Reference no: EM132534139

Question 1. Kay Kay Inc. establishes the following direct labor cost for one unit of product (D).

Standard hours 1.5 hours

Standard rate $20 per hour

Standard cost $30 (1.5 hours @ $20 per hour)

During the month of June $20,000 direct labor hours were worked and 12,500 units of product (D) were manufactured. Total wages related to direct labor in June were $405,000

What was the direct labor rate variance for June?

a. $30,000 Unfavorable

b. $5000 favorable

c. $5000 Unfavorable

d. $30,000 favorable

Question 2. Which of the following cost must be expensed under IAS2?

a. Cost of purchase that are paid to the suppliers of raw materials

b. Variable production overheads that are allocated to each unit based on the actual usage

c. Selling and distribution overheads incurred in the ordinary course of business

d. Import duties on the cost of raw materials that are paid to the authorities

Question 3. What is the correct journal entry under job order costing to dispose of an underapplied manufacturing overhead balance to the cost of goods sold account?

a. Manufacturing overhead (debit), Cost of goods sold (credit)

b. Cost of goods (debit), Work in progress (Credit)

c. Cost of goods (debit), Manufacturing overhead (Credit)

d. Manufacturing overhead (debit), Work in progress (Credit)

Question 4. Caribbean Company sold 100,000 gizoms at $12 each. Fixed Cost were $300,000 and net income was $200,000. What should have been reported as a variable expense in the CVP income statement?

a. $1,000,000

b. $700,000

c. $900,000

d. $500,000

Question 5. A company is selling a product called creamy pops for $5. The fixed costs for the manufactured company are $30,000, with variable cost $2 per unit. How many units should the company produce to break even?

a. 6000

b. 10,000

c. 15,000

d. 30,000

Question 6. Lewis Co. has fixed of $150,000 and variable cost of $9 per unit. If sales price per unit is $12, what is the break-even sales in dollars?

a. $200,000

b. $600,000

c. $480,000

d. $450,000

Question 7. In a job order costing system, raw material is assignment to a job when the materials are ______________.

a. Received from the materials vendor

b. Sold

c. Purchased

d. Issued by the materials stockroom

Question 8. In producing product ZZ, 14,800 direct labor hours were used at a rate of $8.20 per hour. The standard was 15,000 hours at $8.00 per hour, based on these data, the direct labor ____________

a. Efficiency variance of $3000 is favorable

b. Rate variance is $1600 favorable

c. Rate variance $2960 Unfavorable

d. Efficiency variance is $1600 Unfavorable

Question 9. Direct materials used $120,000 Beginning work in progress $20,000

Direct labor $100,000 Ending work in progress $10,000

Manufacturing overhead $150,000 Beginning finished goods $25,000

Selling Expenses $50,000 Ending finished goods $15,000

What is the conversion cost?

a. $395,000

b. $370,000

c. $425,000

d. $250.000

Question 10. Kello Inc. used a job order costing system. The following information pertains to the current period:

Estimate manufacturing overheads cost at the beginning of the year $100,000

Estimated direct labor hours at beginning of the year 10,000 hours

Actual manufacturing overheads cost incurred during the year $118,000

Actual direct labor hours worked during the year 11,000 hours

Based on the above information, which of the following is a correct result?

a. Overapplied overhead $8000

b. Underapplied overhead $8000

c. Underapplied overhead $18,000

d. Overapplied overhead $18,000

Question 11. On the cash budget, net cash flow can be calculated as _____________

a. All cash inflows less all cash outflows

b. Opening cash balance plus all cash inflows

c. All cash inflows plus all cash outflows

d. Profit less all expense

Question 12. Fixed production overheads are those_____________

a. Indirect cost of production that remains constant regardless of the volume of production

b. Directs cost attributable to the product or service vary regardless of the volume of production

c. Indirect cost of production that vary directly with the volume of production

d. Direct costs attribution to the production or service that remain constant regardless of volume production

Question 13. A firm is expected to have direct materials purchased of $70,000 in the first quarter and $90,000 in the second quarter. 40% of the purchased will be paid for in cash as they occur, and the balance will be paid in the following quarter. Compute the budgeted cash payment for purchases in the second quarter.

a. $78,000

b. $54,000

c. $28,000

d. $72,000