Type:
Test Bank
Resource:
Managerial Accounting Tools for Business Decision Making
Edition:
5th Edition
Author(s):
Jerry J. Weygandt Paul D. Kimmel Donald E. KIeso
TEST BANK to accompany
MANAGERIAL ACCOUNTING TOOLS FOR BUSINESS DECISION MAKING FIFTH EDITION JERRY J. WEYGANDT Ph.D., C.P.A. Arthur Andersen Alumni Professor of Accounting University of Wisconsin—Madison Madison, Wisconsin
PAUL D. KIMMEL Ph.D., C.P.A. Associate Professor of Accounting University of Wisconsin—Milwaukee Milwaukee, Wisconsin
DONALD E. KIESO
Ph.D., C.P.A. KPMG Peat Marwick Emeritus Professor of Accountancy Northern Illinois University DeKalb, Illinois
John Wiley & Sons, Inc.
CONTENTS Preface To the Instructor Chapter
1
Managerial Accounting
Chapter
2
Job Order Costing
Chapter
3
Process Costing
Chapter
4
Activity-Based Costing
Comprehensive Examination A (Chapters 1-4): Available online, IRCD, and via the computerized test bank Chapter
5
Cost-Volume-Profit
Chapter
6
Cost-Volume-Profit: Additional Issues
Chapter
7
Incremental Analysis
Chapter
8
Pricing
Comprehensive Examination B (Chapters 5-9): Available online, IRCD, and via the computerized test bank Chapter
9
Budgetary Planning
Chapter
10
Budgetary Control and Responsibility Accounting
Chapter
11
Standard Costs and Balanced Scorecard
Chapter
12
Planning for Capital Investments
Chapter
13
Statement of Cash Flows
Chapter 14
Financial Statement Analysis
Comprehensive Examination C (Chapters 10 -14): Available online, IRCD, and via the computerized test bank Appendix A
Time Value of Money
The following exams are available online, the IRCD, and computerized test bank: Achievement Test 1
Chapters 1-2
Achievement Test 2
Chapters 3-4
Achievement Test 3
Chapters 5-6
Achievement Test 4
Chapters 7-8
Achievement Test 5
Chapters 9-10
Achievement Test 6
Chapters 11-12
Achievement Test 7
Chapters 13-14
Final Exam
All Chapters
Achievement Test 1: Chapters 1-2 Managerial Accounting, 5e
Name _________________________ Instructor ______________________ Section # _______ Date _________
Part
I
II
III
IV
Total
Points
30
20
22
28
100
Score
PART I — MULTIPLE CHOICE (30 points) Instructions: Designate the best answer for each of the following questions. ____
1. One cost which is part of both manufacturing overhead and total manufacturing costs is a. direct labor. b. direct materials. c. selling and administrative costs. d. factory utilities.
____
2. Manufacturing costs are typically classified as a. product costs or period costs. b. direct materials or direct labor. c. direct materials, direct labor, or manufacturing overhead. d. direct materials, direct labor, or selling and administrative.
____
3. A credit balance in the Manufacturing Overhead account at the end of an interim month means that a. the balance should be reported as a prepaid expense in the monthly balance sheet. b. corrective action by management is necessary. c. overhead has been overapplied. d. cost of goods sold should be debited on the monthly income statement.
____
4. In a job order cost system, which of the following accounts is not a control account? a. Raw Materials Inventory b. Factory Labor c. Finished Goods Inventory d. Manufacturing Overhead
____
5. In the current assets section of the balance sheet, manufacturing inventories are listed in the following order: a. raw materials, work in process, finished goods. b. finished goods, work in process, raw materials. c. work in process, finished goods, raw materials. d. finished goods, raw materials, work in process.
AT1- 2
Test Bank for Managerial Accounting, Fifth Edition
The following data should be used for questions 6–9: Raw materials inventory, January 1 Raw materials inventory, December 31 Work in process, January 1 Work in process, December 31 Finished goods, January 1 Finished goods, December 31 Raw materials purchases Direct labor Factory utilities Indirect labor Factory depreciation Selling and administrative expenses
$ 10,000 20,000 9,000 6,000 20,000 16,000 500,000 180,000 75,000 25,000 200,000 210,000
____
6. Direct materials used is a. $530,000. b. $510,000. c. $500,000. d. $490,000.
____
7. Assume your answer to question 6 above is $500,000. Total manufacturing costs equal a. $980,000. b. $977,000. c. $880,000. d. $1,190,000.
