ACCT 201B-FINAL EXAM REVIEW
QUESTIONS AND ANSWERS 2026-2027
GUIDE.
Sphere Company produces two products, Alpha and Beta. Alpha is a high-volume item totaling
20,000 units annually. Beta is a low-volume item totaling only 6,000 units per year. Alpha
requires one hour of direct labor for completion, while each unit of Beta requires 2 hours.
Therefore, total annual direct labor hours are 32,000 (20,000 + 12,000). Expected annual
manufacturing overhead costs are $640,000. Sphere uses a traditional costing system and
assigns overhead based on direct labor hours. Each unit of Beta would be assigned overhead of
A. $40.00.
B. $20.00.
C. $24.61.
D. need more information to compute. - Answer $40.00.
Which of the following is not a unit-level activity?
A. Purchase ordering
B. Assembling
C. Sewing
D. Painting - Answer Purchase ordering
All of the following would be entries in assigning accumulated costs to the Work In Process
Inventory except:
A. factory labor is used
B. raw materials are used
C. overhead is applied
D. the purchase of raw materials. - Answer the purchase of raw materials.
Buren Company manufactures two products, Regular and Supreme. Buren's overhead costs
consist of machining, $2,000,000; and assembling, $1,000,000. Information on the two products
is:
Regular
Supreme
Direct labor hours
10,000
15,000
Machine hours
,10,000
30,000
Number of parts
90,000
160,000
Overhead applied to Regular using activity-based costing is
A. $1,200,000.
B. $2,140,000.
C. $1,800,000.
D. $860,000. - Answer $860,000.
If annual overhead costs are expected to be $800,000 and direct labor costs are expected to be
$1,000,000, then if the activity base is direct labor costs:
A. for every dollar of direct labor, 80 cents of manufacturing overhead will be assigned
B. $1.25 is the predetermined overhead rate
C. for every dollar of manufacturing overhead, 80 cents of direct labor will be assigned
D. a predetermined overhead rate cannot be determined. - Answer for every dollar of direct
labor, 80 cents of manufacturing overhead will be assigned
In determining total manufacturing costs on the cost of goods manufactured schedule,
A. manufacturing overhead applied is added to direct materials and direct labor
B. actual manufacturing overhead costs appear as a deduction
C. ending work in process inventory is deducted from beginning work in process inventory
D. beginning work in process inventory should have a zero balance. - Answer manufacturing
overhead applied is added to direct materials and direct labor
A company expected its annual overhead costs to be $900,000 and direct labor costs to be
$1,000,000. Actual overhead was $870,000, and actual labor costs totaled $1,100,000. How
much is the company's predetermined overhead rate to the nearest cent?
A. $0.90
B. $0.79
C. $0.87
D. $0.82 - Answer $0.90
Dolan Manufacturing Company's accounting records reflect the following inventories:
, Raw materials inventory
Dec. 31, 2011 $310,000
Dec. 31, 2010 $260,000
Work in process inventory
Dec. 31, 2011 300,000
Dec. 31, 2010 160,000
Finished goods inventory
Dec. 31, 2011 190,000
Dec. 31, 2010 150,000
During 2011, $400,000 of raw materials were purchased, direct labor costs amounted to
$500,000, and manufacturing overhead incurred was $480,000.If Dolan Manufacturing
Company's cost of goods manufactured for 2011 amounted to $1,190,000, its cost of goods sold
for the year is
A. $1,150,000.
B. $1,050,000.
C. $1,300,000.
D. $1,230,000. - Answer $1,150,000.
For inventoriable costs to become expenses under the matching principle,
A. the product to which they attach must be sold
B. the product must be finished and in stock
C. all accounts payable must be settled
D. the product must be expensed based on its percentage-of-completion. - Answer the
product to which they attach must be sold
Banes Co. incurs $350,000 of overhead costs each year in its three main departments,
machining ($200,000), inspections ($100,000) and packing ($50,000). The machining
department works 4,000 hours per year, there are 500 inspections per year, and the packing
department packs 500 orders per year. Information about Banes's two products is as follows:
Product X
Product Y
Total Activity
Activity Rate
Machining hours
$200,000
1,000
3,000
QUESTIONS AND ANSWERS 2026-2027
GUIDE.
