Description
Test Bank For Managerial Accounting 2nd Edition AGE Ray Garrison Eric Noreen Peter Brewer
Appendix 2A: Further Classification of Labor Costs
True / False Questions
1. The cost of fringe benefits given to direct labor workers is best classified as a period cost.
True False
2. Idle time for direct labor factory workers is classified as an indirect manufacturing cost.
True False
Multiple Choice Questions
3. The cost associated with idle time should be:
A. included as part of direct labor cost.
B. treated as part of manufacturing overhead.
C. added directly to cost of goods sold for the period.
D. included as part of selling and administrative expenses.
4. Bill Harris works on the assembly line of the Boothe Company and earns $10 per hour. He is paid time-and-a-half for work in excess of 40 hours per week. During a given week he worked 43 hours and had no idle time. How much of his week’s wages would be charged to manufacturing overhead?
A. $15
B. $45
C. $30
D. $0
5. During the first week of April, Gillian worked a total of 50 hours and had no idle time. Gillian is paid $15 per hour for regular time, and is paid time-and-a-half for all hours in excess of a 40 hour week. The amount of Gillian’s wages that should be charged to direct labor for the week is:
A. $600
B. $225
C. $750
D. $975
6. Robert Smith earns $6 per hour. For each hour over 40 he works, he is paid time-and-a-half. During a given week he worked 45 hours and had no idle time. How much of his weekly wages would be charged to the manufacturing overhead account?
A. $30
B. $45
C. $15
D. $0
Becky works on the assembly line of a manufacturing company where she installs a component part for one of the company’s products. She is paid $16 per hour for regular time and time and a half for all work in excess of 40 hours per week.
7. Becky works 42 hours during a week in which there was no idle time. The allocation of Becky’s wages for the week between direct labor cost and manufacturing overhead cost would be:
A. Choice A
B. Choice B
C. Choice C
D. Choice D
8. Becky works 46 hours in a given week but is idle for 4 hours during the week due to equipment breakdowns. The allocation of Becky’s wages for the week between direct labor cost and manufacturing overhead cost would be:
A. Choice A
B. Choice B
C. Choice C
D. Choice D
9. Becky’s employer offers fringe benefits that cost the company $3 for each hour of employee time (both regular and overtime). During a given week, Becky works 42 hours but is idle for 3 hours due to material shortages. The company treats all fringe benefits as part of manufacturing overhead. The allocation of Becky’s wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be:
A. Choice A
B. Choice B
C. Choice C
D. Choice D
10. Becky’s employer offers fringe benefits that cost the company $3 for each hour of employee time (both regular and overtime). During a given week, Becky works 42 hours but is idle for 3 hours due to material shortages. The company treats all fringe benefits relating to direct labor as added direct labor cost and the remainder as part of manufacturing overhead. The allocation of Becky’s wages and fringe benefits for the week between direct labor cost and manufacturing overhead would be:
A. Choice A
B. Choice B
C. Choice C
D. Choice D
Bob is a quality inspector on the assembly line of a manufacturing company. He is paid $16 per hour for regular time and time and a half for all work over 40 hours per week. He is classified as a direct labor worker.
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