Question 1

What is the cost of goods manufactured?

Accepted Answer

A)  $114,000. 
B)  $133,000. 
C)  $121,000. 
D)  $138,000.CGM = 66,000 + 27,000 + 21,000 + 20,000 - 13,000 = $121,000 
A)  $114,000. 
B)  $133,000. 
C)  $121,000. 
D)  $138,000.CGM = 66,000 + 27,000 + 21,000 + 20,000 - 13,000 = $121,000

Question 2

Which of the following companies is most likely to use a job-order costing system rather than a process costing system?

Accepted Answer

A)  Fast food restaurant 
B)  Shipbuilder 
C)  Crude oil refinery 
D)  Candy maker 
A)  Fast food restaurant 
B)  Shipbuilder 
C)  Crude oil refinery 
D)  Candy maker

Question 3

In order to improve the accuracy of unit costs,most companies recalculate the predetermined overhead rate each month.

Accepted Answer

A) True 
 B)False

Question 4

Normally,a job cost sheet is NOT prepared for a job until after the job has been completed.

Accepted Answer

A) True 
 B)False

Question 5

In a job-order costing system,when a job remains incomplete at the end of a period,how is the amount of overhead cost that has been applied to that job treated?

Accepted Answer

A)  It is deducted on the Income Statement as overapplied overhead. 
B)  It is closed out to Cost of Goods Sold. 
C)  It is transferred to Finished Goods. 
D)  It is part of the ending balance of the Work in Process inventory account. 
A)  It is deducted on the Income Statement as overapplied overhead. 
B)  It is closed out to Cost of Goods Sold. 
C)  It is transferred to Finished Goods. 
D)  It is part of the ending balance of the Work in Process inventory account.

Question 6

A public accounting firm would have cost elements involving direct labour and overhead but not raw materials.

Accepted Answer

A) True 
 B)False

Question 7

What would be the ending Work in Process account balance?

Accepted Answer

A)  $2,000. 
B)  $13,000. 
C)  $50,000. 
D)  $55,000. 
A)  $2,000. 
B)  $13,000. 
C)  $50,000. 
D)  $55,000.

Question 8

Daffe Corporation uses direct labor-hours in setting its predetermined overhead rate.At the beginning of the year,the total estimated manufacturing overhead was $165,600.At the end of the year,actual direct labor-hours for the year were 11,900 hours,manufacturing overhead for the year was overapplied by $10,760,and the actual manufacturing overhead was $160,600.
Required:
What must have been the predetermined overhead rate for the year?

Accepted Answer

@#IMG-DLM& 
(Applied manufacturing overhead is gre

Question 9

The following journal entry would be made to apply overhead cost to jobs in a job-order costing system:

Accepted Answer

A) True 
 B)False

Question 10

When completed goods are sold,the transaction is recorded as a debit to Cost of Goods Sold and a credit to Work in Process.

Accepted Answer

A) True 
 B)False

Question 11

Knowlton Company applies overhead to completed jobs on the basis of 70% of direct labour cost.If Job 501 shows $21,000 of manufacturing overhead applied,what was the direct labour cost on the job?

Accepted Answer

A)  $14,700. 
B)  $21,000. 
C)  $30,000. 
D)  $27,300. 
A)  $14,700. 
B)  $21,000. 
C)  $30,000. 
D)  $27,300.

Question 12

The Samuelson Company uses a job-order costing system.The following data were recorded for June:  
Overhead is charged to production at 70% of the direct materials cost.Jobs 475,477,and 478 have been delivered to the customer.What was Samuelson's Work in Process inventory balance for Job 476 on June 30?

Accepted Answer

A)  $6,450. 
B)  $2,860. 
C)  $2,300. 
D)  $2,720. 
A)  $6,450. 
B)  $2,860. 
C)  $2,300. 
D)  $2,720.

Question 13

Harrell Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs.At the beginning of the year,the company estimated its total manufacturing overhead cost at $400,000 and its direct labour hours at 100,000 hours.The actual overhead cost incurred during the year was $350,000 and the actual direct labour hours incurred on jobs during the year was 90,000 hours.What would be the manufacturing overhead for the year?

Accepted Answer

A)  $10,000 underapplied. 
B)  $10,000 overapplied. 
C)  $50,000 underapplied. 
D)  $50,000 overapplieD.
Rate = $400,000/100,000 hrs.= $4/hr.Actual OH = $350,000 therefore overapplied by $10,000 
A)  $10,000 underapplied. 
B)  $10,000 overapplied. 
C)  $50,000 underapplied. 
D)  $50,000 overapplieD.
Rate = $400,000/100,000 hrs.= $4/hr.Actual OH = $350,000 therefore overapplied by $10,000

Question 14

A credit balance in the Manufacturing Overhead account at the end of the year means that overhead was underapplied.

Accepted Answer

A) True 
 B)False

Question 15

What was the cost of raw materials purchased during the year?

Accepted Answer

A)  $411,000. 
B)  $360,000. 
C)  $316,000. 
D)  $336,000. 
A)  $411,000. 
B)  $360,000. 
C)  $316,000. 
D)  $336,000.

Question 16

What was the underapplied or over applied overhead for the year?

Accepted Answer

A)  $6,000 overapplied. 
B)  $4,000 underapplied. 
C)  $10,000 underapplied. 
D)  $10,000 overapplieD.
Applied = 24,000 hrs @ $2.50/hr.= $60,000 - 54,000 actual = $6,000 overapplieD. 
A)  $6,000 overapplied. 
B)  $4,000 underapplied. 
C)  $10,000 underapplied. 
D)  $10,000 overapplieD.
Applied = 24,000 hrs @ $2.50/hr.= $60,000 - 54,000 actual = $6,000 overapplieD.

