Question 1

Traditionally companies have used direct labor hours,direct labor costs and machine hours as the primary cost drivers of manufacturing overhead costs.

Accepted Answer

A) True 
 B)False

Question 2

The journal entry to issue $600 of direct materials and $30 of indirect materials to production involves debit(s)to the ________.

Accepted Answer

A)  Work-in-Process Inventory account for $600 and Finished Goods Inventory account for $30 
B)  Manufacturing Overhead account for $630 
C)  Work-in-Process Inventory account for $600 and Manufacturing Overhead account for $30 
D)  Work-in-Process Inventory account for $630 
A)  Work-in-Process Inventory account for $600 and Finished Goods Inventory account for $30 
B)  Manufacturing Overhead account for $630 
C)  Work-in-Process Inventory account for $600 and Manufacturing Overhead account for $30 
D)  Work-in-Process Inventory account for $630

Question 3

Uniq Works purchased raw materials amounting to $126,000 on account and $16,000 for cash.The materials will be used to manufacture upholstery for furniture manufacturers on a contract basis.Which of the following journal entries correctly records this transaction?

Accepted Answer

A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Payable } & 126,000 & \
\hline \text { Cash } & 16,000 & \
\hline \text { Raw Materials Inventory } & & 142,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { |l| r | r | } 
\hline \text { Finished Goods Inventory } & 142,000 & \
\hline \text { Accounts Payable } & & 142,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { |l | r | r | } 
\hline \text { Work-in-Process Inventory } & 142,000 & \
\hline \text { Accounts Payable } & & 142,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Raw Materials Inventory } & 142,000 & \
\hline \text { Cash } & & 16,000 \
\hline \text { Accounts Payable } & & 126,000 \
\hline
\end{array}$$ 
A)  $$\begin{array} { | l | r | r | } 
\hline \text { Accounts Payable } & 126,000 & \
\hline \text { Cash } & 16,000 & \
\hline \text { Raw Materials Inventory } & & 142,000 \
\hline
\end{array}$$ 
B)  $$\begin{array} { |l| r | r | } 
\hline \text { Finished Goods Inventory } & 142,000 & \
\hline \text { Accounts Payable } & & 142,000 \
\hline
\end{array}$$ 
C)  $$\begin{array} { |l | r | r | } 
\hline \text { Work-in-Process Inventory } & 142,000 & \
\hline \text { Accounts Payable } & & 142,000 \
\hline
\end{array}$$ 
D)  $$\begin{array} { | l | r | r | } 
\hline \text { Raw Materials Inventory } & 142,000 & \
\hline \text { Cash } & & 16,000 \
\hline \text { Accounts Payable } & & 126,000 \
\hline
\end{array}$$

Question 4

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 5

Which of the following will be categorized as a manufacturing overhead cost?

Accepted Answer

A)  depreciation on factory plant and equipment 
B)  wages paid to assembly line workers 
C)  administration charges of showroom 
D)  cost of direct materials used 
A)  depreciation on factory plant and equipment 
B)  wages paid to assembly line workers 
C)  administration charges of showroom 
D)  cost of direct materials used

Question 6

Based on the following information,prepare a Schedule of Cost of Goods Manufactured and a multi-step Income Statement for Junaluska Company for the year ended December 31,2020
 $$\begin{array} { | l | r | } 
\hline \text { Beginning Work-in-Process Inventory, Jan. 1 } & \$ 60,000 \
\hline \text { Ending Work-in-Process Inventory, Dec. 31 } & 40,000 \
\hline \text { Beginning Finished Goods Inventory, Jan. 1 } & 50,000 \
\hline \text { Ending Finished Goods Inventory, Dec. 31 } & 20,000 \
\hline \text { Net Sales Revenue } & 1,800,000 \
\hline \text { Selling and Administrative Expenses } & 500,000 \
\hline \text { Direct Labor } & 300,000 \
\hline \text { Manufacturing Overhead; actual and allocated } & 400,000 \
\hline \text { Direct Materials Used } & 200,000 \
\hline \text { Income Tax Expense } & 70,000 \
\hline
\end{array}$$

