Question 1

Under an effective system of internal control the authorization for issuing materials is made

Accepted Answer

A)  orally. 
B)  on a prenumbered materials requisition slip. 
C)  by the accounting department. 
D)  by anyone on the production line. 
A)  orally. 
B)  on a prenumbered materials requisition slip. 
C)  by the accounting department. 
D)  by anyone on the production line.

Question 2

Edwards Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $1800000 for the year and machine usage is estimated at 200000 hours.
In January $186000 of overhead costs are incurred and 22000 machine hours are used. For the remainder of the year $1940000 of additional overhead costs are incurred and 214000 additional machine hours are worked.
Instructions
(a) Compute the manufacturing overhead rate for the year.
(b) What is the amount of over- or underapplied overhead at January 31?
(c) What is the amount of over- or underapplied overhead at December 31?

Accepted Answer

None

Question 3

If Manufacturing Overhead has a debit balance at the end of the period then

Accepted Answer

A)  overhead has been underapplied. 
B)  the overhead assigned to Work in Process Inventory is more than the overhead incurred. 
C)  overhead has been overapplied. 
D)  management must take corrective action. 
A)  overhead has been underapplied. 
B)  the overhead assigned to Work in Process Inventory is more than the overhead incurred. 
C)  overhead has been overapplied. 
D)  management must take corrective action.

Question 4

The following inventory information is available for Ricci Manufacturing Corporation for the year ended December 31 2017: $$\begin{array} { c r r } 
& \text { Beginning } & \text { Ending } \
\text { Inventories: } & & \
\text { Raw materials } & \$ 17,000 & \$ 19,000 \
\text { Work in process } & 9,000 & 14,000 \
\text { Finished goods } & 11,000 & 8,000 \
\text { Total } & \underline { \$ 37,000 } & \underline { \$ 41,000 }
\end{array}$$ In addition the following transactions occurred in 2017:
1. Raw materials purchased on account $75000.
2. Incurred factory labor $80000 all is direct labor. (Credit Factory Wages Payable).
3. Incurred the following overhead costs during the year: Utilities $6800 Depreciation on manufacturing machinery $8000 Manufacturing machinery repairs $9200 Factory insurance $9000 (Credit Accounts Payable and Accumulated Depreciation).
4. Assigned $80000 of factory labor to jobs.
5. Applied $36000 of overhead to jobs.
Instructions
(a) Journalize the above transactions.
(b) Reproduce the manufacturing cost and inventory accounts. Use T-accounts.
(c) From an analysis of the accounts compute the following:
1. Raw materials used.
2. Completed jobs transferred to finished goods.
3. Cost of goods sold.
4. Under- or overapplied overhead.

Accepted Answer

@#IMG-DLM& (c) 1. Raw materials used = $17000 + $7

Question 5

A process cost accounting system is appropriate for similar products that are continuously mass produced.

Accepted Answer

A) True 
 B)False

Question 6

Process costing is not used when

Accepted Answer

A)  similar goods are being produced. 
B)  large volumes are produced. 
C)  jobs have distinguishing characteristics. 
D)  a series of connected manufacturing processes is necessary. 
A)  similar goods are being produced. 
B)  large volumes are produced. 
C)  jobs have distinguishing characteristics. 
D)  a series of connected manufacturing processes is necessary.

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

Sardin Company begins the month of March with $17000 of work in process costs from Job 324. Information from job cost sheets shows the following additional costs assigned during March April and May of 2013:  $\quad $ $\quad $ $\quad $ $\quad $$\text { Manufacturing Costs Assigned }$
$\begin{array}{cccc}
\text { Job No. }&\text { March}&\text {  April } & \text { May}\
324 & \$ 26,000 & & \
325 & 20,000 & \$ 28,000 & \$ 15,000 \
326 & 41,000 & 11,000 & \
327 & & 16,000 & 39,000 \
328 & & 34,000 & 51,000
\end{array}$ Job 324 was completed in March. Jobs 325 and 327 were completed in May and Job 326 was completed in April. Jobs are sold during the month after completion. Total revenue for jobs sold during the 3-month period is $145000.
Instructions
Calculate the balances of the work in process and finished goods inventory accounts at the end of May.

