A03 Online Exam 8_07 Score 85% (Incorrect answers are marked)

Question-1
Calculate the cost of goods sold when beginning finished goods inventory equals $70,000, ending finished goods inventory is $85,000, and cost of goods manufactured is $600,000.
  A.  $615,000
  B.  $445,000
  C.  $685,000
  D.  $585,000

Question-2
Which of the following is an approach to sensitivity analysis?
  A.  contribution
  B.  distribution
  C.  margin
  D.  profit

Question-3
The formula for cost of goods manufactured is __________.
  A.  raw materials plus direct labor minus overhead plus beginning work-in-process inventory plus ending work-in-process inventory
  B.  raw materials minus direct labor plus overhead plus beginning work-in-process inventory plus ending work-in-process inventory
  C.  beginning work-in-process plus total manufacturing cost minus ending work-in-process
  D.  raw materials plus direct labor less overhead plus beginning work-in-process inventory less ending work-in-process inventory

Question-4
If direct labor for the month is $40,000, overhead is applied based on direct labor, annual overhead is $600,000, and annual direct labor is $1,000,000, what is the entry to charge direct labor to production?
  A.  debit Work-in-Process Inventory $40,000; credit Payroll $40,000
  B.  debit Overhead-Applied $40,000; credit Work-in-Process Inventory $40,000
  C.  debit Work-in-Process Inventory $24,000; credit Overhead-Applied $24,000
  D.  debit Work-in-Process Inventory $66,000; credit Overhead-Applied $66,000

Question-5
If direct labor for the month is $80,000 and overhead is applied based on 75% of direct labor dollars, what is the entry to apply overhead?
  A.  debit Work-in-Process Inventory $80,000; credit Payroll $80,000
  B.  debit Overhead-Applied $60,000; credit Work-in-Process Inventory $60,000
  C.  debit Work-in-Process Inventory $60,000; credit Overhead-Applied $60,000
  D.  debit Work-in-Process Inventory $80,000; credit Overhead-Applied $80,000

Question-6
An element of sensitivity analysis includes __________.
  A.  unidimensional changes     (Incorrect)
  B.  a sole focus on profit
  C.  simultaneous changes
  D.  a financial accounting approach

Question-7
Which of the following is part of a firm's master budget?
  A.  pro forma budget  (Incorrect)
  B.  inventory purchases budget
  C.  operating budget
  D.  schedule of cash receipts budget

Question-8
During the week ending on November 30, total factory payroll incurred was $6,000. Of this total, 80% was for direct labor. The entry to record the payroll distribution would include __________.
  A.  debit Work-in-Process Inventory $4,800 and Overhead-Control $1,200
  B.  debit Work-in-Process Inventory $6,000
  C.  debit Work-in-Process Inventory $4,800 and Overhead-Applied $1,200
  D.  debit Work-in-Process Inventory $4,800 and Indirect Labor Expense $1,200

Question-9
Candyland completed the manufacturing process. The entry to transfer the product to finished goods is __________.
  A.  
Raw Materials Inventory
Finished Goods Inventory
 
  B.  
Finished Goods Inventory
Cost of Goods Sold
 
  C.  
Finished Goods Inventory
Work-in-Process Inventory
 
  D.  
Finished Goods Inventory
Raw Materials Inventory

Question-10
Sensitivity analysis is part of __________.
  A.  income statement analysis
  B.  gross profit analysis
  C.  cost analysis
  D.  cost-volume-profit analysis

Question-11
The entry to record rent expense $9,000, supervision expense $19,000, and depreciation expense $7,000 to overhead is __________.
  A.  debit Overhead-Applied $35,000; credit Rent Expense $9,000; credit Supervision $19,000; credit Depreciation Expense $7,000
  B.  debit Overhead-Control $35,000; credit Rent Expense $9,000; credit Supervision $19,000; credit Depreciation Expense $7,000
  C.  debit Overhead-Applied $35,000; credit Overhead-Control $35,000
  D.  none of the above  (Incorrect)

Question-12
What is the journal entry to record issuing supplies from the storeroom?
  A.  debit Overhead-Applied; credit Raw Materials Inventory
  B.  debit Overhead-Control; credit Supplies Inventory
  C.  debit Supplies Inventory; credit Overhead-Applied
  D.  debit Overhead-Applied; credit Supplies Inventory

Question-13
A budget enables managers to __________.
  A.  focus solely on production
  B.  adopt lax standards
  C. abrogate responsibility for financial goals
  D.  achieve company objectives

Question-14
ABC Restaurant's revenue budget reflects the following information for February:
 
Food sales
$260,000
Beverage and liquor sales
$140,000
Total sales
$300,000
 
ABC expects revenue to increase by 5% during both March and April. What is the budgeted amount of beverage and liquor sales revenue for March?
  A.  $145,000
  B.  $154,350
  C.  $147,000
  D.  $150,000

Question-15
Manufacturing overhead includes all manufacturing costs __________.
  A.  including raw materials
  B.  including overhead
  C.  excluding raw materials and direct labor
  D.  none of the above

Question-16
Factory Supplies Expense, Depreciation Expense-Factory, and Heat, Light, and Power-Factory appear on which section of the worksheet?
  A.  statement of cost of goods manufactured
  B.  balance sheet
  C.  income statement
  D.  statement of cost of goods sold

Question-17
Omega.com sold 25 jet skis for $7,000 which cost $5,000. The entry to record the sale would include __________.
  A.  credit to Finished Goods Inventory for $5,000
  B.  credit to Sales for $7,000
  C.  debit to Cost of Goods Sold for $5,000
  D.  all of the above

Question-18
ABC Restaurant's revenue budget reflects the following information for February:
 
Food sales
$260,000
Beverage and liquor sales
$140,000
Total sales
$300,000
 
ABC expects revenue to increase by 5% during both March and April. What is the budgeted amount of food sales revenue for April?
  A.  $286,650
  B.  $272,650
  C.  $288,250
  D.  $292,350

Question-19
Journal entries crediting Payroll and debiting Work-in-Process Inventory are made for __________.
  A.  administrative salaries
  B.  hourly manufacturing labor
  C.  foremen's salaries
  D.  raw materials

Question-20
The entry to record the requisition of supplies from the storeroom would include __________.
  A.  debit to Raw Materials; credit to Work-in-Process
  B.  debit to Overhead-Applied; credit to Overhead-Control
  C.  debit to Work-in-Process; credit to Overhead-Control
  D.  debit to Overhead-Control; credit to Supplies Inventory


 

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