Question 1

Operation costing uses which of the following costing systems?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 2

Jackson Inc. listed the following data for 2019:$\begin{array}{lr}
\text { Budgeted factory overhead } & \$ 1,271,000 \
\text { Budgeted direct labor hours } & 82,000 \
\text { Budgeted machine hours } & 41,000 \
\text { Actual factory overhead } & 1,201,000 \
\text { Actual direct labor hours } & 86,300 \
\text { Actual machine hours } & 39,400
\end{array}$Assuming Jackson Inc.applied overhead based on direct labor hours, the firm's predetermined overhead rate for 2019 is:(round calculations to 2 significant digits):

Accepted Answer

A) $14.20 per direct labor hour. 
B) $14.38 per direct labor hour. 
C) $15.24 per direct labor hour. 
D) $15.50 per direct labor hour. 
E) $15.85 per direct labor hour. 
A) $14.20 per direct labor hour. 
B) $14.38 per direct labor hour. 
C) $15.24 per direct labor hour. 
D) $15.50 per direct labor hour. 
E) $15.85 per direct labor hour.

Question 3

Product costing provides useful cost information for all the following except:

Accepted Answer

A) Both manufacturing and non-manufacturing firms. 
B) For non-manufacturing firms. 
C) Management planning, cost control, and performance evaluation 
D) Financial statement reporting. 
E) Identifying and hiring competent managers. 
A) Both manufacturing and non-manufacturing firms. 
B) For non-manufacturing firms. 
C) Management planning, cost control, and performance evaluation 
D) Financial statement reporting. 
E) Identifying and hiring competent managers.

Question 4

The time ticket shows which amount for an employee?

Accepted Answer

A) The pay rate. 
B) Number of hours a manager assigns. 
C) Check-in times and check-out times. 
D) Overtime costs. 
A) The pay rate. 
B) Number of hours a manager assigns. 
C) Check-in times and check-out times. 
D) Overtime costs.

Question 5

The following information is for Stier Company for the month of November:
a.Factory overhead costs are applied to jobs at the predetermined rate of $80 per labor-hour.Job X-14 incurred 2,300 labor-hours; Job SM-4 used 1,850 labor-hours.
b.Job X-14 was shipped to customers during November.
The company closed the overapplied or underapplied overhead to the Cost of Goods Sold account at the end of November
c.Factory utilities, factory depreciation, and factory insurance incurred is summarized by these factory vouchers, invoices, and cost memos: $$\begin{array} { | l | r | } 
\hline \text { Utilities } & \$ 44,500 \
\hline \text { Depreciation } & 53,500 \
\hline \text { Insurance } & 38,600 \
\hline
\end{array}$$ d.The Company purchased the following direct materials and indirect materials: $$\begin{array} { l r } 
\hline \text { Material A } & \$ 6,000 \
\text { Material B } & 7,000 \
\text { Indirect materials } & 4,250 \
\text { Total } & \$ 17,250 \
\hline
\end{array}$$ e.Direct materials and indirect materials used are as follows: $\begin{array}{lccr} 
& \text { Job X-14 } & \text { Job SM-4 } & \text { Total } \
\text { Material A } & \$ 5,450 & \$ 33,000 & \$ 38,450 \
\text { Material B } & 1,650 & 25,500 & 27,150\
\text { Subtotal }&\$7,100&\$58,500&\$65,600\
\text { Indirect materials }&&&66,500\
\text { Total }&&&\$132,100
\end{array}$ f.Factory labor incurred for the two jobs and indirect labor is as follows: $$\begin{array} { l r } 
\text { Job X-14 } & \$ 32,200 \
\text { Job SM-4 } & 25,900 \
\text { Indirect labor } & \underline { 122,000 } \
\text { Total } & \underline { \$ 180,100 } \
\hline
\end{array}$$ Required:
1.Calculate the amount of overapplied or underapplied overhead and state whether the cost of goods sold account will be increased or decreased by the adjustment.
2.Calculate the total manufacturing cost for Job X-14 and Job SM-4 for November.

Accepted Answer

The answer of The following information is for Stier Company...

