Question 1

In a normal costing system,the Manufacturing Overhead Control account ________.

Accepted Answer

A) is increased by allocated manufacturing overhead 
B) is credited with amounts transferred to Work-in-Process 
C) is decreased by allocated manufacturing overhead 
D) is debited with actual overhead costs 
A) is increased by allocated manufacturing overhead 
B) is credited with amounts transferred to Work-in-Process 
C) is decreased by allocated manufacturing overhead 
D) is debited with actual overhead costs

Question 2

A local CPA employs ten full-time professionals.The budgeted compensation per employee is $50,000.The maximum billable hours for each client are 400.Clients always receive their full amount of time.All professional labor costs are included in a single direct-cost category and are traced to jobs on a per-hour basis.Any other costs are included in a single indirect-cost pool,allocated according to professional labor-hours.Budgeted indirect costs for the year are $200,000 and the firm had 20 clients.
Required:
a.What is the direct-labor-cost rate per hour?
b.What is the indirect-cost rate per hour?

Accepted Answer

@#IMG-DLM&_TB5540_00_TB5540_00

Question 3

Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products.Manufacturing overhead costs are allocated on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department.At the beginning of 2018,the following estimates were provided for the coming year:
 
The accounting records of the company show the following data for Job #316:
 
For Bauer Manufacturing,what is the annual manufacturing overhead cost-allocation rate for the Machining Department?

Accepted Answer

A) $3.00 
B) $6.00 
C) $5.00 
D) $15.00 
A) $3.00 
B) $6.00 
C) $5.00 
D) $15.00

Question 4

For 2018,Franklin Manufacturing uses machine-hours as the only overhead cost-allocation base.The estimated manufacturing overhead costs are $300,000 and estimated machine hours are 50,000.The actual manufacturing overhead costs are $420,000 and actual machine hours are 60,000.
Using job costing,the 2018 budgeted manufacturing overhead rate is ________.(Round the final answer to the nearest cent. )

Accepted Answer

A) $8.40 per machine-hour 
B) $5.00 per machine-hour 
C) $7.00 per machine-hour 
D) $6.00 per machine-hour 
A) $8.40 per machine-hour 
B) $5.00 per machine-hour 
C) $7.00 per machine-hour 
D) $6.00 per machine-hour

Question 5

A company may use job costing to assign costs to different product lines and then use process costing to calculate unit costs within each product line.

Accepted Answer

A) True 
 B)False

Question 6

Management wants to prepare a profitability analysis of the company's customers and therefore the most accurate choice of disposing of underallocated or overallocated manufacturing overhead at year-end is the proration based on final balances of work-in-process,finished goods,and cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 7

A job that shows low profitability may be the result of ________.

Accepted Answer

A) excessive usage of direct materials 
B) inefficient direct manufacturing labor 
C) overpricing the job 
D) insurance claim of the damaged goods 
A) excessive usage of direct materials 
B) inefficient direct manufacturing labor 
C) overpricing the job 
D) insurance claim of the damaged goods

Question 8

Smith Office Equipment Company's budgeted manufacturing overhead is $5,400,000.Overhead is allocated on the basis of direct labor hours.The budgeted direct labor hours for the period are 30,000.What is the manufacturing overhead rate?

Accepted Answer

A) $15.00 
B) $54.00 
C) $195.00 
D) $180.00 
A) $15.00 
B) $54.00 
C) $195.00 
D) $180.00

Question 9

When $10,0000 direct materials are requisitioned,which of the following would be the correct journal entry?
A)Manufacturing Overhead Control $10,000

Accepted Answer

The answer of When $10,0000 direct materials are requisitioned,which of...

Question 10

The sum of all entries in underlying subsidiary ledgers equals the total amount in the corresponding general ledger control accounts.

Accepted Answer

A) True 
 B)False

Question 11

________ is the process of assigning indirect costs to products.

Accepted Answer

A) Cost allocation 
B) Job cost recording 
C) Cost pooling 
D) Cost tracing 
A) Cost allocation 
B) Job cost recording 
C) Cost pooling 
D) Cost tracing

Question 12

Better Products Company manufactures insulation and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour.The following data are obtained from the accounting records for October 2018:
 
The actual amount of manufacturing overhead costs incurred in October 2018 totals ________.

Accepted Answer

A) $277,500 
B) $116,000 
C) $162,000 
D) $123,000 
A) $277,500 
B) $116,000 
C) $162,000 
D) $123,000

Question 13

Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products.Manufacturing overhead costs are allocated on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department.At the beginning of 2018,the following estimates were provided for the coming year:
 
The accounting records of the company show the following data for Job #316:
 
What amount of manufacturing overhead costs will be allocated to Job #316?

Accepted Answer

A) $1,460.00 
B) $970.00 
C) $1,748.00 
D) $1,188.00 
A) $1,460.00 
B) $970.00 
C) $1,748.00 
D) $1,188.00

Question 14

Direct costs are allocated to the cost object using a cost-allocation method.

Accepted Answer

A) True 
 B)False

Question 15

A company would use multiple cost-allocation bases ________.

