Question 1

Which of the following is the correct order of the four steps of tracking product costs?

Accepted Answer

A) assign → accumulate → allocate → adjust 
B) accumulate → assign → allocate → adjust 
C) adjust → allocate → accumulate → assign 
D) allocate → adjust → accumulate → assign 
A) assign → accumulate → allocate → adjust 
B) accumulate → assign → allocate → adjust 
C) adjust → allocate → accumulate → assign 
D) allocate → adjust → accumulate → assign

Question 2

Manufacturing overhead costs are allocated to the Work-in-Process Inventory account by a debit to the Manufacturing Overhead account.

Accepted Answer

A) True 
 B)False

Question 3

Accounting firms,building contractors,and healthcare providers use process costing.

Accepted Answer

A) True 
 B)False

Question 4

The journal entry to record indirect labor costs incurred involves a debit to the ________.

Accepted Answer

A) Manufacturing Overhead account 
B) Wages Payable account 
C) Finished Goods Inventory account 
D) Work-in-Process Inventory account 
A) Manufacturing Overhead account 
B) Wages Payable account 
C) Finished Goods Inventory account 
D) Work-in-Process Inventory account

Question 5

What causes manufacturing overhead to be underallocated? When manufacturing overhead is underallocated,will the Manufacturing Overhead account have a debit or a credit balance?

Accepted Answer

Manufacturing overhead is underallocated

Question 6

Broxsie Fabrication,Inc.issued $60,000 of direct materials and $15,500 of indirect materials to production.Prepare the journal entry to record the transaction.

Accepted Answer

The answer of Broxsie Fabrication,Inc.issued $60,000 of direct materials and...

Question 7

When direct materials are received on the production floor,they are recorded on the job cost record.

Accepted Answer

A) True 
 B)False

Question 8

Brink Financial Advisors provides accounting and finance assistance to customers in the retail business.Brink has four professionals on staff,plus an office with six clerical staff.Total compensation,including benefits,for the professional staff runs up to $800,000 per year,and normal billable hours are about 3,400 billable hours per year.The professional staff keep detailed time sheets organized by client number.The total office and administrative costs for the year are $290,000.
Brink allocates office and administrative costs to clients monthly,using a predetermined overhead allocation rate based on billable hours.During July,Brink's professionals spent 43 hours on their client,Waseca Sales.Brink adds a 30% markup on its costs to calculate the amount billed to the customer.How much gross profit did Brink earn from Waseca Sales in July? (Round any intermediate calculations to two decimal places,and your final answer to the nearest whole number. )

Accepted Answer

A) $13,784.94 
B) $3,035.241 
C) $3,667 
D) $4,135 
A) $13,784.94 
B) $3,035.241 
C) $3,667 
D) $4,135

Question 9

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 10

Work-in-Process Inventory is debited when indirect labor costs are incurred in a job order costing system.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

Accounts Receivable

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

When goods are transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account,________.

Accepted Answer

A) total assets and total liabilities increase by the same amount 
B) total assets of the company remain constant 
C) total equity and total assets increase by the same amount 
D) total liabilities increase and total equity decreases by the same amount 
A) total assets and total liabilities increase by the same amount 
B) total assets of the company remain constant 
C) total equity and total assets increase by the same amount 
D) total liabilities increase and total equity decreases by the same amount

Question 14

On June 1,Dalton Productions had beginning balances as shown in the T-accounts below.

During June,the following transactions took place:
June 2: Issued $2,900 of direct materials and $200 of indirect materials to production.
What was the balance in the Manufacturing Overhead account following this transaction?

Accepted Answer

A) $44,100 
B) $43,900 
C) $41,200 
D) $41,000 
A) $44,100 
B) $43,900 
C) $41,200 
D) $41,000

Question 15

When a job is completed,the total cost of the job is recorded with a debit to Finished Goods Inventory and a credit to Work-in-Process Inventory.

Accepted Answer

A) True 
 B)False

Question 16

Unlike manufacturing companies,service companies use an allocation base for allocating both direct and indirect costs.

Accepted Answer

A) True 
 B)False

Question 17

Ivade,Inc.uses a predetermined overhead allocation rate of $75 per direct labor hour.In January,Ivade completed Job B23,which utilized 20 direct labor hours.Provide the journal entry to allocate overhead to the job.

Accepted Answer

@#IMG-DLM&
Explanati

Question 18

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 $572,000 per year,and normal billable hours are 8,000 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) $94.25 per hour 
B) $22.75 per hour 
C) $71.50 per hour 
D) $165.75 per hour 
A) $94.25 per hour 
B) $22.75 per hour 
C) $71.50 per hour 
D) $165.75 per hour

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

Jordan Manufacturing uses a predetermined overhead allocation rate based on a percentage of direct labor cost.At the beginning of the year,it estimated the manufacturing overhead rate to be 30% times the direct labor cost.In the month of June,Jordan completed Job 13C,and its details are as follows:
 
What is the cost per unit of finished product of Job 13C? (Round your answer to the nearest cent. )

Accepted Answer

A) $154.08 
B) $131.30 
C) $124.12 
D) $130.00 
A) $154.08 
B) $131.30 
C) $124.12 
D) $130.00

Exam 19: Job Order Costing

Which of the following is the correct order of the four steps of tracking product costs?

Manufacturing overhead costs are allocated to the Work-in-Process Inventory account by a debit to the Manufacturing Overhead account.

Accounting firms,building contractors,and healthcare providers use process costing.

The journal entry to record indirect labor costs incurred involves a debit to the ________.

What causes manufacturing overhead to be underallocated? When manufacturing overhead is underallocated,will the Manufacturing Overhead account have a debit or a credit balance?

Broxsie Fabrication,Inc.issued $60,000 of direct materials and $15,500 of indirect materials to production.Prepare the journal entry to record the transaction.

When direct materials are received on the production floor,they are recorded on the job cost record.

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

Work-in-Process Inventory is debited when indirect labor costs are incurred in a job order costing system.

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

When goods are transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account,________.

When a job is completed,the total cost of the job is recorded with a debit to Finished Goods Inventory and a credit to Work-in-Process Inventory.

Unlike manufacturing companies,service companies use an allocation base for allocating both direct and indirect costs.

Ivade,Inc.uses a predetermined overhead allocation rate of $75 per direct labor hour.In January,Ivade completed Job B23,which utilized 20 direct labor hours.Provide the journal entry to allocate overhead to the job.

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

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

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