Work Extra Ch 1 - 4
Student: ___________________________________________________________________________
1. _________________ is an example of a staff position.
A. Sales manager for a manufacturer
B. President of a merchandising company
C. Store manager for Best Buy
D. Human resource manager for a community college
2. One of the steps in the lean thinking model is to organize work arrangements around the flow of the business
process. This is often accomplished by:
A. automating the business process.
B. implementing an enterprise system.
C. instituting a six sigma program.
D. creating a manufacturing cell.
3. Which of the following is NOT one of the five steps in the lean thinking model discussed in the text?
A. Create a pull system that responds to customer orders.
B. Automate the business process.
C. Identify the business process that delivers value.
D. Organize work arrangements around the flow of the business process.
4. Which of the following persons would occupy a line position in a department store?
I. Sales manager
II. Manager, furniture department
III. Manager, advertising department
IV. Manager, personnel department
A. Only I
B. Only I and II
C. Only I, II, III
D. I, II, III, IV
5. Which of the following is NOT one of the three major customer value propositions discussed in the text?
A. customer intimacy
B. operational excellence
C. zero defects
D. product leadership
6. Inventories consisting of units of product that are only partially complete are called _______________.
A. finished goods
B. raw materials
C. work in process
D. none of these
7. The controller occupies:
A. a line position.
B. a staff position.
C. neither a line nor a staff position, since the accounting department must be independent.
D. both a line and a staff position.
8. Dorra Corporation manufactures lawnmowers in five work stations. Dorra's weekly demand is 5,000 mowers
but Dorra can only produce 4,200. According to the theory of constraints, to increase production output Dorra
would benefit the most by concentrating improvement efforts on the:
A. first work station.
B. last work station.
C. largest work station.
D. fastest work station.
E. slowest work station.
9. The Institute of Management Accountants' Statement of Ethical Professional Practice states that when faced
with significant ethical issues, management accountants should first:
A. discuss such problems with the immediate superior except when it appears that the superior is involved.
B. clarify relevant concepts by confidential discussion with an objective advisor to obtain an understanding of
possible courses of action.
C. follow the established policies of the organization bearing on the resolution of such conflict.
D. submit an informative memorandum describing the ethical issue to an appropriate representative of the
organization and resign if no action is taken as a result of the memorandum.
10. The Sarbanes-Oxley Act of 2002 contains all of the following provisions EXCEPT:
A. A CFO must be a CPA or CMA.
B. The audit committee of the board of directors of a company must hire, compensate, and terminate the public
accounting firm that audits the company's financial reports.
C. Severe penalties are established for altering or destroying documents that may eventually be used in an
official proceeding.
D. Both the CEO and CFO must certify in writing that their company's financial statements and accompanying
disclosures fairly represent the results of operations.
Dasilva Company had only one job in process on May 1. The job had been charged with $1,400 of direct
materials, $6,192 of direct labor, and $5,712 of manufacturing overhead cost. The company assigns overhead
cost to jobs using the predetermined overhead rate of $11.90 per direct labor-hour. During May, the following
activity was recorded:
Work in process inventory on May 30 contains $4,773 of direct labor cost. Raw materials consist solely of items
that are classified as direct materials.
11. The balance in the raw materials inventory account on May 30 was:
A. $4,700
B. $43,300
C. $3,800
D. $39,500
Roofe Inc. has provided the following data for the month of October. There were no beginning inventories;
consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the
current month.
Manufacturing overhead for the month was underapplied by $2,000.
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and
cost of goods sold at the end of the month on the basis of the overhead applied during the month in those
accounts.
12. The cost of goods sold for October after allocation of any underapplied or overapplied overhead for the
month is closest to:
A. $241,320
B. $237,960
C. $241,640
D. $237,640
13. The entry to dispose of the underapplied or overapplied overhead cost for the month would include a:
A. credit of $1,610 to Manufacturing Overhead
B. debit of $4,403 to Manufacturing Overhead
C. credit of $4,403 to Manufacturing Overhead
D. debit of $1,610 to Manufacturing Overhead
14. Which of the following companies would be most likely to use a job-order costing system rather than a
process costing system?
A. fast food restaurant
B. shipbuilding
C. crude oil refining
D. candy making
15. The journal entry to record the allocation of any underapplied or overapplied overhead for October would
include the following:
A. credit to Finished Goods of $260
B. credit to Finished Goods of $35,950
C. debit to Finished Goods of $260
D. debit to Finished Goods of $35,950
Baken Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the
most recent year, the company based its predetermined overhead rate on total estimated overhead of $172,140
and 3,800 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $171,000 and
actual direct labor-hours were 3,880.