Accepted Answer

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

Question 7

At the beginning of the year,Springfield Manufacturing had the following account balances:           The following additional details are provided for the year:
$$\begin{array} { | l | r | } 
\hline \text { Direct materials placed in production } & \$ 83,000 \
\hline \text { Direct labor incurred } & 190,000 \
\hline \text { Manufacturing overhead incurred } & 300,000 \
\hline \text { Manufacturing overhead allocated to production } & 295,000 \
\hline \text { Cost of jobs completed and transferred } & 505,000 \
\hline \text { Total revenue } & 753,000 \
\hline \text { Cost of goods sold (before adjustment) } & 442,300 \
\hline
\end{array}$$ 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 $437,300 
B)  debit of $447,300 
C)  credit of $447,300 
D)  debit of $442,300 
A)  debit of $437,300 
B)  debit of $447,300 
C)  credit of $447,300 
D)  debit of $442,300

Question 8

Seal Financial Advisors provides accounting and finance assistance to customers in the retail business.Seal has four professionals on staff and an office with six clerical staff.Total compensation,including benefits,for the professional staff runs about $571,000 per year,and normal billable hours are 8100 hours per year.The professional staff keep detailed time sheets organized by client number.The total office and administrative costs for the year are $754,000.Seal allocates office and administrative costs to clients monthly,using a predetermined overhead allocation rate based on billable hours.What is the predetermined overhead allocation rate that Seal will use for office and administrative costs? (Round your answer to the nearest cent.)

Accepted Answer

A)  $93.09 per hour 
B)  $22.59 per hour 
C)  $70.49 per hour 
D)  $163.58 per hour 
A)  $93.09 per hour 
B)  $22.59 per hour 
C)  $70.49 per hour 
D)  $163.58 per hour

Question 9

Davie,Inc.used 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: $$\begin{array} { | l | l | } 
\hline \text { Actual manufacturing overhead } & \$ 700,000 \
\hline \text { Allocated manufacturing overhead } & \$ 825,000 \
\hline
\end{array}$$ What was the number of direct labor hours worked during the year? (Round any intermediate calculations to two decimal places,and your final answer to the nearest whole number.)

Accepted Answer

A)  146,087 hours 
B)  282,857 hours 
C)  240,084 hours 
D)  172,234 hours 
A)  146,087 hours 
B)  282,857 hours 
C)  240,084 hours 
D)  172,234 hours

Question 10

During the year,a company incurred $498,000 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 11

Define a process costing system and list two types of businesses that would use a process costing system.

Accepted Answer

A process costing system is an accountin

Question 12

Patrick Manufacturing Systems uses job order costing and a perpetual inventory system.When recording the sale of a job,which account(s)is(are)credited?

Accepted Answer

Sales Revenue and Fi

Question 13

On June 30,Caroline,Inc.finished Job 750 with total job costs of $4400 and transferred the costs to Finished Goods Inventory.On July 6,Caroline sold goods from Job 750 to a customer for $6000 cash.Which of the following is the correct entry needed to record the revenue earned? Assume the perpetual inventory system is used.

Accepted Answer

A)  debit Finished Goods Inventory $4400 and credit Sales Revenue $4400 
B)  debit Cash $6000 and credit Sales Revenue $6000 
C)  debit Sales Revenue $6000 and credit Cash $6000 
D)  debit Cost of Goods Sold $4400 and credit Sales Revenue $4400 
A)  debit Finished Goods Inventory $4400 and credit Sales Revenue $4400 
B)  debit Cash $6000 and credit Sales Revenue $6000 
C)  debit Sales Revenue $6000 and credit Cash $6000 
D)  debit Cost of Goods Sold $4400 and credit Sales Revenue $4400

Question 14

South Bay Manufacturing began business on January 1.During its first year of operation,South Bay worked on five industrial jobs and reported the following information at year-end: $\begin{array}{|l|r|r|r|r|r|} 
\hline& \text { Job 1 } & \text { Job } 2 & \text { Job 3 } & \text { Job 4 } & \text { Job 5 } \
\hline \text { Direct Materials } & \$ 1000 & \$ 8500 & \$ 4,000 & \$ 3,500 & \$ 1,500 \
\hline \text { Direct Labor } & \$ 12,000 & \$ 20,100 & \$ 13,000 & \$ 12,000 & \$ 800 \
\hline \text { Allocated Mfg, Overhead } & \$ 1700 & \$ 6600 & \$ 2,500 & \$ 7,500 & \$ 200 \
\hline & & & & & \text { Not } \
\hline \text { Tob completed: } & \text { Jur } 30 & \text { Sep } 1 & \text { Oct } 15 & \text { Nov } 1 & \text { completed } \
\hline \text { Tob sold: } & \text { Jul } 10 & \text { Sep } 12 & \text { Not sold } & \text { Not sold } & \text { N/A } \
\hline \text { Revenues: } & \$ 39,000 & \$ 39,000 & \text { N/A } & \text { N/A } & \text { N/A } \
\hline
\end{array}$
 South Bay's allocation of overhead costs left a debit balance of $1400 in the Manufacturing Overhead account,which was adjusted to zero at year-end.What was the amount of gross profit earned during the year?

Accepted Answer

A)  $26,700 
B)  $2400 
C)  $28,100 
D)  $22,900 
A)  $26,700 
B)  $2400 
C)  $28,100 
D)  $22,900

Question 15

When raw materials are requisitioned for a job,the Raw Materials Inventory account is debited.

Accepted Answer

A) True 
 B)False

Question 16

Altima,Inc.finished Job A40 on the last working day of the year.It utilized $370 of direct materials and $3420 of direct labor.Altima uses a predetermined overhead allocation rate based on direct labor costs,which has been fixed at 40%.The entry to record the completion of the job should involve a ________.

Accepted Answer

A)  debit to Finished Goods Inventory $5158 and a credit to Materials Inventory $5158 
B)  debit to Cost of Goods Sold $5158 and a credit to Finished Goods Inventory $5158 
C)  debit to Finished Goods Inventory $5158 and a credit to Work-in-Process Inventory $5158 
D)  debit to Work-in-Process Inventory $5158 and a credit to Finished Goods Inventory $5158 
A)  debit to Finished Goods Inventory $5158 and a credit to Materials Inventory $5158 
B)  debit to Cost of Goods Sold $5158 and a credit to Finished Goods Inventory $5158 
C)  debit to Finished Goods Inventory $5158 and a credit to Work-in-Process Inventory $5158 
D)  debit to Work-in-Process Inventory $5158 and a credit to Finished Goods Inventory $5158

Question 17

The Carlin Fabrication Plant suffered a fire incident at the beginning of the year,which resulted in the loss of property including the accounting records.Some data for the year were retrieved,and extracts from it are shown below: $$\begin{array} { | l | l | } 
\hline\begin{array} { l }  
\text { Total manufacturing overhead costs estimated at the beginning } \
\text { of the year }
\end{array} & \$ 100,700 \
\hline \text { Total direct labor costs estimated at the beginning of the year } & \$ 185,000 \
\hline \text { Total direct labor hours estimated at the beginning of the year } & 3000 \text { direct labor hours } \
\hline \text { Total machine hours estimated at the beginning of the year } & 9600 \text { machine hours } \
\hline \text { Actual manufacturing overhead costs for the year } & \$ 96,900 \
\hline \text { Actual direct labor costs for the year } & \$ 147,000 \
\hline \text { Actual direct labor hours for the year } & 2900 \text { direct labor hours } \
\hline \text { Actual machine hours for the year } & 10,000 \text { machine hours } \
\hline
\end{array}$$ The company's manufacturing overhead allocation is based on the number of machine hours.What is the amount of manufacturing overhead cost allocated to Work-in-Process Inventory during the year? (Round any intermediate calculations to two decimal places,and your final answer to the nearest dollar.)

