Question 1

The difference between actual overhead and applied overhead is the overhead variance.

Accepted Answer

A) True 
 B)False

Question 2

HiTech Housing uses job-order costing. At the end of the month, the following data were gathered:
HiTech Housing's selling price is cost plus 50% for each of its houses.
 $\begin{array}{lrrr}
\text { Job \# } & \text { Total Cost } & \text { Complete? } & \text { Sold? } \
529 & \$ 409 & \text { no } & \text { no } \
530 & \$ 513 & \text { yes } & \text { no }\
531 & \$ 115 & \text { no } & \text { no } \
532 & \$ 790 & \text { yes } & \text { yes } \
533 & \$ 650 & \text { yes } & \text { no } \
534 & \$ 540 & \text { no } & \text { no } \
535 & \$ 90 & \text { no } & \text { no } \
536 & \$ 970 & \text { yes } & \text { yes } \
537 & \$ 179 & \text { no } & \text { no } \
538 & \$ 400 & \text { no } & \text { no }
\end{array}$
-Refer to the Figure.What is the total in the work-in-process account?

Accepted Answer

A) $1,163 
B) $1,733 
C) $1,760 
D) $2,923 
A) $1,163 
B) $1,733 
C) $1,760 
D) $2,923

Question 3

The raw materials account is an inventory account located on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 4

In job-order costing,the journal entry for $7,200 raw materials requisitioned for use in production is:
 $\begin{array} { | c | l | l | } 
\hline \text { Raw Materials } & 7,200 & \
\text { Work in Process } && 7,200 \
\hline
\end{array}$

Accepted Answer

A) True 
 B)False

Question 5

At the beginning of the year,Healthworks Company estimated the following for the coming year: Healthworks used normal costing and applies overhead on the basis of direct labour hours.For the month of May,direct labour hours equalled 10,300 and actual overhead equalled $56,750.
What is the overhead applied to production in May?
$\begin{array}{lr}
\text { Overhead } & \$ 420,000 \
\text { Direct labour hours } & 70,000
\end{array}$

Accepted Answer

A) $30,000 
B) $46,750 
C) $51,600 
D) $61,800 
A) $30,000 
B) $46,750 
C) $51,600 
D) $61,800

Question 6

Nature's Best Milk produces dairy equipment. Most of its jobs have a number of units per job. The company has two different departments through which all jobs pass. Overhead is applied using a plantwide rate of $13 per direct labour hour. Direct labour wages average $8 an hour. Data for Job 3 for the year are as follows:
  
-Refer to the Figure .What is the total cost of Job 3?

Accepted Answer

A) $112,000 
B) $134,600 
C) $145,800 
D) $229,000 
A) $112,000 
B) $134,600 
C) $145,800 
D) $229,000

Question 7

Which of the following types of businesses is most likely to use a process-costing system?

Accepted Answer

A) print shop 
B) doctor's office 
C) home building 
D) petroleum 
A) print shop 
B) doctor's office 
C) home building 
D) petroleum

Question 8

What is characteristic of job-order costing?

Accepted Answer

A) It is used in firms that produce homogeneous products. 
B) The total cost of each job is accumulated on the time card. 
C) The document for accumulating manufacturing costs is the cost sheet. 
D) Costs are collected by department. 
A) It is used in firms that produce homogeneous products. 
B) The total cost of each job is accumulated on the time card. 
C) The document for accumulating manufacturing costs is the cost sheet. 
D) Costs are collected by department.

Question 9

Rally Point Inc. designs and builds volleyball gymnasiums. Each gymnasium is custom-built to an individual customer's specifications. Rally Point uses job-order costing to track its costs. In January, Rally Point worked on three jobs. Data for these jobs are as follows:
Overhead is applied to jobs at the rate of $25 per machine hour. By January 31, Job 200 is the only job unfinished. The balance of finished goods on January 1 is $63,290 (consisting of Job 100 only). Jobs 100 and 300 are sold during January. Rally Point sells its product at cost plus 40%.
 $\begin{array}{lrrrr}&\text { Job } 100&\text { Job } 200&\text { Job } 300\
\text { Balance } 1 / 1 & \$ 13,790 & \$ 0 & \$ 0 \
\text { Direct Materials } & 16,200 & 8,500 & 30,500 \
\text { Direct Labour Cost } & 23,300 & 7,600 & 45,000 \
\text { Machine Hours } & 400 & 300 & 2,000
\end{array}$
-Refer to Rally Point,Inc.What is the balance in the work-in-process account on January 31?