16. The predetermined overhead rate for the year was closest to:
A. $45.00
B. $44.07
C. $46.25
D. $45.30
17. During August at Schlappi Corporation, $80,000 of raw materials were requisitioned from the storeroom for
use in production. These raw materials included both direct and indirect materials. The indirect materials totaled
$2,000. The journal entry to record this requisition would include a debit to Manufacturing Overhead of:
A. $2,000
B. $80,000
C. $78,000
D. $0
18. Which of the following situations always results in underapplied overhead?
A. actual overhead is greater than applied overhead
B. actual overhead is less than applied overhead
C. estimated overhead is greater than actual overhead
D. estimated overhead is less than actual overhead
19. For the current year, Paxman Company incurred $150,000 in actual manufacturing overhead cost. The
Manufacturing Overhead account showed that overhead was overapplied in the amount of $6,000 for the year.
If the predetermined overhead rate was $8.00 per direct labor-hour, how many hours were worked during the
year?
A. 19,500 hours
B. 18,000 hours
C. 18,750 hours
D. 17,750 hours
20. Sweet Company applies overhead to jobs on the basis of 125% of direct labor cost. If Job 107 shows
$10,000 of manufacturing overhead applied, how much was the direct labor cost on the job?
A. $8,000
B. $12,500
C. $11,250
D. $10,000
The following partially completed T-accounts summarize last year's transactions for Kelshaw Company.
At the end of the year, the company closes out the balance in the Manufacturing Overhead account to Cost of
Goods Sold.
21. The indirect labor cost is:
A. $5,000
B. $12,000
C. $15,000
D. $35,000
22. The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The
predetermined overhead rate is based on labor cost in Dept. A and on machine-hours in Dept. B. At the
beginning of the year, the company made the following estimates:
What predetermined overhead rates would be used in Dept A and Dept B, respectively?
A. 50% and $8.00
B. 50% and $5.00
C. $15 and 110%
D. 200% and $5.00
Rappaport Corporation reported the following data for the month of February:
23. The direct materials cost for February is:
A. $95,000
B. $88,000
C. $79,000
D. $63,000
24. In December, Perone Inc. incurred $78,000 of direct labor costs and $4,000 of indirect labor costs. The
journal entry to record the accrual of these wages would include a:
A. debit to Work in Process of $82,000
B. debit to Manufacturing Overhead of $4,000
C. credit to Work in Process of $82,000
D. credit to Manufacturing Overhead of $4,000
25. When applying manufacturing overhead to jobs, the formula to calculate the amount is as follows:
A. Predetermined overhead rate divided by the actual manufacturing overhead incurred on the particular job.
B. Predetermined overhead rate times the actual manufacturing overhead incurred on the particular job.
C. Predetermined overhead rate divided by the actual units of allocation base charged to the particular job.
D. Predetermined overhead rate times the actual units of allocation base charged to the particular job.
Eccles Corporation uses a job-order costing system and applies overhead to jobs using a predetermined
overhead rate. During the year the company's Finished Goods inventory account was debited for $384,000 and
credited for $325,900. The ending balance in the Finished Goods inventory account was $72,100. At the end of
the year, manufacturing overhead was underapplied by $5,400.
26. The balance in the Finished Goods inventory account at the beginning of the year was:
A. $72,100
B. $5,400
C. $14,000
D. $58,100
27. Wandrie Inc. has provided the following data for the month of October. There were no beginning
inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below
are all for the current month.
Manufacturing overhead for the month was overapplied by $3,000.
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and
cost of goods sold at the end of the month on the basis of the overhead applied during the month in those
accounts.
The cost of goods sold for October after allocation of any underapplied or overapplied overhead for the month
is closest to:
A. $215,600
B. $210,980
C. $210,290
D. $216,290
The Lee Company uses a job-order costing system. The following data were recorded for June:
Overhead is charged to production at 80% of direct materials cost. Jobs 235, 237, and 238 were completed
during June and transferred to finished goods. Jobs 235 and 238 have been delivered to customers.
28. Lee's Work in Process inventory balance on June 30 was:
A. $4,100
B. $3,940
C. $3,300
D. $9,450
29. Computing unit product costs involves averaging in:
A. Choice A
B. Choice B
C. Choice C
D. Choice D
Alvernaz Inc. has provided the following data for the month of April. There were no beginning inventories;
consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the
current month.
Manufacturing overhead for the month was overapplied by $2,000.
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and
cost of goods sold at the end of the month on the basis of the overhead applied during the month in those
accounts.
