Exam 2: A Further Look at Financial Statements

Spencer Inc.applies overhead to production at a predetermined rate of 80% based on direct labor cost.Job No.130, the only job still in process at the end of August, has been charged with manufacturing overhead of $6,400.What was the amount of direct materials charged to Job 130 assuming the balance in Work in Process inventory is $20,000?

The predetermined overhead rate is based on the relationship between

Accumulating and assigning manufacturing costs are two important activities in a job order cost system.

Direct materials requisitioned from the storeroom should be charged to the Work In Process Inventory account and the job cost sheets for the individual jobs on which the materials were used.

Time tickets should be approved by

Job order cost sheets constitute the subsidiary ledger of the control account Work In Process Inventory.

Finished Goods Inventory is charged for the cost of jobs completed during a period.

The cost of raw materials purchased is credited to Raw Materials Inventory when materials are received.

A company assigned overhead to work in process.At year end, what does the amount of overapplied overhead mean?

Raw Materials Inventory, Factory Labor, and Manufacturing Overhead are all control accounts in the general ledger when a job order cost accounting system is used.

A process cost system would most likely be used by a company that makes

If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period, overhead is said to be

Which of the following is not a control account?

Process costing is used when

Barnes Company applies overhead on the basis of machine hours.Given the following data, compute overhead applied and the under- or overapplication of overhead for the period: Estimated annual overhead cost \ 3,000,000 Actual annual overhead cost \ 2,970,000 Estimated machine hours 300,000 Actual machine hours 295,000

If actual overhead is greater than applied manufacturing overhead, then manufacturing overhead is:

The formula for the predetermined overhead rate is estimated annual overhead costs divided by an expected annual operating activity.

Which of the following is not included in factory labor costs?

Haight Company incurred direct materials costs of $2,500,000 during the year.Manu-facturing overhead applied was $450,000 and is applied at the rate of 60% of direct labor costs.Haight Company's total manufacturing costs for the year was

A job order cost system identifies costs with a particular job rather than with a set time period.