Question 1

Which of the following would be included in the journal entry to record the incurrence of indirect labor costs?

Accepted Answer

A)  Debit to Manufacturing overhead 
B)  Debit to Wages payable 
C)  Debit to Finished goods inventory 
D)  Debit to Work in process inventory 
A)  Debit to Manufacturing overhead 
B)  Debit to Wages payable 
C)  Debit to Finished goods inventory 
D)  Debit to Work in process inventory

Question 2

If there are 500 units in Department 1 Work in process account at the end of the month, and they are 80% complete with respect to conversion costs, they would be accounted for as 400 equivalent units with respect to conversion costs.

Accepted Answer

A) True 
 B)False

Question 3

Gardner Machine Shop estimates manufacturing overhead costs for the coming year at $316,000. They will allocate based on direct labor hours. Gardner estimates 5,000 direct labor hours for the coming year. What is the predetermined manufacturing overhead rate?

Accepted Answer

A)  $6.32 per direct labor hour 
B)  $0.016 per direct labor hour 
C)  $63.20 per direct labor hour 
D)  $16.00 per direct labor hour 
A)  $6.32 per direct labor hour 
B)  $0.016 per direct labor hour 
C)  $63.20 per direct labor hour 
D)  $16.00 per direct labor hour

Question 4

The cost of goods manufactured is recorded as a debit to the Finished goods account.

Accepted Answer

A) True 
 B)False

Question 5

Gardner Machine Shop uses a predetermined manufacturing overhead rate of $63.20 per direct labor hour. In January, Gardener completed job number A33, which included 15 direct labor hours. Please provide the journal entry to allocate overhead to the job.
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\hline \text {  } & \text {  } & \text {  }\
\hline 
\end{array}$

Accepted Answer

\[\begin{array} { | l | r | r

Question 6

Bilkins Financial Advisors provides accounting and finance assistance to customers in the retail business. They have 4 professionals on staff, plus an office with 6 clerical staff. Total compensation, including benefits, for the professional staff runs about $576,000 per year, and they normally have about 8,000 billable hours per year. Professional staff keep detailed time sheets distributed by client number. Office and administrative costs total $754,000 a year.
- 
Bilkins allocates professional time and administrative costs to clients monthly, using allocation rates based on billable hours. During July, Bilkins' professionals spent 36 hours on their client, Soupy Sales. Bilkins adds a 25% markup on their costs to calculate amount billed to the customer. How much gross profit did Bilkins earn from Soupy Sales in July?

Accepted Answer

A)  $1,698.25 
B)  $648.00 
C)  $1,870.31 
D)  $1,496.25 
A)  $1,698.25 
B)  $648.00 
C)  $1,870.31 
D)  $1,496.25

Question 7

Inglesias Company just completed job number 12. See details below.
Direct labor cost: $840
Direct materials cost: $1,100
Machine hours for milling machinery: 7
Direct labor hours: 22
Predetermined manufacturing overhead allocation rate: $90 per machine hour
Number of units of finished product: 25 units
What was cost per unit of finished product? (Please round to nearest cent.)

Accepted Answer

A)  $77.88 
B)  $102.80 
C)  $12.40 
D)  $156.80 
A)  $77.88 
B)  $102.80 
C)  $12.40 
D)  $156.80

Question 8

Forsyth Company uses estimated direct labor hours of 150,000 and estimated manufacturing overhead costs of $337,500 in establishing its 2012 predetermined manufacturing overhead rate. Actual results showed:
$\begin{array}{|l|r|}
\hline\text { Actual manufacturing overhead } & \$ 346,500 \
\hline \text { Allocated manufacturing overhead } & \$ 343,800 \
\hline
\end{array}$ 
The number of direct labor hours worked during the period was:

Accepted Answer

A)  154,000. 
B)  152,800. 
C)  150,000. 
D)  146,000. 
A)  154,000. 
B)  152,800. 
C)  150,000. 
D)  146,000.

Question 9

Falstaff Products estimated manufacturing overhead costs for the year at $500,000. Falstaff also estimated 8,000 machine hours for the year. Falstaff bases their predetermined manufacturing overhead rate on machine hours. On January 31, job 300 was completed. It required 12 machine hours to produce. How much manufacturing overhead was allocated to the job?

Accepted Answer

A)  $62.50 
B)  $19.20 
C)  $750.00 
D)  $42.00 
A)  $62.50 
B)  $19.20 
C)  $750.00 
D)  $42.00

Question 10

At the beginning of 2012, Conway Manufacturing Company had the following account balances:   $$\begin{array}{l}
\text { During the year, the following transactions took place: }\
\begin{array} { l r } 
\text { Direct materials placed in production: } & \$ 80,000 \
\text { Direct labor incurred: } & \$ 190,000 \
\text { Manufacturing overhead incurred } & \$ 300,000 \
\text { Manufacturing overhead allocated to production: } & \$ 295,000 \
\text { Jobs completed with cost of : } & \$ 500,000
\end{array}
\end{array}$$
- After these transactions have been recorded, the preliminary balance in the Work in process account is a:

Accepted Answer

A)  credit of $63,000. 
B)  debit of $70,000. 
C)  debit of $72,000. 
D)  debit of $67,000. 
A)  credit of $63,000. 
B)  debit of $70,000. 
C)  debit of $72,000. 
D)  debit of $67,000.

