ACG 2071 EXAM 2 FINAL PAPER
COMPLETE QUESTIONS WITH CORRECT
ANSWERS ALREADY PASSED
●● Hughes Company paid production workers $25,550 cash. These
wages will be classified as:
Answer: work in process.
●● Furst Company pays production workers' salaries on account. The
cost will be recognized as an expense when:
Answer: the goods made by the production workers are sold.
●● Frost Corporation incurred the following transactions during its first
year of operations. (Assume all transactions involve cash.)
1) Acquired $1,900 of capital from the owners.
2) Purchased $435 of direct raw materials.
3) Used $290 of these direct raw materials in the production process.
4) Paid production workers $490 cash.
5) Paid $290 for manufacturing overhead (applied and actual overhead
are the same).
6) Started and completed 250 units of inventory.
7) Sold 140 units at a price of $6 each.
,8) Paid $130 for selling and administrative expenses.
The amount of raw material inventory on the balance sheet at the end of
the accounting period would be:
Answer: $145.
●● Jones Manufacturing Company experienced an accounting event that
affected its financial statements as indicated below:
Assets=Liabilities+EquityRevenue−Expenses=Net Income+− NA
NANA NA NA
Which of the following accounting events could have caused the
indicated effects on the firm's accounting equation?
Answer: Transferred cost of goods manufactured from the Work in
Process Inventory to the Finished Goods Inventory account.
●● Virginia Company paid $7,500 cash for various manufacturing
overhead costs. As a result of this transaction:
Answer: total assets, total equity, and net income are not affected.
●● Ferguson Company recognized $400 of estimated manufacturing
overhead costs at the end of the month. How does this transaction affect
the financial statements?
,Assets=Liabilities+EquityRevenue−Expenses=Net
IncomeManufacturing Overhead+Work in Process Inventory
Answer: (400)+400=NA+NANA−NA=NA
●● The Winchester Company estimates that its overhead costs will
amount to $595,000 and the company's manufacturing employees will
work 85,000 direct labor hours during the current year. If actual
overhead costs for the year amounted to $599,000 and actual labor hours
amounted to 87,000, then overhead would be:
Answer: overapplied by $10,000
Step 1: $595,000 ÷ 85,000 direct labor hours = $7.00 per direct labor
hour
Step 2: 87,000 direct labor hours × $7.00 per direct labor hour =
$609,000
Step 3: $609,000 − $599,000 = $10,000
●● Which of the following statements regarding the schedule of cost of
goods manufactured and sold is correct?
Answer: The schedule is an internal document that is not presented with
the company's financial statements, and, in addition, the schedule of cost
, of goods manufactured and sold reports the amount of direct raw
materials used during the period.
●● Ringgold Company had beginning finished goods of $18,700.
During the period, the company produced goods that cost $78,500. If the
ending balance in the Finished Goods Inventory account was $12,700,
the amount of cost of goods sold was:
Answer: $84,500.
●● Select the response that indicates the correct sequence of product
cost flows from production to sale
Answer: Raw materials, work in process, finished goods, and cost of
goods sold
●● Herald Company paid $2,800 cash for production supplies. The
recognition of this event will:
Answer: not impact total assets.
●● Company X manufactures 3-ring notebooks. All of the following are
considered indirect costs except:
Answer: cardboard used in production of the notebooks.
●● The cost of indirect labor will initially be charged to:
Answer: Manufacturing Overhead.
COMPLETE QUESTIONS WITH CORRECT
ANSWERS ALREADY PASSED
●● Hughes Company paid production workers $25,550 cash. These
wages will be classified as:
Answer: work in process.
●● Furst Company pays production workers' salaries on account. The
cost will be recognized as an expense when:
Answer: the goods made by the production workers are sold.
●● Frost Corporation incurred the following transactions during its first
year of operations. (Assume all transactions involve cash.)
1) Acquired $1,900 of capital from the owners.
2) Purchased $435 of direct raw materials.
3) Used $290 of these direct raw materials in the production process.
4) Paid production workers $490 cash.
5) Paid $290 for manufacturing overhead (applied and actual overhead
are the same).
6) Started and completed 250 units of inventory.
7) Sold 140 units at a price of $6 each.
,8) Paid $130 for selling and administrative expenses.
The amount of raw material inventory on the balance sheet at the end of
the accounting period would be:
Answer: $145.
●● Jones Manufacturing Company experienced an accounting event that
affected its financial statements as indicated below:
Assets=Liabilities+EquityRevenue−Expenses=Net Income+− NA
NANA NA NA
Which of the following accounting events could have caused the
indicated effects on the firm's accounting equation?
Answer: Transferred cost of goods manufactured from the Work in
Process Inventory to the Finished Goods Inventory account.
●● Virginia Company paid $7,500 cash for various manufacturing
overhead costs. As a result of this transaction:
Answer: total assets, total equity, and net income are not affected.
●● Ferguson Company recognized $400 of estimated manufacturing
overhead costs at the end of the month. How does this transaction affect
the financial statements?
,Assets=Liabilities+EquityRevenue−Expenses=Net
IncomeManufacturing Overhead+Work in Process Inventory
Answer: (400)+400=NA+NANA−NA=NA
●● The Winchester Company estimates that its overhead costs will
amount to $595,000 and the company's manufacturing employees will
work 85,000 direct labor hours during the current year. If actual
overhead costs for the year amounted to $599,000 and actual labor hours
amounted to 87,000, then overhead would be:
Answer: overapplied by $10,000
Step 1: $595,000 ÷ 85,000 direct labor hours = $7.00 per direct labor
hour
Step 2: 87,000 direct labor hours × $7.00 per direct labor hour =
$609,000
Step 3: $609,000 − $599,000 = $10,000
●● Which of the following statements regarding the schedule of cost of
goods manufactured and sold is correct?
Answer: The schedule is an internal document that is not presented with
the company's financial statements, and, in addition, the schedule of cost
, of goods manufactured and sold reports the amount of direct raw
materials used during the period.
●● Ringgold Company had beginning finished goods of $18,700.
During the period, the company produced goods that cost $78,500. If the
ending balance in the Finished Goods Inventory account was $12,700,
the amount of cost of goods sold was:
Answer: $84,500.
●● Select the response that indicates the correct sequence of product
cost flows from production to sale
Answer: Raw materials, work in process, finished goods, and cost of
goods sold
●● Herald Company paid $2,800 cash for production supplies. The
recognition of this event will:
Answer: not impact total assets.
●● Company X manufactures 3-ring notebooks. All of the following are
considered indirect costs except:
Answer: cardboard used in production of the notebooks.
●● The cost of indirect labor will initially be charged to:
Answer: Manufacturing Overhead.