Accepted Answer

A) if managers believed the benefits exceeded the additional costs of that costing system 
B) because there is more than one way to allocate overhead 
C) because this is a simpler approach than using one cost allocation base 
D) if managers believe that using multiple cost-allocation bases is the only acceptable method 
A) if managers believed the benefits exceeded the additional costs of that costing system 
B) because there is more than one way to allocate overhead 
C) because this is a simpler approach than using one cost allocation base 
D) if managers believe that using multiple cost-allocation bases is the only acceptable method

Question 16

The proration approach to allocating overapplied or underapplied overhead adjusts individual job-cost records.

Accepted Answer

A) True 
 B)False

Question 17

Fixed costs remain constant at $450,000 per month.During high-output months variable costs are $300,000,and during low-output months variable costs are $125,000.What are the respective high and low indirect-cost rates if budgeted professional labor-hours are 24,000 for high-output months and 5,000 for low-output months?

Accepted Answer

A) $31.25 per hour;$115.00 per hour 
B) $31.25 per hour;$31.25 per hour 
C) $18.75 per hour;$25.00 per hour 
D) $12.50 per hour;$115.00 per hour 
A) $31.25 per hour;$115.00 per hour 
B) $31.25 per hour;$31.25 per hour 
C) $18.75 per hour;$25.00 per hour 
D) $12.50 per hour;$115.00 per hour

Question 18

For 2018,Rest-Well Bedding uses machine-hours as the only overhead cost-allocation base.The direct cost rate is $6.00 per unit.The selling price of the product is $21.00.The estimated manufacturing overhead costs are $275,000 and estimated 40,000 machine hours.The actual manufacturing overhead costs are $350,000 and actual machine hours are 50,000.
Using job costing,the 2018 actual indirect-cost rate is ________.

Accepted Answer

A) $7.00 per machine-hour 
B) $5.50 per machine-hour 
C) $8.75 per machine-hour 
D) $8.50 per machine-hour 
A) $7.00 per machine-hour 
B) $5.50 per machine-hour 
C) $8.75 per machine-hour 
D) $8.50 per machine-hour

Question 19

Jordan Company has two departments,Assembly and Machining.Overhead is applied based on direct labor cost in Department Assembly and machine-hours in Department Machining.The following additional information is available:

Required:
a.Compute the budgeted factory overhead rate for Assembly.
b.Compute the budgeted factory overhead rate for Machining.
c.What is the total overhead cost of Job 10?
d.If Job 10 consists of 50 units of product,what is the unit cost of this job?

Accepted Answer

a.$300,000/$200,000 = 150%
b.$180,000/30

Question 20

Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products.Manufacturing overhead costs are allocated on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department.At the beginning of 2018,the following estimates were provided for the coming year:
 
The accounting records of the company show the following data for Job #316:
 
What are the total manufacturing costs of Job #316?

Accepted Answer

A) $1,885.00 
B) $2,085.00 
C) $2,485.00 
D) $900.00 
A) $1,885.00 
B) $2,085.00 
C) $2,485.00 
D) $900.00

In a normal costing system,the Manufacturing Overhead Control account ________.

A company may use job costing to assign costs to different product lines and then use process costing to calculate unit costs within each product line.

Management wants to prepare a profitability analysis of the company's customers and therefore the most accurate choice of disposing of underallocated or overallocated manufacturing overhead at year-end is the proration based on final balances of work-in-process,finished goods,and cost of goods sold.

A job that shows low profitability may be the result of ________.

Smith Office Equipment Company's budgeted manufacturing overhead is $5,400,000.Overhead is allocated on the basis of direct labor hours.The budgeted direct labor hours for the period are 30,000.What is the manufacturing overhead rate?

When $10,0000 direct materials are requisitioned,which of the following would be the correct journal entry? A)Manufacturing Overhead Control $10,000

The sum of all entries in underlying subsidiary ledgers equals the total amount in the corresponding general ledger control accounts.

________ is the process of assigning indirect costs to products.

Direct costs are allocated to the cost object using a cost-allocation method.

A company would use multiple cost-allocation bases ________.

The proration approach to allocating overapplied or underapplied overhead adjusts individual job-cost records.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets,direct-Cost Variances,and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy,balanced Scorecard,and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters

Exam 4: Job Costing

In a normal costing system,the Manufacturing Overhead Control account ________.

A company may use job costing to assign costs to different product lines and then use process costing to calculate unit costs within each product line.

A job that shows low profitability may be the result of ________.

Smith Office Equipment Company's budgeted manufacturing overhead is $5,400,000.Overhead is allocated on the basis of direct labor hours.The budgeted direct labor hours for the period are 30,000.What is the manufacturing overhead rate?

When $10,0000 direct materials are requisitioned,which of the following would be the correct journal entry? A)Manufacturing Overhead Control $10,000

The sum of all entries in underlying subsidiary ledgers equals the total amount in the corresponding general ledger control accounts.

________ is the process of assigning indirect costs to products.

Direct costs are allocated to the cost object using a cost-allocation method.

A company would use multiple cost-allocation bases ________.

The proration approach to allocating overapplied or underapplied overhead adjusts individual job-cost records.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets,direct-Cost Variances,and Management Control

Flexible Budgets, overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy,balanced Scorecard,and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, transfer Pricing, and Multinational Considerations

Performance Measurement, compensation, and Multinational Considerations

Filters