Sphere Company produces two products, Alpha and Beta. Alpha is a high-volume item totaling
20,000 units annually. Beta is a low-volume item totaling only 6,000 units per year. Alpha
requires one hour of direct labor for completion, while each unit of Beta requires 2 hours.
Therefore, total annual direct labor hours are 32,000 (20,000 + 12,000). Expected annual
manufacturing overhead costs are $640,000. Sphere uses a traditional costing system and
assigns overhead based on direct labor hours. Each unit of Beta would be assigned overhead of
A. $40.00.
B. $20.00.
C. $24.61.
D. need more information to compute. - Answer $40.00.
Which of the following is not a unit-level activity?
A. Purchase ordering
B. Assembling
C. Sewing
D. Painting - Answer Purchase ordering
All of the following would be entries in assigning accumulated costs to the Work In Process
Inventory except:
A. factory labor is used
B. raw materials are used
C. overhead is applied
D. the purchase of raw materials. - Answer the purchase of raw materials.
Buren Company manufactures two products, Regular and Supreme. Buren's overhead costs
consist of machining, $2,000,000; and assembling, $1,000,000. Information on the two products
is:
Regular
Supreme
Direct labor hours
10,000
15,000
Machine hours
,10,000
30,000
Number of parts
90,000
160,000
Overhead applied to Regular using activity-based costing is
A. $1,200,000.
B. $2,140,000.
C. $1,800,000.
D. $860,000. - Answer $860,000.
If annual overhead costs are expected to be $800,000 and direct labor costs are expected to be
$1,000,000, then if the activity base is direct labor costs:
A. for every dollar of direct labor, 80 cents of manufacturing overhead will be assigned
B. $1.25 is the predetermined overhead rate
C. for every dollar of manufacturing overhead, 80 cents of direct labor will be assigned
D. a predetermined overhead rate cannot be determined. - Answer for every dollar of direct
labor, 80 cents of manufacturing overhead will be assigned
In determining total manufacturing costs on the cost of goods manufactured schedule,
A. manufacturing overhead applied is added to direct materials and direct labor
B. actual manufacturing overhead costs appear as a deduction
C. ending work in process inventory is deducted from beginning work in process inventory
D. beginning work in process inventory should have a zero balance. - Answer manufacturing
overhead applied is added to direct materials and direct labor
A company expected its annual overhead costs to be $900,000 and direct labor costs to be
$1,000,000. Actual overhead was $870,000, and actual labor costs totaled $1,100,000. How
much is the company's predetermined overhead rate to the nearest cent?
A. $0.90
B. $0.79
C. $0.87
D. $0.82 - Answer $0.90
Dolan Manufacturing Company's accounting records reflect the following inventories:
, Raw materials inventory
Dec. 31, 2011 $310,000
Dec. 31, 2010 $260,000
Work in process inventory
Dec. 31, 2011 300,000
Dec. 31, 2010 160,000
Finished goods inventory
Dec. 31, 2011 190,000
Dec. 31, 2010 150,000
During 2011, $400,000 of raw materials were purchased, direct labor costs amounted to
$500,000, and manufacturing overhead incurred was $480,000.If Dolan Manufacturing
Company's cost of goods manufactured for 2011 amounted to $1,190,000, its cost of goods sold
for the year is
A. $1,150,000.
B. $1,050,000.
C. $1,300,000.
D. $1,230,000. - Answer $1,150,000.
For inventoriable costs to become expenses under the matching principle,
A. the product to which they attach must be sold
B. the product must be finished and in stock
C. all accounts payable must be settled
D. the product must be expensed based on its percentage-of-completion. - Answer the
product to which they attach must be sold
Banes Co. incurs $350,000 of overhead costs each year in its three main departments,
machining ($200,000), inspections ($100,000) and packing ($50,000). The machining
department works 4,000 hours per year, there are 500 inspections per year, and the packing
department packs 500 orders per year. Information about Banes's two products is as follows:
Product X
Product Y
Total Activity
Activity Rate
Machining hours
$200,000
1,000
3,000