Accepted Answer

None

Question 9

As of December 31 2017 Nilsen Industries had $2000 of raw materials inventory. At the beginning of 2017 there was $1600 of materials on hand. During the year the company purchased $354000 of materials; however it paid for only $314000. How much inventory was requisitioned for use on jobs during 2017?

Accepted Answer

A)  $354400 
B)  $344400 
C)  $343600 
D)  $353600 
A)  $354400 
B)  $344400 
C)  $343600 
D)  $353600

Question 10

When determining costs of jobs how does a company account for indirect materials?

Accepted Answer

A)  It is added to work in process as used. 
B)  It remains part of raw materials inventory. 
C)  It is transferred out of raw materials into manufacturing overhead when used. 
D)  It is transferred out of raw materials into work in process as used. 
A)  It is added to work in process as used. 
B)  It remains part of raw materials inventory. 
C)  It is transferred out of raw materials into manufacturing overhead when used. 
D)  It is transferred out of raw materials into work in process as used.

Question 11

Fancy Decorating uses a job order costing system to collect the costs of its interior decorating business. Each client's consultation is treated as a separate job. Overhead is applied to each job based on the number of decorator hours incurred. Listed below are data for the current year. $$\begin{array} { l r } 
\text { Budgeted overhead } & \$ 880,000 \
\text { Actual overhead } & \$ 910,000 \
\text { Budgeted decorator hours } & 40,000 \
\text { Actual decorator hours } & 41,000
\end{array}$$ The company uses Operating Overhead in place of Manufacturing Overhead.
Instructions
(a) Compute the predetermined overhead rate.
(b) Prepare the entry to apply the overhead for the year.
(c) Determine whether the overhead was under - or overapplied and by how much.

Accepted Answer

(a)
\[\begin{aligned}
\text { Predetermi

Question 12

When a job is completed and all costs have been accumulated on a job cost sheet the journal entry that should be made is

Accepted Answer

A)  Finished Goods Inventory Direct Materials
Direct Labor
Manufacturing Overhead 
B)  Work In Process Inventory Direct Materials
Direct Labor
Manufacturing Overhead 
C)  Raw Materials Inventory Work In Process Inventory 
D)  Finished Goods Inventory Work In Process Inventory 
A)  Finished Goods Inventory Direct Materials
Direct Labor
Manufacturing Overhead 
B)  Work In Process Inventory Direct Materials
Direct Labor
Manufacturing Overhead 
C)  Raw Materials Inventory Work In Process Inventory 
D)  Finished Goods Inventory Work In Process Inventory

Question 13

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 $6400. What was the amount of direct materials charged to Job 130 assuming the balance in Work in Process inventory is $20000?

Accepted Answer

A)  $7000. 
B)  $6400. 
C)  $5600. 
D)  $20000. 
A)  $7000. 
B)  $6400. 
C)  $5600. 
D)  $20000.

Question 14

If annual overhead costs are expected to be $750000 and direct labor costs are expected to be $1000000 then if the activity base is direct labor costs:

Accepted Answer

A)  $1.33 is the predetermined overhead rate. 
B)  for every dollar of manufacturing overhead 75 cents of direct labor will be assigned. 
C)  for every dollar of direct labor 75 cents of manufacturing overhead will be assigned. 
D)  a predetermined overhead rate cannot be determined. 
A)  $1.33 is the predetermined overhead rate. 
B)  for every dollar of manufacturing overhead 75 cents of direct labor will be assigned. 
C)  for every dollar of direct labor 75 cents of manufacturing overhead will be assigned. 
D)  a predetermined overhead rate cannot be determined.

Question 15

The Raw Materials Inventory account is

Accepted Answer

A)  a subsidiary account. 
B)  debited for invoice costs and freight costs chargeable to the purchaser. 
C)  debited for purchase discounts taken. 
D)  debited for purchase returns and allowances. 
A)  a subsidiary account. 
B)  debited for invoice costs and freight costs chargeable to the purchaser. 
C)  debited for purchase discounts taken. 
D)  debited for purchase returns and allowances.