Question 6

ABC Company listed the following data for the current year:$\begin{array}{lr}
\text { Budgeted factory overhead } & \$ 1,044,000 \
\text { Budgeted direct labor hours } & 69,600 \
\text { Budgeted machine hours } & 24,000 \
\text { Actual factory overhead } & 1,037,400 \
\text { Actual labor hours } & 72,600 \
\text { Actual machine hours } & 23,600
\end{array}$Assuming ABC Company applied overhead based on direct labor hours, the company's predetermined overhead rate for the year is:

Accepted Answer

A) $43.95 per direct labor hour. 
B) $15.50 per direct labor hour. 
C) $15.00 per direct labor hour. 
D) $14.28 per direct labor hour. 
E) $14.00 per direct labor hour. 
A) $43.95 per direct labor hour. 
B) $15.50 per direct labor hour. 
C) $15.00 per direct labor hour. 
D) $14.28 per direct labor hour. 
E) $14.00 per direct labor hour.

Question 7

Randall Company manufactures products to customer specifications. A job costing system is used to accumulate production costs. Factory overhead cost was applied at 125% of direct labor cost. Selected data concerning the past year's operation of the company are presented below.$\begin{array}{lrrr} 
& \text { January 1 } & \text { December 31 } \
\text { Direct materials } & \$  77,000 & \$ 40,000 \
\text { Work in process } & 66,000 & 42,000 \
\text { Finished goods } & 115,000 & 100,000\
\text { Other information }\
\text { Direct materials purchases } && \$ 324,000 \
\text { Cost of goods available for sale } && 950,000 \
\text { Actual factory overhead costs } && 260,000
\end{array}$The cost of direct materials used for production is:

Accepted Answer

A) $351,000. 
B) $297,000. 
C) $361,000. 
D) $306,000. 
E) $324,000. 
A) $351,000. 
B) $297,000. 
C) $361,000. 
D) $306,000. 
E) $324,000.

Question 8

Dye Co.uses a job cost system and predetermines a factory overhead rate based on the amount of expected fixed costs and expected volume.At the conclusion of the fiscal year, overapplied overhead could be explained by which of the following?

Accepted Answer

A) Option A 
B) Option B 
C) Option C 
D) Option D 
A) Option A 
B) Option B 
C) Option C 
D) Option D

Question 9

Which one of the following is the amount of factory overhead applied that exceeds the actual factory overhead cost?

Accepted Answer

A) Factory overhead applied. 
B) Actual factory overhead. 
C) Overapplied overhead. 
D) Allocated factory overhead. 
E) Underapplied overhead. 
A) Factory overhead applied. 
B) Actual factory overhead. 
C) Overapplied overhead. 
D) Allocated factory overhead. 
E) Underapplied overhead.

Question 10

Jackson Inc. listed the following data for 2019:$\begin{array}{lr}
\text { Budgeted factory overhead } & \$ 1,271,000 \
\text { Budgeted direct labor hours } & 82,000 \
\text { Budgeted machine hours } & 41,000 \
\text { Actual factory overhead } & 1,201,000 \
\text { Actual direct labor hours } & 86,300 \
\text { Actual machine hours } & 39,400
\end{array}$If overhead is applied based on machine hours, the overapplied/underapplied overhead is:

Accepted Answer

A) $20,400 underapplied. 
B) $20,400 overapplied. 
C) $48,374 underapplied. 
D) $48,374 overapplied. 
E) $-0-. 
A) $20,400 underapplied. 
B) $20,400 overapplied. 
C) $48,374 underapplied. 
D) $48,374 overapplied. 
E) $-0-.

Question 11

Beckner Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours are 133,000 and estimated factory overhead is $784,700. The following information is for September. Job X was completed during September, while Job Y was started but not finished.$\begin{array}{lr}
\text { September 1, inventories: }\
\text { Materials }&\$24,000\
\text { Work-in-process (All Job X) } & 53,400 \
\text { Finished goods } & 105,600\
\text { Materials purchases }&\$157,000\
\text { Direct materials requisitioned: }\
\text { Job X } & \$5 74,000 \
\text { Job Y } &68,000 \\text { Direct labor hours: } & \
\text { Job X } & 7,000 \
\text { Job Y } & 5,500\\text { Labor costs incurred: }\
\text { Direct labor ( } \$ 6.00 \text { per hour) }&\$75,000\
\text { Indirect labor } & 24,200 \
\text { Factory supervisory salaries } & 11,100 \
\text { Rental costs: } &\\text { Factory }&\$9,300\
\text { Administrative offices }&3,200\\text { Total equipment depreciation costs: }\
\text { Factory } & \$  10,400 \
\text { Administrative offices } & 2,800 \
\text { Indirect materials used } & \$  17,800
\end{array}$The total factory overhead applied during September is:

