Question 1

McGown Corp. has the following information:   Additional information for the year is as follows:   Compute the current manufacturing costs.

Accepted Answer

A)  $245,000 
B)  $255,000 
C)  $65,000 
D)  $68,000 
A)  $245,000 
B)  $255,000 
C)  $65,000 
D)  $68,000

Question 2

To incorporate sustainability into the Cost of Goods Manufactured report, include information on all of the following except:

Accepted Answer

A)  the cost of direct materials used compared to standard (non-sustainable) materials. 
B)  indirect labor rates. 
C)  source information for direct materials used. 
D)  sustainability benchmarking information for peer companies. 
A)  the cost of direct materials used compared to standard (non-sustainable) materials. 
B)  indirect labor rates. 
C)  source information for direct materials used. 
D)  sustainability benchmarking information for peer companies.

Question 3

Ragtime Company had the following information for the year:   Ragtime Company used a predetermined overhead rate of $35 per direct labor hour for the year. Assume the only inventory balance is an ending Work in Process Inventory balance of $17,000. What was cost of goods manufactured?

Accepted Answer

A)  $260,000 
B)  $426,000 
C)  $435,000 
D)  $418,000 
A)  $260,000 
B)  $426,000 
C)  $435,000 
D)  $418,000

Question 4

When materials are purchased, which of the following accounts is debited?

Accepted Answer

A)  Raw Materials Inventory 
B)  Work in Process Inventory 
C)  Finished Goods Inventory 
D)  Cost of Goods Sold 
A)  Raw Materials Inventory 
B)  Work in Process Inventory 
C)  Finished Goods Inventory 
D)  Cost of Goods Sold

Question 5

Which of the following would be used to record the usage of indirect manufacturing resources?

Accepted Answer

A)  Raw Materials Inventory would be debited. 
B)  Work in Process Inventory would be debited. 
C)  Manufacturing Overhead would be debited. 
D)  Manufacturing Overhead would be crediteD.
All actual indirect manufacturing costs are accumulated in the Manufacturing Overhead account on the debit side of the account. The raw materials account would be crediteD. 
A)  Raw Materials Inventory would be debited. 
B)  Work in Process Inventory would be debited. 
C)  Manufacturing Overhead would be debited. 
D)  Manufacturing Overhead would be crediteD.
All actual indirect manufacturing costs are accumulated in the Manufacturing Overhead account on the debit side of the account. The raw materials account would be crediteD.

Question 6

Josie Inc. has provided the following information for 20x5:
a. Purchased raw materials on account for $120,000.
b. Issued $115,000 in raw materials to production ($22,000 were not traceable to specific jobs).
c. Incurred $115,000 in direct labor costs (14,375 hours) and $62,500 in supervision costs (paid in cash).
d. Incurred the following additional manufacturing overhead costs: factory lease $24,000 (paid in cash); depreciation on equipment $20,000; custodial supplies $7,500 (paid in cash).
e. Incurred the following nonmanufacturing costs, both paid in cash: advertising $75,000; sales commissions $88,000.
f. Applied manufacturing overhead to jobs in process at a rate of $10 per direct labor hour.
g. Completed jobs costing a total of $345,000.
h. Sold jobs for $425,000 on account. The cost of the jobs was $342,000.
i. Closed the Manufacturing Overhead account balance.
Prepare the journal entries to record these transactions.

Accepted Answer

The answer of Josie Inc. has provided the following information...

Question 7

Green Cabinets is a custom cabinet builder. They recently completed a set of kitchen cabinets (Job #1478), as summarized below:   Green Cabinets applies overhead to jobs at a rate of $12 per direct labor hour.
a. How much overhead would be applied to Job #1478?
b. What is the total cost of Job #1478?

Accepted Answer

The answer of Green Cabinets is a custom cabinet builder....

Question 8

A predetermined overhead rate is calculated by dividing:

Accepted Answer

A)  actual manufacturing overhead cost by estimated total cost driver. 
B)  estimated total cost driver by estimated manufacturing overhead cost. 
C)  estimated manufacturing overhead cost by actual total cost driver. 
D)  estimated manufacturing overhead cost by estimated total cost driver. 
A)  actual manufacturing overhead cost by estimated total cost driver. 
B)  estimated total cost driver by estimated manufacturing overhead cost. 
C)  estimated manufacturing overhead cost by actual total cost driver. 
D)  estimated manufacturing overhead cost by estimated total cost driver.

