ACCT 2521 EXAM 1 | QUESTIONS AND ANSWERS |
2025/2026 UPDATE | 100% CORRECT
Which account is credited if direct materials of $20,000 are sent to the
manufacturing plant floor?
a.Manufacturing Overhead Control
b.Work-in-Process Control
c.Accounts Payable Control
d.Materials Control Answer - D
At what point are manufacturing costs expensed?
a.When they are transferred out of Work in Process
b.When they are entered into production
c.When finished goods are sold
d.At the end of the accounting period Answer - C
Period costs
a. are treated as expenses in the period they are incurred
b. are directly traceable to products
c. are treated as expenses in the following period after are incurred
d. are also referred to as manufacturing overhead costs Answer - A
,Mosely Company's per-unit cost is the same at all levels of activity. The
company's cost structure must have all:
a.Fixed costs
b.Variable costs
c.Mixed costs
d.Stepped costs Answer - B
Owl Electronics is a manufacturing company. The wages of Owl's assembly line
workers can be described as:
Inventoriable costs - Direct costs
a.Yes - No
b.No - Yes
c.Yes - Yes
d.No - No Answer - C
Which of the following statements about CVP analysis is correct?
a.At the breakeven point, sales revenue is exactly equal to total costs, and
there is no operating profit or loss.
b.On the breakeven graph, any level of sales to the left of the breakeven point
represents a profit.
c.The difference between total revenues and total costs is called contribution
margin
d.None of the above statements is correct Answer - A
Which of the following is not classified as a period cost?
a.The cost of toner for the sales department laser printer
b.The salary for the president of the company
c.The cost of utilities for the factory building
,d.Advertising costs Answer - C
ABC Inc. incurred a cost of $450 for the plant manager's salary. The journal
entry for this transaction would include
a.A debit to manufacturing overhead control
b.A credit to manufacturing overhead allocated
c.A debit to salaries expense
d.A debit to manufacturing overhead control Answer - A
Which of the following are debited to the Work-in-Process account?
a.actual plant insurance costs
b.customer services costs
c.marketing expenses
d.direct manufacturing labor costs Answer - D
ABC company incurred $32,000 in manufacturing overhead and applied
$32,500. The company uses the most common and simple method (i.e. COGS)
of handling differences between actual and applied overhead. The journal
entry to dispose of the difference would include
a.A debit to manufacturing overhead control
b.A debit to cost of goods sold
c.A credit to manufacturing overhead allocated
d.A credit to cost of goods sold Answer - D
Factory machine operator wages are classified as
a.Product costs & indirect labor costs
b. Period costs & indirect labor costs
, c. Product costs & direct labor costs
d. Period costs & direct labor costs Answer - C
Blue Company is a manufacturing company. Salaries for sales personnel are
classified as
a. Period costs & indirect labor costs
b. Period costs & selling costs
c. Selling costs & direct labor costs
d. Period costs & direct labor costs Answer - B
Gulf Corp's managers have determined that their small company can break
even (each month) at 400 units and $2,000 in revenues. Gulf is currently selling
430 units per month. Which of the following statements is NOT true?
a. Gulf will make losses at all sales levels below 400 units.
b. Gulf is currently making profits.
c. Gulf's fixed costs are $2,000 because the breakeven revenues are $2,000.
d. Gulf's product price is $5. Answer - C
ABC company incurred $31,000 in manufacturing overhead and applied
$33,000 to jobs during 2016. Budgeted manufacturing overhead costs at the
beginning of the year was $30,500. The company uses the most common and
simple method of handling differences between actual and applied overhead.
4. During 2016, the company
a. Overapplied overhead costs by $2,000
b. Underapplied overhead costs by $2,000
c. Overapplied overhead costs by $2,500
d. Underapplied overhead costs by $2,500 Answer - A
2025/2026 UPDATE | 100% CORRECT
Which account is credited if direct materials of $20,000 are sent to the
manufacturing plant floor?
a.Manufacturing Overhead Control
b.Work-in-Process Control
c.Accounts Payable Control
d.Materials Control Answer - D
At what point are manufacturing costs expensed?
a.When they are transferred out of Work in Process
b.When they are entered into production
c.When finished goods are sold
d.At the end of the accounting period Answer - C
Period costs
a. are treated as expenses in the period they are incurred
b. are directly traceable to products
c. are treated as expenses in the following period after are incurred
d. are also referred to as manufacturing overhead costs Answer - A
,Mosely Company's per-unit cost is the same at all levels of activity. The
company's cost structure must have all:
a.Fixed costs
b.Variable costs
c.Mixed costs
d.Stepped costs Answer - B
Owl Electronics is a manufacturing company. The wages of Owl's assembly line
workers can be described as:
Inventoriable costs - Direct costs
a.Yes - No
b.No - Yes
c.Yes - Yes
d.No - No Answer - C
Which of the following statements about CVP analysis is correct?
a.At the breakeven point, sales revenue is exactly equal to total costs, and
there is no operating profit or loss.
b.On the breakeven graph, any level of sales to the left of the breakeven point
represents a profit.
c.The difference between total revenues and total costs is called contribution
margin
d.None of the above statements is correct Answer - A
Which of the following is not classified as a period cost?
a.The cost of toner for the sales department laser printer
b.The salary for the president of the company
c.The cost of utilities for the factory building
,d.Advertising costs Answer - C
ABC Inc. incurred a cost of $450 for the plant manager's salary. The journal
entry for this transaction would include
a.A debit to manufacturing overhead control
b.A credit to manufacturing overhead allocated
c.A debit to salaries expense
d.A debit to manufacturing overhead control Answer - A
Which of the following are debited to the Work-in-Process account?
a.actual plant insurance costs
b.customer services costs
c.marketing expenses
d.direct manufacturing labor costs Answer - D
ABC company incurred $32,000 in manufacturing overhead and applied
$32,500. The company uses the most common and simple method (i.e. COGS)
of handling differences between actual and applied overhead. The journal
entry to dispose of the difference would include
a.A debit to manufacturing overhead control
b.A debit to cost of goods sold
c.A credit to manufacturing overhead allocated
d.A credit to cost of goods sold Answer - D
Factory machine operator wages are classified as
a.Product costs & indirect labor costs
b. Period costs & indirect labor costs
, c. Product costs & direct labor costs
d. Period costs & direct labor costs Answer - C
Blue Company is a manufacturing company. Salaries for sales personnel are
classified as
a. Period costs & indirect labor costs
b. Period costs & selling costs
c. Selling costs & direct labor costs
d. Period costs & direct labor costs Answer - B
Gulf Corp's managers have determined that their small company can break
even (each month) at 400 units and $2,000 in revenues. Gulf is currently selling
430 units per month. Which of the following statements is NOT true?
a. Gulf will make losses at all sales levels below 400 units.
b. Gulf is currently making profits.
c. Gulf's fixed costs are $2,000 because the breakeven revenues are $2,000.
d. Gulf's product price is $5. Answer - C
ABC company incurred $31,000 in manufacturing overhead and applied
$33,000 to jobs during 2016. Budgeted manufacturing overhead costs at the
beginning of the year was $30,500. The company uses the most common and
simple method of handling differences between actual and applied overhead.
4. During 2016, the company
a. Overapplied overhead costs by $2,000
b. Underapplied overhead costs by $2,000
c. Overapplied overhead costs by $2,500
d. Underapplied overhead costs by $2,500 Answer - A
