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Exam 11: Managerial Accounting

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Question 41

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Lebron Co. estimated its electricity cost by using activity at 12,500 kilowatt hours and at 24,000 kilowatt hours. The cost formula was $0.03 + $1,430. Lebron Co. planned on using 18,000 kilowatt hours in March, but actually used 19,200. Lebron's expected electricity cost for March was

A) $1,805.
B) $1,970.
C) $1,988.
D) $2,006.
E) $2,150.

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Question 42

Multiple Choice

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When direct labor is recorded in a normal cost, job order cost system,

A) Work in Process Inventory is debited.
B) Finished Goods Inventory is debited.
C) Cost of Services Rendered is debited.
D) Raw Material Inventory is debited.
E) Overhead is debited.

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Question 43

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Managerial accounting is generally required by the

The cost of which of the following labor categories should be classified as production overhead?

Rocky Corp.'s Direct Material Inventory balance at the end of 2009 and 2010 was $200,000 and $150,000, respectively. During 2010, Rocky bought $400,000 of direct materials. During 2010, how many dollars of direct materials were transferred to Work in Process Inventory?

Bullwinkle's Direct Material Inventory balance at the end of 2009 and 2010 was $200,000 and $350,000, respectively. During 2010, Bullwinkle transferred $700,000 of direct materials to Work in Process Inventory. How many dollars of direct materials did Bullwinkle buy during 2010?

When raw material is placed into production, Cost of Goods Manufactured is debited and Raw Material Inventory is credited.

For a cost to be direct, a cost object must be specified.

Which of the following is(are) included in a normal cost system?

Use the following information to answer questions 69 - 70:During 2010, White Lily transferred $300,000 of direct material to Work in Process Inventory and incurred costs of $400,000 for direct labor and $200,000 for overhead. White Lily Corp. had the following beginning and ending balances for Work in Process and Finished Goods Inventory: ‪ -Assume that White Lily's cost of goods manufactured for 2010 was $700,000. What is the company's cost of goods sold?

Hula Juice, a smoothie restaurant, uses a substantial amount of water in its operations. In August, the busiest month, the restaurant used 20,000 gallons of water at a cost of $600. In January, the slowest month of the year, 4,000 gallons of water were used at a cost of $200. The mixed cost formula for Hula's water usage is

A product cost is

Service companies generally have which of the following accounts?

Managers should only be held accountable for costs that they can control.

In computing a predetermined overhead rate, production volume is

Indirect costs are traced to cost objects in a job order costing system.

A mixed cost is one that has both a direct and an indirect cost component.

A direct cost is

Wonderland Inc. estimates that its manufacturing overhead for 2010 will be $3,600,000. Direct labor costs are estimated to be $2,400,000. Overhead is applied to production based on direct labor costs. Actual direct labor and manufacturing overhead costs for the year were $3,750,000 and $5,800,000, respectively. What is the overapplied or underapplied during 2010?

Closing an immaterial amount of underapplied overhead at the end of a period will cause