Question 17

In a normal job-order costing system,the Work in Process inventory account contains the actual costs of direct labour,direct materials,and manufacturing overhead incurred on partially completed jobs.

Accepted Answer

A) True 
 B)False

Question 18

Y Company reported the following actual costs data for the year:   
Y Company used a predetermined overhead rate based on direct labour hours.Estimated annual manufacturing overhead cost and direct labour hours were $150,000 and 20,000,respectively.
Required:
a.What was the pre-determined manufacturing overhead rate?
b.Calculate the cost of goods manufactured.
c.What was the cost of goods sold before adjusting for any under or overapplied overhead?
d.By how much was manufacturing overhead cost under or overapplied?
e.Prepare a summary journal entry to close any under or overapplied manufacturing overhead cost to cost of goods sold.Is such an entry appropriate in this situation? Why or why not?
f.Analyze the under or overapplied manufacturing overhead costs calculated in part c above into two separate components: amount due to incorrect estimate of the annual manufacturing overhead costs and an amount due to incorrect estimate of the annual direct labour cost.

Accepted Answer

@#IMG-DLM& 
 @#IMG-DLM& 
*Actual DLHs = $320,000/$20 @#IMG-DLM& 
 @#IMG-DLM& 
 @#IMG-DLM&

Question 19

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year.Actual costs and activity during the year were:  
What was the under- or overapplied overhead last year?

Accepted Answer

A)  $1,000 underapplied. 
B)  $1,000 overapplied. 
C)  $2,000 underapplied. 
D)  $3,000 overapplieD.
(24,000@ $2)- 47,000 = $1,000 overapplied 
A)  $1,000 underapplied. 
B)  $1,000 overapplied. 
C)  $2,000 underapplied. 
D)  $3,000 overapplieD.
(24,000@ $2)- 47,000 = $1,000 overapplied

Question 20

(Appendix 5A)Which level of activity,if used to set a predetermined overhead rate,may encourage managers to increase selling prices as demand falls?

Accepted Answer

A)  Budgeted level of activity. 
B)  Actual level of activity. 
C)  Capacity (maximum)level of activity. 
D)  Normal level of activity. 
A)  Budgeted level of activity. 
B)  Actual level of activity. 
C)  Capacity (maximum)level of activity. 
D)  Normal level of activity.

What is the cost of goods manufactured?

Which of the following companies is most likely to use a job-order costing system rather than a process costing system?

In order to improve the accuracy of unit costs,most companies recalculate the predetermined overhead rate each month.

Normally,a job cost sheet is NOT prepared for a job until after the job has been completed.

In a job-order costing system,when a job remains incomplete at the end of a period,how is the amount of overhead cost that has been applied to that job treated?

A public accounting firm would have cost elements involving direct labour and overhead but not raw materials.

What would be the ending Work in Process account balance?

The following journal entry would be made to apply overhead cost to jobs in a job-order costing system:

When completed goods are sold,the transaction is recorded as a debit to Cost of Goods Sold and a credit to Work in Process.

Knowlton Company applies overhead to completed jobs on the basis of 70% of direct labour cost.If Job 501 shows $21,000 of manufacturing overhead applied,what was the direct labour cost on the job?

A credit balance in the Manufacturing Overhead account at the end of the year means that overhead was underapplied.

What was the cost of raw materials purchased during the year?

What was the underapplied or over applied overhead for the year?

In a normal job-order costing system,the Work in Process inventory account contains the actual costs of direct labour,direct materials,and manufacturing overhead incurred on partially completed jobs.

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year.Actual costs and activity during the year were: What was the under- or overapplied overhead last year?

(Appendix 5A)Which level of activity,if used to set a predetermined overhead rate,may encourage managers to increase selling prices as demand falls?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Process Costing

Activity-Based Costing: a Tool to Aid Decision Making

Variable Costing: a Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis Online

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Exam 5: Systems Design: Job-Order Costing

What is the cost of goods manufactured?

Which of the following companies is most likely to use a job-order costing system rather than a process costing system?

In order to improve the accuracy of unit costs,most companies recalculate the predetermined overhead rate each month.

Normally,a job cost sheet is NOT prepared for a job until after the job has been completed.

In a job-order costing system,when a job remains incomplete at the end of a period,how is the amount of overhead cost that has been applied to that job treated?

A public accounting firm would have cost elements involving direct labour and overhead but not raw materials.

What would be the ending Work in Process account balance?

The following journal entry would be made to apply overhead cost to jobs in a job-order costing system:

When completed goods are sold,the transaction is recorded as a debit to Cost of Goods Sold and a credit to Work in Process.

Knowlton Company applies overhead to completed jobs on the basis of 70% of direct labour cost.If Job 501 shows $21,000 of manufacturing overhead applied,what was the direct labour cost on the job?

A credit balance in the Manufacturing Overhead account at the end of the year means that overhead was underapplied.

What was the cost of raw materials purchased during the year?

What was the underapplied or over applied overhead for the year?

In a normal job-order costing system,the Work in Process inventory account contains the actual costs of direct labour,direct materials,and manufacturing overhead incurred on partially completed jobs.

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year.Actual costs and activity during the year were: What was the under- or overapplied overhead last year?

(Appendix 5A)Which level of activity,if used to set a predetermined overhead rate,may encourage managers to increase selling prices as demand falls?

Managerial Accounting and the Business Environment

Cost Terms, Concepts, and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Process Costing

Activity-Based Costing: a Tool to Aid Decision Making

Variable Costing: a Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis Online

Filters