____
8. Assume your answer to question 7 above is $950,000. Cost of goods manufactured equals a. $946,000. b. $947,000. c. $953,000. d. $954,000.
____
9. Assume your answer to question 8 above is $970,000. The cost of goods sold is a. $973,000. b. $954,000. c. $966,000. d. $974,000.
____ 10. The functions of management in an organization are a. planning, controlling, and decision making. b. planning, directing, and controlling. c. directing, controlling, and decision making. d. directing, planning, and decision making. ____ 11. The major activities of managerial accounting include all of the following except a. providing a basis for controlling costs by comparing actual results with planned objectives. b. preparing financial statements designed primarily for stockholders and creditors. c. preparing internal reports for management. d. determining the behavior of costs as activity levels change.
Achievement Test 1
AT1- 3
____ 12. A job order cost system would most likely be used by a(n) a. cement manufacturer. b. paint manufacturer. c. specialty printing company. d. automobile manufacturer. ____ 13. The formula for computing a predetermined overhead rate is a. estimated annual overhead costs ÷ estimated annual operating activity. b. estimated annual overhead costs ÷ actual annual operating activity. c. actual annual overhead costs ÷ actual annual operating activity. d. actual annual overhead costs ÷ estimated annual operating activity. ____ 14. An example of a period cost, as opposed to a product cost, is a. factory utilities. b. wages of factory workers. c. salesmen's commissions. d. depreciation on the factory building. ____ 15. When production costs are debited to Work in Process Inventory, accounts that may be credited are a. Raw Materials Inventory, Factory Labor, and Manufacturing Overhead. b. Accounts Payable, Factory Wages Payable, and Accumulated Depreciation. c. Raw Materials Inventory, Factory Labor, and Finished Goods Inventory. d. Manufacturing Overhead, Factory Labor, and Cost of Goods Sold.
AT1- 4
Test Bank for Managerial Accounting, Fifth Edition
PART II — CLASSIFICATION OF COSTS AND EXPENSES (20 points) Instructions: Classify the following manufacturing costs and expenses by using the following code letters: A. B. C. D.
Direct materials cost Direct labor cost Manufacturing overhead cost Period cost
Abel Manufacturing Company incurs the following costs and expenses in making furniture: ____
1. Insurance on factory building
____
2. Oak and pine wood used in desks and chairs
____
3. Lubricants, rosin, and polishing compounds used in manufacturing
____
4. Advertising in trade magazines
____
5. Rent on leased factory machinery
____
6. Wages of assembly line workers
____
7. Salesperson's commissions
____
8. Depreciation on delivery equipment
____
9. Depreciation on factory machinery
____ 10. Wages of factory maintenance workers
Achievement Test 1
AT1- 5
PART III—DETERMINE WORK IN PROCESS AND FINISHED GOODS BALANCES (22 points) Bryan Manufacturing begins operations on March 1. Information from job cost sheets shows the following: Manufacturing Costs Assigned (non-cumulative) Job March April May A $11,500 B $ 5,200 $7,300 C $ 3,400 $5,800 $4,200 D $7,100 $8,000 E $3,400 Job A was completed in March. Job B was completed in April. Job C was completed in May. Each job was sold in the month following completion. Instructions: Determine the following amounts: 1. Work in process inventory, March 31
$_______________
2. Finished goods inventory, March 31
$_______________
3. Work in process inventory, April 30
$_______________
4. Finished goods inventory, April 30
$_______________
5. Work in process inventory, May 31
$_______________
6. Finished goods inventory, May 31
$_______________
AT1- 6
Test Bank for Managerial Accounting, Fifth Edition
