cost-acct-test-bank-chap11-12

MULTIPLECHOICE32.Managersoftencitereductionsinthecostsofspoilageasa(n):a.majorjustificationforimplementingajust-in-timeproductionsystemb.measurementofimprovedoutputqualityc.immaterialitemthatisnottobetrackedd.indicationofimprovementintheaccountingsystemAnswer:aDifficulty:2Objective:1TermstoLearn:spoilage33.Unacceptableunitsofproductionthatarediscardedorsoldforreducedpricesarereferredtoas:a.reworkedunitsb.spoilagec.scrapd.defectiveunitsAnswer:bDifficulty:1Objective:1TermstoLearn:spoilage34.Unacceptableunitsofproductionthataresubsequentlyrepairedandsoldasacceptablefinishedgoodsare:a.reworkedunitsb.spoilagec.scrapd.defectiveunitsAnswer:aDifficulty:1Objective:1TermstoLearn:rework35.Costsofpoorqualityproductionincludethe:a.opportunitycostoftheplantandworkersb.effectoncurrentcustomersc.effectonpotentialcustomersd.Alloftheseanswersarecorrect.Answer:dDifficulty:2Objective:1TermstoLearn:spoilage36.Materialleftoverwhenmakingaproductisreferredtoas:a.reworkedunitsb.spoilagec.scrapd.defectiveunitsAnswer:cDifficulty:1Objective:1TermstoLearn:scrap37.Aproductionprocesswhichinvolvesspoilageandreworkoccursin:a.themanufactureofhighprecisiontoolsb.semiconductorunitsc.themanufactureofclothingd.Alloftheseanswersarecorrect.Answer:aDifficulty:2Objective:1TermstoLearn:spoilage,rework38.Spoilagethatisaninherentresultoftheparticularproductionprocessandarisesunderefficientoperatingconditionsisreferredtoas:a.ordinaryspoilageb.normalspoilagec.abnormalspoilaged.Noneoftheseanswersiscorrect.Answer:bDifficulty:2Objective:2TermstoLearn:normalspoilage39.Spoilagethatshouldnotariseunderefficientoperatingconditionsisreferredtoas:a.ordinaryspoilageb.normalspoilagec.abnormalspoilaged.Noneoftheseanswersiscorrect.Answer:cDifficulty:2Objective:2TermstoLearn:abnormalspoilage40.Costsofnormalspoilageareusuallyaccountedforas:a.partofthecostofgoodssoldb.partofthecostofgoodsmanufacturedc.aseparatelineitemintheincomestatementd.anassetinthebalancesheetAnswer:bDifficulty:2Objective:2TermstoLearn:normalspoilage41.Costsofabnormalspoilageareusuallyaccountedforas:a.partofthecostofgoodssoldb.partofthecostofgoodsmanufacturedc.aseparatelineitemintheincomestatementd.anassetinthebalancesheetAnswer:cDifficulty:2Objective:2TermstoLearn:abnormalspoilage42.Thelossfromabnormalspoilageaccountwouldnotappear:a.onthebalancesheetb.asadetaileditemintheretainedearningsscheduleofthebalancesheetc.asadetaileditemontheincomestatementd.Eitheraorbiscorrect.Answer:dDifficulty:2Objective:2TermstoLearn:abnormalspoilage43.Normalspoilageshouldbecomputedusingasthebasethe:a.totalunitscompletedb.totalgoodunitscompletedc.totalactualunitsstartedintoproductiond.Noneoftheseanswersiscorrect.Answer:bDifficulty:2Objective:2TermstoLearn:normalspoilage44.Companiesthatattempttoachievezerodefectsinthemanufacturingprocesstreatspoilageas:a.scrapb.reworkedunitsc.abnormalspoilaged.normalspoilageAnswer:cDifficulty:2Objective:2TermstoLearn:abnormalspoilage45.Whichoneofthefollowingconditionsusuallyexistswhencomparingnormalandabnormalspoilagetocontrollability?NormalSpoilageAbnormalSpoilagea.ControllableControllableb.ControllableUncontrollablec.UncontrollableUncontrollabled.UncontrollableControllableAnswer:dDifficulty:2Objective:2TermstoLearn:normalspoilage,abnormalspoilage46.Notcountingspoiledunitsintheequivalent-unitcalculationresultsin:a.lowercostpergoodunit.b.highercostpergoodunitc.bettermanagementinformationd.Bothaandcarecorrect.Answer:bDifficulty:2Objective:2TermstoLearn:spoilage47.Recognitionofspoiledunitswhencomputingoutputunits:a.highlightsthecostsofnormalspoilagetomanagementb.distortstheaccountingdatac.focusesmanagement'sattentiononreducingspoilaged.Bothaandcarecorrect.Answer:dDifficulty:2Objective:2TermstoLearn:spoilage,normalspoilageTHEFOLLOWINGINFORMATIONAPPLIESTOQUESTIONS48THROUGH52:AstoriaComputerSystems,Inc.,manufacturesprintercircuitcards.Alldirectmaterialsareaddedattheinceptionoftheproductionprocess.DuringJanuary,theaccountingdepartmentnotedthattherewasnobeginninginventory.Directmaterialspurchasestotaled$100,000duringthemonth.Work-in-processrecordsrevealedthat4,000cardunitswerestartedinJanuary,2,000cardunitswerecomplete,and1,500cardunitswerespoiledasexpected.Endingwork-in-processcardunitsarecompleteinrespecttodirectmaterialscosts.Spoilageisnotdetecteduntiltheprocessiscomplete.48.Whataretherespectivedirectmaterialcostsperequivalentunit,assumingspoiledunitsarerecognizedorignored?a.$20.00;$35.00b.$25.00;$40.00c.$30.00;$45.00d.$35.00;$50.00Answer:bDifficulty:2Objective:2TermstoLearn:spoilageCalculationforRecognizedProblem#IgnoredCosttoaccountfor:$100,000$100,000Dividedbyequivalentunits4,0002,500Costperequivalentunit$25.00(48)$40.00Assignedto:Goodunitscompleted(2,000x$25;$40)$50,000$80,000Normalspoilage(1,500x$25)37,5000Coststransferredout87,500(49/50)80,000WIPendinginventory(500x$25;$40)12,500(51)20,000Costaccountedfor:$100,000$100,00049.Whatisthedirectmaterialcostassignedtogoodunitscompletedwhenspoilageunitsarerecognized?a.$50,000b.$100,000c.$80,000d.$87,500Answer:dDifficulty:3Objective:2TermstoLea