Accepted Answer

A) $79,300. 
B) $57,572. 
C) $73,750. 
D) $68,120. 
E) $51,710. 
A) $79,300. 
B) $57,572. 
C) $73,750. 
D) $68,120. 
E) $51,710.

Question 12

The three major differences between process and job order costing systems are those relating to:

Accepted Answer

A) Quantity, quality, and cost. 
B) Speed, accuracy, and design. 
C) Cost object, product or service variety, and timing of unit cost calculation. 
D) Responsibility for cost, system design, and authorization codes. 
E) None of the above is correct. 
A) Quantity, quality, and cost. 
B) Speed, accuracy, and design. 
C) Cost object, product or service variety, and timing of unit cost calculation. 
D) Responsibility for cost, system design, and authorization codes. 
E) None of the above is correct.

Question 13

A time ticket:

Accepted Answer

A) Shows the time an employee worked on each job, the pay rate, and the total cost chargeable to each job. 
B) Shows the time that a department's employees worked on all jobs, the pay rate of each employee, and the total cost chargeable to each job. 
C) Shows the time an employee worked on each job and the total cost chargeable to each job only. 
D) Shows the time an employee worked on each job only. 
E) None of the above. 
A) Shows the time an employee worked on each job, the pay rate, and the total cost chargeable to each job. 
B) Shows the time that a department's employees worked on all jobs, the pay rate of each employee, and the total cost chargeable to each job. 
C) Shows the time an employee worked on each job and the total cost chargeable to each job only. 
D) Shows the time an employee worked on each job only. 
E) None of the above.

Question 14

Maple Mount Fishery is a canning company in Astoria. The company uses a normal costing system in which factory overhead is applied on the basis of direct labor costs. Budgeted factory overhead for the year was $680,400, and management budgeted $324,000 of direct labor costs. During the year, the company incurred the following actual costs.$\begin{array}{lr}
\text { Direct materials used } & \$ 384,000 \
\text { Direct labor } & 306,000 \
\text { Factory overhead } & 658,000
\end{array}$
$\text { The January } 1 \text { balances of inventory accounts are shown below. }$
$\begin{array}{lr}
\text { Materials-all direct } & \$ 70,000 \
\text { Work-in-process } & 41,000 \
\text { Finished goods } & 26,000
\end{array}$The December 31 balances of these inventory accounts were ten percent lower than the balances at the beginning of the year.
The cost of goods manufactured during the year is:(Round your intermediate calculations to 1 decimal place.)

Accepted Answer

A) $1,332,600. 
B) $1,354,700. 
C) $1,336,700. 
D) $1,373,600. 
E) $1,339,600. 
A) $1,332,600. 
B) $1,354,700. 
C) $1,336,700. 
D) $1,373,600. 
E) $1,339,600.

Question 15

The primary focus of job costing in service industries is on:

Accepted Answer

A) Direct materials. 
B) Direct labor. 
C) Indirect materials. 
D) Supplies. 
E) Factory overhead. 
A) Direct materials. 
B) Direct labor. 
C) Indirect materials. 
D) Supplies. 
E) Factory overhead.

