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If you have difficulty answering the following questions, learn more about this topic by reading our Manufacturing Overhead (Explanation).
- 1.
Selling, general and administrative costs are part of manufacturing overhead.
- 2. Factory overhead and burden are terms used as alternatives for the term overhead.
- 3.
Which of the following are part of manufacturing overhead?
- 4. The factory maintenance department and the factory administration department are examples of
__________
service or support
departments. - 5.
To be in compliance with generally accepted accounting principles, selling and administrative expenses and interest expense should be allocated to the cost of products manufactured in order to properly value inventories on a manufacturer's balance sheet.
- 6.
Manufacturing overhead must be assigned to both work-in-process inventory and finished goods inventory for external financial reporting purposes.
- 7.
Only direct manufacturing costs are assigned to inventories and cost of goods sold.
- 8.
Commissions paid to sell products are reported as part of the cost of goods sold.
- 9.
Traditional costing is more likely to be associated with allocating manufacturing overhead on the basis of __________.
- 10.
The depreciation on the machines used on the manufacturing line is considered to be __________ manufacturing cost.
- 11.
In general, manufacturing overhead has increased as a percentage of product costs during the past 80 years.
- 12.
The use of a plant-wide rate will be more equitable than the use of departmental rates for allocating manufacturing overhead.
- 13.
Manufacturing overhead costs are also known as indirect manufacturing costs.
- 14.
Using only machine hours for assigning manufacturing overhead will likely result in too ___________ costs for low volume products.
- 15.
The salary of the president of a manufacturer is part of the manufacturing overhead costs.
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MULTIPLE CHOICE QUESTIONS
1.When managers of subunits throughout an organization strive to achieve the goals set by top
management, the result is:
A.goal congruence.
B.planning and control.
C.responsibility accounting.
D.delegation of decision making.
E.strategic control.
Answer: A LO: 1 Type: RC
2.Which of the following is not an example of a responsibility center?
A.Cost center.
B.Revenue center.
C.Profit center.
D.Investment center.
E.Contribution center.
Answer: E LO: 2 Type: RC
3. A manufacturer's raw-material purchasing department would likely be classified as a:
A.cost center.
B.revenue center.
C.profit center.
D.investment center.
E.contribution center.
Answer: A LO: 2 Type: N
4.Hitchcock Corporation is in the process of overhauling the performance evaluation system for
its Los Angeles manufacturing division, which produces and sells parts that are popular in the
aerospace industry. Which of the following is least likely to be chosen to evaluate the overall
operations of the Los Angeles division?
A.Cost center.
B. Responsibility center.
C.Profit center.
D.Investment center.
E.The profit center and investment center are equally unlikely to be chosen.
Answer: A LO: 2 Type: N
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