Question 1

If the Manufacturing Overhead account has a debit balance at the end of a period it means that

Accepted Answer

A)  actual overhead costs were less than overhead costs applied to jobs. 
B)  actual overhead costs were greater than overhead costs applied to jobs. 
C)  actual overhead costs were equal to overhead costs applied to jobs. 
D)  no jobs have been completed. 
A)  actual overhead costs were less than overhead costs applied to jobs. 
B)  actual overhead costs were greater than overhead costs applied to jobs. 
C)  actual overhead costs were equal to overhead costs applied to jobs. 
D)  no jobs have been completed.

Question 2

There are two basic types of cost accounting systems: (1)__________________ system and (2)__________________ system.

Accepted Answer

job order

Question 3

Manufacturing overhead items are indirect product costs that cannot be traced to individual products. Explain how manufacturing overhead costs are accumulated and how they are assigned to products in a job order cost system.

Accepted Answer

As manufacturing overhead costs are incu

Question 4

At the beginning of the year Monroe Company estimates annual overhead costs to be $2400000 and that 300000 machine hours will be operated. Using machine hours as a base the amount of overhead applied during the year if actual machine hours for the year was 315000 hours is

Accepted Answer

A)  $2400000. 
B)  $2285714. 
C)  $1680000. 
D)  $2520000. 
A)  $2400000. 
B)  $2285714. 
C)  $1680000. 
D)  $2520000.

Question 5

Which of the following is not used in assigning manufacturing costs to work in process inventory?

Accepted Answer

A)  Actual manufacturing overhead 
B)  Time tickets 
C)  Materials requisitions 
D)  Predetermined overhead rate 
A)  Actual manufacturing overhead 
B)  Time tickets 
C)  Materials requisitions 
D)  Predetermined overhead rate

Question 6

Landis Company uses a job order cost system in each of its two manufacturing departments. Manufacturing overhead is applied to jobs on the basis of direct labor cost in Department A and machine hours in Department B. In establishing the predetermined overhead rates for 2017 the following estimates were made for the year:
During January the job cost sheet showed the following costs and production data: $$\begin{array} { l r r } 
& { \text { Department } } \
& \mathrm { A }& \mathrm { B }\
\text { Direct materials used } &  \$195,000& \$ 128,000 \
\text { Direct labor cost } & \$ 195,000 & 110,000 \
\text { Manufacturing overhead incurred } & 100,000 & 135,000 \
\text { Direct labor hours } & 130,000 & 8,400 \
\text { Machine hours } & 8,000 & 34,000
\end{array}$$ Instructions
(a) Compute the predetermined overhead rate for each department.
(b) Compute the total manufacturing cost assigned to jobs in January in each department.
(c) Compute the balance in the Manufacturing Overhead account at the end of January and indicate whether overhead is over- or underapplied.

Accepted Answer

(a) Predetermined overhead rates:
Depart

Question 7

Barr Mfg. provided the following information from its accounting records for 2017:
 $\begin{array}{lr}
\text { Expected production } & 60,000 \text { labor hours } \
\text { Actual production } & 56,000 \text { labor hours } \
\text { Budgeted overhead } & \$ 900,000 \
\text { Actual overhead } & \$ 870,000
\end{array}$
 How much is the overhead application rate if Barr bases the rate on direct labor hours?

Accepted Answer

A)   $16.07 per hour 
B)   $15.00 per hour 
C)  $14.50 per hour 
D)  $15.54 per hour 
A)   $16.07 per hour 
B)   $15.00 per hour 
C)  $14.50 per hour 
D)  $15.54 per hour

Question 8

When raw materials are purchased the Work in Process Inventory account is debited.

Accepted Answer

A) True 
 B)False

Question 9

Norman Company manufactures customized desks. The following pertains to Job No. 953: $\begin{array}{lr}
\text { Direct materials used } & \$ 22,800 \
\text { Direct labor hours worked } & 600 \
\text { Direct labor rate per hour } & \$ 16.00 \
\text { Machine hours used } & 400 \
\text { Applied factorv overhead rate per machine hour } & \$ 30.00
\end{array}$ What is the total manufacturing cost for Job No. 953?

Accepted Answer

A)  $41200 
B)  $44400 
C)  $47200 
D)  $50400 
A)  $41200 
B)  $44400 
C)  $47200 
D)  $50400

Question 10

Cost accounting is primarily concerned with accumulating information about product costs.

Accepted Answer

A) True 
 B)False

Question 11

$\begin{array}{l}
\text { Lando Company reported the following amounts for } 2016 \text { : }\
\begin{array} { l r l r } 
\text { Raw materials purchased } & \$ 83,000 & \text { Ending work in process inventory } & \$ 6,300 \
\text { Beginning raw materials inventory } & 5,200 & \text { Manufacturing overhead costs applied } & 36,000 \
\text { Ending raw materials inventory } & 4,500 & \text { Beginning work in process inventory } & 6,100
\end{array}
\end{array}$Instructions
Calculate the cost of materials used in production

Accepted Answer

$5200 + $8

Question 12

There should be a separate job cost sheet for each job.

Accepted Answer

A) True 
 B)False

Question 13

In a manufacturing company the cost of factory labor consists of all of the following except

Accepted Answer

A)  employer payroll taxes. 
B)  fringe benefits incurred by the employer. 
C)  net earnings of factory workers. 
D)  gross earnings of factory workers. 
A)  employer payroll taxes. 
B)  fringe benefits incurred by the employer. 
C)  net earnings of factory workers. 
D)  gross earnings of factory workers.

