Question 1

Which of the following would be included in the journal entry to record the requisition of direct materials?

Accepted Answer

A)  Debit to Cost of goods sold 
B)  Debit to Work in process inventory 
C)  Debit to Finished goods inventory 
D)  Debit to Materials inventory 
A)  Debit to Cost of goods sold 
B)  Debit to Work in process inventory 
C)  Debit to Finished goods inventory 
D)  Debit to Materials inventory

Question 2

Indirect materials and indirect labor are tracked to individual job costing records and recorded in the Work in process account.

Accepted Answer

A) True 
 B)False

Question 3

When job order costing is used in a service business, the allocation of direct labor costs is normally based on direct labor hours, and the allocation of indirect costs is normally based on the indirect labor hours.

Accepted Answer

A) True 
 B)False

Question 4

Underallocated manufacturing overhead costs are always the result of which of the following situations?

Accepted Answer

A)  Allocated overhead costs are less than actual overhead costs. 
B)  Actual overhead costs are less than allocated overhead costs. 
C)  Actual overhead costs are greater than estimated overhead costs. 
D)  Estimated overhead costs are greater than actual overhead costs. 
A)  Allocated overhead costs are less than actual overhead costs. 
B)  Actual overhead costs are less than allocated overhead costs. 
C)  Actual overhead costs are greater than estimated overhead costs. 
D)  Estimated overhead costs are greater than actual overhead costs.

Question 5

Halcyon Company just completed job number 10B. See details below.
Direct labor cost: $2,040
Direct materials cost: $90
Machine hours for milling machinery: 5
Direct labor hours: 75
Predetermined manufacturing overhead allocation rate: $34.00 per direct labor hour
What was the total job cost?

Accepted Answer

A)  $2,640 
B)  $4,680 
C)  $2,550 
D)  $4,590 
A)  $2,640 
B)  $4,680 
C)  $2,550 
D)  $4,590

Question 6

All manufacturing overhead costs incurred are accumulated as debits to a general ledger account titled Manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 7

LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the Refining Department had 2,000 liters of partially processed product in production. During January, 32,000 liters were transferred in from the Mixing Department and 29,000 liters were completed and transferred out. At the end of the month, there were 5,000 liters of partially processed product remaining in the Refining Department. See additional details below.
Refining Department, beginning balance at January 1, 2012
$$\begin{array} { l l } 
\text { Quantity: } & 2,000 \text { units (partially processed) } \
\text { Cost: } & \$ 15,600 \text { of costs transferred in } \
& \$ 1,900 \text { of materials cost } \
& \$ 4,500 \text { of conversion cost } \
& \$ 22,000 \text { total account balance }
\end{array}$$

$\begin{array}{ll}
\text { Costs added during January }\
\text { Cost of units transferred in: } & \$ 222,400 \
\text { Direct materials cost } & \$ 45,000 \
\text { Conversion cost } & \$ 93,750
\end{array}$

$\text { Refining Department, ending balance at January } 31,2012$
$\begin{array}{ll}
\text { Quantity: } & 5,000 \text { units (partially processed) } \
\% \text { completion for materials cost: } & 90 \% \
\% \text { completion for conversion cost: } & 75 \%
\end{array}$
- Please perform a process costing analysis and answer the following question:
For the Refining Department in the month of January, what was cost per equivalent unit with respect to transferred in costs? (Please round to nearest cent.)

Accepted Answer

A)  $6.54 
B)  $3.00 
C)  $1.40 
D)  $7.00 
A)  $6.54 
B)  $3.00 
C)  $1.40 
D)  $7.00

Question 8

On June 30, Coraline Company finished job number 750, with total job costs of $4,600, and transferred the costs to Finished goods. On July 6, they completed the sale of the goods to a customer for $5,100 cash. In order to record the sale, two entries are necessary-one to record revenue, and one to record cost of goods sold. Please provide the second of two entries to record cost of goods sold.
 $\begin{array}{|l|l|l|}
 \hline\quad \quad\quad \quad\quad \quad \quad \quad  \quad \quad \quad \quad  \quad &\quad \quad \quad  & \quad \quad \quad \
\hline \text {  } & \text {  } & \text {  }\
\hline 
\end{array}$

Accepted Answer

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

Question 9

The journal entry to record the incurrence of $1,500 of direct labor and $200 of indirect labor includes which of the following?

Accepted Answer

A)  Debit to Manufacturing overhead for $1,700 
B)  Debit to Work in process inventory for $1,500 and debit to Finished goods for $200 
C)  Debit to Work in process inventory for $1,700 
D)  Debit to Work in process for $1,500, debit to Manufacturing overhead for $200 
A)  Debit to Manufacturing overhead for $1,700 
B)  Debit to Work in process inventory for $1,500 and debit to Finished goods for $200 
C)  Debit to Work in process inventory for $1,700 
D)  Debit to Work in process for $1,500, debit to Manufacturing overhead for $200

Question 10

Archangel Manufacturing has just finished the year 2012. They created a predetermined manufacturing overhead allocation rate at the beginning of the year based on a percentage of direct labor costs. Below are various data:
$$\begin{array} { l l } 
\text { Total manufacturing overhead estimated at the beginning of the year: } & \$ 140,000 \
\text { Total direct labor costs estimated at the beginning of the year: } & \$ 350,000 \
\text { Total direct labor hours estimated at the beginning of the year: } & 12,000 \text { direct labor hours } \
\text { Actual manufacturing overhead costs for the year: } & \$ 159,000 \
\text { Actual direct labor costs for the year: } & \$ 362,000 \
\text { Actual direct labor hours for the year: } & 12,400 \text { direct labor hours }
\end{array}$$
- 
Based on the data above, how much manufacturing overhead was allocated to production? (Please round to nearest whole dollar.)

Accepted Answer

A)  $825,360 
B)  $905,000 
C)  $144,800 
D)  $159,280 
A)  $825,360 
B)  $905,000 
C)  $144,800 
D)  $159,280

Question 11

Job order costing is used primarily in the manufacturing and industrial sectors, but is not well suited for the service industry.

Accepted Answer

A) True 
 B)False

Question 12

Falstaff Products estimates manufacturing overhead costs for the coming year at $500,000. Falstaff will allocate based on machine hours. Falstaff estimates 8,000 machine hours for the coming year. What is the predetermined manufacturing overhead rate?

Accepted Answer

A)  $62.50 per machine hour 
B)  $0.016 per machine hour 
C)  $32.00 per machine hour 
D)  $6.25 per machine hour 
A)  $62.50 per machine hour 
B)  $0.016 per machine hour 
C)  $32.00 per machine hour 
D)  $6.25 per machine hour

Question 13

Lakeside Company estimated manufacturing overhead costs for 2012 at $378,000, based on 180,000 estimated direct labor hours. Actual direct labor hours for 2012 totaled 195,000. The manufacturing overhead account contains debit entries totaling $391,500. The manufacturing overhead for 2012 was:

Accepted Answer

A)  $31,500 underallocated. 
B)  $31,500 overallocated. 
C)  $18,000 underallocated. 
D)  $18,000 overallocated. 
A)  $31,500 underallocated. 
B)  $31,500 overallocated. 
C)  $18,000 underallocated. 
D)  $18,000 overallocated.

Question 14

During 2012, a company incurs $500,000 of manufacturing overhead costs and allocates out $506,000 of manufacturing overhead costs. At year-end, the adjustment entry needed to clear the overhead balance to zero will include a debit to Cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 15

The Quadrangle Fabrication Plant had a fire at the beginning of 2013 and most of the records for the year 2012 were lost. Some data for the year 2012 were located by the accountants and are shown below.
$$\begin{array} { l l } 
\text { Total manufacturing overhead estimated at the beginning of the year: } & \$ 105,840 \
\text { Total direct labor costs estimated at the beginning of the year: } & \$ 186,000 \
\text { Total direct labor hours estimated at the beginning of the year: } & 3,600 \text { direct labor hours } \
\text { Actual manufacturing overhead costs for the year: } & \$ 99,760 \
\text { Actual direct labor costs for the year: } & \$ 142,000 \
\text { Actual direct labor hours for the year: } & 2,950 \text { direct labor hours }
\end{array}$$
-
The company bases its manufacturing overhead allocation on direct labor hours. What was the predetermined manufacturing overhead allocation rate for 2012? (Please round to the nearest cent.)

Accepted Answer

A)  $35.87 
B)  $33.82 
C)  $29.40 
D)  $27.71 
A)  $35.87 
B)  $33.82 
C)  $29.40 
D)  $27.71

Question 16

In the service industry, the use of job order costing is made much more effective if a company uses computerized time records.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following would NOT be considered a manufacturing overhead cost?

Accepted Answer

A)  Insurance for the factory 
B)  Indirect labor cost 
C)  Property tax for the plant 
D)  Direct labor 
A)  Insurance for the factory 
B)  Indirect labor cost 
C)  Property tax for the plant 
D)  Direct labor

Question 18

Which of the following would be included in the journal entry to record direct labor costs actually incurred?

Accepted Answer

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

Question 19

When manufacturing overhead is allocated, the amount is recorded as a debit to Work in process and a credit to Manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 20

The Quadrangle Fabrication Plant had a fire at the beginning of 2013 and most of the records for the year 2012 were lost. Some data for the year 2012 were located by the accountants and are shown below.
$$\begin{array} { l l } 
\text { Total manufacturing overhead estimated at the beginning of the year: } & \$ 105,840 \
\text { Total direct labor costs estimated at the beginning of the year: } & \$ 186,000 \
\text { Total direct labor hours estimated at the beginning of the year: } & 3,600 \text { direct labor hours } \
\text { Actual manufacturing overhead costs for the year: } & \$ 99,760 \
\text { Actual direct labor costs for the year: } & \$ 142,000 \
\text { Actual direct labor hours for the year: } & 2,950 \text { direct labor hours }
\end{array}$$
- 
The company bases its manufacturing overhead allocation on direct labor hours. What was the preliminary ending balance in the manufacturing overhead account prior to the year-end adjustment to clear the balance to zero? (Please round to the nearest whole dollar.)

