Question 1

Actual overhead is reconciled with applied overhead at the end of the period.

Accepted Answer

A) True 
 B)False

Question 2

What costs are used in a normal job-order costing system?

Accepted Answer

A) actual costs for direct materials, estimated costs for direct labour, and actual costs for overhead 
B) estimated costs for direct materials, estimated costs for direct labour, and estimated costs for overhead 
C) actual costs for direct materials and actual costs for direct labour, and estimated costs for overhead 
D) estimated costs for direct materials, actual costs for direct labour, and actual costs for overhead 
A) actual costs for direct materials, estimated costs for direct labour, and actual costs for overhead 
B) estimated costs for direct materials, estimated costs for direct labour, and estimated costs for overhead 
C) actual costs for direct materials and actual costs for direct labour, and estimated costs for overhead 
D) estimated costs for direct materials, actual costs for direct labour, and actual costs for overhead

Question 3

If actual overhead for the year is $33,451 and applied overhead is $32,000,is the overhead variance overapplied or underapplied? Prepare the journal entry necessary to reconcile overhead.Assume the variance is immaterial.

Accepted Answer

Actual overhead is more than a

Question 4

Match each item with the correct statement below.
-An approach that assigns actual costs of direct materials,direct labour,and overhead to products

Accepted Answer

A) Actual cost system 
B) Job-order cost system 
C) Normal cost system 
D) Process-costing system 
A) Actual cost system 
B) Job-order cost system 
C) Normal cost system 
D) Process-costing system

Question 5

Kilo Company has a job-costing system.The following items appeared in the work-in-process account during January of the current year:
Kilo applies overhead to production on the basis of direct labour hours.Job XX,the only job in process on January 30,has been charged $10,600 materials cost and has 100 labour hours of direct labour time assigned to it.
Required:
 $\begin{array}{lr}
\text { January } 1 \text { bal ance } & \$ 20,000 \
\text { Materials placed into production } & ? \
\text { Direct labour (4,000 hours) } & \$ 120,000\
\text { Factory overhead applied } & \$ 96,000 \
\text { Cost of goods manufactured } & \$ 400,000 \
\text { January 30 balance } & \$ 16,000
\end{array}$ A. Determine the predetermined factory overhead rate for Kilo Company.
B. Determine the amounts of materials, direct 1 abour, and factory overhead included in the January 30 work in process.
C. Determine the amount of materials placed into production during January.

Accepted Answer

The answer of Kilo Company has a job-costing system.The following...

Question 6

Which of the following statements is characteristic of overhead?

Accepted Answer

A) The adjusted cost of goods sold is equal to the normal cost of goods manufactured plus or minus the overhead variance. 
B) If the overhead variance shows underapplied overhead, then that amount would be subtracted from normal cost of goods sold. 
C) Variances in overhead are expected every other month. 
D) If the overhead variance shows overapplied overhead, then that amount would be subtracted from normal cost of goods sold. 
A) The adjusted cost of goods sold is equal to the normal cost of goods manufactured plus or minus the overhead variance. 
B) If the overhead variance shows underapplied overhead, then that amount would be subtracted from normal cost of goods sold. 
C) Variances in overhead are expected every other month. 
D) If the overhead variance shows overapplied overhead, then that amount would be subtracted from normal cost of goods sold.

Question 7

Company, Inc. applies overhead on the basis of direct labour hours. At the beginning of the year, Company, Inc. estimates overhead to be $540,000, machine hours to be 150,000, and direct labour hours to be 90,000. During January, Company, Inc. has 8,000 direct labour hours and 12,000 machine hours.
-Refer to the Figure.Suppose the actual overhead for January is $51,000.What is the overhead variance?

Accepted Answer

A) $800 overapplied 
B) $800 underapplied 
C) $3,000 overapplied 
D) $3,000 underapplied 
A) $800 overapplied 
B) $800 underapplied 
C) $3,000 overapplied 
D) $3,000 underapplied

Question 8

On March 9 of the current year,Job 123 was completed.The job cost sheet showed a total of $4,000 in direct materials and $6,000 in direct labour at a rate of $20 per direct labour hour.Factory overhead is applied at $30 per direct labour hour.Which of the following debits to finished goods inventory records the completion of Job 123?

Accepted Answer

A) $4,000 
B) $9,000 
C) $13,000 
D) $19,000 
A) $4,000 
B) $9,000 
C) $13,000 
D) $19,000

Question 9

Match the following cost flows with the proper event in a job-costing firm:
-Costs of job are transferred from work in process to finished goods

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 10

What formula is used to calculate the predetermined overhead rate?

Accepted Answer

A) estimated annual overhead / estimated annual activity level 
B) actual annual overhead / estimated annual activity level 
C) estimated annual overhead / actual annual activity level 
D) actual annual overhead / actual annual activity level 
A) estimated annual overhead / estimated annual activity level 
B) actual annual overhead / estimated annual activity level 
C) estimated annual overhead / actual annual activity level 
D) actual annual overhead / actual annual activity level

Question 11

A company has two departments that all goods pass through: machining and assembly.Machining overhead is applied based on machine hours,and assembly overhead is applied based on direct labour hours.Data on each department are as follows:
 $$\begin{array} { l r r } 
& \text { Machining } & \text { Assembly } \
\text { Budgeted Overhead } & \$ 75,000 & \$ 40,000 \
\text { Budgeted Direct Labour Hours } & 5,000 & 10,000 \
\text { Budgeted Machine Hours } & 25,000 & 1,000 \
\text { Actual Overhead } & \$ 75,400 & \$ 39,200 \
\text { Actual Direct Labour Hours } & 5,203 & 9,980 \
\text { Actual Machine Hours } & 25,040 & 850
\end{array}$$ A. Calculate the overhead rate for each department.
B. What is each department's applied overhead?
C. Calculate each department's overhead variance. Specify whether it is overapplied or underapplied.

