Question 1

At the end of the year, any balance in the Manufacturing Overhead account is generally eliminated by adjusting

Accepted Answer

A)  Work In Process Inventory. 
B)  Finished Goods Inventory. 
C)  Cost of Goods Sold. 
D)  Raw Materials Inventory. 
A)  Work In Process Inventory. 
B)  Finished Goods Inventory. 
C)  Cost of Goods Sold. 
D)  Raw Materials Inventory.

Question 2

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.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following statements about under- or overapplied manufacturing overhead is correct?

Accepted Answer

A)  After the entry to transfer over- or underapplied overhead to Cost of Goods Sold is posted, Manufacturing Overhead will have a zero balance. 
B)  When Manufacturing Overhead has a credit balance, overhead is said to be under-applied. 
C)  At the end of the year, under- or overapplied overhead is eliminated by a closing entry. 
D)  When annual financial statements are prepared, overapplied overhead is reported in current liabilities. 
A)  After the entry to transfer over- or underapplied overhead to Cost of Goods Sold is posted, Manufacturing Overhead will have a zero balance. 
B)  When Manufacturing Overhead has a credit balance, overhead is said to be under-applied. 
C)  At the end of the year, under- or overapplied overhead is eliminated by a closing entry. 
D)  When annual financial statements are prepared, overapplied overhead is reported in current liabilities.

Question 4

Edwards Company applies manufacturing overhead to jobs on the basis of machine hours used. Overhead costs are expected to total $1,200,000 for the year, and machine usage is estimated at 200,000 hours.
In January, $128,000 of overhead costs are incurred and 22,000 machine hours are used. For the remainder of the year, $1,296,000 of additional overhead costs are incurred and 214,000 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

The answer of Edwards Company applies manufacturing overhead to jobs...

Question 5

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.

Question 6

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 7

If manufacturing overhead has been overapplied during the year, the adjusting entry at the end of the year will show a

Accepted Answer

A)  debit to Manufacturing Overhead. 
B)  credit to Finished Goods Inventory 
C)  debit to Cost of Goods Sold. 
D)  credit to Work in Process Inventory. 
A)  debit to Manufacturing Overhead. 
B)  credit to Finished Goods Inventory 
C)  debit to Cost of Goods Sold. 
D)  credit to Work in Process Inventory.

Question 8

If annual overhead costs are expected to be $800,000 and direct labor costs are expected to be $1,000,000, then if the activity base is direct labor costs:

Accepted Answer

A)  $1.25 is the predetermined overhead rate. 
B)  for every dollar of manufacturing overhead, 80 cents of direct labor will be assigned. 
C)  for every dollar of direct labor, 80 cents of manufacturing overhead will be assigned. 
D)  a predetermined overhead rate cannot be determined. 
A)  $1.25 is the predetermined overhead rate. 
B)  for every dollar of manufacturing overhead, 80 cents of direct labor will be assigned. 
C)  for every dollar of direct labor, 80 cents of manufacturing overhead will be assigned. 
D)  a predetermined overhead rate cannot be determined.

Question 9

A process cost system would be used for all of the following except the

Accepted Answer

A)  manufacture of cereal. 
B)  refining of petroleum. 
C)  printing of wedding invitations. 
D)  production of automobiles. 
A)  manufacture of cereal. 
B)  refining of petroleum. 
C)  printing of wedding invitations. 
D)  production of automobiles.

Question 10

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 11

If the entry to assign factory labor showed only a debit to Work In Process Inventory, then all labor costs were

Accepted Answer

A)  direct labor. 
B)  indirect labor. 
C)  overtime related. 
D)  regular hours. 
A)  direct labor. 
B)  indirect labor. 
C)  overtime related. 
D)  regular hours.

Question 12

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 2010, the following estimates were made for the year:
During January, the job cost sheet showed the following costs and production data:   
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

The answer of Landis Company uses a job order cost...

Question 13

Which of the following is not a control account?