30. The work in process inventory at the end of April after allocation of any underapplied or overapplied
overhead for the month is closest to:
A. $20,947
B. $20,400
C. $21,000
D. $20,453
31. Which of the following accounts is debited when indirect labor is recorded?
A. Work in Process
B. Salaries and Wages Expense
C. Salaries and Wages Payable
D. Manufacturing Overhead
32. Niglio Inc. has provided the following data for the month of December. There were no beginning
inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below
are all for the current month.
Manufacturing overhead for the month was underapplied by $10,000.
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and
cost of goods sold at the end of the month on the basis of the overhead applied during the month in those
accounts.
The finished goods inventory at the end of December after allocation of any underapplied or overapplied
overhead for the month is closest to:
A. $56,950
B. $51,750
C. $51,691
D. $57,009
During August, Sherill Corporation incurred $78,000 of actual Manufacturing Overhead costs. During the same
period, the Manufacturing Overhead applied to Work in Process was $81,000.
33. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a:
A. credit to Work in Process of $78,000
B. debit to Manufacturing Overhead of $81,000
C. credit to Manufacturing Overhead of $81,000
D. debit to Work in Process of $78,000
On July 1, Woolard Corporation had $20,000 of raw materials on hand. During the month, the company
purchased an additional $53,000 of raw materials. During July, $49,000 of raw materials were requisitioned
from the storeroom for use in production. These raw materials included both direct and indirect materials. The
indirect materials totaled $5,000.
Prepare journal entries to record these events. Use those journal entries to answer the following questions:
34. The credits to the Raw Materials account for the month of July total:
A. $53,000
B. $49,000
C. $20,000
D. $73,000
The Garnet Company uses a job-order costing system. The following data were recorded for February:
Overhead is charged to jobs at the rate of 140% of direct labor cost.
Jobs 1, 2, and 3 were completed during February and transferred to
finished goods. Job 3 has been delivered to the customer.
35. The manufacturing costs added to jobs during the month totaled:
A. $8,250
B. $11,880
C. $12,500
D. $15,180
36. Park Company uses the weighted-average method in its process costing system. The Molding Department is
the second department in its production process. The data below summarize the department's operations in
January.
The accounting records indicate that the conversion cost that had been assigned to beginning work in process
inventory was $40,484 and a total of $213,890 in conversion costs were incurred in the department during
January.
The cost per equivalent unit for conversion costs for January in the Molding Department is closest to:
A. $4.823
B. $4.186
C. $4.650
D. $4.590
Bosril Corporation uses the weighted-average method in its process costing system. This month, beginning
inventory the in the first processing department consisted of 400 units. The costs and percentage completion of
these units in beginning inventory were:
A total of 5,600 units were started and 4,900 units were transferred to the second processing department during
the month. The following costs were incurred in the first processing department during the month:
The ending inventory was 85% complete with respect to materials and 45% complete with respect to conversion
costs.
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer
that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least
three decimal places.
37. The cost per equivalent unit for conversion costs for the first department for the month is closest to:
A. $18.74
B. $17.85
C. $17.68
D. $16.05
Dufour Corporation uses the weighted-average method in its process costing system. This month, the beginning
inventory in the first processing department consisted of 600 units. The costs and percentage completion of
these units in beginning inventory were:
A total of 5,700 units were started and 4,900 units were transferred to the second processing department during
the month. The following costs were incurred in the first processing department during the month:
The ending inventory was 85% complete with respect to materials and 70% complete with respect to conversion
costs.
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer
that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least
three decimal places.
38. How many units are in ending work in process inventory in the first processing department at the end of the
month?
A. 5,100
B. 800
C. 1,400
D. 900
39. In September, one of the processing departments at Shenkel Corporation had beginning work in process
inventory of $25,000 and ending work in process inventory of $18,000. During the month, the cost of units
transferred out from the department was $304,000. In the department's cost reconciliation report for September,
the total cost accounted for would be:
A. $619,000
B. $644,000
C. $322,000
D. $43,000
40. Process costing would be appropriate for each of the following except:
A. custom furniture manufacturing.
B. oil refining.
C. grain milling.
D. newsprint production.
41. Natraj Corporation uses the weighted-average method in its process costing system. Operating data for the
Lubricating Department for the month of October appear below:
What were the equivalent units for conversion costs in the Lubricating Department for October?