Question 9

Service firms:

Accepted Answer

A)  tend to use a lot of direct materials in addition to billable hours. 
B)  tend to incur few indirect costs that cannot be traced to specific clients or accounts. 
C)  assign indirect costs to individual clients or accounts based on an allocation base such as billable hours. 
D)  use process costing to assign costs to individual clients or accounts. 
A)  tend to use a lot of direct materials in addition to billable hours. 
B)  tend to incur few indirect costs that cannot be traced to specific clients or accounts. 
C)  assign indirect costs to individual clients or accounts based on an allocation base such as billable hours. 
D)  use process costing to assign costs to individual clients or accounts.

Question 10

Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000, and actual labor hours were 21,000. Which of the following would be correct?

Accepted Answer

A)  Overhead is underapplied by $15,000. 
B)  Overhead is underapplied by $5,000. 
C)  Overhead is overapplied by $5,000. 
D)  Overhead is overapplied by $15,000. 
A)  Overhead is underapplied by $15,000. 
B)  Overhead is underapplied by $5,000. 
C)  Overhead is overapplied by $5,000. 
D)  Overhead is overapplied by $15,000.

Question 11

Which of the following represents the accumulated costs of incomplete jobs?

Accepted Answer

A)  Raw Materials Inventory 
B)  Work in Process Inventory 
C)  Finished Goods Inventory 
D)  Cost of Goods Sold 
A)  Raw Materials Inventory 
B)  Work in Process Inventory 
C)  Finished Goods Inventory 
D)  Cost of Goods Sold

Question 12

If there is a debit balance in the Manufacturing Overhead account at the end of the period, overhead was underapplied

Accepted Answer

A) True 
 B)False

Question 13

Which of the following types of firms would most likely use process costing?

Accepted Answer

A)  Superior Auto Body & Repair 
B)  Crammond Custom Cabinets 
C)  Sunshine Soft Drinks 
D)  Jackson & Taylor Tax Service 
A)  Superior Auto Body & Repair 
B)  Crammond Custom Cabinets 
C)  Sunshine Soft Drinks 
D)  Jackson & Taylor Tax Service

Question 14

Jenkins Company had the following information for the year:   Jenkins Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours. Assume the only inventory balance is an ending Finished Goods Inventory balance of $19,000. What was cost of goods manufactured?

Accepted Answer

A)  $841,000 
B)  $860,000 
C)  $883,000 
D)  $900,000 
A)  $841,000 
B)  $860,000 
C)  $883,000 
D)  $900,000

Question 15

Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000, and actual labor hours were 21,000. The amount credited to the Manufacturing Overhead account would be:

Accepted Answer

A)  $200,000. 
B)  $215,000. 
C)  $210,000. 
D)  $225,750. 
A)  $200,000. 
B)  $215,000. 
C)  $210,000. 
D)  $225,750.

Question 16

Job order costing systems for companies that compete in, for example, the green building arena should reflect:

Accepted Answer

A)  only costs in dollars. 
B)  only sustainability-related metrics. 
C)  both costs of materials in dollars and sustainability-related metrics. 
D)  neither costs of materials in dollars nor sustainability-related metrics. 
A)  only costs in dollars. 
B)  only sustainability-related metrics. 
C)  both costs of materials in dollars and sustainability-related metrics. 
D)  neither costs of materials in dollars nor sustainability-related metrics.

Question 17

Optimum Finance Inc. provides budget, savings, and investment services to clients who want a stress-free financial lifestyle. The company customizes a program for each client based on their individual goals that includes budget recommendations, investment counseling, and savings techniques. The company uses a job order cost system that keeps track of the cost of the amount of time financial consultants spend with each client. Optimum applies all indirect operating costs (e.g., rent, utilities, and management salaries) as a percentage of the consultant's labor cost. During the most recent year, the firm estimated that it would pay $500,000 to its consultants and incur indirect operating costs of $750,000. Actual consultant labor costs were $537,500 and actual indirect operating costs were $725,000. During the year, Optimum provided 64 hours of consulting services to Robert Howard for which Optimum pays an average of $18 per hour. What is the total cost of providing services to Robert?

Accepted Answer

A)  $2,707 
B)  $2,822 
C)  $1,924 
D)  $2,880 
A)  $2,707 
B)  $2,822 
C)  $1,924 
D)  $2,880

Question 18

Which of the following statements is correct?

Accepted Answer

A)  Companies must choose to use either job order costing or process costing; there is no overlap between the two systems. 
B)  Companies always use job order costing unless it is prohibitively expensive. 
C)  Companies always use process costing unless it is prohibitively expensive. 
D)  Companies often provide products and services that have both common and unique characteristics, so they may use a blend of job order and process costing. 
A)  Companies must choose to use either job order costing or process costing; there is no overlap between the two systems. 
B)  Companies always use job order costing unless it is prohibitively expensive. 
C)  Companies always use process costing unless it is prohibitively expensive. 
D)  Companies often provide products and services that have both common and unique characteristics, so they may use a blend of job order and process costing.

