Following are selected costs of company that manufactures computer chips.

Classify each as
either a product cost or a period cost. Then classify each of the product costs as direct material,
direct labor or overhead.
a. Plastic boards used to mount chips ® product cost ® direct material
b. Advertising costs ® period cost
c. Factory maintenance workers’ salaries ® product cost ® direct labor
d. Real estate taxes paid on the sales office ® period cost
e. Real estate taxes paid on the factory ® product cost ® overhead
f. Factory supervisor salary ® product cost ® overhead
g. Depreciation on factory equipment ® product cost ® overhead
h. Assembly worker hourly pay to make chips ® product cost ® direct labor
18 – 1A
1. Listed here are the total costs associated with the 2015 production of 1,000 drum sets
manufactured by TrueBeat. The drum sets sell for $500 each.
a. Classify each cost and its amount as (a) either variable or fixed and (b) either
product or period.
b. Compute the manufaturing cost per drum set

a. Variable/ Fixed Product/Period

Plastic for casing Variable Product
Wages of assembly workers Variable Product
Property taxes on factory Fixed Product
Accounting staff salaries Fixed Period
Drum stands Variable Product
Rent cost of equipment for salaries staff Fixed Period
Upper management salaries Fixed Period
Annual flat fee for factory maintenance service Fixed Product
Sales commissions Variable Period
Machinery depreciation, straight-line Fixed Product

