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Exam 2 with Answers - Principles of Managerial Accounting | ACCT 202, Exams of Financial Accounting

Material Type: Exam; Professor: Kubichan; Class: Principles of Managerial Accounting; Subject: Accounting; University: Old Dominion University; Term: Fall 2010;

Typology: Exams

2010/2011
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Accounting 202 Exam 2
1. Last year, Smith Company sold 10,000 units of its only product. If sales increase by
15% in the current year, how will unit variable cost and unit fixed cost be affected?
A) Choice A
B) Choice B
C) Choice C
D) Choice D
E) Choice E
2. Product costs:
A) are expenditures necessary and integral to finished products.
B) are expenditures identified more with a time period rather than with finished
products.
C) include selling and administrative expenses.
D) are costs that vary with the volume of activity.
E) are costs that do not vary with the volume of activity.
3. Products that are in the process of being manufactured but are not yet complete are
called:
A) Raw materials inventory.
B) Conversion costs.
C) Cost of goods sold.
D) Goods in process inventory.
E) Finished goods inventory.
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Accounting 202 Exam 2

  1. Last year, Smith Company sold 10,000 units of its only product. If sales increase by 15% in the current year, how will unit variable cost and unit fixed cost be affected? A) Choice A B) Choice B C) Choice C D) Choice D E) Choice E
  2. Product costs: A) are expenditures necessary and integral to finished products. B) are expenditures identified more with a time period rather than with finished products. C) include selling and administrative expenses. D) are costs that vary with the volume of activity. E) are costs that do not vary with the volume of activity.
  3. Products that are in the process of being manufactured but are not yet complete are called: A) Raw materials inventory. B) Conversion costs. C) Cost of goods sold. D) Goods in process inventory. E) Finished goods inventory.
  1. Labor costs that are clearly associated with specific units or batches of product and also used to convert raw materials into finished products is called: A) Sunk labor. B) Direct labor. C) Indirect labor. D) Finished labor. E) All of these.
  2. Materials that are used in support of the production process but are not clearly identified with units or batches of product are called: A) secondary materials. B) general materials. C) direct materials. D) indirect materials. E) materials inventory.
  3. Which of the following items appears only in a manufacturing company's financial statements? A) Cost of goods sold. B) Cost of goods manufactured. C) Goods available for sale. D) Gross profit. E) Net income.
  1. Ajax Company accumulated the following account information for the year: Using the above information, total factory overhead costs would be: A) $ 9,800. B) $16,800. C) $15,800. D) $13,000. E) $ 7,800.
  2. A job order cost accounting system would best fit the needs of a company that makes: A) Shoes and apparel. B) Paint. C) Cement. D) Custom machinery. E) Pencils and erasers.
  3. The job order cost sheets used by Garza Company revealed the following: Job No. 125 was completed during May and Jobs No. 124 and 125 were shipped to customers in May. What were the company's cost of goods sold for May and the goods in process inventory on May 31? A) $3,200; $ 900. B) $2,900; $1,200. C) $1,200; $2,900.

D) $1,700; $1,200.

E) $4,100; $ 0.

  1. Labor costs in production can be: A) Direct or indirect. B) Indirect or sunk. C) Direct or payroll. D) Indirect or payroll. E) Direct or sunk.
  2. Canoe Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. Canoe Company's production costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied, $6,000. The overhead application rate was: A) 5.0%. B) 12.0%. C) 20.0%. D) 500.0%. E) 16.7%.
  3. The amount by which overhead incurred during a period exceeds the overhead applied to jobs is: A) Balanced overhead. B) Predetermined overhead. C) Actual overhead. D) Underapplied overhead. E) Overapplied overhead.

C) units started and completed. D) direct labor cost. E) materials cost.

  1. The following is an account for a production department, showing its costs for one month: Goods in Process Inventory Balance 5, Direct materials 21, Direct labor 16, Overhead 10, Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the units in ending goods in process inventory cost $4,590, and the started and completed units cost $41,850, what was the cost of completing the units in the beginning goods in process inventory? A) $12,150. B) $ 2,160. C) $ 7,560. D) $54,000. E) $37,260.
  2. Direct material costs are recorded: A) indirectly to Goods in Process account. B) indirectly to a Finished Goods account. C) directly to a Goods in Process account. D) directly to a Finished Goods account. E) directly to a Cost of Goods Sold account.

Answer Key

1. D

2. A

3. D

4. B

5. D

6. B

7. C

8. C

9. A

10. D

11. A

12. A

13. C

14. D

15. A

16. C

17. C

18. A

19. B

20. C