Accepted Answer

The answer of A company has two departments that all...

Question 12

What document lists the total cost for a single product?

Accepted Answer

A) job-order cost sheet 
B) materials requisition form 
C) time ticket 
D) purchase order 
A) job-order cost sheet 
B) materials requisition form 
C) time ticket 
D) purchase order

Question 13

Company, Inc. applies overhead on the basis of direct labour hours. At the beginning of the year, Company, Inc. estimates overhead to be $540,000, machine hours to be 150,000, and direct labour hours to be 90,000. During January, Company, Inc. has 8,000 direct labour hours and 12,000 machine hours.
-Refer to the Figure.What is the predetermined overhead rate?

Accepted Answer

A) $4 per machine hour 
B) $6 per direct labour hour 
C) $40,200 
D) $44,000 
A) $4 per machine hour 
B) $6 per direct labour hour 
C) $40,200 
D) $44,000

Question 14

What schedule is used to ensure accuracy in computing product costs?

Accepted Answer

A) the schedule of the cost of goods manufactured 
B) the schedule of the cost of goods sold 
C) the schedule of the overhead 
D) the schedule of raw materials used 
A) the schedule of the cost of goods manufactured 
B) the schedule of the cost of goods sold 
C) the schedule of the overhead 
D) the schedule of raw materials used

Question 15

Using a time ticket,the cost accounting department can enter the cost of direct materials onto the correct job-order cost sheet.

Accepted Answer

A) True 
 B)False

Question 16

Michelle's has the following transactions for the month of October:
1.Purchased materials on account for $111,482.
2.Materials requisitioned for $82,383.
3.Direct labour of $51,000 was incurred (but not yet paid).
4.Actual overhead for the month was $33,000. It has not been paid yet (charge to various payables).
5.Overhead is applied to production at the rate of 70% of direct labour.
6.Jobs totalling $56,000 were transferred from work in process to finished goods.
7.Jobs costing $41,000 were sold.Balances at the beginning of the month were:
 $\begin{array}{lr}
\text { Materials } & \$ 17,890 \
\text { Work in process } & 0 \
\text { Finished goods } & 8,321
\end{array}$
-Refer to the Figure.What is the ending balance in work in process?

Accepted Answer

A) $110,383 
B) $113,083 
C) $166,383 
D) $169,083 
A) $110,383 
B) $113,083 
C) $166,383 
D) $169,083

Question 17

Giant Company is a job-order costing company that produces customized bicycles.During the month of October,Giant had three jobs in-process,Job 50cm,Job 56cm,and Job 60 cm.By the end of the month,all three jobs had been completed,with Job 60cm being sold for $484.50.The following costs belong to each job:
 $\begin{array}{lrrr}&\text { Job } 50 \mathrm{~cm} & \underline{\text { Job } 56 \mathrm{~cm}} &\text { Job } 60 \mathrm{~cm}\
\text { Direct Materials } & \$ 90 & \$ 85 & \$ 95 \
\text { Direct Labour } & 100 & 110 & 95 \
\text { Applied Overhead } & 140 & 154 & 133 \
\text { Total } & \$ 330 & \$ 349 & \$ 323
\end{array}$ A. Overhead is applied based on direct labour dollars. What is the overhead rate?
B. What rate does Giant use to price its jobs?
C. What is the gross margin on Job $60 \mathrm {~cm}$ ?

Accepted Answer

The answer of Giant Company is a job-order costing company...

Actual overhead is reconciled with applied overhead at the end of the period.

What costs are used in a normal job-order costing system?

If actual overhead for the year is $33,451 and applied overhead is $32,000,is the overhead variance overapplied or underapplied? Prepare the journal entry necessary to reconcile overhead.Assume the variance is immaterial.

Match each item with the correct statement below. -An approach that assigns actual costs of direct materials,direct labour,and overhead to products

Which of the following statements is characteristic of overhead?

Match the following cost flows with the proper event in a job-costing firm: -Costs of job are transferred from work in process to finished goods

What formula is used to calculate the predetermined overhead rate?

What document lists the total cost for a single product?

What schedule is used to ensure accuracy in computing product costs?

Using a time ticket,the cost accounting department can enter the cost of direct materials onto the correct job-order cost sheet.

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

Actual overhead is reconciled with applied overhead at the end of the period.

What costs are used in a normal job-order costing system?

If actual overhead for the year is $33,451 and applied overhead is $32,000,is the overhead variance overapplied or underapplied? Prepare the journal entry necessary to reconcile overhead.Assume the variance is immaterial.

Match each item with the correct statement below. -An approach that assigns actual costs of direct materials,direct labour,and overhead to products

Which of the following statements is characteristic of overhead?

Match the following cost flows with the proper event in a job-costing firm: -Costs of job are transferred from work in process to finished goods

What formula is used to calculate the predetermined overhead rate?

What document lists the total cost for a single product?

What schedule is used to ensure accuracy in computing product costs?

Using a time ticket,the cost accounting department can enter the cost of direct materials onto the correct job-order cost sheet.

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