Some costs that possibly could be traced directly to

5. Some costs that possibly could be traced directly to cost objects are nonetheless classified as indirect costs.
Why?
a. because such practice results in a more accurate accumulated cost for the object
B. because such costs cannot be traced to objects in a cost-effective manner
c. because it is less expensive to account for indirect costs
d. All of the above
e. None of the above
6. The work in process account for Hoosier Company contained the following entries:
Work in Process Account
No beginning balance Debit of $48,000 for direct raw materials
Debit of $51,000 for direct labor
Debit of $28,000 for manufacturing overhead applied
Ending balance, $37,000 associated with Job 1
The company uses a job order cost system. Work was only performed on two jobs during the period. What
amount would be reported as a debit to finished goods for cost of goods manufactured?
7. Which of the following should not be recorded as an expense?

8. Bruins Company reported the following income for 2003:
What is the company's times interest earned ratio?
9. Huskies Tools produces a variety of scissors and other cutting instruments at its City-State manufacturing
plant. The plant is highly automated and uses an activity-based costing system to allocate overhead costs to
its various product lines. The company expects to produce 20,000 total units during the current period. The
costs and cost drivers associated with four activity cost pools are given below:
Production of 1,200 units of a pipe-cutting tool required 500 labor hours, 10 setups, and consumed 25% of
the product sustaining activities and resulted in an overhead allocation of $18,000. What amount of batch-
level overhead costs must have been expected during the period?
a. $18,000
B.
$32,500
c. $180,000
d. None of the above
Page 3

10. In a process cost system, the output of Department One becomes an input to Department Two. What is this
input generally referred to as?
11. Golden Bears Company allocates overhead on the basis of direct labor hours. It allocates overhead costs of
$10,800 to two different jobs as follows:
Job 1: (8 hours) = $5,400 Job 2: (8 hours) = $5,400
The production process for Job 1 is automated. Now Job 1 requires only two hours of direct labor but four
hours of mechanical processing. As a result, total overhead increases to $14,600. Select the correct
statement from the following.
Page 4