Question 16

Kline Manufacturing has the following labor costs: $$\begin{array} { l r } 
\text { Factory-Gross wages } & \$ 500,000 \
\text { Factory-Net wages } & 420,000 \
\text { Employer Payroll Taxes Payable } & 50,000
\end{array}$$ The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor for

Accepted Answer

A)  $550000. 
B)  $500000. 
C)  $470000. 
D)  $450000. 
A)  $550000. 
B)  $500000. 
C)  $470000. 
D)  $450000.

Question 17

Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows: $\begin{array}{lr}
\text { Actual manufacturing overhead } & \$ 150,000 \
\text { Estimated manufacturing overhead } & \$ 145,000 \
\text { Direct labor hours incurred } & 4,800 \
\text { Direct labor hours estimated } & 5,000
\end{array}$ Instructions
Compute the predetermined overhead rate.

Accepted Answer

$145000 ÷

Question 18

Redman Company manufactures customized desks. The following pertains to Job No. 978: $\begin{array}{lr}
\text { Direct materials used } & \$ 15.450 \
\text { Direct labor hours worked } & 360 \
\text { Direct labor rate per hour } & \$ 15.00 \
\text { Machine hours used } & 300 \
\text { Applied factory overhead rate per machine hour } & \$ 22.00
\end{array}$ What is the total manufacturing cost for Job No. 978?

Accepted Answer

A)  $25650 
B)  $27450 
C)  $28950 
D)  $30750 
A)  $25650 
B)  $27450 
C)  $28950 
D)  $30750

Question 19

Kimble 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: 11eb1392_1b8d_7390_8021_e3debd3d7d66

Accepted Answer

A)  $1560000 applied and $15000 overapplied 
B)  $1600000 applied and $15000 overapplied 
C)  $1560000 applied and $15000 underapplied 
D)  $1575000 applied and neither under-nor overapplied 
A)  $1560000 applied and $15000 overapplied 
B)  $1600000 applied and $15000 overapplied 
C)  $1560000 applied and $15000 underapplied 
D)  $1575000 applied and neither under-nor overapplied

Question 20

Which one of the following is a source document that impacts the job cost sheet?

Accepted Answer

A)  Raw materials receiving slips. 
B)  Materials purchase orders. 
C)  Labor time tickets. 
D)  Finished goods shipping documents. 
A)  Raw materials receiving slips. 
B)  Materials purchase orders. 
C)  Labor time tickets. 
D)  Finished goods shipping documents.

Under an effective system of internal control the authorization for issuing materials is made

If Manufacturing Overhead has a debit balance at the end of the period then

A process cost accounting system is appropriate for similar products that are continuously mass produced.

Process costing is not used when

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

When determining costs of jobs how does a company account for indirect materials?

When a job is completed and all costs have been accumulated on a job cost sheet the journal entry that should be made is

If annual overhead costs are expected to be $750000 and direct labor costs are expected to be $1000000 then if the activity base is direct labor costs:

The Raw Materials Inventory account is

Kline Manufacturing has the following labor costs: Factory-Gross wages \ 500,000 Factory-Net wages 420,000 Employer Payroll Taxes Payable 50,000 The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor for

Kimble 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: 11eb1392_1b8d_7390_8021_e3debd3d7d66

Which one of the following is a source document that impacts the job cost sheet?

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

Exam 20: Job Order Costing

Under an effective system of internal control the authorization for issuing materials is made

If Manufacturing Overhead has a debit balance at the end of the period then

A process cost accounting system is appropriate for similar products that are continuously mass produced.

Process costing is not used when

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

When determining costs of jobs how does a company account for indirect materials?

When a job is completed and all costs have been accumulated on a job cost sheet the journal entry that should be made is

If annual overhead costs are expected to be $750000 and direct labor costs are expected to be $1000000 then if the activity base is direct labor costs:

The Raw Materials Inventory account is

Kline Manufacturing has the following labor costs: Factory-Gross wages \ 500,000 Factory-Net wages 420,000 Employer Payroll Taxes Payable 50,000 The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor for

Kimble 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: 11eb1392_1b8d_7390_8021_e3debd3d7d66

Which one of the following is a source document that impacts the job cost sheet?

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