Accepted Answer

A)  $30,419 
B)  $335,666 
C)  $104,900 
D)  $192,708 
A)  $30,419 
B)  $335,666 
C)  $104,900 
D)  $192,708

Question 18

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 19

For each of the following accounts,indicate what event causes the account to increase and to decrease.The answer is not debit or credit.
 $$\begin{array} { | l | l | l | } 
\hline \text { Account } & \text { Is increased by: } & \text { Is decreased by: } \
\hline \text { Raw Materials } & & \
\text { Inventory } & & \
\hline \text { Work-in-Process } & & \
\text { Inventory } & & \
\hline \text { Finished Goods } & & \
\text { Inventory } & & \
\hline \text { Cost of Goods Sold } & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following accounts,indicate what...

Question 20

What is an advantage of using a raw materials subsidiary ledger?

Accepted Answer

A)  It includes only one large record for all materials used, so materials details are combined into one location. 
B)  It is less detailed than the general ledger, giving a broader overview for decision purposes. 
C)  It allows for better control of inventory because it tracks each type of material used in production. 
D)  It contributes to easier recordkeeping since the sum of the balances of the subsidiary ledger do not have to match general ledger totals. 
A)  It includes only one large record for all materials used, so materials details are combined into one location. 
B)  It is less detailed than the general ledger, giving a broader overview for decision purposes. 
C)  It allows for better control of inventory because it tracks each type of material used in production. 
D)  It contributes to easier recordkeeping since the sum of the balances of the subsidiary ledger do not have to match general ledger totals.

Traditionally companies have used direct labor hours,direct labor costs and machine hours as the primary cost drivers of manufacturing overhead costs.

The journal entry to issue $600 of direct materials and $30 of indirect materials to production involves debit(s)to the ________.

Uniq Works purchased raw materials amounting to $126,000 on account and $16,000 for cash.The materials will be used to manufacture upholstery for furniture manufacturers on a contract basis.Which of the following journal entries correctly records this transaction?

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

Which of the following will be categorized as a manufacturing overhead cost?

During the year,a company incurred $498,000 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.

Define a process costing system and list two types of businesses that would use a process costing system.

Patrick Manufacturing Systems uses job order costing and a perpetual inventory system.When recording the sale of a job,which account(s)is(are)credited?

When raw materials are requisitioned for a job,the Raw Materials Inventory account is debited.

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.

For each of the following accounts,indicate what event causes the account to increase and to decrease.The answer is not debit or credit. Account Is increased by: Is decreased by: Raw Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold

What is an advantage of using a raw materials subsidiary ledger?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

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

Traditionally companies have used direct labor hours,direct labor costs and machine hours as the primary cost drivers of manufacturing overhead costs.

The journal entry to issue $600 of direct materials and $30 of indirect materials to production involves debit(s)to the ________.

Uniq Works purchased raw materials amounting to $126,000 on account and $16,000 for cash.The materials will be used to manufacture upholstery for furniture manufacturers on a contract basis.Which of the following journal entries correctly records this transaction?

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

Which of the following will be categorized as a manufacturing overhead cost?

During the year,a company incurred $498,000 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.

Define a process costing system and list two types of businesses that would use a process costing system.

Patrick Manufacturing Systems uses job order costing and a perpetual inventory system.When recording the sale of a job,which account(s)is(are)credited?

When raw materials are requisitioned for a job,the Raw Materials Inventory account is debited.

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.

For each of the following accounts,indicate what event causes the account to increase and to decrease.The answer is not debit or credit. Account Is increased by: Is decreased by: Raw Materials Inventory Work-in-Process Inventory Finished Goods Inventory Cost of Goods Sold

What is an advantage of using a raw materials subsidiary ledger?

Accounting and the Business Environment

Recording Business Transactions

The Adjusting Process

Completing the Accounting Cycle

Merchandising Operations

Merchandise Inventory

Accounting Information Systems

Internal Control and Cash

Receivables

Plant Assets,natural Resources,and Intangibles

Current Liabilities and Payroll

Partnerships

Corporations

Long-Term Liabilities

Investments

The Statement of Cash Flows

Financial Statement Analysis

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