multiple choicesmultiple_choice.docxFactory Supplies Expense, Depreciation Expense—Factory, and Heat, Light, and Power—Factory appear on which section of the worksheet?
A. Statement of cost of goods manufactured
B. Balance sheet
C. Income statement
D. Statement of cost of goods sold
Calculate the cost of goods sold when beginning finished goods inventory equals $70,000, ending finished goods inventory is $85,000, and cost
of goods manufactured is $600,000.
A. $615,000
B. $445,000
C. $685,000
D. $585,000
What is the journal entry to record issuing supplies from the storeroom?
A. Debit Overhead—Applied; credit Raw Materials Inventory
B. Debit Overhead—Control; credit Supplies Inventory
C. Debit Supplies Inventory; credit Overhead—Applied
D. Debit Overhead—Applied; credit Supplies Inventory
The formula for cost of goods manufactured is
A. raw materials plus direct labor minus overhead plus beginning work-in-process inventory plus ending work-in-process inventory.
B. raw materials minus direct labor plus overhead plus beginning work-in-process inventory plus ending work-in-process inventory.
C. beginning work-in-process plus total manufacturing cost minus ending work-in-process.
D. raw materials plus direct labor less overhead plus beginning work-in-process inventory less ending work-in-process inventory.
The entry to record rent expense of $9,000, supervision expense of $19,000, and depreciation expense of $7,000 to overhead is which of the
following?
A. Debit Overhead—Applied $35,000; credit Rent Expense $9,000; credit Supervision $19,000; credit Depreciation Expense $7,000
B. Debit Overhead—Control $35,000; credit Rent Expense $9,000; credit Supervision $19,000; credit Depreciation Expense $7,000
C. Debit Overhead—Applied $35,000; credit Overhead—Control $35,000
D. None of the above
If direct labor for the month is $40,000, overhead is applied based on direct labor, annual overhead is $600,000, and annual direct labor is
$1,000,000, what is the entry to charge direct labor to production?
A. Debit Work-in-Process Inventory $40,000; credit Payroll $40,000
B. Debit Overhead—Applied $40,000; credit Work-in-Process Inventory $40,000
C. Debit Work-in-Process Inventory $24,000; credit Overhead—Applied $24,000
D. DeWhat is the journal entry to record the direct labor summarized on the labor distribution report?
A. Debit Finished Goods; credit Payroll
B. Debit Work-in-Process; credit Payroll
C. Debit Payroll; credit Direct Labor
D. Debit Payroll; credit Cash bit Work-in-Process Inventory $66,000; credit Overhead—Applied $66,000
Manufacturing overhead includes all manufacturing costs,
A. including raw materials.
B. including overhead.
C. excluding raw materials and direct labor.
D. None of the above
During the week ending on November 30, total factory payroll incurred was $6,000. Of this total, 80% was for direct labor. The entry to record
the payroll distribution would include which of the following?
A. Debit Work-in-Process Inventory $4,800 and Overhead—Control $1,200
B. Debit Work-in-Process Inventory $6,000
C. Debit Work-in-Process Inventory $4,800 and Overhead—Applied $1,200
D. Debit Work-in-Process Inventory $4,800 and Indirect Labor Expense $1,200
Direct labor includes the wages of
A. an hourly worker producing the product.
B. the shop foreman.
C. maintenance workers.
D. administrators.
The statement of cost of goods manufactured includes
A. direct labor costs.
B. raw material costs.
C. manufacturing overhead.
D. All of the above
Lumber used in construction of a building is part of
A. raw material costs.
B. labor costs.
C. manufacturing overhead.
D. None of the above
If direct labor for the month is $80,000 and overhead is applied based on 75% of direct labor dollars, what is the entry to apply overhead?
A. Debit Work-in-Process Inventory $80,000; credit Payroll $80,000
B. Debit Overhead—Applied $60,000; credit Work-in-Process Inventory $60,000
C. Debit Work-in-Process Inventory $60,000; credit Overhead—Applied $60,000
D. Raw Materials Inventoryebit Work-in-Process Inventory $80,000; credit Overhead—Applied $80,000
In a manufacturing company, the purchase of materials on account should be recorded as follows:
A.
Raw Materials Inventory
Accounts Payable
B.
Work-in-Process Inventory
Accounts Payable
C.
Finished Goods Inventory
Accounts Payable
D.
Accounts Payable
The entry to record the requisition of supplies from the storeroom would include which of the following?
A. Debit to Raw Materials; credit to Work-in-Process
B. Debit to Overhead—Applied; credit to Overhead—Control
C. Debit to Work-in-Process; credit to Overhead—Control
D. Debit to Overhead—Control; credit to Supplies Inventory
The entry for indirect materials (such as glue, etc.) requisitioned for use in production is which of the following?
A.