Accepted Answer

A)  $6,080 credit balance 
B)  $4,982 debit balance 
C)  $13,030 credit balance 
D)  $13,030 debit balance 
A)  $6,080 credit balance 
B)  $4,982 debit balance 
C)  $13,030 credit balance 
D)  $13,030 debit balance

Which of the following would be included in the journal entry to record the requisition of direct materials?

Indirect materials and indirect labor are tracked to individual job costing records and recorded in the Work in process account.

When job order costing is used in a service business, the allocation of direct labor costs is normally based on direct labor hours, and the allocation of indirect costs is normally based on the indirect labor hours.

Underallocated manufacturing overhead costs are always the result of which of the following situations?

Halcyon Company just completed job number 10B. See details below. Direct labor cost: $2,040 Direct materials cost: $90 Machine hours for milling machinery: 5 Direct labor hours: 75 Predetermined manufacturing overhead allocation rate: $34.00 per direct labor hour What was the total job cost?

All manufacturing overhead costs incurred are accumulated as debits to a general ledger account titled Manufacturing overhead.

The journal entry to record the incurrence of $1,500 of direct labor and $200 of indirect labor includes which of the following?

Job order costing is used primarily in the manufacturing and industrial sectors, but is not well suited for the service industry.

Falstaff Products estimates manufacturing overhead costs for the coming year at $500,000. Falstaff will allocate based on machine hours. Falstaff estimates 8,000 machine hours for the coming year. What is the predetermined manufacturing overhead rate?

Lakeside Company estimated manufacturing overhead costs for 2012 at $378,000, based on 180,000 estimated direct labor hours. Actual direct labor hours for 2012 totaled 195,000. The manufacturing overhead account contains debit entries totaling $391,500. The manufacturing overhead for 2012 was:

During 2012, a company incurs $500,000 of manufacturing overhead costs and allocates out $506,000 of manufacturing overhead costs. At year-end, the adjustment entry needed to clear the overhead balance to zero will include a debit to Cost of goods sold.

In the service industry, the use of job order costing is made much more effective if a company uses computerized time records.

Which of the following would NOT be considered a manufacturing overhead cost?

Which of the following would be included in the journal entry to record direct labor costs actually incurred?

When manufacturing overhead is allocated, the amount is recorded as a debit to Work in process and a credit to Manufacturing overhead.

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 requisition of direct materials?

Indirect materials and indirect labor are tracked to individual job costing records and recorded in the Work in process account.

When job order costing is used in a service business, the allocation of direct labor costs is normally based on direct labor hours, and the allocation of indirect costs is normally based on the indirect labor hours.

Underallocated manufacturing overhead costs are always the result of which of the following situations?

Halcyon Company just completed job number 10B. See details below. Direct labor cost: $2,040 Direct materials cost: $90 Machine hours for milling machinery: 5 Direct labor hours: 75 Predetermined manufacturing overhead allocation rate: $34.00 per direct labor hour What was the total job cost?

All manufacturing overhead costs incurred are accumulated as debits to a general ledger account titled Manufacturing overhead.

The journal entry to record the incurrence of $1,500 of direct labor and $200 of indirect labor includes which of the following?

Job order costing is used primarily in the manufacturing and industrial sectors, but is not well suited for the service industry.

Falstaff Products estimates manufacturing overhead costs for the coming year at $500,000. Falstaff will allocate based on machine hours. Falstaff estimates 8,000 machine hours for the coming year. What is the predetermined manufacturing overhead rate?

Lakeside Company estimated manufacturing overhead costs for 2012 at $378,000, based on 180,000 estimated direct labor hours. Actual direct labor hours for 2012 totaled 195,000. The manufacturing overhead account contains debit entries totaling $391,500. The manufacturing overhead for 2012 was:

During 2012, a company incurs $500,000 of manufacturing overhead costs and allocates out $506,000 of manufacturing overhead costs. At year-end, the adjustment entry needed to clear the overhead balance to zero will include a debit to Cost of goods sold.

In the service industry, the use of job order costing is made much more effective if a company uses computerized time records.

Which of the following would NOT be considered a manufacturing overhead cost?

Which of the following would be included in the journal entry to record direct labor costs actually incurred?

When manufacturing overhead is allocated, the amount is recorded as a debit to Work in process and a credit to Manufacturing overhead.

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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