b. Manufaturing cost per drum set = total cost / 1.000 drum sets
Variable production costs = Plastic for casing + Wages pf assemblu workers + Drum stands =
$125,000
Fixed production costs = Property taxed on fatory + Annual flat fee for factory maintenance
service + Machienry depreciation = $55,000
® Manufacturing cost per drum set = (125,000 + 55,000)/1,000 = $180/ drum set
c. Assume that 1,200 drum sets are produced in the next year. What do you predict will be the
total cost of plastic for the casings and the per unit cost for the plastic for the casings?
Total cost of plastic for the casing = (1,200 x 17,000)/ 1,000 = $20,400
Per unit cost for the plastic for casing = 20,400/1200 = $17
d. Assumue that 1,200 drum sets are produced in the next year. What do you predict will be the
total cost of property taxes and the per unit cost of the property taxes?
54. Dell Builders manufactures each house to customer specifications. It most likely would use:
Select one:
a. Capital process costing.
b. Job order costing
c. Unique costing
d. A periodic inventory system.
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60. A job cost sheet includes:
Select one:
a. Direct labor, overhead, selling costs.
b. Direct materials, overhead, administrative costs.
c. Direct material, direct labor, overhead.
d. Direct materials, direct labor, operating costs.
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35. Ajax Company accumulated the following account information for the year: Beginning raw
materials inventory: $6,000; Indirect materials cost: $2,000; Indirect labor cost: $5,000; Maintenance
of factory equipment: $2,800; Direct labor cost: $7,000. Using the above information, total factory
overhead costs would be:
Select one:
a. $15,800.
b. $13,000.
c. $16,800.
d. $ 9,800.
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88. At the beginning of the recent period, there were 900 units of product in a department, one-third
completed. These units were finished and an additional 5,000 units were started and completed
during the period. 800 units were still in process at the end of the period, one-fourth completed. The
equivalent units produced by the department were:
Select one:
a. 6,700 units.
b. 5,900 units.
c. 5,500 units.
d. 5,800 units.
Câu hỏi 5
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 87. The following data are available for a company's manufacturing activities: Beginning goods in
process inventory: 5,000 units, 1/4 of the labor added this period; Units started and completed:
15,000; Ending goods in process inventory: 6,000 units, 1/2 of the labor added this period. If
materials are added when the production process begins and direct labor is applied uniformly
throughout the process, what are the equivalent units for direct materials and for direct labor,
respectively?
Select one:
a. 21,000; 19,250.
b. 16,250; 21,750.
c. 19,250; 18,750.
d. 16,250; 19,250.
Câu hỏi 6
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102. Costs that the manager does not have the power to determine or at least strongly influence are:
Select one:
a. Direct costs.
b. Variable costs.
c. Uncontrollable costs.
d. Indirect costs.
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78. Equivalent units of production are equal to:
Select one:
a. The number of units still in process that period.
b. The number of units that could have been completed if all effort had been applied to units that were
started and completed that period.
c. The number of units introduced into the process that period.
d. The number of finished units actually produced that period.
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14. Raw materials that physically become part of the product and can be traced to specific units or
batches of product are called:
Select one:
a. Raw materials sold.
b. Indirect materials.
c. Direct materials.
d. Goods in process.
Câu hỏi 9
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75. The amount by which overhead incurred during a period exceeds the overhead applied to jobs
is:
Select one:
a. Predetermined overhead.
b. Underapplied overhead.
c. Balanced overhead.
d. Actual overhead.
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86. A company's beginning work in process inventory consisted of 20,000 units that were 1/5
complete with respect to direct labor. These beginning units were completed and another 90,000
units were started during the current period. Of those started, 60,000 were finished and the
remaining 30,000 were 1/3 complete at the end of the period. The equivalent units of production
were:
Select one:
a. 86,000.
b. 76,000.
c. 60,000.
d. 74,000.
Câu hỏi 11
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33. A company’s prime costs total $3,000,000 and its conversion costs total $7,000,000. If direct
materials are $1,000,000 and factory overhead is $5,000,000, then direct labor is:
Select one:
a. $4,000,000.
b. $14,000,000.
c. $1,000,000.
d. $2,000,000.
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84. Which of the following characteristics applies to process cost accounting and not to job order
cost accounting?
Select one:
a. Labor time ticket for each employee.
b. Use of a predetermined overhead rate.
c. Equivalent units of production.
d. Identifiable lots of production.
Câu hỏi 13
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77. A measure of the productivity of a process with respect to its use of direct materials, direct labor,
or overhead, and an expression of the activity of a process as the number of units that would have
been processed during a period if all effort had been applied to units that were started and finished
during the period, is called:
Select one:
a. Equivalent units of production.
b. Units in process.
c. A job cost sheet.
d. Manufacturing overhead.
Câu hỏi 14
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76. If a company applies overhead to production with a predetermined rate, a credit balance in the
Factory Overhead account at the end of the period means that:
Select one:
a. Actual overhead was less than the overhead amount charged to production.
b. The overhead was underapplied for the period.
c. The bookkeeper has made an error because the debits don't equal the credits.
d. The balance will be carried forward to the next period as an overhead cost.
Câu hỏi 15
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50. In comparison to a general accounting system for a manufacturing company, a cost accounting
system places an emphasis on:
Select one:
a. Products and average costs.
b. Total costs.
c. Unit costs and cost control.
d. Periodic inventory counts.
Câu hỏi 16
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13. Which of the following is never included in direct materials costs?
Select one:
a. Outgoing delivery charges.
b. Invoice costs of direct materials.
c. Materials storage costs.
d. Materials handling costs.
Câu hỏi 17
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36. The following information is available for the year ended December 31: Beginning raw materials
inventory: $2,500; Raw materials purchases: $4,000; Ending raw materials inventory: $3,000; Office
supplies expense: $1,000. The amount of raw materials used in production for the year is:
Select one:
a. $4,100.
b. $5,100.
c. $3,500.
d. $6,500.
Câu hỏi 18
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12. Costs classified by controllability are useful for:
Select one:
a. balance sheet.
b. Cash flow statement.
c. Management reports.
d. The income statement.
Câu hỏi 19
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27. Which one of the following items is normally not a manufacturing cost?
Select one:
a. Direct materials.
b. General and administrative expenses.
c. Direct labor.
d. Factory overhead.
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82. Aniston Enterprises manufactures stylish hats. All materials are introduced at the beginning of
the manufacturing process. Conversion costs are incurred uniformly throughout the manufacturing
process. Information for the process for the month of May 2007 follows: Goods in Process, April 30:
50,000 units (100% complete for direct materials; 40% complete for conversion costs); ----------Actual
costs of direct materials was $70,500; actual conversion costs were $34,050;--------------Units started
in May: 225,000 units;-------- Units completed in May: 200,000 units;--------- Goods in Process, May
31: 75,000 units (100% complete for direct materials; 20% complete for conversion costs).
-------------Direct materials added in May $342,000 actual costs; Conversion costs added in May
$352,950 actual costs. If Aniston Enterprises uses the FIFO method of process costing, the costs
per equivalent unit for May 2007 were:
 Select one:
a. Direct Materials : $1.50; Conversion Costs: $1.76
b. Direct Materials : $1.71; Conversion Costs: $1.81
c. Direct Materials : $1.52; Conversion Costs: $1.81
d. Direct Materials : $1.83; Conversion Costs: $1.72