Question 16

Sutherland Company listed the following data for 2019:$\begin{array}{lr}
\text { Budgeted factory overhead } & \$ 2,100,000 \
\text { Budgeted direct labor hours } & 89,000 \
\text { Budgeted machine hours } & 51,000 \
\text { Actual factory overhead } & 2,201,000 \
\text { Actual direct labor hours } & 83,700 \
\text { Actual machine hours } & 48,900
\end{array}$Assuming Sutherland applied overhead based on direct labor hours, the company's predetermined overhead rate for 2019 is (round to two significant digits):

Accepted Answer

A) $23.20 per direct labor hour. 
B) $23.60 per direct labor hour. 
C) $22.24 per direct labor hour. 
D) $22.50 per direct labor hour. 
E) $22.85 per direct labor hour. 
A) $23.20 per direct labor hour. 
B) $23.60 per direct labor hour. 
C) $22.24 per direct labor hour. 
D) $22.50 per direct labor hour. 
E) $22.85 per direct labor hour.

Question 17

Warren Company uses a predetermined overhead rate. Overhead for the next twelve months is estimated to be $480,000. Jackson applies overhead as a percentage of direct labor cost. Direct labor costs are estimated to be $400,000 for the next year. During the year actual direct labor costs amounted to $520,000 and the actual overhead was $605,000.
Required:
(1) Calculate the over/under-applied overhead for the year.
(2) Prepare the journal entries to close the accounts, assuming that the over/under-applied overhead is closed to cost of goods sold.

Accepted Answer

(1) Application rate = $480,000/$400,000

Question 18

Departmental overhead rates are preferred over plantwide rates when

Accepted Answer

A) The plant makes a single product. 
B) The plant has a complex production process for a small number of products that go through the same production processes. 
C) There are a number of different products in the plant which go through the same processes. 
D) The products use different amounts of different processes in different departments. 
A) The plant makes a single product. 
B) The plant has a complex production process for a small number of products that go through the same production processes. 
C) There are a number of different products in the plant which go through the same processes. 
D) The products use different amounts of different processes in different departments.

Question 19

When completed units are sold:

Accepted Answer

A) Cost of Goods Sold account is credited. 
B) Cost of Goods Manufactured account is credited. 
C) Finished Goods Inventory account is credited. 
D) Work-in-Process Inventory account is credited. 
E) Finished Goods Inventory account is debited. 
A) Cost of Goods Sold account is credited. 
B) Cost of Goods Manufactured account is credited. 
C) Finished Goods Inventory account is credited. 
D) Work-in-Process Inventory account is credited. 
E) Finished Goods Inventory account is debited.

Question 20

The system where the cost of a product or service is obtained by assigning costs to masses of similar units in each department and then computing unit cost on an average basis is called

Accepted Answer

A) A process costing system. 
B) A job costing system. 
C) An activity-based costing system. 
D) An inventory materials control system. 
E) None of the above. 
A) A process costing system. 
B) A job costing system. 
C) An activity-based costing system. 
D) An inventory materials control system. 
E) None of the above.

Operation costing uses which of the following costing systems?

Product costing provides useful cost information for all the following except:

The time ticket shows which amount for an employee?

Dye Co.uses a job cost system and predetermines a factory overhead rate based on the amount of expected fixed costs and expected volume.At the conclusion of the fiscal year, overapplied overhead could be explained by which of the following?

Which one of the following is the amount of factory overhead applied that exceeds the actual factory overhead cost?

The three major differences between process and job order costing systems are those relating to:

A time ticket:

The primary focus of job costing in service industries is on:

Departmental overhead rates are preferred over plantwide rates when

When completed units are sold:

The system where the cost of a product or service is obtained by assigning costs to masses of similar units in each department and then computing unit cost on an average basis is called

Cost Management and Strategy

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters

Exam 4: Job Costing

Operation costing uses which of the following costing systems?

Product costing provides useful cost information for all the following except:

The time ticket shows which amount for an employee?

Dye Co.uses a job cost system and predetermines a factory overhead rate based on the amount of expected fixed costs and expected volume.At the conclusion of the fiscal year, overapplied overhead could be explained by which of the following?

Which one of the following is the amount of factory overhead applied that exceeds the actual factory overhead cost?

The three major differences between process and job order costing systems are those relating to:

A time ticket:

The primary focus of job costing in service industries is on:

Departmental overhead rates are preferred over plantwide rates when

When completed units are sold:

The system where the cost of a product or service is obtained by assigning costs to masses of similar units in each department and then computing unit cost on an average basis is called

Cost Management and Strategy

Implementing Strategy: The Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit CVP Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

The Management and Control of Quality

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters