Accounting

Principles Of Cost Accounting 15e Edward J. Vanderbeck Solutions Manual and Test Bank

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CHAPTER 3—ACCOUNTING FOR LABOR

MULTIPLE CHOICE

1. At a plant where car doors were manufactured, all of the following would be classified as direct labor except:

a. Machinists.

b. Assembly workers.

c. Maintenance personnel.

d. Painters.

Maintenance workers, while integral to the manufacturing process as they keep the machinery maintained, are not direct laborers because they do not actually add value to the product. Machinists, assembly workers and painters would all add value to the manufacture of a car door.

PTS: 1 DIF: Moderate REF: P. OBJ: Introduction

NAT: IMA 2B - Cost Management TOP: AACSB - Reflective

2. All of the following personnel would be classified as indirect labor except the:

a. machinist.

b. supervisor.

c. fork lift driver.

d. plant janitor.

The machinist would most likely be a direct laborer. The supervisor, fork lift driver and plant janitor, while part of the manufacturing process, do not add value to the goods being produced.

PTS: 1 DIF: Moderate REF: P. OBJ: Introduction

NAT: IMA 2B - Cost Management TOP: AACSB - Reflective

3. All of the following are characteristics of hourly wage plans except:

a. They provide no extra recognition for doing more than the minimum required.

b. They are easy to apply.

c. They establish a definite rate per hour for each employee.

d. They encourage employees to sacrifice quality in order to maximize earnings.

Hourly wage plans pay a fixed rate per hour, so they are easy to apply, but they do not provide any incentive to do more than what is required, nor do they encourage employees to work so fast as to sacrifice quality.

PTS: 1 DIF:...