102716 9 47 pm unit 9 quiz fa16 foundations of

This preview shows page 8 - 11 out of 11 pages.

10/27/16, 9 : 47 PM Unit 9 Quiz: Fa16 - FOUNDATIONS OF ACCOUNTING-WB (02720) 3.6 / 3.6 pts Question 12 Which of the following statements is true? A. For financial reporting purposes, merchandising firms expense the cost of items when they purchase them B. Product costs always appear “below the line” for gross margin C. The terms cost of goods sold and costs of goods manufactured are used interchangeably D. As with service firms, period costs appear below the line for gross margin E. Product costs are often referred to as inventoriable costs because these are the costs that firms attach to inventories of work in process and fiished goods. Both D & E are correct For financial reporting purposes, merchandising firms expense the cost of items when they are sold, not when they purchase them.
Page 8 of 11 0 / 3.6 pts Question 13 Incorrect Incorrect Doug Brown’s Corporation manufactures soccer balls and basketballs. Overhead costs are currently allocated using direct labor hours. Soccer Basketballs Total Direct labor hours (unit) 25,000 100,000 125,000
10/27/16, 9 : 47 PM Unit 9 Quiz: Fa16 - FOUNDATIONS OF ACCOUNTING-WB (02720) #Units Shipped 60,000 50,000 110,000 Total Overhead Cost $315,000 What is the unit OH cost for basketballs if the total OH cost is allocated based on labor hours?
Page 9 of 11
3.6 / 3.6 pts Question 14 The Clarke Company provided the following information for the month of December: Beginning work-in-process $12,000 Ending work-in-process $9,000 Direct labor/materials used $14,000 Manufacturing overhead $7,000 The company’s cost of goods manufactured for December is:
10/27/16, 9 : 47 PM Unit 9 Quiz: Fa16 - FOUNDATIONS OF ACCOUNTING-WB (02720) Page 10 of 11 3.6 / 3.6 pts Question 15 The following information is available for the Downtown Furniture Company which produces two types of tables. Oak Cherry Total Sales volume (units) 500 300 Revenue $80,000 $78,000 $158,000 Variable Costs Direct materials $5,000 $8,000 $13,000 Direct labor $17,000 $21,000 $38,000 Contribution Margin $58,000 $49,000 $107,000 Fixed Costs Manufacturing $40,000 Administrative $33,000 Profit before Tax $34,000 Management feels that the fixed administrative costs should be allocated based on units sold. The rate at which fixed administrative costs which should be allocated, and the administrative costs allocated to cherry tables are: $41.25 per unit and $20,625 $41.25 per unit and $12,375 Explanation: Rate at which fixed administrative costs allocated: Administrative 33,000/ Total units 800=$41.25 per unit For cherry tables, the administrative costs allocated = 41.25 * 300=$12,375 $66 per unit and $12,375 $110 per unit and $20,625 800
10/27/16, 9 : 47 PM Unit 9 Quiz: Fa16 - FOUNDATIONS OF ACCOUNTING-WB (02720) 0 / 3.6 pts Question 16 Incorrect Incorrect Which of the following statements relating to period costs is not correct?
Page 11 of 11 Quiz Score: 46.8 out of 54

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture