Excellent Corporation is a job-order costing company that uses activity-based costing to apply overhead to jobs. The following overhead activities were budgeted for the year: \[\begin{array} { | l | c | c | c | } \hline \text { Activity } & \text { Cost } & \text { Driver } & \text { Amount of driver } \\ \hline \text { Setups } & \$ 250,000 & \text { Number of setups } & 5,000 \\ \hline \text { Purchasing } & 190,000 & \text { Number of parts } & 18,000 \\ \hline \text { Other overhead } & 270,000 & \text { Direct labor hours } & 88,000 \\ \hline \end{array}\] The following information about the jobs was given for June: \[\begin{array} { | l | r | r | r | r | } \hline & \text { Job 201 } & \text { Job 202 } & \text { Job 203 } & \text { Job 204 } \\ \hline \text { Balance 6/1 } & \$ 64,500 & \$ 40,200 & \$ 32,500 & 0 \\ \hline \text { Direct materials } & 74,000 & 37,900 & 23,000 & 13,000 \\ \hline \text { Direct labor } & 77,000 & 36,500 & 43,500 & 22,000 \\ \hline \text { Number of setups } & 50 & 10 & 20 & 200 \\ \hline \text { Number of parts } & 200 & 80 & 400 & 500 \\ \hline \text { Direct labor hours } & 4,000 & 2,300 & 5,100 & 1,500 \\ \hline \end{array}\] By June 30, Jobs 202 and 203 were completed and sold. The remaining jobs were still in process. The ending work in process would consist of the costs of _____.

A) Job 202 and Job 203 B) Job 201 and Job 204 C) Job 201, Job 202, Job 203, and Job 204 D) Job 201, Job 202, and Job 203 A) Job 202 and Job 203 B) Job 201 and Job 204 C) Job 201, Job 202, Job 203, and Job 204 D) Job 201, Job 202, and Job 203

Lanyard Company uses a job-order costing system to account for product costs. The following information pertains to 2018: \[\begin{array} { l r } \text { Materials placed into production } & \$ 140,000 \\ \text { Indirect labor } & 40,000 \\ \text { Direct labor (10,000 hours) } & 160,000 \\ \text { Depreciation of factory buil ding } & 60,000 \\ \text { Other factory overhead } & 100,000 \\ \text { Increase in work-in-process inventory } & 30,000 \end{array}\] Factory overhead rate is $18 per direct labor hour. What is the total amount credited to Materials Inventory for Lanyard in 2018?

A) $480,000 B) $170,000 C) $140,000 D) $110,000 A) $480,000 B) $170,000 C) $140,000 D) $110,000

The Teal Company manufactures customized fabric yarns on a job-order basis. Job 450 is an order for 150 units. It requires the following: \[\begin{array} { l r } \text { Direct materials } & \$ 4,000 \\ \text { Direct lab or } ( \$ 10 / \mathrm { hr } ) & 2,000 \\ \text { Overhead } ( 150 \text { percent of direct labor cost } ) & 3,000 \end{array}\] After inspection, 3 units required rework which required 6 additional direct labor hours and $50 of materials. If the spoilage was considered normal, what is the cost of job 450?

A) $9,000 B) $5,000 C) $7,000 D) $11,000 A) $9,000 B) $5,000 C) $7,000 D) $11,000

Canmore Company has the following data pertaining to 2018: \[\begin{array} { l r } \text { Beginning materials inventory } & \$ 50,000 \\ \text { Beginning work-in-process inventory } & 0 \\ \text { Beginning finished goods inventory } & 0 \\ \text { Materials placed into production } & 125,000 \\ \text { Materials purchased on account } & 137,500 \\ \text { Direct labor incurred (10,000 hours) } & 62,500 \\ \text { Cost of goods completed (Job B B8) } & 25,000 \end{array}\] Factory overhead rate is 125 percent of direct labor costs. What is the ending materials inventory balance for Canmore in 2018?

A) $50,000 B) $62,500 C) $12,500 D) $37,500 A) $50,000 B) $62,500 C) $12,500 D) $37,500

The following information is available pertaining to the Production Division of Clarkson Enterprises: $\begin{array} { l c c c } & \text { Assembly Dept. } & \text { Finishing Dept. } & \text { Total } \\ \text { Overhead costs } & \$ 7,500 & \$ 22,500 & \$ 30,000 \\ \text { Direct labor hours } & 7,500 & 2,500 & 10,000 \\ \text { Machine hours } & 2,500 & 7,500 & 10,000 \end{array}$ Production information pertaining to Job 4X5: $\begin{array}{lrrr} &\text { Assembly Dept. }& \text { Finishing Dept. } &\text { Total }\\ \text { Prime costs } & \$ 1,250 & \$ 0 & \$ 1,250 \\ \text { Direct labor hours } & 250 & 0 & 250 \\ \text { Machine hours } & 0 & 0 & 0\\ \text { Units produced }&500&0&500 \end{array}$ What is the overhead rate for the Finishing Department based on machine hours?

A) $9.00 B) $3.00 C) $2.25 D) $1.00 A) $9.00 B) $3.00 C) $2.25 D) $1.00

The following information is available pertaining to the Production Division of Clarkson Enterprises: $\begin{array} { l c c c } & \text { Assembly Dept. } & \text { Finishing Dept. } & \text { Total } \\ \text { Overhead costs } & \$ 7,500 & \$ 22,500 & \$ 30,000 \\ \text { Direct labor hours } & 7,500 & 2,500 & 10,000 \\ \text { Machine hours } & 2,500 & 7,500 & 10,000 \end{array}$ Production information pertaining to Job 4X5: $\begin{array}{lrrr} &\text { Assembly Dept. }& \text { Finishing Dept. } &\text { Total }\\ \text { Prime costs } & \$ 1,250 & \$ 0 & \$ 1,250 \\ \text { Direct labor hours } & 250 & 0 & 250 \\ \text { Machine hours } & 0 & 0 & 0\\ \text { Units produced }&500&0&500 \end{array}$ Based on departmental overhead rates, what is the cost of Job 4X5? Departmental overhead rates for the Assembly Department are based on direct labor hours, while departmental overhead rates for the Finishing Department are based on machine hours.

A) $7,500 B) $8,750 C) $1,500 D) $1,250 A) $7,500 B) $8,750 C) $1,500 D) $1,250

Exam 5: Product and Service Costing: Job-Order System

The Omega Company manufactures customized motors on a job-order basis. Job 492 is an order for 100 units. It requires the following: direct materials \ 3,000 direct labor (\ 10/) 1,000 overhead (150\% DLS) 1,500 After inspection, 2 units required rework which required 8 additional direct labor hours and $\$ 60$ of materials. If the rework is considered abnormal spoilage, what is the journal entry for overhead control? a. no journal entry is needed b. materials $\$ 60$ payroll $\$ 80$ overhead control $\$ 140$ c. overhead control $\$ 140$ materials \ 60 payroll \ 80 d. none of the above

(Short Answer)

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Question 121

When materials are purchased, the costs of the materials "flows" into the materials inventory account.

(True/False)

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Question 122

Excellent Corporation is a job-order costing company that uses activity-based costing to apply overhead to jobs. The following overhead activities were budgeted for the year: Activity Cost Driver Amount of driver Setups \ 250,000 Number of setups 5,000 Purchasing 190,000 Number of parts 18,000 Other overhead 270,000 Direct labor hours 88,000 The following information about the jobs was given for June: Job 201 Job 202 Job 203 Job 204 Balance 6/1 \ 64,500 \ 40,200 \ 32,500 0 Direct materials 74,000 37,900 23,000 13,000 Direct labor 77,000 36,500 43,500 22,000 Number of setups 50 10 20 200 Number of parts 200 80 400 500 Direct labor hours 4,000 2,300 5,100 1,500 By June 30, Jobs 202 and 203 were completed and sold. The remaining jobs were still in process. The ending work in process would consist of the costs of _____.

(Multiple Choice)

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Question 123

Lanyard Company uses a job-order costing system to account for product costs. The following information pertains to 2018: Materials placed into production \ 140,000 Indirect labor 40,000 Direct labor (10,000 hours) 160,000 Depreciation of factory buil ding 60,000 Other factory overhead 100,000 Increase in work-in-process inventory 30,000 Factory overhead rate is $18 per direct labor hour. What is the total amount credited to Materials Inventory for Lanyard in 2018?

(Multiple Choice)

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Question 124

The Teal Company manufactures customized fabric yarns on a job-order basis. Job 450 is an order for 150 units. It requires the following: Direct materials \ 4,000 Direct lab or (\ 10/) 2,000 Overhead (150 percent of direct labor cost ) 3,000 After inspection, 3 units required rework which required 6 additional direct labor hours and $50 of materials. If the spoilage was considered normal, what is the cost of job 450?

