Tag: accounting

“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

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“16. If a company applies overhead to production on the basis of a predetermined rate, a debit balance in the manufacturing overhead account at the end of the period means that a. actual overhead cost was greater than the amount charged to production. b. actual overhead cost was less than the amount of direct labor cost. c. more overhead cost has been charged to production than has been charged to finished goods during the period. d. actual overhead cost was less than the amount charged to production.”

Managerial Accounting

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“17. Compute the amount of direct materials used during August if $25,000 of raw materials was purchased during the month and the inventories were as follows: Balance Balance Inventories August 1 August 31 Raw Materials $ 5,000 $ 3,000 Work in process 13,000 16,000 Finished goods 25,000 27,000 a. $16,000 b. $19,000 c. $23,000 d. $27,000”,”4Direct materials used during August = Beginning balance of raw materials + Purchases – Ending balance of raw materials 5,000 + 25,000 – 3,000 = $27

Managerial Accounting

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