Accepted Answer

A) $0 
B) $16,100 
C) $23,600 
D) $212,390 
A) $0 
B) $16,100 
C) $23,600 
D) $212,390

Question 10

Match each item with the correct statement below.
-A costing system that accumulates production costs by process by department for a given period of time
A)Actual cost system
B)Job-order cost system
C)Normal cost system
D)Process-costing system

Accepted Answer

The answer of Match each item with the correct statement...

Question 11

Which of the following statements about overhead costs is correct?

Accepted Answer

A) Overhead costs are not incurred uniformly throughout the year. 
B) Overhead costs have a definite, identifiable relationship with units produced. 
C) Low production in one month would give rise to low unit overhead costs. 
D) High production in one month would give rise to high unit overhead costs. 
A) Overhead costs are not incurred uniformly throughout the year. 
B) Overhead costs have a definite, identifiable relationship with units produced. 
C) Low production in one month would give rise to low unit overhead costs. 
D) High production in one month would give rise to high unit overhead costs.

Question 12

There are other source documents besides the time ticket and the material requisition form used to fill out the job-order cost sheet.

Accepted Answer

A) True 
 B)False

Question 13

Match the following cost flows with the proper event in a job-costing firm:
-Costs of product are removed from finished goods and added to cost of goods sold

Accepted Answer

A) Completion of job 
B) End of each accounting period 
C) Materials are removed from storage into production 
D) Product is sold 
E) End of year 
A) Completion of job 
B) End of each accounting period 
C) Materials are removed from storage into production 
D) Product is sold 
E) End of year

Question 14

Budgeted overhead is $40,000,budgeted direct labour hours are 2,000,actual overhead is $40,400,and direct labour hours are 3,230.Unadjusted cost of goods sold is $140,800.Calculate the following:
 A. Calculate the overhead variance.
B. What is adjusted cost of goods sold?

Accepted Answer

predetermined overhead rate =

Question 15

Which of the following is a characteristic of the job-order cost sheet?

Accepted Answer

A) It contains information about special orders only. 
B) It is subsidiary to the cost of goods sold account. 
C) It is the primary document for accumulating all costs related to a particular job. 
D) It contains only the materials information pertinent to a job. 
A) It contains information about special orders only. 
B) It is subsidiary to the cost of goods sold account. 
C) It is the primary document for accumulating all costs related to a particular job. 
D) It contains only the materials information pertinent to a job.

Question 16

At the beginning of the year,Shoeman Corporation estimates its overhead for the year will be $150,000.Suppose the actual overhead for the year is $160,000 and the applied overhead for the year is $145,000.Assume that the overhead variance is immaterial.What journal entry is needed to reconcile the overhead variance?

Accepted Answer

A) Cost of Goods Sold 15,000Overhead Control 15,000 
B) Overhead Control 15,000Cost of Goods Sold 15,000 
C) Cost of Goods Sold 5,000Overhead Control 5,000 
D) Overhead Control 5,000Cost of Goods Sold 5,000 
A) Cost of Goods Sold 15,000Overhead Control 15,000 
B) Overhead Control 15,000Cost of Goods Sold 15,000 
C) Cost of Goods Sold 5,000Overhead Control 5,000 
D) Overhead Control 5,000Cost of Goods Sold 5,000

Question 17

Goodwin Company uses a normal job-order costing system.Currently,a plantwide overhead rate based on direct labour is used.Sarah Lindsay,the plant manager,has heard that departmental overhead rates can offer significantly better cost assignments than a plantwide rate can offer.Some jobs spend most of their time in Department A,while others spend most of their time in Department B.Goodwin Company has the following data for its two departments for the coming year:
 $\begin{array}{lrr}&\text { Department A }&\text { Department B }\
\text { Expected overhead cost } & \$ 75,000 & \$ 33,000 \
\text { Expected direct labour hours } & 30,000 & 24,000
\end{array}$ A. Compute the plantwide overhead rate.
B. Compute the departmental overhead rates. (Carry out your answers to three decimal places.)
C. Which overhead rate would you recommend, and why?

