Question 1

When goods are transferred from the Finished Goods Inventory account to the Cost of Goods Sold account,the product costs move from the balance sheet to the income statement.

Accepted Answer

A) True 
 B)False

Question 2

The cost of goods manufactured is recorded with a debit to the Finished Goods Inventory account and a credit to the Work-in-Process Inventory account.

Accepted Answer

A) True 
 B)False

Question 3

Why would the manager of a service company need to use job order costing?

Accepted Answer

Service companies,like manufac

Question 4

Jupiter Manufacturing began business on January 1.During its first year of operation,Jupiter worked on five industrial jobs and reported the following information at year-end: $$\begin{array} { | l | r | r | r | r | r | } 
\hline & \text { Job 1 } & \text { Job 2 } & \text { Job 3 } & \text { Job 4 } & \text { Job 5 } \
\hline \text { Direct Materials } & 1,000 & 7,500 & 4,000 & 3,500 & 1,500 \
\hline \text { Direct Labor } & 12,000 & 20,000 & 13,000 & 12,000 & 900 \
\hline \text { Allocated Mfg. Overhead } & 1,500 & 6,000 & 2,500 & 7,500 & 500 \
\hline& & & & & \text { Not } \
 \text { Job completed: } & \text { Jun 30 } & \text { Sep 1 } & \text { Oct 15 } & \text { Nov 1 } & \text { completed } \
\hline \text { Job sold: } & \text { Jul 10 } & \text { Sep 12 } & \text { Not sold } & \text { Not sold } & \text { N/A } \
\hline \text { Revenues: } & 25,000 & 39,000 & \text { N/A } & \text { N/A } & \text { N/A } \
\hline
\end{array}$$ 
What was the balance in Work-in-Process Inventory at year-end?

Accepted Answer

A)  $2,900 
B)  $2,400 
C)  $2,000 
D)  $1,400 
A)  $2,900 
B)  $2,400 
C)  $2,000 
D)  $1,400

Question 5

Felton Quality Productions uses a predetermined overhead allocation rate based on machine hours.It has provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Actual manufacturing overhead costs incurred } & \$ 100,000 \
\hline \text { Manufacturing overhead costs allocated to production } & \$ 46,000 \
\hline \text { Actual direct materials cost } & \$ 230,000 \
\hline \text { Actual direct labor cost } & \$ 50,000 \
\hline \text { Actual machine hours } & 32,000 \text { hours } \
\hline
\end{array}$$ 
Based on the above information,calculate the predetermined overhead allocation rate applied by Felton Quality.(Round your answer to the nearest cent.)

Accepted Answer

A)  $1.44 per machine hour 
B)  $3.13 per machine hour 
C)  $7.19 per machine hour 
D)  $1.56 per machine hour 
A)  $1.44 per machine hour 
B)  $3.13 per machine hour 
C)  $7.19 per machine hour 
D)  $1.56 per machine hour

Question 6

Archangel Manufacturing calculated a predetermined overhead allocation rate at the beginning of the year based on a percentage of direct labor costs.The production details for the year are given below: $\begin{array}{|l|r|}
\hline\text { Total manufacturing overhead costs estimated at the beginning } \
\text { of the year } & \$ 140,000 \
\hline \text { Total direct labor costs estimated at the beginning of the year } & \$ 320,000\
\hline& 12,000 \text { direct labor } \
\text { Total direct labor hours estimated at the beginning of the year }&\text {hours}\
\hline \text { Actual manufacturing overhead costs for the year } & \$ 160,000 \
\hline \text { Actual direct labor costs for the year } & \$ 370,000 \
\hline \text { Actual direct labor hours for the year } & 11,200 \text { direct labor } \
&\text { hours }\
\hline
\end{array}$
 Calculate the manufacturing overhead allocation rate for the year based on the above data.(Round your final answer to two decimal places.)