Question 11

In a process costing system, conversion costs are normally assumed to be incurred evenly throughout the production process.

Accepted Answer

A) True 
 B)False

Question 12

The journal entry to issue $500 of direct materials and $30 of indirect materials to production includes which of the following?

Accepted Answer

A)  Debit to Work in process for $500 and debit to Finished goods for $30 
B)  Debit to Manufacturing overhead for $530 
C)  Debit to Work in process for $500 and debit to Manufacturing overhead for $30 
D)  Debit to Work in process inventory for $530 
A)  Debit to Work in process for $500 and debit to Finished goods for $30 
B)  Debit to Manufacturing overhead for $530 
C)  Debit to Work in process for $500 and debit to Manufacturing overhead for $30 
D)  Debit to Work in process inventory for $530

Question 13

Specialty Wood Products company had the following manufacturing labor costs last month:
 $$\begin{array} { | l | r | } 
\hline \text { Woudwarkers' weges } & \$ 100,000 \
\hline \text { Indlirect laborers' wages } & \$ 20,000 \
\hline \text { Maintenance personnel weges } & \$ 10,000 \
\hline
\end{array}$$ 
Please provide the journal entry to record the incurrence of these labor costs.
 $\begin{array}{|l|l|l|}
 \hline\quad \quad\quad \quad\quad \quad \quad \quad  \quad \quad \quad \quad  \quad &\quad \quad \quad  & \quad \quad \quad \
\hline \text {  } & \text {  } & \text {  }\
\hline \text {  } & \text {  } & \text {  }\
 \hline
\end{array}$

Accepted Answer

\[\begin{array} { | l | r | r | } 
\hlin

Question 14

Altina Company just finished job A40. It included $400 of direct materials, and $3,600 of direct labor. Altina uses a predetermined manufacturing overhead rate based on a percentage of direct labor costs. That rate is 40%. The entry to record the completion of the job should be a:

Accepted Answer

A)  debit to Finished goods $5,440, and a credit to Materials inventory $5,440. 
B)  debit to Cost of goods sold $5,440, and a credit to Finished goods $5,440. 
C)  debit to Finished goods $5,440, and a credit to Work in process $5,440. 
D)  debit to Work in process $5,440, and a credit to Finished goods $5,440. 
A)  debit to Finished goods $5,440, and a credit to Materials inventory $5,440. 
B)  debit to Cost of goods sold $5,440, and a credit to Finished goods $5,440. 
C)  debit to Finished goods $5,440, and a credit to Work in process $5,440. 
D)  debit to Work in process $5,440, and a credit to Finished goods $5,440.

Question 15

Arabica Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2012, they estimated total manufacturing overhead costs at $1,050,000, and they estimated total direct labor costs at $840,000. In June, 2012, Arabica completed job number 511. Job stats are as follows:
$$\begin{array} { l l } 
\text { Direct materials cost } & \$ 27,500 \
\text { Direct labor cost } & \$ 13,000 \
\text { Direct labor hours } & 400 \text { hours } \
\text { Units of product produced: } & 200 \text { crates }
\end{array}$$
- 
How much was the total job cost?

Accepted Answer

A)  $40,500 
B)  $56,750 
C)  $50,900 
D)  $74,875 
A)  $40,500 
B)  $56,750 
C)  $50,900 
D)  $74,875

Question 16

Q-dot Manufacturing Company has provided the following information for the year 2012:
$$\begin{array} { l l } 
\text { Actual manufacturing overhead costs incurred } & \$ 199,900 \
\text { Manufacturing overhead costs allocated to production } & \$ 189,000 \
\text { Actual direct materials cost } & \$ 560,000 \
\text { Actual direct labor cost } & \$ 333,000 \
\text { Actual direct labor hours } & 9,450 \text { direct labor hours } \
\text { Actual machine hours } & 180,000 \text { machine hours }
\end{array}$$
Based on the above information, what was Q-dot's allocation rate? (Hint: for this type of problem, the "trial and error" method may be used.)

Accepted Answer

A)  $7.60 per machine hour 
B)  132% of direct labor cost 
C)  80% of direct materials cost 
D)  $20 per direct labor hour 
A)  $7.60 per machine hour 
B)  132% of direct labor cost 
C)  80% of direct materials cost 
D)  $20 per direct labor hour

Question 17

On June 1, 2012, Dalton Production Company had beginning balances as shown in the T-accounts below.   During June, the following transactions took place:
June 2: Issue $2,400 of direct materials and $200 of indirect materials to production.
June 13: Pay $7,500 of direct factory labor cost, and $14,100 of indirect factory labor cost.
-
Following these transactions, what was the balance in the Work in process inventory account?

Accepted Answer

A)  $29,900 
B)  $9,900 
C)  $44,200 
D)  $22,200 
A)  $29,900 
B)  $9,900 
C)  $44,200 
D)  $22,200

Question 18

Darrius Travel Services provided the following information:
Cost allocation rate for direct labor: $40 per hour
Cost allocation rate for indirect costs: $22 per hour
If Darrius receives $700 for a job requiring 12 hours of direct labor, they will make a profit of $44.

Accepted Answer

A) True 
 B)False

Question 19

When manufacturing overhead costs are incurred, the amounts are recorded as a credit to Manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 20

In a process costing system, calculating the cost per unit is used for a number of purposes. Which of the following is NOT one of those purposes?

Accepted Answer

A)  To set selling prices 
B)  To manage and control administrative expenses 
C)  To manage and control production costs 
D)  To calculate the ending work in process inventory 
A)  To set selling prices 
B)  To manage and control administrative expenses 
C)  To manage and control production costs 
D)  To calculate the ending work in process inventory

Which of the following would be included in the journal entry to record the incurrence of indirect labor costs?

If there are 500 units in Department 1 Work in process account at the end of the month, and they are 80% complete with respect to conversion costs, they would be accounted for as 400 equivalent units with respect to conversion costs.

Gardner Machine Shop estimates manufacturing overhead costs for the coming year at $316,000. They will allocate based on direct labor hours. Gardner estimates 5,000 direct labor hours for the coming year. What is the predetermined manufacturing overhead rate?

The cost of goods manufactured is recorded as a debit to the Finished goods account.

Gardner Machine Shop uses a predetermined manufacturing overhead rate of $63.20 per direct labor hour. In January, Gardener completed job number A33, which included 15 direct labor hours. Please provide the journal entry to allocate overhead to the job.

In a process costing system, conversion costs are normally assumed to be incurred evenly throughout the production process.

The journal entry to issue $500 of direct materials and $30 of indirect materials to production includes which of the following?

Specialty Wood Products company had the following manufacturing labor costs last month: Woudwarkers' weges \ 100,000 Indlirect laborers' wages \ 20,000 Maintenance personnel weges \ 10,000 Please provide the journal entry to record the incurrence of these labor costs.

Altina Company just finished job A40. It included $400 of direct materials, and $3,600 of direct labor. Altina uses a predetermined manufacturing overhead rate based on a percentage of direct labor costs. That rate is 40%. The entry to record the completion of the job should be a:

Darrius Travel Services provided the following information: Cost allocation rate for direct labor: $40 per hour Cost allocation rate for indirect costs: $22 per hour If Darrius receives $700 for a job requiring 12 hours of direct labor, they will make a profit of $44.

When manufacturing overhead costs are incurred, the amounts are recorded as a credit to Manufacturing overhead.

In a process costing system, calculating the cost per unit is used for a number of purposes. Which of the following is NOT one of those purposes?

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

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Exam 17: Job Order and Process Costing

Which of the following would be included in the journal entry to record the incurrence of indirect labor costs?

If there are 500 units in Department 1 Work in process account at the end of the month, and they are 80% complete with respect to conversion costs, they would be accounted for as 400 equivalent units with respect to conversion costs.

Gardner Machine Shop estimates manufacturing overhead costs for the coming year at $316,000. They will allocate based on direct labor hours. Gardner estimates 5,000 direct labor hours for the coming year. What is the predetermined manufacturing overhead rate?

The cost of goods manufactured is recorded as a debit to the Finished goods account.

Gardner Machine Shop uses a predetermined manufacturing overhead rate of $63.20 per direct labor hour. In January, Gardener completed job number A33, which included 15 direct labor hours. Please provide the journal entry to allocate overhead to the job.

In a process costing system, conversion costs are normally assumed to be incurred evenly throughout the production process.

The journal entry to issue $500 of direct materials and $30 of indirect materials to production includes which of the following?

Specialty Wood Products company had the following manufacturing labor costs last month: Woudwarkers' weges \ 100,000 Indlirect laborers' wages \ 20,000 Maintenance personnel weges \ 10,000 Please provide the journal entry to record the incurrence of these labor costs.

Altina Company just finished job A40. It included $400 of direct materials, and $3,600 of direct labor. Altina uses a predetermined manufacturing overhead rate based on a percentage of direct labor costs. That rate is 40%. The entry to record the completion of the job should be a:

Darrius Travel Services provided the following information: Cost allocation rate for direct labor: $40 per hour Cost allocation rate for indirect costs: $22 per hour If Darrius receives $700 for a job requiring 12 hours of direct labor, they will make a profit of $44.

When manufacturing overhead costs are incurred, the amounts are recorded as a credit to Manufacturing overhead.

In a process costing system, calculating the cost per unit is used for a number of purposes. Which of the following is NOT one of those purposes?

Corporations: Paid-In Capital and the Balance Sheet

Corporations: Effects on Retained Earnings and the Income Statement

The Statement of Cash Flows

Financial Statement Analysis

Introduction to Management Accounting

Activity-Based Costing and Other Cost Management Tools

Cost-Volume-Profit Analysis

Short-Term Business Decisions

Capital Investment Decisions and the Time Value of Money

The Master Budget and Responsibility Accounting

Flexible Budgets and Standard Costs

Performance Evaluation and the Balanced Scorecard

Filters