Accepted Answer

The answer of Goodwin Company uses a normal job-order costing...

Question 18

On March 1,Job 492 had a beginning balance of $500.During March,direct materials of $700 and direct labour of $400 were added to the job.Overhead is applied to production at a rate of 60% of direct labour.There are ten units in Job 492.What is the unit cost?

Accepted Answer

A) $134 
B) $184 
C) $1,100 
D) $1,840 
A) $134 
B) $184 
C) $1,100 
D) $1,840

Question 19

White Mountain Company produces various types of snow skis.Estimated overhead for the year was $780,000 and estimated direct labour hours were 260,000.During the month of June,18,100 direct labour hours were worked,$55,400 of direct materials were used,and the average wage was $15 per hour.In June,10,000 pairs of skis were produced.
 A. Calculate the predetermined overhead rate.
B. Calculate the overhead applied to production for June.
C. Calculate unit cost for each pair of skis.

Accepted Answer

@#IMG-DLM& Direct Labour: 18,1

Question 20

What are the characteristics of process costing?

Accepted Answer

A) wide variety of distinct products 
B) costs accumulated by job 
C) unit costs computed by dividing total job costs by number of units produced for that job 
D) homogeneous products 
A) wide variety of distinct products 
B) costs accumulated by job 
C) unit costs computed by dividing total job costs by number of units produced for that job 
D) homogeneous products

The difference between actual overhead and applied overhead is the overhead variance.

The raw materials account is an inventory account located on the balance sheet.

In job-order costing,the journal entry for $7,200 raw materials requisitioned for use in production is: Raw Materials 7,200 Work in Process 7,200

Which of the following types of businesses is most likely to use a process-costing system?

What is characteristic of job-order costing?

Match each item with the correct statement below. -A costing system that accumulates production costs by process by department for a given period of time A)Actual cost system B)Job-order cost system C)Normal cost system D)Process-costing system

Which of the following statements about overhead costs is correct?

There are other source documents besides the time ticket and the material requisition form used to fill out the job-order cost sheet.

Match the following cost flows with the proper event in a job-costing firm: -Costs of product are removed from finished goods and added to cost of goods sold

Budgeted overhead is $40,000,budgeted direct labour hours are 2,000,actual overhead is $40,400,and direct labour hours are 3,230.Unadjusted cost of goods sold is $140,800.Calculate the following: A. Calculate the overhead variance. B. What is adjusted cost of goods sold?

Which of the following is a characteristic of the job-order cost sheet?

On March 1,Job 492 had a beginning balance of $500.During March,direct materials of $700 and direct labour of $400 were added to the job.Overhead is applied to production at a rate of 60% of direct labour.There are ten units in Job 492.What is the unit cost?

What are the characteristics of process costing?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 5: Job-Order Costing

The difference between actual overhead and applied overhead is the overhead variance.

The raw materials account is an inventory account located on the balance sheet.

In job-order costing,the journal entry for $7,200 raw materials requisitioned for use in production is: Raw Materials 7,200 Work in Process 7,200

Which of the following types of businesses is most likely to use a process-costing system?

What is characteristic of job-order costing?

Match each item with the correct statement below. -A costing system that accumulates production costs by process by department for a given period of time A)Actual cost system B)Job-order cost system C)Normal cost system D)Process-costing system

Which of the following statements about overhead costs is correct?

There are other source documents besides the time ticket and the material requisition form used to fill out the job-order cost sheet.

Match the following cost flows with the proper event in a job-costing firm: -Costs of product are removed from finished goods and added to cost of goods sold

Budgeted overhead is $40,000,budgeted direct labour hours are 2,000,actual overhead is $40,400,and direct labour hours are 3,230.Unadjusted cost of goods sold is $140,800.Calculate the following: A. Calculate the overhead variance. B. What is adjusted cost of goods sold?

Which of the following is a characteristic of the job-order cost sheet?

On March 1,Job 492 had a beginning balance of $500.During March,direct materials of $700 and direct labour of $400 were added to the job.Overhead is applied to production at a rate of 60% of direct labour.There are ten units in Job 492.What is the unit cost?

What are the characteristics of process costing?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Costvolumeprofit Analysis: a Managerial Planning Tool

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, production, cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters