Accounting 202: Trivia Quiz! Exam
(90).jpg "Accounting 202: Trivia Quiz! Exam - Quiz")
During the manufacturing of a product, different factors go into choosing what input to use during manufacturing a product. Take up this quiz on overhead costs when it comes to job costing and see if you are prepared for the upcoming test. All the best as you tackle it!
- 1.
Which comes third in the flow of costs?
- A.
Cost of goods sold
- B.
Finished goods inventory
- C.
Raw materials inventory
- D.
Work in process inventory
Correct Answer
B. Finished goods inventoryExplanation
Finished goods inventory comes third in the flow of costs because it represents the cost of producing goods that are ready for sale but have not yet been sold. The flow of costs typically starts with raw materials inventory, which are the materials used to produce goods. These raw materials are then moved into the work in process inventory, where they are transformed into partially completed goods. Finally, the goods are completed and transferred to the finished goods inventory, where they await sale. Cost of goods sold represents the cost of the goods that have been sold and is typically recorded after the finished goods inventory.Rate this question:
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- 2.
Which comes last in the flow of costs?
- A.
Cost of goods sold
- B.
Finished goods inventory
- C.
Raw materials inventory
- D.
Work in process inventory
Correct Answer
A. Cost of goods soldExplanation
Cost of goods sold represents the cost incurred by a company to produce or acquire the goods that are sold to customers. It includes the cost of raw materials, labor, and overhead expenses. The cost of goods sold is calculated after the completion of the production process and the goods are ready to be sold. Therefore, it comes last in the flow of costs as it represents the final cost associated with the goods that have been sold to customers.Rate this question:
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- 3.
Payroll costs for factory employees who do NOT work directly on the product are considered:
- A.
Direct labor
- B.
Manufacturing overhead
- C.
Selling expenses
- D.
Administrative costs
Correct Answer
B. Manufacturing overheadExplanation
Payroll costs for factory employees who do NOT work directly on the product are considered manufacturing overhead. Manufacturing overhead includes indirect costs such as employee salaries, benefits, and other expenses that are incurred in the manufacturing process but are not directly attributable to the production of a specific product. These costs are necessary for the overall operation of the factory and are allocated to the products indirectly through overhead allocation methods.Rate this question:
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- 4.
An estimated manufacturing overhead rate computed before the year begins is a(n):
- A.
Cost allocation
- B.
Cost driver
- C.
Actual manufacturing overhead rate
- D.
Predetermined manufacturing overhead rate
Correct Answer
D. Predetermined manufacturing overhead rateExplanation
A predetermined manufacturing overhead rate is an estimated rate that is calculated before the start of the year to allocate manufacturing overhead costs to products or services. This rate is based on historical data and is used to estimate the amount of overhead costs that will be incurred for each unit of a cost driver, such as direct labor hours or machine hours. By using a predetermined rate, companies can more accurately allocate overhead costs to products and services, which helps in setting prices and making informed business decisions.Rate this question:
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- 5.
Assigning manufacturing overhead costs and other indirect costs is called:
- A.
Cost allocation
- B.
Cost driver
- C.
Materials requisition
- D.
Predetermined manufacturing overhead rate
Correct Answer
A. Cost allocationExplanation
Cost allocation refers to the process of assigning manufacturing overhead costs and other indirect costs to specific cost objects, such as products or departments. This is done in order to determine the total cost of producing a product or providing a service. Cost allocation is an important aspect of cost accounting as it helps in accurately determining the cost of production and making informed decisions regarding pricing, profitability, and resource allocation.Rate this question:
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- 6.
Manufacturers follow four steps to implement a manufacturing overhead allocation system. The last step is to:
- A.
Select an allocation base and estimate the total amount that will be used during the year
- B.
Allocate some manufacturing overhead to each individual job
- C.
Estimate total manufacturing overhead costs for the coming year
- D.
Calculate a predetermined manufacturing overhead rate
Correct Answer
B. Allocate some manufacturing overhead to each individual jobExplanation
The last step in implementing a manufacturing overhead allocation system is to allocate some manufacturing overhead to each individual job. This step involves assigning a portion of the total manufacturing overhead costs to each job based on a predetermined allocation base. This allows for a more accurate determination of the actual costs associated with each job and helps in determining the profitability of each job.Rate this question:
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- 7.
Manufacturers follow four steps to implement a manufacturing overhead allocation system. The first step is to:
- A.
Select an allocation base and estimate the total amount that will be used during the year
- B.
Allocate some manufacturing overhead to each individual job
- C.
Estimate total manufacturing overhead costs for the coming year
- D.
Calculate a predetermined manufacturing overhead rate
Correct Answer
C. Estimate total manufacturing overhead costs for the coming yearExplanation
The correct answer is to estimate total manufacturing overhead costs for the coming year. This is the first step in implementing a manufacturing overhead allocation system. By estimating the total manufacturing overhead costs for the coming year, manufacturers can have a clear understanding of the expenses they will incur and can plan their budget accordingly. This estimation helps in determining the amount of overhead that needs to be allocated to each job or product. It is an essential step in the overall allocation process.Rate this question:
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- 8.
Manufacturers follow four steps to implement a manufacturing overhead allocation system. Which step is NOT performed before the year begins?
- A.
Select an allocation base and estimate the total amount that will be used during the year.
- B.
Allocate some manufacturing overhead to each individual job.
- C.
Estimate total manufacturing overhead costs for the coming year.
- D.
Calculate a predetermined manufacturing overhead rate.
Correct Answer
B. Allocate some manufacturing overhead to each individual job. -
- 9.
Manufacturing overhead is allocated on the basis of
- A.
Machine hours
- B.
Direct labor hours
- C.
Direct labor costs
- D.
Any of the above
Correct Answer
D. Any of the aboveExplanation
Manufacturing overhead can be allocated on the basis of machine hours, direct labor hours, or direct labor costs. This means that the allocation of manufacturing overhead can be determined using any of these factors, depending on the specific requirements and circumstances of the manufacturing process. The choice of allocation basis may vary from one company to another or even within different departments of the same company.Rate this question:
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- 10.
Allocating manufacturing overhead costs is done:
- A.
Before the period starts
- B.
During the period
- C.
At the end of the period
- D.
At none of these times
Correct Answer
B. During the periodExplanation
Manufacturing overhead costs are allocated during the period because these costs are incurred throughout the production process and are not directly attributable to specific units of production. Therefore, they need to be allocated to all units produced during the period based on a predetermined allocation method, such as direct labor hours or machine hours. This ensures that the overhead costs are distributed fairly and accurately among the units produced, allowing for a more accurate determination of the cost of goods sold and the profitability of the company.Rate this question:
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- 11.
Computing the predetermined manufacturing overhead rate is done:
- A.
Before the period starts
- B.
During the period
- C.
At the end of the period
- D.
At any time
Correct Answer
A. Before the period startsExplanation
The predetermined manufacturing overhead rate is calculated before the period starts because it is used to allocate overhead costs to products or services. By determining the rate in advance, the company can estimate its overhead costs based on factors such as labor hours, machine hours, or direct labor costs. This allows for better budgeting and planning for the upcoming period.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Sep 23, 2012Quiz Created by
Jc173
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