Question 1

Match the items in the two columns below by entering the appropriate code letter in the space provided.

Accepted Answer

The answer of Match the items in the two columns...

Question 2

A cost accounting system consists of manufacturing cost accounts that are fully integrated into the general ledger of a company.

Accepted Answer

A) True 
 B)False

Question 3

The predetermined overhead rate is based on the relationship between estimated annual overhead costs and expected annual operating activity expressed in terms of a common activity base.

Accepted Answer

A) True 
 B)False

Question 4

Klinger Company estimates that annual manufacturing overhead costs will be $4800000 for 2017. The actual overhead costs at the end of 2017 are $4980000. Activity base information for 2017 follows: $$\begin{array} { l r r } 
\text { Activity Base } & \text { Estimated } &  { \text { Actual } } \
\hline \text { Direct Labor Cost } & \$ 3,000,000 & \$ 3,150,000 \
\text { Direct Labor Hours } & 200,000 & 212,000 \
\text { Machine Hours } & 150,000 & 152,000
\end{array}$$ Instructions
(a) Compute the predetermined overhead rate for each activity base.
(b) Compute the amount of overhead applied in 2017 for each activity base.
(c) Compute the amount of under- or overapplied overhead for 2017 for each activity base.

Accepted Answer

The answer of Klinger Company estimates that annual manufacturing overhead...

Question 5

Which of the following is not a control account?

Accepted Answer

A)  Raw Materials Inventory 
B)  Factory Labor 
C)  Manufacturing Overhead 
D)  All of these are control accounts. 
A)  Raw Materials Inventory 
B)  Factory Labor 
C)  Manufacturing Overhead 
D)  All of these are control accounts.

Question 6

If actual manufacturing overhead was greater than the amount of manufacturing overhead applied to jobs the Manufacturing Overhead account will have a ___________ balance and overhead is said to be ______________.

Accepted Answer

The answer of If actual manufacturing overhead was greater than...

Question 7

Which of the following would be accounted for using a job order cost system?

Accepted Answer

A)  The production of personal computers. 
B)  The production of automobiles. 
C)  The refining of petroleum. 
D)  The construction of a new campus building. 
A)  The production of personal computers. 
B)  The production of automobiles. 
C)  The refining of petroleum. 
D)  The construction of a new campus building.

Question 8

Simpson Company applies overhead on the basis of 200% of direct labor cost. Job No. 305 is charged with $180000 of direct materials costs and $200000 of manufacturing overhead. The total manufacturing costs for Job No. 305 is:

Accepted Answer

A)  $380000 
B)  $480000 
C)  $560000 
D)  $580000 
A)  $380000 
B)  $480000 
C)  $560000 
D)  $580000

Question 9

Henson Company applies overhead on the basis of 120% of direct labor cost. Job No. 190 is charged with $140000 of direct materials costs and $180000 of manufacturing overhead. The total manufacturing costs for Job No. 190 is

Accepted Answer

A)  $320000. 
B)  $536000. 
C)  $348000. 
D)  $470000. 
A)  $320000. 
B)  $536000. 
C)  $348000. 
D)  $470000.

Question 10

The accounting records of Roland Manufacturing Company include the following information: $$\begin{array} { l r r } 
& { \text { Dec. } 31 } &\text { Jan. } 1  \
\text { Work in process inventory } & \$ 20,000 & \$ 50,000 \
\text { Finished goods inventory } & 120,000 & 150,000 \
\text { Direct materials used } & 350,000 & \
\text { Direct labor } & 160,000 & \
\text { Selling expenses } & 125,000 &
\end{array}$$ Manufacturing overhead is applied at a rate of 150% of direct labor cost.
Instructions
Answer the following questions:
1. What is the total of the debits to Work in Process Inventory during the year?
2. What is the amount transferred to Finished Goods Inventory during the year?
3. What is the cost of goods sold?

Accepted Answer

None

Question 11

The following amounts were reported by Burke Company before adjusting its immaterial overapplied manufacturing overhead of $8000. $\begin{array}{lr}
\text { Raw Materials Inventory } & \$ 40,000 \
\text { Finished Goods Inventory } & 60,000 \
\text { Work in Process Inventory } & 100,000 \
\text { Cost of Goods Sold } & 730,000
\end{array}$ Instructions
Compute what amount Burke will report as cost of goods sold after it disposes of its overapplied overhead.

Accepted Answer

$730000 -

Question 12

Factory labor costs

Accepted Answer

A)  are accumulated in a control account. 
B)  do not include pension costs. 
C)  include vacation pay. 
D)  are based on workers' net pay. 
A)  are accumulated in a control account. 
B)  do not include pension costs. 
C)  include vacation pay. 
D)  are based on workers' net pay.