A. 41,220
B. 38,400
C. 37,800
D. 41,520
Chabud Corporation uses the weighted-average method in its process costing system. This month, the
beginning inventory in the first processing department consisted of 500 units. The costs and percentage
completion of these units in beginning inventory were:
A total of 8,100 units were started and 7,300 units were transferred to the second processing department during
the month. The following costs were incurred in the first processing department during the month:
The ending inventory was 70% complete with respect to materials and 40% complete with respect to conversion
costs.
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer
that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least
three decimal places.
42. How many units are in ending work in process inventory in the first processing department at the end of the
month?
A. 7,600
B. 800
C. 1,300
D. 900
Krepps Corporation uses the weighted-average method in its process costing system. Data concerning the first
processing department for the most recent month are listed below:
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer
that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least
three decimal places.
43. The total cost transferred from the first processing department to the next processing department during the
month is closest to:
A. $410,402
B. $459,405
C. $436,300
D. $429,900
44. Black Company uses the weighted-average method in its process costing system. The company's ending
work in process inventory consists of 5,000 units, 80% complete with respect to materials and 50% complete
with respect to labor and overhead. If the total dollar value of the inventory is $60,000 and the cost per
equivalent unit for labor and overhead is $8.00, the cost per equivalent unit for materials must be:
A. $5.00
B. $10.00
C. $8.00
D. $4.00
Abis Corporation uses the weighted-average method in its process costing system. This month, the beginning
inventory in the first processing department consisted of 800 units. The costs and percentage completion of
these units in beginning inventory were:
A total of 9,200 units were started and 8,200 units were transferred to the second processing department during
the month. The following costs were incurred in the first processing department during the month:
The ending inventory was 80% complete with respect to materials and 20% complete with respect to conversion
costs.
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer
that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least
three decimal places.
45. The cost of ending work in process inventory in the first processing department according to the company's
cost system is closest to:
A. $73,829
B. $18,457
C. $92,286
D. $31,891
Guasson Corporation uses the weighted-average method in its process costing system. This month, the
beginning inventory in the first processing department consisted of 500 units. The costs and percentage
completion of these units in beginning inventory were:
A total of 6,400 units were started and 5,800 units were transferred to the second processing department during
the month. The following costs were incurred in the first processing department during the month:
The ending inventory was 85% complete with respect to materials and 50% complete with respect to conversion
costs.
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer
that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least
three decimal places.
46. The cost per equivalent unit for materials for the month in the first processing department is closest to:
A. $22.35
B. $20.59
C. $21.81
D. $21.10
Ermoin Corporation uses the weighted-average method in its process costing system. This month, the
beginning inventory in the first processing department consisted of 600 units. The costs and percentage
completion of these units in beginning inventory were:
A total of 5,700 units were started and 4,700 units were transferred to the second processing department during
the month. The following costs were incurred in the first processing department during the month:
The ending inventory was 75% complete with respect to materials and 20% complete with respect to conversion
costs.
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer
that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least
three decimal places.
47. The cost per equivalent unit for materials for the month in the first processing department is closest to:
A. $8.25
B. $7.73
C. $7.59
D. $7.11
48. What are the equivalent units for materials for the month in the first processing department?
A. 935
B. 6,735
C. 6,900
D. 5,800
49. What are the equivalent units for conversion costs for the month in the first processing department?
A. 4,900
B. 5,880
C. 6,300
D. 980
In September, one of the processing departments at Kuzminski Corporation had beginning work in process
inventory of $15,000 and ending work in process inventory of $19,000. During the month, $170,000 of costs
were added to production.
50. In the department's cost reconciliation report for September, the cost of units transferred out of the
department would be:
A. $166,000
B. $185,000
C. $147,000
D. $151,000
51. The total cost transferred from the first processing department to the next processing department during the
month is closest to:
A. $413,100
B. $389,650
C. $463,549
D. $435,200
52. The total cost transferred from the first processing department to the next processing department during the
month is closest to:
A. $512,700
B. $452,300
C. $420,414
D. $436,400
53. In the department's cost reconciliation report for September, the total cost to be accounted for would be:
A. $34,000
B. $185,000
C. $370,000
D. $355,000
54. Overland, Inc., uses the weighted-average method in its process costing system. The company's work in
process inventory on April 30 consists of 25,000 units. The units in the ending inventory are 100% complete
with respect to materials and 75% complete with respect to conversion costs. If the cost per equivalent unit is
$3.00 for materials and $5.50 for conversion costs, the total cost in the April 30 work in process inventory is:
A. $212,500
B. $178,125
C. $159,375
D. $109,375
55. How many units are in ending work in process inventory in the first processing department at the end of the
month?
