accounting exam 1

Which of the following statements is true with respect to the cost of goods sold equation?

• Cost of goods sold = beginning merchandise inventory + purchases − ending merchandise inventory

• Cost of goods sold = beginning merchandise inventory − purchases + ending merchandise inventory

• Cost of goods sold = ending merchandise inventory + purchases − beginning merchandise inventory

Which of the following is not a product cost?

• direct materials

• sales commission

• direct labor

• variable manufacturing overhead

3

• $174,500

• $81,500

• $79,500

• $84,500

Which of the following statements is true regarding job-order costing?

• It is used in situations where many different products, each with unique features, are produced each period.

• It is used for manufacturing companies, but not service companies.

• It relies on a predetermined overhead rate to apply direct material cost to units of product.

• It relies on a predetermined overhead rate to apply direct labor cost to units of product.

A predetermined overhead rate includes:

• the actual total amount of the allocation base in the denominator.

• the fixed portion of the estimated manufacturing overhead cost in the denominator.

• the fixed portion of the actual manufacturing overhead cost in the denominator

• the estimated total amount of the allocation base in the denominator.

Which of the following statements is true regarding the formula used in normal costing for applying overhead cost to a specific job?

• The predetermined overhead rate is multiplied by the estimated amount of the allocation base used by the job.

• The actual overhead rate is multiplied by the actual amount of the allocation base used by the job.

• The predetermined overhead rate is multiplied by the actual amount of the allocation base used by the job.

• The actual overhead rate is multiplied by the estimated amount of the allocation base used by the job.

A unit product cost is calculated by:

• Dividing the total non-manufacturing costs assigned to a job by the total number of units contained in the job.

• Dividing the total manufacturing costs assigned to a job by the total number of units contained in the job.

• Dividing the total manufacturing and nonmanufacturing costs assigned to a job by the total number of units contained in the job.

• Dividing the total nonmanufacturing costs and normal costs assigned to job by the total number of units contained in the job.

Overhead application refers to applying:

• Direct material costs to jobs.

• 
  Direct labor costs to jobs

• Nonmanufacturing overhead costs to jobs.

• Manufacturing overhead costs to jobs.

Which of the following is not one of the three inventory accounts reported on the balance sheet?

• Cost of goods sold

• finished goods

• work in process

• raw materials

Which of the following statements is false?

• • Work in process inventory is included in the balance sheet.

• • Work in process inventory includes direct materials used in production.

• • Work in process inventory includes direct labor costs.

• • Work in process inventory includes actual manufacturing overhead costs assigned to jobs worked on during the period.