Accepted Answer

A)  43.75% 
B)  264.29% 
C)  11.43% 
D)  25.00% 
A)  43.75% 
B)  264.29% 
C)  11.43% 
D)  25.00%

Question 7

Halcyon,Inc.completed Job 10B last month.The cost details of Job 10B are shown below. $$\begin{array} { | l | r | } 
\hline \text { Direct labor cost } & \$ 2,140 \
\hline \text { Direct materials cost } & \$ 80 \
\hline \text { Machine hours } & 7 \text { hours } \
\hline \text { Direct labor hours } & 71 \text { hours } \
\hline \text { Predetermined overhead allocation rate per direct labor } & \
\text { hour } & \$ 34\ 
\hline
\end{array}$$ Calculate the total job cost for Job 10B.

Accepted Answer

A)  $2,458 
B)  $4,634 
C)  $2,220 
D)  $4,872 
A)  $2,458 
B)  $4,634 
C)  $2,220 
D)  $4,872

Question 8

Pluto Travel Services provided the following information:
Direct labor rate: $45 per hour
Predetermined overhead allocation rate for indirect costs: $24 per direct labor hour
Pluto is negotiating a job with a new client.The job will require 10 hours of direct labor.If Pluto wishes to have at least a 15% gross profit on the revenues,it needs to earn $716 of revenues.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following correctly describes the term cost driver?

Accepted Answer

A)  the inflation rate that causes costs to rise 
B)  the average inventory costs incurred at any point of time 
C)  the primary factor that causes a cost to be incurred 
D)  the total material, labor, and overhead costs of a completed job 
A)  the inflation rate that causes costs to rise 
B)  the average inventory costs incurred at any point of time 
C)  the primary factor that causes a cost to be incurred 
D)  the total material, labor, and overhead costs of a completed job

Question 10

Cost accounting systems are used ________.

Accepted Answer

A)  to accumulate product cost information 
B)  to accumulate and assign period costs to products 
C)  by manufacturing companies, not service companies 
D)  by stockholders for decision-making purposes 
A)  to accumulate product cost information 
B)  to accumulate and assign period costs to products 
C)  by manufacturing companies, not service companies 
D)  by stockholders for decision-making purposes

Question 11

Forsyth,Inc.uses estimated direct labor hours of 240,000 and estimated manufacturing overhead costs of $1,150,000 in establishing its predetermined overhead allocation rate for the year.Actual results showed the following: $$\begin{array} { | l | l | } 
\hline \text { Actual manufacturing overhead } & \$ 800,000 \
\hline \text { Allocated manufacturing overhead } & \$ 900,000 \
\hline
\end{array}$$ 
The number of direct labor hours worked during the period was ________.(Round any intermediate calculations to two decimal places,and your final answer to the nearest whole number.)

Accepted Answer

A)  240,000 hours 
B)  187,891 hours 
C)  167,015 hours 
D)  213,333 hours 
A)  240,000 hours 
B)  187,891 hours 
C)  167,015 hours 
D)  213,333 hours

Question 12

Zephyros Corporation had estimated manufacturing overhead costs for the coming year to be $312,000.The total estimated direct labor hours and machine hours for the coming year are 6,000 and 11,000,respectively.Manufacturing overhead costs are allocated based on direct labor hours.What is the predetermined overhead allocation rate? (Round your answer to the nearest cent.)

Accepted Answer

A)  $28.36 per machine hour 
B)  $18.35 per direct labor hour 
C)  $52.00 per direct labor hour 
D)  $1.83 per machine hour 
A)  $28.36 per machine hour 
B)  $18.35 per direct labor hour 
C)  $52.00 per direct labor hour 
D)  $1.83 per machine hour

Question 13

Which one of the following companies is most likely to use job order costing?

Accepted Answer

A)  a gold refinery 
B)  a law firm 
C)  a surfboard manufacturer 
D)  a soft drink company 
A)  a gold refinery 
B)  a law firm 
C)  a surfboard manufacturer 
D)  a soft drink company

Question 14

What is cost of goods sold? Describe the flow of this cost through the job order costing system.Your answer should include the accounts involved and whether the flow involves a debit or credit.

Accepted Answer

When the job is sold,the costs are trans

Question 15

During the year,a company incurred $500,000 of manufacturing overhead costs and allocated $510,000 of manufacturing overhead costs.At the year-end,the adjustment entry needed to adjust the Manufacturing Overhead account balance to zero will include a debit to Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Question 16

A process costing system is used when a company produces identical units through a series of production steps.

Accepted Answer

A) True 
 B)False

Question 17

On January 1,Alistair Manufacturing had a beginning balance in Work-in-Process Inventory of $160,000 and a beginning balance in Finished Goods Inventory of $24,000.During the year,Alistair incurred manufacturing costs of $202,000. During the year,the following transactions occurred:
Job C-62 was completed for a total cost of $141,000 and was sold for $157,000.
Job C-63 was completed for a total cost of $183,000 and was sold for $210,000.
Job C-64 was completed for a total cost $81,000 but was not sold as of year-end.
The Manufacturing Overhead account had an unadjusted credit balance of $24,000 and was adjusted to zero at year-end.
What was the amount of gross profit reported by Alistair at the end of the year?

Accepted Answer

A)  $43,000 
B)  $67,000 
C)  $16,000 
D)  $27,000 
A)  $43,000 
B)  $67,000 
C)  $16,000 
D)  $27,000

Question 18

At the beginning of the year,Springfield Manufacturing had the following account balances:           The following additional details are provided for the year:
$$\begin{array} { | l | l } 
\hline \text { Direct materials placed in production } & \$ 80,000 \
\hline \text { Direct labor incurred } & 192,000 \
\hline \text { Manufacturing overhead incurred } & 304,000 \
\hline \text { Manufacturing overhead allocated to production } & 292,000 \
\hline \text { Cost of jobs completed and transferred } & 505,000 \
\hline \text { Total revenue } & 755,000 \
\hline \text { Cost of goods sold } & 442,700 \
\hline
\end{array}$$ After recording all these transactions and adjusting for the over/underallocated overhead,the ending balance in the Cost of Goods Sold account is a ________.

Accepted Answer

A)  debit of $430,700 
B)  debit of $454,700 
C)  credit of $454,700 
D)  debit of $442,700 
A)  debit of $430,700 
B)  debit of $454,700 
C)  credit of $454,700 
D)  debit of $442,700

Question 19

Altec Designs makes fashion clothing and reports the following data for the month of September: $$\begin{array} { | l | r | } 
\hline \text { Salaries paid to seamstresses } & \$ 130,000 \
\hline \text { Wages paid to fabric cutters } & 30,000 \
\hline \text { Indirect wages } & 7,000 \
\hline
\end{array}$$ What is the journal entry to record the total labor charges incurred during September?

Accepted Answer

A)  $$\begin{array} { | c | r | r | } 
\hline \text { Work-in-Process Inventory } & 160,000 & \
\hline \text { Manufacturing Overhead } & 7,000 & \
\hline \text { Wages Payable } & & 167,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Work-in-Process Inventory } & 167,000 & \
\hline \text { Wages Payable } & & 167,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Wages Payable } & 167,000 & \
\hline \text { Finished Goods Inventory } & & 137,000 \
\hline \text { Work-in-Process Inventory } & & 30,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Manufacturing Overhead } & 167,000 & \
\hline \text { Wages Payable } & & 167,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | c | r | r | } 
\hline \text { Work-in-Process Inventory } & 160,000 & \
\hline \text { Manufacturing Overhead } & 7,000 & \
\hline \text { Wages Payable } & & 167,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { | c | r | r | } 
\hline \text { Work-in-Process Inventory } & 167,000 & \
\hline \text { Wages Payable } & & 167,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { | l | r | r | } 
\hline \text { Wages Payable } & 167,000 & \
\hline \text { Finished Goods Inventory } & & 137,000 \
\hline \text { Work-in-Process Inventory } & & 30,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | c | r | r | } 
\hline \text { Manufacturing Overhead } & 167,000 & \
\hline \text { Wages Payable } & & 167,000 \
\hline
\end{array}$$

Question 20

Underallocated overhead occurs when ________.

Accepted Answer

A)  allocated overhead costs are less than actual overhead costs 
B)  actual overhead costs are less than allocated overhead costs 
C)  estimated overhead costs are greater than budgeted 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)  estimated overhead costs are greater than budgeted overhead costs 
D)  estimated overhead costs are greater than actual overhead costs

When goods are transferred from the Finished Goods Inventory account to the Cost of Goods Sold account,the product costs move from the balance sheet to the income statement.

The cost of goods manufactured is recorded with a debit to the Finished Goods Inventory account and a credit to the Work-in-Process Inventory account.

Why would the manager of a service company need to use job order costing?

Halcyon,Inc.completed Job 10B last month.The cost details of Job 10B are shown below. Direct labor cost \ 2,140 Direct materials cost \ 80 Machine hours 7 hours Direct labor hours 71 hours Predetermined overhead allocation rate per direct labor hour \ 34 Calculate the total job cost for Job 10B.

Which of the following correctly describes the term cost driver?

Cost accounting systems are used ________.

Which one of the following companies is most likely to use job order costing?

What is cost of goods sold? Describe the flow of this cost through the job order costing system.Your answer should include the accounts involved and whether the flow involves a debit or credit.

During the year,a company incurred $500,000 of manufacturing overhead costs and allocated $510,000 of manufacturing overhead costs.At the year-end,the adjustment entry needed to adjust the Manufacturing Overhead account balance to zero will include a debit to Cost of Goods Sold.

A process costing system is used when a company produces identical units through a series of production steps.

Altec Designs makes fashion clothing and reports the following data for the month of September: Salaries paid to seamstresses \ 130,000 Wages paid to fabric cutters 30,000 Indirect wages 7,000 What is the journal entry to record the total labor charges incurred during September?

Underallocated overhead occurs when ________.

Introduction to Managerial Accounting

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters

Exam 19: Job Order Costing

When goods are transferred from the Finished Goods Inventory account to the Cost of Goods Sold account,the product costs move from the balance sheet to the income statement.

The cost of goods manufactured is recorded with a debit to the Finished Goods Inventory account and a credit to the Work-in-Process Inventory account.

Why would the manager of a service company need to use job order costing?

Halcyon,Inc.completed Job 10B last month.The cost details of Job 10B are shown below. Direct labor cost \ 2,140 Direct materials cost \ 80 Machine hours 7 hours Direct labor hours 71 hours Predetermined overhead allocation rate per direct labor hour \ 34 Calculate the total job cost for Job 10B.

Which of the following correctly describes the term cost driver?

Cost accounting systems are used ________.

Which one of the following companies is most likely to use job order costing?

What is cost of goods sold? Describe the flow of this cost through the job order costing system.Your answer should include the accounts involved and whether the flow involves a debit or credit.

During the year,a company incurred $500,000 of manufacturing overhead costs and allocated $510,000 of manufacturing overhead costs.At the year-end,the adjustment entry needed to adjust the Manufacturing Overhead account balance to zero will include a debit to Cost of Goods Sold.

A process costing system is used when a company produces identical units through a series of production steps.

Altec Designs makes fashion clothing and reports the following data for the month of September: Salaries paid to seamstresses \ 130,000 Wages paid to fabric cutters 30,000 Indirect wages 7,000 What is the journal entry to record the total labor charges incurred during September?

Underallocated overhead occurs when ________.

Introduction to Managerial Accounting

Process Costing

Cost-Volume-Profit Analysis

Master Budgets

Flexible Budgets and Standard Cost Systems

Cost Allocation and Responsibility Accounting

Short-Term Business Decisions

Capital Investment Decisions

Filters