Midterm Practice Econ 545

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Practice Midterm Exam Page 1 1. | Indirect labor is a part of: | A | Prime cost. | B | Conversion cost. | C | Period cost. | D | Nonmanufacturing cost. | 2. | Prime cost and conversion cost share what common element of total cost? | A | Direct materials. | B | Direct labor. | C | Variable overhead. | D | Variable overhead. | 3. | On the Schedule of Cost of Goods Manufactured, the final Cost of Goods Manufactured figure represents: | A | the amount of cost charged to Work in Process during the period. | B | the amount of cost transferred from Finished Goods to Cost of Goods Sold during the period. | C | the amount of cost placed into production during the period. | D | the amount of cost of goods completed during the current year whether they were started before or during the current year. | 4. | Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table? | A | The amount paid to the individual who stains the table | B | The commission paid to the salesperson who sold the table | C | The cost of the glue used in the table | D | The cost of the wood used in the table | Page 2 1. | Overapplied overhead means that: | A) | the applied overhead cost was less than the actual overhead cost. | B) | the applied overhead cost was greater than the actual overhead cost. | C) | the estimated overhead cost was less than the actual overhead cost. | D) | the estimated overhead cost was less than the applied overhead cost. | 2. | Departmental overhead rates are generally preferred to plant-wide overhead rates when: | A) | the activities of the various departments in the plant are not homogeneous. | B) | the activities of the various departments in the plant are homogeneous. | C) | most of the overhead costs are fixed. |

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