Raw Materials Inventory
Work-in-Process Inventory
B.
Work-in-Process Inventory
Accounts Payable
C.
Work-in-Process Inventory
Raw Materials Inventory
D. None of the above
What is the journal entry to record issuing raw materials from the storeroom?
A. Debit Raw Materials Inventory; credit Work-in-Process
B. Debit Overhead—Control; credit Work-in-Process
C. Debit Work-in-Process; credit Overhead—Control
D. Debit Work-in-Process; credit Raw Materials Inventory
Journal entries crediting Payroll and debiting Work-in-Process Inventory are made for
A. administrative salaries.
B. hourly manufacturing labor.
C. foremen’s salaries.
D. raw materials.
Candyland completed the manufacturing process. The entry to transfer the
product to finished goods is which of the following?
A.
Raw Materials Inventory
Finished Goods Inventory
B.
Finished Goods Inventory
Cost of Goods Sold
C.
Finished Goods Inventory
Work-in-Process Inventory
D.
Finished Goods Inventory
Raw Materials Inventory
Raw material inventory appears on the
A. balance sheet.
B. income statement.
C. cost of goods manufactured statement.
D. Both a and c
Profitability ratios measure
A. a company’s ability to earn profits.
B. a company’s ability to meet short-term obligations.
C. how well a company is using debt versus equity.
D. how effectively a company is using its assets.
If management wishes to evaluate the ability of a business to provide funding to cover operating expenses, they could use the
A. rate of return on total assets.
B. rate of return on common stockholders’ equity.
C. gross profit rate.
D. times interest earned.
What is the purpose of determining the contribution margin?
A. To show the contribution by a department toward covering indirect costs
B. To help determine whether to eliminate a department
C. To show the effect on net income of each department
D. All of the above
If total assets are $6,000, what is the vertical analysis for Cash when it has a balance of $2,400?
A. 40%
B. 60%
C. 250%
D. 25%
If management wishes to know how well a business’s inventory is moving, they could use the
A. accounts receivable turnover.
B. inventory turnover.
C. acid test ratio.
D. current ratio.
When preparing an income statement showing departmental contribution margin,
A. indirect expenses are combined with direct expenses.
B. indirect departmental expenses are added to contribution margin.
C. direct expenses are subtracted from contribution margin on sales.
D. None of the above
Scott Company had a current ratio of 2.76:1 in Year 1 and 2.57:1 in Year 2. This change in current ratio indicates that the
A. company’s debt-paying ability has improved.
B. company’s debt-paying ability has weakened.
C. company’s customers are paying their accounts sooner.
D. company is able to sell its inventory faster.
A unit or department that incurs costs and generates revenues is a/an _______ center.
A. expense
B. direct
C. cost
D. profit
A line on the income statement that indicates what a department has left after covering cost of goods sold and direct expenses is
A. the gross margin.
B. the net income.
C. the contribution margin.
D. None of the above
If Cash is $2,345 in 20X2 and $3,671 in 20X1, what is the percentage of increase or (decrease) from 20X1 to 20X2?
A. 56.55%
B. (56.55%)
C. 36.12%
D. (36.12%)
Comparative reports in which each item is expressed as a percentage of a base amount without dollar amounts are called
A. comparative financial statements.
B. common-size statements.
C. cash flow analysis.
D. horizontal analysis
In a comparative balance sheet, the ending Cash was $315,000 in 2011 and $270,000 in 2012. The net increase or decrease from 2011 to 2012
is
A. 86.0%.
B. 14.3%.
C. 26.4%.
D. 16.7%.
Departmental reports are useful for all of the following purposes except
A. determining performance.
B. determining future revenue.
C. controlling.
D. planning.
Gross profit by department appears on the
A. balance sheet.
B. statement of retained earnings.
C. statement of cash flows.
D. income statement.
An example of a cost center is
A. a Holiday Inn.
B. the restaurant in a hotel.
C. the administrative department in a hotel.
D. the catering department in a hotel.
Debt management ratios measure
A. how effectively a company is using its cash.
B. how well a company is using debt versus equity position.
C. a company’s ability to earn profit.
D. a company’s ability to meet payable obligations.
Direct expenses are expenses that
A. can be identified with a specific department.
B. can’t be identified with a specific department.
C. can be identified with more than one department.
D. None of the above
What was the percentage of decrease in the Accounts Receivable account if the receivables were $80,000 in Year 1 and $60,000 in Year 2?
A. (25%)
B. 33.33%
C. (33.33%)
D. 25%
A maintenance department would be an example of a
A. cost center.
B. direct expense.
C. profit center.
D. None of the above
If management wishes to evaluate the amount of assets that were financed by creditors, they could use the
A. debt to total assets.
B. rate of return on common stockholders’ equity.
C. debt to total liabilities.
D. times interest earned.
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