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ACC 312 Exam Mastering Costing
Methods: Key Concepts With 100%
correct answers
SECTION I – MULTIPLE-CHOICE QUESTIONS (24 questions, 3 points
each) - Please choose the ONE BEST answer for each question and record
your answer on your Gradescope answer sheet.
1. How many of the following statements are TRUE?
• Under or Overapplied manufacturing overhead at the end of the
period is often charged or credited to Raw Materials.
• An estimated or predetermined overhead rate (POHR) is used when
a company uses “Normal Costing”.
• Job-order costing methods do NOT have applications in service or
nonprofit organizations.
• A POHR is calculated by dividing actual overhead by actual amount
of cost driver used in the process.
• Applied overhead is debited to the Manufacturing Overhead
account.
A. Four
B. Three
C. Two
D. One
E. None
2. The Axil Company makes all sales on account, subject to the following
cash collection pattern:
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Collected in the month of sales: 25%
Collected in the first month following sales: 60%
Collected in the second month following sales: 15%
October, November, and December sales were $200,000, $230,000, and
$280,000, respectively. Compute Axil’s Accounts Receivable balance at the
end of December.
A. $172,500
B. $238,000
C. $244,500
D. $280,000
E. None of the other answers are correct.
3. Luhan Enterprises uses a traditional costing system with budgeted
manufacturing overhead of $200,000 applied on the basis of direct labor
hours. An activity-based costing (ABC) analysis of the $200,000 resulted in
the identification of four activity cost pools: (1) machining, (2) quality
engineering, (3) maintenance, and (4) customer service. Which of the
following cost drivers would be most appropriate for assigning the
customer service costs to products.
A. Machine hours
B. Number of product shipments
C. Number of inspections
D. Number of customer phone calls received
E. Square footage associated with each activity cost pool
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4. The purpose of budgets is (are) to:
A. Facilitate communication and coordination.
B. Quantify a plan of action.
C. Control profit and operations.
D. Allocate limited resources.
E. All the other answers are purposes of budgets.
5. Which of the following information is not required to prepare the cash
disbursements budget?
A. Sales collection pattern
B. Direct material purchases
C. Direct-labor costs
D. Planned equipment purchases
E. Total manufacturing overhead costs excluding non-cash expenses.
6. Levy Inc. uses a normal costing system. Costs for the year were:
Applied Overhead $270,000
Cost of Goods Manufactured $300,000
Actual Overhead $250,000
Finished goods inventory was $100,000 on January 1st and $180,000 on
December 31st. If Levy Inc. closes over- or underapplied overhead to cost
of goods sold at year-end, what is the adjusted cost of goods sold for the
year?
A. $340,000
B. $320,000
C. $240,000
D. $220,000
E. $200,000
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ACC 312 Exam Mastering Costing
Methods: Key Concepts With 100%
correct answers
SECTION I – MULTIPLE-CHOICE QUESTIONS (24 questions, 3 points
each) - Please choose the ONE BEST answer for each question and record
your answer on your Gradescope answer sheet.
1. How many of the following statements are TRUE?
• Under or Overapplied manufacturing overhead at the end of the
period is often charged or credited to Raw Materials.
• An estimated or predetermined overhead rate (POHR) is used when
a company uses “Normal Costing”.
• Job-order costing methods do NOT have applications in service or
nonprofit organizations.
• A POHR is calculated by dividing actual overhead by actual amount
of cost driver used in the process.
• Applied overhead is debited to the Manufacturing Overhead
account.
A. Four
B. Three
C. Two
D. One
E. None
2. The Axil Company makes all sales on account, subject to the following
cash collection pattern:
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Collected in the month of sales: 25%
Collected in the first month following sales: 60%
Collected in the second month following sales: 15%
October, November, and December sales were $200,000, $230,000, and
$280,000, respectively. Compute Axil’s Accounts Receivable balance at the
end of December.
A. $172,500
B. $238,000
C. $244,500
D. $280,000
E. None of the other answers are correct.
3. Luhan Enterprises uses a traditional costing system with budgeted
manufacturing overhead of $200,000 applied on the basis of direct labor
hours. An activity-based costing (ABC) analysis of the $200,000 resulted in
the identification of four activity cost pools: (1) machining, (2) quality
engineering, (3) maintenance, and (4) customer service. Which of the
following cost drivers would be most appropriate for assigning the
customer service costs to products.
A. Machine hours
B. Number of product shipments
C. Number of inspections
D. Number of customer phone calls received
E. Square footage associated with each activity cost pool
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4. The purpose of budgets is (are) to:
A. Facilitate communication and coordination.
B. Quantify a plan of action.
C. Control profit and operations.
D. Allocate limited resources.
E. All the other answers are purposes of budgets.
5. Which of the following information is not required to prepare the cash
disbursements budget?
A. Sales collection pattern
B. Direct material purchases
C. Direct-labor costs
D. Planned equipment purchases
E. Total manufacturing overhead costs excluding non-cash expenses.
6. Levy Inc. uses a normal costing system. Costs for the year were:
Applied Overhead $270,000
Cost of Goods Manufactured $300,000
Actual Overhead $250,000
Finished goods inventory was $100,000 on January 1st and $180,000 on
December 31st. If Levy Inc. closes over- or underapplied overhead to cost
of goods sold at year-end, what is the adjusted cost of goods sold for the
year?
A. $340,000
B. $320,000
C. $240,000
D. $220,000
E. $200,000
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