5.

0 Points
Question 1 of 20
A system that focuses on activities as the fundamental cost object and uses the costs for
these activities to compile indirect costs of goods and services is:

A.appraisalcosts.

B.valueengineering.

C.activitybasedcosting.

D.preventioncosts.

Question 2 of 20
Which of the following is a lean strategy?

5.0 Points

A.Grouplikemachinestogether.

B.Produceinsmallerbatchesthanatraditionalsystem.

C.Maintainahigherlevelofinventorythanatraditionalsystem.

D.Lengthensetuptimesrelativetoatraditionalsystem.

Question 3 of 20
The first step in developing an ABC system is:

A.calculateanactivitycostallocationrateforeachactivity.

B.allocatethecoststothecostobjectusingtheactivitycostallocationrates.

C.selectanallocationbaseforeachactivity.

D.identifytheprimaryactivitiesandestimateatotalcostpoolforeach.

5.0 Points

5.0 Points
Question 4 of 20
Which term listed below describes costs incurred when the company fails to detect poor
quality goods or services before delivery to the customer?

A.Internalfailurecosts

B.Valueaddedactivity

C.Externalfailurecosts

D.Justintimeproduction

5.0 Points
Question 5 of 20
The entry to record the purchase of raw materials on account using a job costing system
would include a:

A.credittoworkinprocessinventory.

B.debittoaccountspayable.

C.debittoworkinprocessinventory.

D.debittorawmaterialsinventory.

5.0 Points
Question 6 of 20
Showboat Corporation had actual manufacturing overhead costs for the most recent year
of $29,500. Manufacturing overhead is allocated using a predetermined manufacturing
overhead rate of $1.50 per direct labor hour. Direct labor cost is $19 per hour. At the end
of the year, Cabaret Corporation found it had over allocated manufacturing overhead by
$1,250. How much manufacturing overhead was allocated in total during the year?

A.$28,250

B.$29,500

C.$30,750

D.$1,250

5.0 Points
Question 7 of 20
Venus Crates manufactures custom crates for a variety of uses. The following data have
been recorded for Job 551, which was recently completed. Direct materials used cost
$7,200. There were 82 machine hours used on this job. The predetermined overhead rate
is $30 per machine hour used. There were 175 direct labor hours worked on this job at a
direct labor wage rate of $24 per hour. What is the total manufacturing cost of Job 551?

A.$13,860

B.$4,200

C.$2,460

D.$7,457

5.0 Points
Question 8 of 20
A(n) ________ is an estimated manufacturing overhead rate computed before the year
begins.

A.costallocation

B.costdriver

C.predeterminedmanufacturingoverheadrate

D.actualmanufacturingoverheadrate

5.0 Points
Question 9 of 20
The cost of downtime caused by quality problems with the raw materials would be
classified as what type of cost?

A.Preventioncost

B.Appraisalcost

C.Externalfailurecost

D.Internalfailurecost

5.0 Points
Question 10 of 20
Watson's Computer Company uses ABC to account for its manufacturing process.
Activities
Materials handling
Machine setup
Assembling
Packaging

Indirect activity budget Allocation base (cost driver)

$52,000 Based on number of parts
30,000 Based on number of setups
9,750 Based on number of parts
15,300 Based on number of finished units

Watson's Computer Company expects to produce 2,250 computers. Watson's Computer

Company also expects to use 13,000 parts and have 20 setups. The allocation rate for
materials handling will be:

A.$4.

B.$6.80.

C.$23.11.

D.$7.01.

5.0 Points
Question 11 of 20
In job costing, the journal entry to record the use of direct materials on jobs is to debit
work-in-process inventory and credit:

A.rawmaterialsinventory.

B.finishedgoodsinventory.

C.manufacturingoverhead.

D.wagespayable.

5.0 Points
Question 12 of 20
Which term listed below describes a system where companies purchase raw materials
when needed in production and complete finished goods when needed by customers?

A.Internalfailurecosts

B.Backflushcosting

C.Justintime

D.Externalfailurecosts

Question 13 of 20
The predetermined indirect cost allocation rate is computed as:

5.0 Points

A.totalestimatedindirectcosts/totalestimatedamountoftheallocationbase.

B.totalamountoftheallocationbase/totalestimatedindirectcosts.

C.totalestimatedindirectcosts+totalestimatedamountoftheallocationbase.

D.totalamountoftheallocationbasetotalestimatedindirectcosts.

Question 14 of 20
Which of the following is a result of cost distortion?

A.Overcostingofallproducts

B.Undercostingofallproducts

C.Accuratecostingofallproducts

D.Overcostingofsomeproductsandundercostingofotherproducts

5.0 Points

5.0 Points
Question 15 of 20
Which of these documents informs the storeroom to send specific materials to the factory
floor?

A.Receivingreport

B.Billofmaterials

C.Purchaseorder

D.Materialsrequisition

5.0 Points

Question 16 of 20
Here are selected data for Sunny Sky Corporation.

Beginningrawmaterialsinventory

$37,000 Beginningworkinprocessinventory

Beginningfinishedgoodsinventory

58,300 Costofmaterialspurchased

Costofdirectmaterialsrequisitioned

91,300 Directlaborincurred

Actualmanufacturingoverhead

160,000 Costofgoodsmanufactured

Costofgoodssold

265,000 Manufacturingoverheadrate(%ofdirectlabor)

What is the ending work-in-process inventory balance?

A.$161,500

B.$170,250

C.$211,200

D.$229,950

5.0 Points
Question 17 of 20
Service firms develop a predetermined rate for some costs. This rate is called the:

A.laborrate.

B.directcostrate.

C.indirectcostallocationrate.

D.hourlycostrate.

5.0 Points
Question 18 of 20
If jobs have been under costed due to under allocation of manufacturing overhead, then
cost of goods sold (COGS) is too low and which of the following corrections must be
made?

A.DecreaseCOGSfortheamountoftheunderallocation

B.IncreaseCOGSfordoubletheamountoftheunderallocation

C.DecreaseCOGSfordoubletheamountoftheunderallocation

D.IncreaseCOGSfortheamountoftheunderallocation

Question 19 of 20
The benefits of using the ABC costing system are higher if the company:

5.0 Points

A.hashighindirectcosts.

B.producesmanydifferentproductsthatusedifferingamountsofresources.

C.hashighindirectcostsandproducesmanydifferentproductsthatusedifferingamountsofresources.

D.producesonlyoneproduct.

5.0 Points
Question 20 of 20
Kramer Company manufactures coffee tables and uses an activity-based costing system
to allocate all manufacturing conversion costs. Each coffee table consists of 20 separate
parts totaling $240 in direct materials, and each requires 5 hours of machine time to
produce. Additional information follows.

Activity

AllocationBase

CostAllocationRate

Materialshandling

Numberofparts

$2.00perpart

Machining

Machinehours

$2.75permachinehour

Assembling

Numberofparts

$1.00perpart

Packaging

Numberoffinishedunits

$3.00perfinishedunit

What is the cost of machining per coffee table?

A.$15

B.$21

C.$13.75

D.$55