PART IV — JOB ORDER COST ACCOUNTING ENTRIES (28 points) The ledger accounts of Larken Company are presented below, with an identification number for each. Instructions: Prepare appropriate job order cost system entries to record the data/events given below. Place the appropriate identification number(s) in the debit and credit columns provided and the dollar amount in the adjoining column. 1. Cash 9. Accumulated Depreciation 2. Accounts Receivable 10. Sales 3. Raw Materials Inventory 11. Depreciation Expense 4. Work in Process Inventory 12. Factory Labor 5. Finished Goods Inventory 13. Wages Expense 6. Manufacturing Overhead 14. Cost of Goods Sold 7. Accounts Payable 15. Other Accounts 8. Factory Wages Payable —————————————————————————————————————————— Account(s) Account(s) Dollar Entry Information Debited Credited Amount —————————————————————————————————————————— 1. Purchased raw materials on account $270,000 —————————————————————————————————————————— 2. Incurred factory labor—$100,000 —————————————————————————————————————————— 3. Charged direct labor to job 152—$90,000 —————————————————————————————————————————— 4. Charged direct materials to job 152—$55,000 —————————————————————————————————————————— 5. Incurred manufacturing overhead on account— $65,000 —————————————————————————————————————————— 6. Recorded the remaining factory labor as indirect labor —————————————————————————————————————————— 7. Recognized depreciation on factory equipment— $25,000 —————————————————————————————————————————— 8. Charged overhead to job 152 at 150% of direct labor cost —————————————————————————————————————————— 9. Recorded completion of job 152 —————————————————————————————————————————— 10. Recorded cost of sales for job 152 —————————————————————————————————————————— 11. Recorded revenue from sale of job 152 on account— $400,000 —————————————————————————————————————————— 12. Assume total actual overhead was $2,260,000 and total applied overhead was $2,280,000 for the year. Record the entry to close the manufacturing overhead account.
Achievement Test 1
AT1- 7
Solutions — Achievement Test 1: Chapters 1-2 PART I — MULTIPLE CHOICE (30 points) 1. 2. 3. 4. 5.
d c c b b
6. 7. 8. 9. 10.
d a c d b
11. 12. 13. 14. 15.
b c a c a
PART II — CLASSIFICATION OF COSTS AND EXPENSES (20 points) 1. 2. 3. 4. 5.
C A C D C
6. 7. 8. 9. 10.
B D D C C
PART III—DETERMINE WORK IN PROCESS AND FINISHED GOODS BALANCES (22 points) 1. 2. 3. 4. 5. 6.
$8,600 $11,500. $16,300 $12,500 $18,500 $13,400
($5,200 + $3,400). ($3,400 + $5,800 + $7,100). ($5,200 + $7,300). ($7,100 + $8,000 + $3,400). ($3,400 + $5,800 + $4,200).
*Four points for each except for item 2 (2 points). PART IV — JOB ORDER COST ACCOUNTING ENTRIES (28 points)*
1. 2. 3. 4. 5. 6.
Account(s) Debited 3 12 4 4 6 6
Account(s) Credited 7 8 12 3 7 12
Dollar Amount $270,000 $100,000 $ 90,000 $ 55,000 $ 65,000 $ 10,000
7. 8. 9. 10. 11. 12.
Account(s) Debited 6 4 5 14 2 6
Account(s) Credited 9 6 4 5 10 14
Dollar Amount $ 25,000 $135,000 $280,000 $280,000 $400,000 $ 20,000
*One point for each account title and one point for computed amounts (Entries 6, 8, 9, and 12).
Achievement Test 2: Chapters 3-4 Managerial Accounting, 5e
Name _________________________ Instructor ______________________ Section # _______ Date _________
Part
I
II
III
IV
V
Total
Points
30
10
25
20
15
100
Score
PART I — MULTIPLE CHOICE (30 points) Instructions: Designate the best answer for each of the following questions. ____
1. Given the following data, compute equivalent units of production for conversion costs: Beginning Work in Process—8,000 units, 40% complete Units Completed and Transferred Out—90,000 units Ending Work in Process—6,000 units, 20% complete. a. b. c. d.
88,000 91,200 94,400 96,000
____
2. When there is beginning work in process, units transferred out can be computed by subtracting a. ending work in process units from the units accounted for. b. ending work in process units from the units started into production. c. beginning work in process units from the units to be accounted for. d. beginning work in process units from the units started into production.
____
3. Given the following data, compute equivalent units of production for materials costs. Materials are added at the beginning of the process. Beginning Work in Process—8,000 units, 40% complete Units Completed and Transferred Out—90,000 units Ending Work in Process—6,000 units, 20% complete. a. b. c. d.
88,000 91,200 94,400 96,000