The Final Exam consists of 55 of these exact, same questions (below):
The answers are NOT given – that’s the whole idea of a “review”
Chapter 18: Introduction to Management Accounting
Revenue from mowing lawns less the operating costs from mowing lawns equals net operating income.
Sales minus cost of goods sold equals gross profit.
Labor costs that are directly traceable to the product are part of manufacturing overhead.
Manufacturing overhead includes all manufacturing costs except direct materials and direct labor.
Managerial accounting develops reports for internal parties.
The costs of indirect materials cannot easily be traced to specific finished products.
To what does the term e-commerce refer?
A) the production of superior products and services
B) the conduct of business on the Internet
C) the quick delivery of goods and services
D) the exchange of information with customers and suppliers
Which of the following are period costs?
A) current assets on the balance sheet
B) costs incurred and expensed in the accounting period
C) costs related to the sale of products
D) current liabilities on the balance sheet
Case 18.1
James and John provide lawn mowing services in the local community. During the month of July
they incurred the following operating costs to mow 200 lawns.
Wages expense $5,000
Gasoline expense 1,500
Depreciation on equipment 1,000
They earned $20,000 from mowing lawns in July.
Refer to Case 18.1. What is the net operating income for July?
A) 15,000
B) 7,500
C) 20,000
D) 12,500
Refer to Case 18.1. What is the average cost of mowing one lawn?
A) 75.00
B) 37.50
C) 100.00
D) 62.50
Inventory accounts for a manufacturer include which of the following?
A) materials, work in process, and finished goods
B) work in process, direct labor, and finished goods
C) merchandise, materials, and finished goods
D) work in process, materials, and manufacturing overhead
Goods that are partially completed by a manufacturer are referred to as which of the following?
A) materials inventory
B) finished goods inventory
C) merchandise inventory
D) work in process inventory
Which of the following is an example of direct labor?
A) wages of assembly line personnel
B) salary of vice president of production
C) wages of factory security
D) salary of production manager
Which of the following defines direct materials?
A) used to determine total inventoriable product costs
B) cannot be separately and conveniently traced through the manufacturing process to finished
goods
C) are not part of the finished product
D) used to determine total manufacturing overhead
Manufacturing overhead includes which of the following?
A) indirect labor and indirect materials
B) indirect materials and direct materials
C) direct materials and direct labor
D) factory rent and direct labor
All of the following are examples of manufacturing overhead except for one. Which is it?
A) utilities incurred in the factory
B) insurance expired on factory equipment
C) wages of assembly line workers
D) indirect materials
Where is finished goods inventory reported?
A) income statement as revenue
B) income statement as a period cost
C) balance sheet as a current asset
D) balance sheet as a long-term asset
Chapter 19: Job Order Costing
Job costing systems accumulate costs for each individual job.
A job cost record is a document that accumulates direct materials, direct labor, and manufacturing
overhead costs assigned to each individual job.
All manufacturing overhead costs are accumulated as debits to a single general ledger account titled
manufacturing overhead.
The key to assigning indirect manufacturing costs to jobs is to identify a manufacturing overhead
allocation base.
Since service firms do NOT carry inventory, it is not necessary to know the costs related to different jobs.
The most significant cost for a service firm is direct labor.
Which of the following would be debited to record the requisition of direct materials?
A) materials inventory
B) work in process inventory
C) finished goods inventory
D) cost of goods manufactured
The entry to transfer direct labor and indirect labor costs from manufacturing wages into production
includes a debit to which of the following?
A) manufacturing overhead and work in process inventory
B) finished goods inventory
C) manufacturing overhead
D) finished goods inventory and work in process inventory
In job costing, direct materials used in production are debited to which of the following?
A) manufacturing overhead
B) work in process inventory
C) finished goods inventory
D) either manufacturing overhead or work in process inventory
In job costing, all manufacturing labor incurred is initially debited to what account?
A) manufacturing overhead
B) work in process inventory
C) manufacturing wages
D) wages payable
Case 19.1
Wall Corporation’s selected cost data for July is shown below:
Cost of goods manufactured $420,000
Work in process inventory, July 1 100,000
Work in process inventory, July 31 120,000
Direct materials used 50,000
Manufacturing overhead is allocated at 70% of direct labor cost.
Refer to Case 19.1. What are the total manufacturing costs for July?
A) $520,000
B) $400,000
C) $550,000
D) $440,000
Refer to Case 19.1. What was the amount of direct labor incurred in July?
A) $330,126
B) $229,412
C) $243,750
D) $224,500
The records at Smith and Jones Company show Job. No. 110 charged with $11,000 of direct materials
and $12,500 of direct labor. Smith and Jones Company allocates manufacturing overhead at 85% of
direct labor cost. What is the total cost of Job No. 110?
A) $20,625
B) $34,125
C) $22,500
D) $21,625
How is the predetermined manufacturing overhead rate used to allocate manufacturing overhead
calculated?
A) by dividing the total estimated manufacturing overhead costs by the total estimated quantity of
allocation base
B) by dividing the total estimated quantity of allocation base by the total estimated manufacturing
overhead costs
C) by multiplying the total estimated manufacturing overhead costs by the total estimated quantity
of allocation base
D) by dividing the total estimated manufacturing overhead costs by the total actual quantity of the
allocation base
When a job is completed in a job costing system, the journal entry involves which accounts?
A) a debit to finished goods inventory and a credit to work in process inventory for the cost of the
job
B) a debit to finished goods inventory and a credit to work in process inventory for the sales price