Question 13

The following information is available for Marks Company at December 31 2017: $\begin{array} { c c r } \text { 1. Inventory balance } & \text { Beginning of Year } & \text { End of Year } \ \text { Finished Goods } & \$ 14,000 & \$ 10,000 \ \text { Work in Process } & 6,000 & 12,000 \ \text { Raw Materials } & 10,300 & 6,500 \end{array}$

2. Debit postings to Work in Process Inventory during the year were:
$\begin{array}{lr}
\text { Direct materials } & \$ 90,000 \
\text { Direct labor } & 60,000 \
\text { Manufacturing overhead applied } & 75,000
\end{array}$

3. Sales totaled $\$ 310,000$ for the year. Instructions
(a) Prepare a condensed cost of goods manufactured schedule.
(b) Prepare an income statement for the year through gross profit.

Accepted Answer

The answer of The following information is available for Marks...

Question 14

A job cost sheet of Fugate Company is given below.   Instructions
(a) Answer the following questions.
(1) What is the predetermined manufacturing overhead rate?
(2) What are the total cost and the unit cost of the completed job?
(b) Prepare the entry to record the completion of the job.

Accepted Answer

(a)
(1) The predetermined overhead rate

Question 15

The two basic types of cost accounting systems are

Accepted Answer

A)  job order and job accumulation systems. 
B)  job order and process cost systems. 
C)  process cost and batch systems. 
D)  job order and batch systems. 
A)  job order and job accumulation systems. 
B)  job order and process cost systems. 
C)  process cost and batch systems. 
D)  job order and batch systems.

Question 16

Distinguish between the two types of cost accounting systems. (b) May a company use both types of cost accounting systems?

Accepted Answer

(a) The two principal types of cost acco

Question 17

An important feature of a job order cost system is that each job

Accepted Answer

A)  must be similar to previous jobs completed. 
B)  has its own distinguishing characteristics. 
C)  must be completed before a new job is accepted. 
D)  consists of one unit of output. 
A)  must be similar to previous jobs completed. 
B)  has its own distinguishing characteristics. 
C)  must be completed before a new job is accepted. 
D)  consists of one unit of output.

Question 18

When goods are sold the Cost of Goods Sold account is debited and Work in Process Inventory account is credited.

Accepted Answer

A) True 
 B)False

Question 19

Overhead application is recorded with a

Accepted Answer

A)  credit to Work in Process Inventory. 
B)  credit to Manufacturing Overhead. 
C)  debit to Manufacturing Overhead. 
D)  credit to job cost sheets. 
A)  credit to Work in Process Inventory. 
B)  credit to Manufacturing Overhead. 
C)  debit to Manufacturing Overhead. 
D)  credit to job cost sheets.

Question 20

The labor costs that have been identified as indirect labor should be charged to

Accepted Answer

A)  manufacturing overhead. 
B)  direct labor. 
C)  the individual jobs worked on. 
D)  salary expense. 
A)  manufacturing overhead. 
B)  direct labor. 
C)  the individual jobs worked on. 
D)  salary expense.

Exam 20: Job Order Costing

Match the items in the two columns below by entering the appropriate code letter in the space provided.

A cost accounting system consists of manufacturing cost accounts that are fully integrated into the general ledger of a company.

The predetermined overhead rate is based on the relationship between estimated annual overhead costs and expected annual operating activity expressed in terms of a common activity base.

Which of the following is not a control account?

If actual manufacturing overhead was greater than the amount of manufacturing overhead applied to jobs the Manufacturing Overhead account will have a ___________ balance and overhead is said to be ______________.

Which of the following would be accounted for using a job order cost system?

Simpson Company applies overhead on the basis of 200% of direct labor cost. Job No. 305 is charged with $180000 of direct materials costs and $200000 of manufacturing overhead. The total manufacturing costs for Job No. 305 is:

Henson Company applies overhead on the basis of 120% of direct labor cost. Job No. 190 is charged with $140000 of direct materials costs and $180000 of manufacturing overhead. The total manufacturing costs for Job No. 190 is

Factory labor costs

A job cost sheet of Fugate Company is given below. Instructions (a) Answer the following questions. (1) What is the predetermined manufacturing overhead rate? (2) What are the total cost and the unit cost of the completed job? (b) Prepare the entry to record the completion of the job.

The two basic types of cost accounting systems are

Distinguish between the two types of cost accounting systems. (b) May a company use both types of cost accounting systems?

An important feature of a job order cost system is that each job

When goods are sold the Cost of Goods Sold account is debited and Work in Process Inventory account is credited.

Overhead application is recorded with a

The labor costs that have been identified as indirect labor should be charged to

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

If actual manufacturing overhead was greater than the amount of manufacturing overhead applied to jobs the Manufacturing Overhead account will have a _ balance and overhead is said to be ____.