Accepted Answer

A)  Manufacturing Overhead 
B)  Factory Labor 
C)  Accounts Receivable 
D)  Raw Materials Inventory 
A)  Manufacturing Overhead 
B)  Factory Labor 
C)  Accounts Receivable 
D)  Raw Materials Inventory

Question 14

Barger Company had the following information at December 31:   If the cost of goods manufactured during the year amounted to $1,330,000 and annual sales were $1,996,000, how much is the amount of gross profit for the year?

Accepted Answer

A)  $666,000 
B)  $606,000 
C)  $1,306,000 
D)  $690,000 
A)  $666,000 
B)  $606,000 
C)  $1,306,000 
D)  $690,000

Question 15

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

Accepted Answer

A)  underapplied. 
B)  overapplied. 
C)  a loss on the income statement under "Other Expenses and Losses." 
D)  considered a miscellaneous expense. 
A)  underapplied. 
B)  overapplied. 
C)  a loss on the income statement under "Other Expenses and Losses." 
D)  considered a miscellaneous expense.

Question 16

Which of the following is one of the components of cost accounting?

Accepted Answer

A)  It involves measuring product costs. 
B)  It involves the determination of company profits. 
C)  It requires GAAP to be applied. 
D)  It requires cost minimizing principles. 
A)  It involves measuring product costs. 
B)  It involves the determination of company profits. 
C)  It requires GAAP to be applied. 
D)  It requires cost minimizing principles.

Question 17

The entry to record the acquisition of raw materials on account is

Accepted Answer

A)  Work in Process Inventory Accounts Payable 
B)  Manufacturing Overhead Raw Materials Inventory
Accounts Payable 
C)  Accounts Payable Raw Materials Inventory 
D)  Raw Materials Inventory Accounts Payable 
A)  Work in Process Inventory Accounts Payable 
B)  Manufacturing Overhead Raw Materials Inventory
Accounts Payable 
C)  Accounts Payable Raw Materials Inventory 
D)  Raw Materials Inventory Accounts Payable

Question 18

A major purpose of cost accounting is to

Accepted Answer

A)  classify all costs as operating or nonoperating. 
B)  measure, record, and report period costs. 
C)  provide information to stockholders for investment decisions. 
D)  measure, record, and report product costs. 
A)  classify all costs as operating or nonoperating. 
B)  measure, record, and report period costs. 
C)  provide information to stockholders for investment decisions. 
D)  measure, record, and report product costs.

Question 19

Factory labor costs

Accepted Answer

A)  accumulate in advance of utilization. 
B)  accumulate in a control account. 
C)  include sick pay earned by factory workers. 
D)  accumulate in the Factory Labor Expense account. 
A)  accumulate in advance of utilization. 
B)  accumulate in a control account. 
C)  include sick pay earned by factory workers. 
D)  accumulate in the Factory Labor Expense account.

Question 20

If Manufacturing Overhead has a credit 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 less 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 less than the overhead incurred. 
C)  overhead has been overapplied. 
D)  management must take corrective action.

Exam 20: Job Order Costing

At the end of the year, any balance in the Manufacturing Overhead account is generally eliminated by adjusting

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.

Which of the following statements about under- or overapplied manufacturing overhead is correct?

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

Process costing is used when

If manufacturing overhead has been overapplied during the year, the adjusting entry at the end of the year will show a

If annual overhead costs are expected to be $800,000 and direct labor costs are expected to be $1,000,000, then if the activity base is direct labor costs:

A process cost system would be used for all of the following except the

The two basic types of cost accounting systems are

If the entry to assign factory labor showed only a debit to Work In Process Inventory, then all labor costs were

Which of the following is not a control account?

Barger Company had the following information at December 31: If the cost of goods manufactured during the year amounted to $1,330,000 and annual sales were $1,996,000, how much is the amount of gross profit for the year?

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

Which of the following is one of the components of cost accounting?

The entry to record the acquisition of raw materials on account is

A major purpose of cost accounting is to

Factory labor costs

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

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 Analysis: the Big Picture

Managerial Accounting

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Filters