Question 14

Which of the following is not a control account?

Accepted Answer

A)  Manufacturing Overhead 
B)  Raw Materials Inventory 
C)  Accounts Receivable 
D)  All of these are control accounts 
A)  Manufacturing Overhead 
B)  Raw Materials Inventory 
C)  Accounts Receivable 
D)  All of these are control accounts

Question 15

Watson Manufacturing Company employs a job order cost accounting system and keeps perpetual inventory records. The following transactions occurred in the first month of operations: $$\begin{array}{l}
\text { 1. Direct materials requisitioned during the month: }\
\begin{array} { l r } 
\text { Job } 101 & \$ 20,000 \
\text { Job } 102 & 16,000 \
\text { Job } 103 & 24,000 \
&\$60,000
\end{array}
\end{array}$$ $$\begin{array}{l}
\text { 2. Direct labor incurred and charged to jobs during the month was: }\
\begin{array} { r r } 
\text { Job } 101 & \$ 32,000 \
\text { Job } 102 & 28,000 \
\text { Job } 103 & 20,000 \
 & \$ 80,000
\end{array}
\end{array}$$ 
3. Manufacturing overhead was applied to jobs worked on using a predetermined overhead rate based on 75% of direct labor costs.
4. Actual manufacturing overhead costs incurred during the month amounted to $66000.
5. Job 101 consisting of 1000 units and Job 103 consisting of 200 units were completed during the month.
Instructions
(a) Prepare journal entries to record the above transactions.
(b) Answer the following questions:
1. How much manufacturing overhead was applied to Job 103 during the month?
2. Compute the unit cost of Jobs 101 and 103.
3. What is the balance in Work In Process Inventory at the end of the month?
4. Determine if manufacturing overhead was under- or overapplied during the month. How much?

Accepted Answer

(a)
3. Work In Process Inventory is $650

Question 16

The two major steps in the flow of costs are

Accepted Answer

A)  allocating and assigning. 
B)  acquiring and accumulating. 
C)  accumulating and assigning. 
D)  accumulating and amortizing. 
A)  allocating and assigning. 
B)  acquiring and accumulating. 
C)  accumulating and assigning. 
D)  accumulating and amortizing.

Question 17

A time ticket does not indicate the

Accepted Answer

A)  employee's name. 
B)  account to be charged. 
C)  number of personal exemptions claimed by the employee. 
D)  job number. 
A)  employee's name. 
B)  account to be charged. 
C)  number of personal exemptions claimed by the employee. 
D)  job number.

Question 18

Gulick Company developed the following data for the current year: $\begin{array}{lr}
\text { Beginning work in process inventory } & \$ 240,000 \
\text { Direct materials used } & 144,000 \
\text { Actual overhead } & 288,000 \
\text { Overhead applied } & 216,000 \
\text { Cost of goods manufactured } & 264,000 \
\text { Total manufacturing costs } & 720,000
\end{array}$ Gulick Company's direct labor cost for the year is

Accepted Answer

A)  $72000. 
B)  $360000. 
C)  $216000. 
D)  $288000. 
A)  $72000. 
B)  $360000. 
C)  $216000. 
D)  $288000.

Question 19

Simmons Inc. applies overhead to production at a predetermined rate of 90% based on direct labor cost. Job No. 250 the only job still in process at the end of August has been charged with manufacturing overhead of $8100. What was the amount of direct materials charged to Job 250 assuming the balance in Work in Process inventory is $30000?

Accepted Answer

A)  $ 8100. 
B)  $ 9000. 
C)  $12900. 
D)  $30000. 
A)  $ 8100. 
B)  $ 9000. 
C)  $12900. 
D)  $30000.

Question 20

Which of the following is not viewed as part of accumulating manufacturing costs in a job order cost system?

Accepted Answer

A)  Cost of goods sold is recognized 
B)  Raw materials are purchased 
C)  Factory labor is incurred 
D)  Manufacturing overhead is incurred 
A)  Cost of goods sold is recognized 
B)  Raw materials are purchased 
C)  Factory labor is incurred 
D)  Manufacturing overhead is incurred

Exam 20: Job Order Costing

If the Manufacturing Overhead account has a debit balance at the end of a period it means that

There are two basic types of cost accounting systems: (1)__________________ system and (2)__________________ system.

Manufacturing overhead items are indirect product costs that cannot be traced to individual products. Explain how manufacturing overhead costs are accumulated and how they are assigned to products in a job order cost system.

At the beginning of the year Monroe Company estimates annual overhead costs to be $2400000 and that 300000 machine hours will be operated. Using machine hours as a base the amount of overhead applied during the year if actual machine hours for the year was 315000 hours is

Which of the following is not used in assigning manufacturing costs to work in process inventory?

When raw materials are purchased the Work in Process Inventory account is debited.

Cost accounting is primarily concerned with accumulating information about product costs.

There should be a separate job cost sheet for each job.

In a manufacturing company the cost of factory labor consists of all of the following except

Which of the following is not a control account?

The two major steps in the flow of costs are

A time ticket does not indicate the

Which of the following is not viewed as part of accumulating manufacturing costs in a job order cost system?

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

Filters

There are two basic types of cost accounting systems: (1) system and (2) system.