Question 1

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

Accepted Answer

A)  The overhead assigned to work in process is greater than the estimated overhead costs. 
B)  The overhead assigned to work in process is less than the estimated overhead costs. 
C)  The overhead assigned to work in process is less than the actual overhead. 
D)  The overhead assigned to work in process is greater than the overhead incurred. 
A)  The overhead assigned to work in process is greater than the estimated overhead costs. 
B)  The overhead assigned to work in process is less than the estimated overhead costs. 
C)  The overhead assigned to work in process is less than the actual overhead. 
D)  The overhead assigned to work in process is greater than the overhead incurred.

Question 2

In January Harlan Inc. production supervisor requisitioned raw materials for production as follows: Job 1 $700 Job 2 $900 Job 3 $400 and general factory use $520.
Instructions
Prepare a summary journal entry to record raw materials used.

Accepted Answer

None

Question 3

Debits to Work in Process Inventory are accompanied by a credit to all but which one of the following accounts?

Accepted Answer

A)  Raw Materials Inventory 
B)  Factory Labor 
C)  Manufacturing Overhead 
D)  Cost of Goods Sold 
A)  Raw Materials Inventory 
B)  Factory Labor 
C)  Manufacturing Overhead 
D)  Cost of Goods Sold

Question 4

Process costing is used when

Accepted Answer

A)  the production process is continuous. 
B)  production is aimed at filling a specific customer order. 
C)  dissimilar products are involved. 
D)  costs are to be assigned to specific jobs. 
A)  the production process is continuous. 
B)  production is aimed at filling a specific customer order. 
C)  dissimilar products are involved. 
D)  costs are to be assigned to specific jobs.

Question 5

Graham Manufacturing is a small manufacturer that uses machine-hours as its activity base for assigned overhead costs to jobs. The company estimated the following amounts for 2017 for the company and for Job 62: $\begin{array}{lrr} 
& \text { Company } & \text { Job } 62 \
\hline \text { Direct materials } & \$ 60,000 & \$ 4,500 \
\text { Direct labor } & \$ 25,000 & \$ 2,500 \
\text { Manufacturing overhead costs } & \$ 72,000 & \
\text { Machine hours } & 90,000 & 1,350
\end{array}$ During 2017 the actual machine-hours totaled 95000 and actual overhead costs were $71000.
Instructions
(a) Compute the predetermined overhead rate.
(b) Compute the total manufacturing costs for Job 62.
(c) How much overhead is over or underapplied for the year for the company? State amount and whether it is over- or underapplied.
(d) If Graham Manufacturing sells Job 62 for $14000 compute the gross profit.

Accepted Answer

(a) $72000 /90000 = $0.80 per machine ho

Question 6

Overapplied overhead means that actual manufacturing overhead costs were greater than the manufacturing overhead costs applied to jobs.

Accepted Answer

A) True 
 B)False

Question 7

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: 11eb1392_1b8d_9aa1_8021_f18e64fdb092

Accepted Answer

A)  $2950000 applied and $20000 overapplied 
B)  $3000000 applied and $20000 overapplied 
C)  $2950000 applied and $20000 underapplied 
D)  $2970000 applied and neither under- nor overapplied 
A)  $2950000 applied and $20000 overapplied 
B)  $3000000 applied and $20000 overapplied 
C)  $2950000 applied and $20000 underapplied 
D)  $2970000 applied and neither under- nor overapplied

Question 8

Actual manufacturing overhead costs should be charged to the Work in Process Inventory account as they are incurred.

Accepted Answer

A) True 
 B)False

Question 9

Of these three accounts; Raw Materials Inventory Factory Labor and Manufacturing Overhead ______________ is not a control account.

Accepted Answer

The answer of Of these three accounts; Raw Materials Inventory...

Question 10

Factory labor should be assigned to selling and administrative expenses on a proportionate basis.

Accepted Answer

A) True 
 B)False

Question 11

A company expected its annual overhead costs to be $1500000 and direct labor costs to be $1000000. Actual overhead was $1450000 and actual labor costs totaled $1100000. How much is the company's predetermined overhead rate to the nearest cent?

Accepted Answer

A)  $1.45 
B)  $1.31 
C)  $1.50 
D)  $1.37 
A)  $1.45 
B)  $1.31 
C)  $1.50 
D)  $1.37

Question 12

On the cost of goods manufactured schedule the cost of goods manufactured agrees with the

Accepted Answer

A)  balance of Finished Goods Inventory at the end of the period. 
B)  total debits to Work in Process Inventory during the period. 
C)  amount transferred from Work in Process Inventory to Finished Goods during the period. 
D)  debits to Cost of Goods Sold during the period. 
A)  balance of Finished Goods Inventory at the end of the period. 
B)  total debits to Work in Process Inventory during the period. 
C)  amount transferred from Work in Process Inventory to Finished Goods during the period. 
D)  debits to Cost of Goods Sold during the period.

Question 13

Factory Labor is a(n)

Accepted Answer

A)  expense account. 
B)  control account. 
C)  subsidiary account. 
D)  temporary account. 
A)  expense account. 
B)  control account. 
C)  subsidiary account. 
D)  temporary account.