(Multiple Choice)

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Question 125

Canmore Company has the following data pertaining to 2018: Beginning materials inventory \ 50,000 Beginning work-in-process inventory 0 Beginning finished goods inventory 0 Materials placed into production 125,000 Materials purchased on account 137,500 Direct labor incurred (10,000 hours) 62,500 Cost of goods completed (Job B B8) 25,000 Factory overhead rate is 125 percent of direct labor costs. What is the ending materials inventory balance for Canmore in 2018?

(Multiple Choice)

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Question 126

The collection of all job-order cost sheets defines a work-in-process inventory file.

(True/False)

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Question 127

Robinson Corporation constructs new homes. Assume that Robinson uses a job costing system. During July 2018, the following transactions occurred: Robinson purchased $4,500 of lumber on account. Robinson used $3,750 of lumber in production and incurred 50 hours of direct labor hours at $15 per hour. Depreciation of $1,500 on equipment used to build new houses was recorded. A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash. The journal entry to record labor for Robinson would include a

(Multiple Choice)

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Question 128

Tonneau Corporation had the following information available for October 2018: Work in Process, October 1 \ 20,000 Materials placed into production, October 27,500 Direct labor, October 37,500 Factory overhead rate is 150 percent of direct labor costs. Job cost sheets had the following balances: 0Z1 \ 32,500 Z2 55,000 Job Z3 35,000 Job Z4 18,750 Jobs Z3 and Z4 were not completed at the end of December. What is the balance in Work-in-Process for Tonneau at the end of October?

(Multiple Choice)

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Question 129

The effect of uniform production levels on unit production costs can be achieved

(Multiple Choice)

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Question 130

Inseparability means that production and consumption are inseparable for services.

(True/False)

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Question 131

In a traditional enterprise, the flow of costs through the system is

(Multiple Choice)

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Question 132

The uniqueness of the products or units for cost accounting purposes relates to their common costs.

(True/False)

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Question 133

The following information is available pertaining to the Production Division of Clarkson Enterprises: Assembly Dept. Finishing Dept. Total Overhead costs \ 7,500 \ 22,500 \ 30,000 Direct labor hours 7,500 2,500 10,000 Machine hours 2,500 7,500 10,000 Production information pertaining to Job 4X5: Assembly Dept. Finishing Dept. Total Prime costs \ 1,250 \ 0 \ 1,250 Direct labor hours 250 0 250 Machine hours 0 0 0 Units produced 500 0 500 What is the overhead rate for the Finishing Department based on machine hours?

(Multiple Choice)

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Question 134

Which of the following firms would make extensive use of a job-order costing?

(Multiple Choice)

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Question 135

A debit to Materials Inventory indicates materials were

(Multiple Choice)

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Question 136

In a job-order costing system, if costs are incurred to rework a job due to inadequate training of personnel, these costs would be

(Multiple Choice)

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Question 137

The following information is available pertaining to the Production Division of Clarkson Enterprises: Assembly Dept. Finishing Dept. Total Overhead costs \ 7,500 \ 22,500 \ 30,000 Direct labor hours 7,500 2,500 10,000 Machine hours 2,500 7,500 10,000 Production information pertaining to Job 4X5: Assembly Dept. Finishing Dept. Total Prime costs \ 1,250 \ 0 \ 1,250 Direct labor hours 250 0 250 Machine hours 0 0 0 Units produced 500 0 500 Based on departmental overhead rates, what is the cost of Job 4X5? Departmental overhead rates for the Assembly Department are based on direct labor hours, while departmental overhead rates for the Finishing Department are based on machine hours.

(Multiple Choice)

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Question 138

Which of the following would NOT use a process costing system?

(Multiple Choice)

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Question 139

Costs of normal spoilage are included in overhead and applied to all good units produced.

(True/False)

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Question 140

When materials are purchased, the costs of the materials "flows" into the materials inventory account.

The collection of all job-order cost sheets defines a work-in-process inventory file.

The effect of uniform production levels on unit production costs can be achieved

Inseparability means that production and consumption are inseparable for services.

In a traditional enterprise, the flow of costs through the system is

The uniqueness of the products or units for cost accounting purposes relates to their common costs.

Which of the following firms would make extensive use of a job-order costing?

A debit to Materials Inventory indicates materials were

In a job-order costing system, if costs are incurred to rework a job due to inadequate training of personnel, these costs would be

Which of the following would NOT use a process costing system?

Costs of normal spoilage are included in overhead and applied to all good units produced.

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

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