Question 19

Ace Architects employs two architects, each having a different area of specialization. Caitlin specializes in industrial commercial construction and Zachary specializes in residential construction. Ace expects to incur total overhead costs of $779,625 during the year and applies overhead based on annual salary costs. Caitlin is a senior partner, her annual salary is $168,750, and she is expected to bill 2,000 hours during the year. Zachary is a senior associate, his annual salary is $91,125, and he is expected to bill 1,800 hours during the year.
a. Calculate the predetermined overhead rate.
b. Assuming that the hourly billing rate should be set to cover the total cost of services plus a 20% markup, compute the hourly billing rates for Caitlin and Zachary.

Accepted Answer

a. Predetermined Overhead Rate: $779,625

Question 20

Manufacturing overhead was estimated to be $500,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $450,000, and actual direct labor hours were 19,000. The predetermined overhead rate per direct labor hour would be:

Accepted Answer

A)  $22.50. 
B)  $25.00. 
C)  $23.68. 
D)  $26.32. 
A)  $22.50. 
B)  $25.00. 
C)  $23.68. 
D)  $26.32.

McGown Corp. has the following information: Additional information for the year is as follows: Compute the current manufacturing costs.

To incorporate sustainability into the Cost of Goods Manufactured report, include information on all of the following except:

Ragtime Company had the following information for the year: Ragtime Company used a predetermined overhead rate of $35 per direct labor hour for the year. Assume the only inventory balance is an ending Work in Process Inventory balance of $17,000. What was cost of goods manufactured?

When materials are purchased, which of the following accounts is debited?

Which of the following would be used to record the usage of indirect manufacturing resources?

Green Cabinets is a custom cabinet builder. They recently completed a set of kitchen cabinets (Job #1478), as summarized below: Green Cabinets applies overhead to jobs at a rate of $12 per direct labor hour. a. How much overhead would be applied to Job #1478? b. What is the total cost of Job #1478?

A predetermined overhead rate is calculated by dividing:

Service firms:

Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000, and actual labor hours were 21,000. Which of the following would be correct?

Which of the following represents the accumulated costs of incomplete jobs?

If there is a debit balance in the Manufacturing Overhead account at the end of the period, overhead was underapplied

Which of the following types of firms would most likely use process costing?

Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000, and actual labor hours were 21,000. The amount credited to the Manufacturing Overhead account would be:

Job order costing systems for companies that compete in, for example, the green building arena should reflect:

Which of the following statements is correct?

Manufacturing overhead was estimated to be $500,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $450,000, and actual direct labor hours were 19,000. The predetermined overhead rate per direct labor hour would be:

Introduction to Managerial Accounting

Process Costing

Activity-Based Cost Management

Cost Behavior and Estimation

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgeting and Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 2: Job-Order Costing

McGown Corp. has the following information: Additional information for the year is as follows: Compute the current manufacturing costs.

To incorporate sustainability into the Cost of Goods Manufactured report, include information on all of the following except:

Ragtime Company had the following information for the year: Ragtime Company used a predetermined overhead rate of $35 per direct labor hour for the year. Assume the only inventory balance is an ending Work in Process Inventory balance of $17,000. What was cost of goods manufactured?

When materials are purchased, which of the following accounts is debited?

Which of the following would be used to record the usage of indirect manufacturing resources?

Green Cabinets is a custom cabinet builder. They recently completed a set of kitchen cabinets (Job #1478), as summarized below: Green Cabinets applies overhead to jobs at a rate of $12 per direct labor hour. a. How much overhead would be applied to Job #1478? b. What is the total cost of Job #1478?

A predetermined overhead rate is calculated by dividing:

Service firms:

Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $415,000, and actual labor hours were 21,000. Which of the following would be correct?

Which of the following represents the accumulated costs of incomplete jobs?

If there is a debit balance in the Manufacturing Overhead account at the end of the period, overhead was underapplied

Which of the following types of firms would most likely use process costing?

Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $215,000, and actual labor hours were 21,000. The amount credited to the Manufacturing Overhead account would be:

Job order costing systems for companies that compete in, for example, the green building arena should reflect:

Which of the following statements is correct?

Manufacturing overhead was estimated to be $500,000 for the year along with 20,000 direct labor hours. Actual manufacturing overhead was $450,000, and actual direct labor hours were 19,000. The predetermined overhead rate per direct labor hour would be:

Introduction to Managerial Accounting

Process Costing

Activity-Based Cost Management

Cost Behavior and Estimation

Cost-Volume-Profit Analysis

Incremental Analysis for Short-Term Decision Making

Budgeting and Planning

Standard Costing and Variances

Decentralized Performance Evaluation

Capital Budgeting

Statement of Cash Flows

Financial Statement Analysis

Filters