ACCT 2521 EXAM 1 UPDATED ACTUAL QUESTIONS AND CORRECT ANSWERS

ACCT 2521 EXAM 1 UPDATED ACTUAL QUESTIONS AND
CORRECT ANSWERS

Question:
1. The cost of electricity for running production equipment is classified as:
Answer:
conversion cost yes, period cost no

Question:
2. The cost of lubricants used to grease a production machine in a manufacturing company is an example
of an
Answer:
indirect material cost

Question:
3. Which costs will change with a decrease in activity within the relevant range?
Answer:
unit fixed costs and total variable costs

Question:
4. Which of the following approaches to preparing an income includes a calculation for the gross margin?
Answer:
traditional approach yes , contribution approach no

Question:
5. Kneeland corp has provided the following info:
-direct materials, CPU = 6.8
-direct labor, CPU = 4.15
-variable manufacturing overhead, CPU = 1.65
-fixed manufacturing overhead, CPP = 121,500
-sales commissions, CPU = 1.00
-variable admin expense, CPU = .50
-fixed selling & admin expense, CPP = 40,500 If 10,000 units are produced the total amount of
manufacturing overhead cost is closest
Answer:
138,000

,Question:
6. Bressette corp provided following info:
-direct materials, CPU = 6.2
-direct labor, CPU = 3.7
-variable manufacturing overhead, CPU = 1.25
-fixed manufacturing overhead, CPP = 10,000
-sales commissions, CPU = 1.5
-variable admin exp, CPU = .5
-fixed selling & admin exp, CPP = 5,000 The total amount of product costs incurred to make 5,000 is
closest to
Answer:
65,750

Question:
7. Which is classified as both a prime cost & a conversion cost?
Answer:
direct labor

Question:
8. Tirri corp has provided following info:
-direct materials, CPU = 6.85
-direct labor, CPU = 3.9
-variable manufacturing overhead, CPU = 1.25
-fixed manufacturing overhead, CPP = 22,500
-sales commissions, CPU = 1.00
-variable admin exp, CPU = .55
-fixed selling & admin exp, CPP = 7,500 If selling price is 26.2 per unit, the contribution margin per unit
sold is closest to
Answer:
12.65

Question:
9. Data for most recently completed year appears below:
-est machine hours: 39,000
-est variable manufacturing overhead: 6.76 / machine hr
-est total fixed manufacturing overhead: 794,430
-actual machine hrs for the yr: 42,700 Predetermined overhead rate for the recently completed year?
Answer:
27.13 / machine hr

Question:
10. Pendergraph corp incurred 60,000 of actual manufacturing overhead costs. During the same period, the
manufacturing overhead applied to work in process was 62,000. What is the journal entry to record
incurrence of the actual manufacturing overhead costs
Answer:
debit to manufacturing overhead of 60,000

, Question:
11. In a job order costing system, indirect labor cost is usually recorded as a debit to:
Answer:
manufacturing overhead

Question:
12. During july 83,000 of raw materials were requisitioned from the storeroom for use in production. The
raw materials included both direct and indirect materials. The indirect materials = 4,000. What is the
journal entry to record requisition from storeroom?
Answer:
debit to work in process of 79,000

Question:
13. Balance in finished good inventory account at the beginning of the month was 52,000 and 30,000 at the
end of the month. The cost of goods manufactured for the month was 212,000. The actual manufacturing
overhead cost incurred was 55,000 and the manufacturing overhead applied to work in process was 58,000.
The company closes out any under-applied or over-applied manufacturing overhead to cost of goods sold.
The adjusted cost of goods sold that would appear on income statement is:
Answer:
231,000

Question:
14. Balance in work in process inventory account was 22,000 at the beginning of the month and 17,000 at
end of month. During the month they incurred direct materials cost of 55,000 and direct labor cost of
28,000. The actual manufacturing overhead cost incurred was 53,000. The manufacturing overhead cost
applied to work in process was 51,000. The cost of gods manufactured was?
Answer:
139,000

Question:
15. Beginning balance in raw materials account was 20,000 and the ending bal was 36,000. Raw materials
purchases during the month totaled 63,000. Manufacturing overhead cost incurred during the month was
111,000 of which 2,000 consisted of raw materials classified as indirect materials. The direct materials cost
is?
Answer:
45,000

Question:
16. Within relevant range, fixed costs:
Answer:
shouldn't be expressed on a per unit basis when making decisions ; Remain constant in total regardless of
changes in activity ; Generally includes rent and supervisor salaries

Question:
17. Fixed costs that usually arise from annual spending decisions by management are ______ fixed costs
Answer:
discretionary