A. 1,100
B. 5,200
C. 900
D. 700
56. The cost per equivalent unit for materials for the month in the first processing department is closest to:
A. $16.72
B. $18.15
C. $17.52
D. $17.33
A sporting goods manufacturer buys wood as a direct material for baseball bats. The Forming Department
processes the baseball bats, and the bats are then transferred to the Finishing Department where a sealant is
applied. There was no beginning work in process inventory in the Forming Department in May. The Forming
Department began manufacturing 10,000 Casey Slugger baseball bats during May. Costs for the Forming
Department for the month of May were as follows:
A total of 8,000 bats were completed and transferred to the Finishing Department during May. The ending work
in process inventory was 100% complete with respect to direct materials and 25% complete with respect to
conversion costs. The company uses the weighted-average method of process costing.
57. The cost of the units transferred to the Finishing Department during May was:
A. $50,000
B. $40,000
C. $53,000
D. $42,400
58. Dewey Company uses the weighted-average method in its process costing system. The first processing
department, the Welding Department, started the month with 15,000 units in its beginning work in process
inventory that were 20% complete with respect to conversion costs. The conversion cost in this beginning work
in process inventory was $19,200. An additional 86,000 units were started into production during the month.
There were 13,000 units in the ending work in process inventory of the Welding Department that were 60%
complete with respect to conversion costs. A total of $575,360 in conversion costs were incurred in the
department during the month.
The cost per equivalent unit for conversion costs is closest to:
A. $5.812
B. $6.206
C. $6.400
D. $6.690
Belegorsk Corporation uses a weighted-average process costing system to collect costs related to production in
its Milling Department. The following information relates to Milling Department production for August:
59. What are the Milling Department's equivalent units related to materials for August?
A. 37,000
B. 51,000
C. 42,000
D. 46,000
60. The cost per equivalent unit for conversion costs for the first department for the month is closest to:
A. $40.77
B. $33.24
C. $38.83
D. $37.68
61. How many units are in ending work in process inventory in the first processing department at the end of the
month?
A. 900
B. 1,100
C. 600
D. 5,900
62. The cost per equivalent unit for materials for the month in the first processing department is closest to:
A. $15.73
B. $17.09
C. $16.62
D. $16.18
The information below was obtained from the records of the first processing department of Christine
Corporation for the month of July. The company uses the weighted-average method in its process costing
system.
All materials are added at the beginning of the manufacturing process.
63. The equivalent units for labor and overhead for the month is:
A. 70,000
B. 90,000
C. 80,000
D. 82,500
64. The cost of ending work in process inventory in the first processing department according to the company's
cost system is closest to:
A. $29,402
B. $24,502
C. $49,003
D. $25,895
65. Fauste Corporation uses the weighted-average method in its process costing system. The Assembly
Department started the month with 10,000 units in its beginning work in process inventory that were 70%
complete with respect to conversion costs. An additional 55,000 units were transferred in from the prior
department during the month to begin processing in the Assembly Department. During the month 52,000 units
were completed in the Assembly Department and transferred to the next processing department. There were
13,000 units in the ending work in process inventory of the Assembly Department that were 80% complete with
respect to conversion costs.
What were the equivalent units for conversion costs in the Assembly Department for the month?
A. 58,000
B. 55,400
C. 62,400
D. 52,000
Extra Work Ch 1 - 4 Key
1. D
2. D
3. B
4. B
5. C
6. C
7. B
8. E
9. C
10. A
11. A
12. A
13. D
14. B
15. C
16. D
17. A
18. A
19. A
20. A
21. A
22. D
23. B
24. B
25. D
26. C
27. B
28. B
29. B
30. B
31. D
32. A
33. C
34. B
35. D
36. A
37. B
38. C
39. C
40. A
41. A
42. C
43. A
44. B
45. D
46. A
47. A
48. B
49. B
50. A
51. B
52. C
53. B
54. B
55. A
56. B
57. D
58. B
59. B
60. C
61. B
62. B
63. D
64. D
65. C
Extra Work Ch 1 - 4 Summary
Category
# of Questions
AACSB: Analytic
49
AACSB: Reflective Thinking
16
AICPA BB: Critical Thinking
63
AICPA BB: Industry
2
AICPA FN: Measurement
65
Garrison - Chapter 001
10
Garrison - Chapter 003
36
Garrison - Chapter 004
41
Learning Objective: 1
3
Learning Objective: 2
29
Learning Objective: 3
22
Learning Objective: 4
14
Learning Objective: 5
6
Learning Objective: 6
4
Learning Objective: 7
3
Learning Objective: 8
8
Level: Easy
22
Level: Hard
7
Level: Medium
36