Question

6. What is the primary goal of accounting? A. To set long-term goals and objectives. B. To arrange for the necessary resources to achieve a plan C. To provide information for decision making D. To motivate employees to work towards a plan's Success 7. Manufacturing overhead was estimated to be $250.000 for the year along with Actual manufacturing overhead was $225,000, and ac following would be correct? A Overhead is underapplied by $25.000 B. Overhead is underapplied by $12.500 C. Overhead is overapplied by $12.500 D. Overhead is overapplied by $25.000 year along with 20,000 direct labor hours. hich of the **S225.000, and actual direct labor hours were 19.000. Which on 8. When disposed of, overapplied manufacturing overhead will A. Increase Cost of Goods Sold. B. increase Finished Goods. C. decrease Cost of Goods Sold. D. decrease Finished Goods. 9. Washington, Inc. produces two different products Product Cand Product 2) using two different activities Machining, which uses machine hours as an activity driver and Inspection which uses number of batches as activity driver. The cost of Machining is $750,000, while the cost of Inspection is $90,000. Usage of the activity drivers are as follows: Product Product 2 Total Machine hours 1.000 3.000 4.000 Number of batches 45 15 60 What is the activity rate for Inspection? A. $45,000 per batch B. $1,500 per batch C. $6,000 per batch D. $2,000 per batch 10. When units are sold, the cost associated with the units is transferred (or debited to) which account A. Raw Materials Inventory B. Work in Process Inventory C. Cost of Goods Sold D. Finished Goods Inventory 11. To reconcile the number of physical units using the weighted average method of process costi must determine whether the units ended up A. completed or still in process at the end of the period. B. sold or still in inventory at the end of the period. C. in the next production process or sold at the end of the period. D. using direct materials or conversion costs at the end of the period. 12. Prevention costs are costs that A. are incurred to prevent quality problems from occurring in the first place. B. are incurred to identify defective products before products are shipped to the custome C. result from defects that are caught before the product is shipped to the customer. D. occur when a defective product makes its way into the hands of the customer.

Answer 1

Solutions:

6. C. To provide information for decision making

7. C. Overhead Over-applied by $12500

Predetermined Ovrehead rate = 250000/20000 = $12.5

Overhead Applied = 19000*$12.5 = 237500

Actual Overhead = 225000

Overapplied Overhead = 237500-225000 = $12500

8. C. Decrease Cost of Goods Sold

9. B. $1500 per batch

Inspection Cost = $90000

Total Number of Batches = 60

Cost of Inspection per batch = $90000/60 = $1500

10. C. Cost of Goods Sold

12. A. are incurred to prevent the quality problems from occuring in the first place