Question 1

Payroll-related costs for factory employees who do not work directly on the product are considered

Accepted Answer

A) direct labor. 
B) selling expenses. 
C) manufacturing overhead. 
D) administrative costs. 
A) direct labor. 
B) selling expenses. 
C) manufacturing overhead. 
D) administrative costs.

Question 2

Which of the following is not a way in which management can use job cost information?

Accepted Answer

A) Assessing and comparing the profitability of each product type 
B) Using the cost information in determining the bid price for custom orders 
C) Preparing the financial statements 
D) Determining the balance in raw materials inventory 
A) Assessing and comparing the profitability of each product type 
B) Using the cost information in determining the bid price for custom orders 
C) Preparing the financial statements 
D) Determining the balance in raw materials inventory

Question 3

Spruce Company uses a job costing system. Spruce Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 31.   Manufacturing overhead cost is allocated at the rate of $19 per direct labor hour.
What is the amount of allocated manufacturing overhead costs for August?

Accepted Answer

A) $48,640 
B) $76,800 
C) $124,600 
D) $43,000 
A) $48,640 
B) $76,800 
C) $124,600 
D) $43,000

Question 4

In the basic flow of inventory through a manufacturing system, which of the following occurs last in the job costing system?

Accepted Answer

A) Finished goods inventory 
B) Cost of goods sold 
C) Raw materials inventory 
D) Work in process inventory 
A) Finished goods inventory 
B) Cost of goods sold 
C) Raw materials inventory 
D) Work in process inventory

Question 5

How do you calculate the predetermined manufacturing overhead rate used to allocate manufacturing overhead costs?

Accepted Answer

A) By multiplying the total estimated manufacturing overhead costs by the total estimated amount of the allocation base 
B) By dividing the total estimated amount of the allocation base by the total estimated manufacturing overhead costs 
C) By dividing the total estimated manufacturing overhead costs by the total actual amount of the allocation base 
D) By dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base 
A) By multiplying the total estimated manufacturing overhead costs by the total estimated amount of the allocation base 
B) By dividing the total estimated amount of the allocation base by the total estimated manufacturing overhead costs 
C) By dividing the total estimated manufacturing overhead costs by the total actual amount of the allocation base 
D) By dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base

Question 6

Quick Step Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year:   If Quick Step Company uses direct labor cost as the allocation base, what would the allocated manufacturing overhead be for the year?

Accepted Answer

A) $350,000 
B) $748,584 
C) $409,376 
D) $422,400 
A) $350,000 
B) $748,584 
C) $409,376 
D) $422,400

Question 7

Assigning manufacturing overhead costs and other indirect costs is called

Accepted Answer

A) cost driver. 
B) cost allocation. 
C) materials requisition. 
D) predetermined manufacturing overhead rate. 
A) cost driver. 
B) cost allocation. 
C) materials requisition. 
D) predetermined manufacturing overhead rate.

Question 8

The amount of overallocation or underallocation should be reflected as an adjustment to cost of goods sold under what circumstances?

Accepted Answer

A) In all circumstances 
B) If most of the inventory produced during the period has not been sold 
C) If most of the inventory produced during the period has been sold 
D) Under no circumstance 
A) In all circumstances 
B) If most of the inventory produced during the period has not been sold 
C) If most of the inventory produced during the period has been sold 
D) Under no circumstance

Question 9

If manufacturing overhead has been overallocated during the period, and most of the jobs produced have been sold, then

Accepted Answer

A) Cost of Goods Sold on the income statement should be increased. 
B) Cost of Goods Sold on the income statement should be decreased. 
C) finished goods inventory should be increased. 
D) work in process inventory should be decreased. 
A) Cost of Goods Sold on the income statement should be increased. 
B) Cost of Goods Sold on the income statement should be decreased. 
C) finished goods inventory should be increased. 
D) work in process inventory should be decreased.

Question 10

To allocate manufacturing overhead to specific jobs, the needed journal entry would include a

Accepted Answer

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

Question 11

A graphic designer spends 44 hours working with client #130 during May. Her basic annual salary is $61,940, while her annual salary plus benefits totals $81,040 per year. She typically works 50 hours a week for 48 weeks each year. What is the hourly cost to the firm that employs her?

Accepted Answer

A) $632 
B) $2400 
C) $34 
D) $31 
A) $632 
B) $2400 
C) $34 
D) $31

Question 12

The ________ is the hourly price charged to clients for professional labor.

Accepted Answer

A) salary rate 
B) billing rate 
C) wage rate 
D) job rate 
A) salary rate 
B) billing rate 
C) wage rate 
D) job rate

Question 13

If the actual amount of the manufacturing overhead allocation base is greater than the estimated amount of the allocation base used to calculate the predetermined rate, then manufacturing overhead must have been underallocated.

Accepted Answer

A) True 
 B)False

Question 14

The difference between the sales price and the job cost is

Accepted Answer

A) gross profit. 
B) cost of goods sold. 
C) net income. 
D) operating income. 
A) gross profit. 
B) cost of goods sold. 
C) net income. 
D) operating income.

Question 15

An underallocation of manufacturing overhead is typically corrected by decreasing Cost of Goods Sold on the income statement.