Question 14

Garner Company begins operations on July 1 2017. Information from job cost sheets shows the following:  $\quad $ $\quad $ $\quad $ $\quad $$\text { Manufacturing Costs Assigned }$
$\begin{array}{rrrr}
\text { JobNo.   }& \text { July }& \text { August } & \text { September }\
100 & \$ 12,000 & \$ 8,800 & \
101 & 10,800 & 9,700 & \$ 12,000 \
102 & 5,000 & & \
103 & & 11,800 & 6,000 \
104 & & 5,800 & 7,000
\end{array}$ Job 102 was completed in July. Job 100 was completed in August and Jobs 101 and 103 were completed in September. Each job was sold for 60% above its cost in the month following completion.
Instructions
(a) Compute the balance in Work in Process Inventory at the end of July.
(b) Compute the balance in Finished Goods Inventory at the end of September.
(c) Compute the gross profit for August.

Accepted Answer

(a) Work i

Question 15

Gannon Company had the following information at December 31: Finished goods inventory January 1 $ 50000
Finished goods inventory December 31 150000
If the cost of goods manufactured during the year amounted to $2200000 and annual sales were $2750000 the amount of gross profit for the year is

Accepted Answer

A)  $550000. 
B)  $2100000. 
C)  $650000. 
D)  $450000. 
A)  $550000. 
B)  $2100000. 
C)  $650000. 
D)  $450000.

Question 16

During 2017 Tanner Manufacturing expected Job No. 26 to cost $300000 of overhead $500000 of materials and $200000 in labor. Tanner applied overhead based on direct labor cost. Actual production required an overhead cost of $290000 $550000 in materials used and $220000 in labor. All of the goods were completed. What amount was transferred to Finished Goods?

Accepted Answer

A)  $1000000 
B)  $1060000 
C)  $1070000 
D)  $1100000 
A)  $1000000 
B)  $1060000 
C)  $1070000 
D)  $1100000

Question 17

Greer Company developed the following data for the current year: $\begin{array}{ll}
\text { Beginning work in process inventory } & \$ 136,000 \
\text { Direct materials used } & 208,000 \
\text { Actual overhead } & 176,000 \
\text { Overhead applied } & 184,000 \
\text { Cost of goods manufactured } & 900,000 \
\text { Total manufacturing costs } & 856,000
\end{array}$ How much is Greer Company's direct labor cost for the year?

Accepted Answer

A)  $508000 
B)  $600000 
C)  $464000 
D)  $328000 
A)  $508000 
B)  $600000 
C)  $464000 
D)  $328000

Question 18

Kinney Company applies overhead on the basis of 150% of direct labor cost. Job No. 176 is charged with $150000 of direct materials costs and $180000 of manufacturing overhead. The total manufacturing costs for Job No. 176 is

Accepted Answer

A)  $330000. 
B)  $600000. 
C)  $450000. 
D)  $405000. 
A)  $330000. 
B)  $600000. 
C)  $450000. 
D)  $405000.

Question 19

Finn Manufacturing Company uses a job order cost accounting system and keeps perpetual inventory records. Prepare journal entries to record the following transactions during the month of June.
June 1 Purchased raw materials for $20000 on account.
25 Applied manufacturing overhead to production based on a predetermined overhead rate of $7 per direct labor hour worked.
28 Goods costing $18000 were completed in the factory and were transferred to finished goods.
30 Goods costing $15000 were sold for $20000 on account.

Accepted Answer

The answer of Finn Manufacturing Company uses a job order...

Question 20

The following information is available for completed Job No. 402: Direct materials $120000; direct labor $180000; manufacturing overhead applied $90000; units produced 5000 units; units sold 4000 units. The cost of the finished goods on hand from this job is

Accepted Answer

A)  $60000. 
B)  $390000. 
C)  $78000. 
D)  $312000. 
A)  $60000. 
B)  $390000. 
C)  $78000. 
D)  $312000.

Exam 20: Job Order Costing

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

In January Harlan Inc. production supervisor requisitioned raw materials for production as follows: Job 1 $700 Job 2 $900 Job 3 $400 and general factory use $520. Instructions Prepare a summary journal entry to record raw materials used.

Debits to Work in Process Inventory are accompanied by a credit to all but which one of the following accounts?

Process costing is used when

Overapplied overhead means that actual manufacturing overhead costs were greater than the manufacturing overhead costs applied to jobs.

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: 11eb1392_1b8d_9aa1_8021_f18e64fdb092

Actual manufacturing overhead costs should be charged to the Work in Process Inventory account as they are incurred.

Of these three accounts; Raw Materials Inventory Factory Labor and Manufacturing Overhead ______________ is not a control account.

Factory labor should be assigned to selling and administrative expenses on a proportionate basis.

A company expected its annual overhead costs to be $1500000 and direct labor costs to be $1000000. Actual overhead was $1450000 and actual labor costs totaled $1100000. How much is the company's predetermined overhead rate to the nearest cent?

On the cost of goods manufactured schedule the cost of goods manufactured agrees with the

Factory Labor is a(n)

Gannon Company had the following information at December 31: Finished goods inventory January 1 $ 50000 Finished goods inventory December 31 150000 If the cost of goods manufactured during the year amounted to $2200000 and annual sales were $2750000 the amount of gross profit for the year is

Kinney Company applies overhead on the basis of 150% of direct labor cost. Job No. 176 is charged with $150000 of direct materials costs and $180000 of manufacturing overhead. The total manufacturing costs for Job No. 176 is

The following information is available for completed Job No. 402: Direct materials $120000; direct labor $180000; manufacturing overhead applied $90000; units produced 5000 units; units sold 4000 units. The cost of the finished goods on hand from this job is

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

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