, c) Wages payable 130, Finished goods inventory 100, Work in process inventory 30, d) Manufacturing overhead 130, Wages payable 130,
  6. On January 1, 2012, Matthew Company’s work in process inventory account had a balance of $30,000. During 21012, $58,000 of direct materials was placed into production. Manufacturing wages incurred amounted to $84,000, of which $66,000 were for direct labor. Manufacturing overhead is allocated on the basis of 120% of direct labor cost. Actual manufacturing overhead was $90,000. Jobs costing $220, were completed during 2012. What is the December 31, 2012 balance in work in process inventory? a) $16, b) $34, c) $6, d) $12,
  7. Under allocation of manufacturing overhead would require which of the following year-end adjustments? a) A credit to Finished goods inventory b) A credit to manufacturing overhead c) A debit to Work-in-process inventory d) A credit to Cost of goods sold
  1. Gardner Machine Shop estimates manufacturing overhead costs for the coming year at $316,000. They will allocate based on direct labor hours. Gardner estimates 5,000 direct labor hours for the coming year. In January, Gardner completed Job Number A33, which included 15 direct labor hours. How much overhead was allocated to the job? a) $ b) $ c) $1, d) $ In the following questions 30 through 34, please circle the correct answer.
  2. In a process costing system, each department has its own Work in process account. True or False
  3. In a process costing system, conversion costs are normally assumed to be incurred evenly throughout the production process. True or False
  4. In a process costing system, direct materials costs are normally assumed to be incurred evenly throughout the production process. True or False
  5. In a process costing system, equivalent units must be calculated separately for materials and conversion costs. True or False
  6. If there are 500 units in The Mixing Department’s Work in process account at the end of the month, and they are 80% complete with respect to conversion costs, they would be accounted for as 400 equivalent units with respect to conversion costs. True or False
  7. Overallocation of manufacturing overhead would require which of the following year-end adjustments? a) A credit Finished goods inventory b) A credit to manufacturing overhead c) A debit to Work-in-process inventory d) A credit to Cost of Goods sold
  8. ABC Manufacturing produces a pesticide chemical and uses process costing. There are two processing departments: Mixing and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the process, and conversion costs are applied evenly throughout the process. At the end of the month, ABC Manufacturing Company calculated equivalent units. The ending inventory in Mixing Department was 60% complete with respect to conversion costs. With respect to direct materials costs, how many equivalent units were calculated for the work in process ending balance? a) 32,000 equivalent units and 4,800 equivalent units b) 32,000 equivalent units and 8,000 equivalent units c) 19,200 equivalent units and 4,800 equivalent units d) 40,000 equivalent units and 8,000 equivalent units
  9. ABC Manufacturing produces a pesticide chemical and uses process costing. There are two processing departments: Mixing and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the process, and conversion costs are applied evenly throughout the process. At the end of the month, ABC Manufacturing Company calculated equivalent units. The ending inventory in Mixing Department was 60% complete with respect to conversion costs. With respect to conversion costs, how many equivalent units were calculated for the work in process ending balance? a) 32,000 equivalent units and 4,800 equivalent units b) 32,000 equivalent units and 8,000 equivalent units c) 19,200 equivalent units and 4,800 equivalent units

d) 40,000 equivalent units and 8,000 equivalent units

  1. A process costing system is useful in which of the following circumstances? a) Providing specialized services b) Production of unique products c) Production of multiple products in separate batches d) Mass production of a single type of product
  2. In a process costing system, calculating the cost per unit is used for a number of purposes. Which of the following is not one of those purposes? a) To set selling prices b) To manage and control administrative expenses c) To manage and control production costs d) To calculate the ending work in process inventory
  3. Which of the following best describes the term of equivalent number of complete units a) Partially completed units counted in terms of equivalent number of complete units b) Partially completed units that will be sold as is c) Different types of units that can be used for the equivalent purpose or length of time as other units. d) Different products that have the same selling price