Accepted Answer

A) True 
 B)False

Question 16

Venus Crates manufactures custom crates for a variety of uses. The following data have been recorded for Job 551, which was recently completed. Direct materials used cost $7700. There were 90 machine hours used on this job. The predetermined overhead rate is $32 per machine hour used. There were 179 direct labor hours worked on this job at a direct labor wage rate of $31 per hour. What is the total manufacturing cost of Job 551?

Accepted Answer

A) $16,129 
B) $5549 
C) $2880 
D) $7969 
A) $16,129 
B) $5549 
C) $2880 
D) $7969

Question 17

Earnst & Earnst Consulting pays Amber Kelly $58,000 per year. The cost of her annual benefits is $17,000. Kelly works 2,500 hours per year.
A. What is the hourly rate to Earnst & Earnst Consulting of employing Amber Kelly?
B. If Amber works 30 hours for client 252, what is the direct labor cost associated with that client?

Accepted Answer

The answer of Earnst & Earnst Consulting pays Amber Kelly...

Question 18

When used, raw materials

Accepted Answer

A) would be classified as direct materials. 
B) would be classified as direct labor. 
C) would be classified as indirect materials. 
D) cannot be determined with the information provided. 
A) would be classified as direct materials. 
B) would be classified as direct labor. 
C) would be classified as indirect materials. 
D) cannot be determined with the information provided.

Question 19

Which product costing system would be better for custom-order products?

Accepted Answer

A) Product costing system 
B) Company costing system 
C) Job costing system 
D) Overhead costing system 
A) Product costing system 
B) Company costing system 
C) Job costing system 
D) Overhead costing system

Question 20

When direct materials are requisitioned, they flow directly into

Accepted Answer

A) cost of goods sold account. 
B) finished goods inventory account. 
C) work in process inventory account. 
D) manufacturing overhead account. 
A) cost of goods sold account. 
B) finished goods inventory account. 
C) work in process inventory account. 
D) manufacturing overhead account.

Payroll-related costs for factory employees who do not work directly on the product are considered

Which of the following is not a way in which management can use job cost information?

In the basic flow of inventory through a manufacturing system, which of the following occurs last in the job costing system?

How do you calculate the predetermined manufacturing overhead rate used to allocate manufacturing overhead costs?

Assigning manufacturing overhead costs and other indirect costs is called

The amount of overallocation or underallocation should be reflected as an adjustment to cost of goods sold under what circumstances?

If manufacturing overhead has been overallocated during the period, and most of the jobs produced have been sold, then

To allocate manufacturing overhead to specific jobs, the needed journal entry would include a

A graphic designer spends 44 hours working with client #130 during May. Her basic annual salary is $61,940, while her annual salary plus benefits totals $81,040 per year. She typically works 50 hours a week for 48 weeks each year. What is the hourly cost to the firm that employs her?

The ________ is the hourly price charged to clients for professional labor.

If the actual amount of the manufacturing overhead allocation base is greater than the estimated amount of the allocation base used to calculate the predetermined rate, then manufacturing overhead must have been underallocated.

The difference between the sales price and the job cost is

An underallocation of manufacturing overhead is typically corrected by decreasing Cost of Goods Sold on the income statement.

When used, raw materials

Which product costing system would be better for custom-order products?

When direct materials are requisitioned, they flow directly into

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters

Exam 3: Job Costing

Payroll-related costs for factory employees who do not work directly on the product are considered

Which of the following is not a way in which management can use job cost information?

In the basic flow of inventory through a manufacturing system, which of the following occurs last in the job costing system?

How do you calculate the predetermined manufacturing overhead rate used to allocate manufacturing overhead costs?

Assigning manufacturing overhead costs and other indirect costs is called

The amount of overallocation or underallocation should be reflected as an adjustment to cost of goods sold under what circumstances?

If manufacturing overhead has been overallocated during the period, and most of the jobs produced have been sold, then

To allocate manufacturing overhead to specific jobs, the needed journal entry would include a

A graphic designer spends 44 hours working with client #130 during May. Her basic annual salary is $61,940, while her annual salary plus benefits totals $81,040 per year. She typically works 50 hours a week for 48 weeks each year. What is the hourly cost to the firm that employs her?

The ________ is the hourly price charged to clients for professional labor.

If the actual amount of the manufacturing overhead allocation base is greater than the estimated amount of the allocation base used to calculate the predetermined rate, then manufacturing overhead must have been underallocated.

The difference between the sales price and the job cost is

An underallocation of manufacturing overhead is typically corrected by decreasing Cost of Goods Sold on the income statement.

When used, raw materials

Which product costing system would be better for custom-order products?

When direct materials are requisitioned, they flow directly into

Introduction to Managerial Accounting

Building Blocks of Managerial Accounting

Activity-Based Costing, Lean Operations, and the Costs of Quality

Process Costing

Cost Behavior

Cost-Volume-Profit Analysis

Relevant Costs for Short-Term Decisions

The Master Budget

Performance Evalulation

Standard Costs and Variances

Capital Investment Decisions and the Time Value of Money

Statement of Cash Flows

Financial Statement Analysis

Sustainability

Filters