Category: Managerial Accounting

“11. Karvel Corporation uses machine hours as the basis for allocating manufacturing overhead costs to production. For the month of August, Karvel estimated total manufacturing overhead costs at $300,000 and total machine hours at 75,000 hours. Actual results for the period were total manufacturing overhead costs of $290,000 and total machine hours of 75,000 hours. As a result of this outcome, Karvel would have a. applied more overhead to Work in Process than the actual amount of overhead cost for the year. b. applied less overhead to Work in Process than the actual amount of overhead cost for the year. c. applied an amount of overhead to Work in Process that was equal to the actual amount of overhead. d. found it necessary to recalculate the predetermined overhead rate.”

Managerial Accounting

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27. A successful JIT system is based upon which of the following concepts? a. The company must rely upon a large number of suppliers to ensure frequent deliveries of small lots. b. The company should always choose those suppliers offering the lowest prices. c. The company should avoid long-term contracts with suppliers in order to exert pressure on suppliers to make prompt and frequent deliveries. d. A small number of supplier make frequent deliveries of specific quantities thus avoiding the buildup of large inventories of materials on hand.

Managerial Accounting

Average Rating 0 out of 5 stars. 0 votes.You must log in to submit a review.27. A successful JIT system[…]

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“12. The operations of the Kerry Company resulted in underapplied overhead of $5,000. The entry to close out this balance and the effect of the underapplied overhead on cost of goods sold would be Effect on Cost Entry of Goods Sold a. Manufacturing Overhead 5,000 Deduct $5,000 Cost of Goods Sold 5,000 b. Cost of Goods Sold 5,000 Deduct $5,000 Manufacturing Overhead 5,000 c. Cost of Goods Sold 5,000 Add $5,000 Manufacturing Overhead 5,000 d. Manufacturing Overhead 5,000 Add $5,000 Cost of Goods Sold 5,000”

Managerial Accounting

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“28. Departmental overhead rates may not correctly assign overhead costs due to the use of direct labor hours in allocating overhead cost to products rather than machine time or quantity of materials used. b. the high correlation between direct labor-hours and the incurrence of overhead costs. c. over reliance on volume as a basis for allocating overhead costs where products differ regarding the number of units produced, lot size, or complexity of production. d. difficulties associated with identifying cost pools for the first stage of the allocation process.”

Managerial Accounting

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Operating income statement *,”1) contribution margin per unit X average sales volume units= contribution marginLESS: fixed expenses= operating income* average sales volume units = use the “”most locations WERE selling2) new contribution margin per unit (‘lower sales price per bowl’ – ‘variable costs would be’)X new sales volume units (‘each restaurants volume to increase 8

Managerial Accounting

Average Rating 0 out of 5 stars. 0 votes.You must log in to submit a review.Operating income statement *,”1) contribution[…]

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“13. As manufacturing moves toward automation, direct labor a. continues to be a major factor in the cost of products since supervisory salaries are increasing. b. continues to be a major factor in the cost of products since automation is not capable of totally supplanting production workers. c. is becoming less of a factor in the cost of products since machines now perform various functions that once were performed by direct labor workers. d. continues to be an appropriate base for computing overhead rates in all situations.”

Managerial Accounting

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14. Overapplied factory overhead would result if a. the plant was operated at less than normal capacity. b. factory overhead costs incurred were less than estimated overhead costs. c. factory overhead costs incurred were less than overhead costs charged to production. d. factory overhead costs incurred were greater than overhead charged to production.

Managerial Accounting

Average Rating 0 out of 5 stars. 0 votes.You must log in to submit a review.14. Overapplied factory overhead would[…]

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