Question 1

Overhead applied to the Jefferson Apartments project amounted to:

Accepted Answer

A)  $450,000. 
B)  $650,000. 
C)  $975,000. 
D)  Some other amount. 
A)  $450,000. 
B)  $650,000. 
C)  $975,000. 
D)  Some other amount.

Question 2

Which of the following is a characteristic of manufacturing overhead in a job order cost system?

Accepted Answer

A)  It is indirectly traceable to specific jobs or units. 
B)  It includes the cost of all labor relating to manufacturing operations. 
C)  It is assigned to units produced by means of an overhead application rate. 
D)  It includes the cost of direct materials used and of indirect labor. 
A)  It is indirectly traceable to specific jobs or units. 
B)  It includes the cost of all labor relating to manufacturing operations. 
C)  It is assigned to units produced by means of an overhead application rate. 
D)  It includes the cost of direct materials used and of indirect labor.

Question 3

Under-applied overhead at the end of a month:

Accepted Answer

A)  Results when actual overhead costs are less than amounts applied to work in process. 
B)  Indicates a poorly designed cost accounting system. 
C)  Is represented by a debit balance remaining in the Manufacturing Overhead account. 
D)  Is represented by a credit balance remaining in the Manufacturing Overhead account. 
A)  Results when actual overhead costs are less than amounts applied to work in process. 
B)  Indicates a poorly designed cost accounting system. 
C)  Is represented by a debit balance remaining in the Manufacturing Overhead account. 
D)  Is represented by a credit balance remaining in the Manufacturing Overhead account.

Question 4

The amount of overhead costs applied to Job #007 during March was:

Accepted Answer

A)  $90,000. 
B)  $26,250. 
C)  $65,000. 
D)  $60,000. 
A)  $90,000. 
B)  $26,250. 
C)  $65,000. 
D)  $60,000.

Question 5

A credit balance in the manufacturing overhead account at month end indicates that the actual overhead costs were less than the amount of overhead costs applied to jobs.

Accepted Answer

A) True 
 B)False

Question 6

The journal entry made by Canfield to record the sale of the Jefferson Apartments project to King Development Company for $5,250,000 would include:

Accepted Answer

A)  A debit to Sales of $5,250,000. 
B)  A debit to Cost of Goods Sold of $2,625,000. 
C)  A credit to Finished Goods Inventory of $975,000. 
D)  A debit to Finished Goods Inventory of $975,000. 
A)  A debit to Sales of $5,250,000. 
B)  A debit to Cost of Goods Sold of $2,625,000. 
C)  A credit to Finished Goods Inventory of $975,000. 
D)  A debit to Finished Goods Inventory of $975,000.

Question 7

An activity-based costing system would probably not be appropriate if:

Accepted Answer

A)  A company produces more than one product line. 
B)  A company produces only one product. 
C)  A company is highly automated. 
D)  A company has more than one production facility. 
A)  A company produces more than one product line. 
B)  A company produces only one product. 
C)  A company is highly automated. 
D)  A company has more than one production facility.

Question 8

If manufacturing overhead is materially over-applied, it is best to close it to:

Accepted Answer

A)  Work-in-process inventory. 
B)  Finished goods inventory. 
C)  Cost of goods sold. 
D)  Apportioned among work-in-process, finished goods, and cost of goods sold. 
A)  Work-in-process inventory. 
B)  Finished goods inventory. 
C)  Cost of goods sold. 
D)  Apportioned among work-in-process, finished goods, and cost of goods sold.

Question 9

Metalworks applies manufacturing overhead on the basis of direct materials used in production. During the current period, direct materials used for job #123 amounted to $22,545. If Metalworks' overhead rate is 0.65 of direct materials used, the overhead applied to job #123 for the period was $15,000.
Correct answer would have been $22,545 x 0.65 = $14,654.25

Accepted Answer

A) True 
 B)False

Question 10

Under a job order cost system, costs are accumulated for:

Accepted Answer

A)  Each department in the production cycle. 
B)  Each batch of production, known as a job or lot. 
C)  Each individual unit produced. 
D)  Each job supervisor. 
A)  Each department in the production cycle. 
B)  Each batch of production, known as a job or lot. 
C)  Each individual unit produced. 
D)  Each job supervisor.

Question 11

At the end of the accounting period, applied overhead was larger than actual overhead by a material amount. The over-applied overhead should be:

Accepted Answer

A)  Treated as an extraordinary gain. 
B)  Treated as an extraordinary loss. 
C)  Apportioned among Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold. 
D)  Ignored; actual overhead is determined only for internal control purposes. 
A)  Treated as an extraordinary gain. 
B)  Treated as an extraordinary loss. 
C)  Apportioned among Work in Process Inventory, Finished Goods Inventory, and Cost of Goods Sold. 
D)  Ignored; actual overhead is determined only for internal control purposes.

Question 12

Under- and over-applied overhead
What is meant by under-applied overhead? By over-applied overhead? Briefly explain each term.

Accepted Answer

Under-applied overhead refers to the deb

Question 13

The advantage of using a predetermined overhead application rate is that:

Accepted Answer

A)  Units produced are charged with a "normal" amount of manufacturing overhead regardless of whether they are produced in a high-volume month or a low-volume month. 
B)  Overhead costs will be limited to the predetermined amount. 
C)  Entries need not be made to record actual overhead costs incurred. 
D)  The unit cost of production will be lower than it would be if actual overhead costs were assigned to units produced. 
A)  Units produced are charged with a "normal" amount of manufacturing overhead regardless of whether they are produced in a high-volume month or a low-volume month. 
B)  Overhead costs will be limited to the predetermined amount. 
C)  Entries need not be made to record actual overhead costs incurred. 
D)  The unit cost of production will be lower than it would be if actual overhead costs were assigned to units produced.

Question 14

Alice Blue is a wholesale dress manufacturer. In manufacturing dresses, the following costs were incurred in March:
$\begin{array}{|l|l|}
\hline \text { Direct materials } & \$ 40,600 \
\hline \text { Direct labor } & \$ 78,000 \
\hline
\end{array}$
Projected overhead for the year was $560,000 to be allocated based on project direct labor cost of $395,000. What are the total manufacturing costs for March?

Accepted Answer

The answer of Alice Blue is a wholesale dress manufacturer....

Question 15

In a job cost system, the Work-in-Process Inventory controlling account may be reconciled to the total of the:

Accepted Answer

A)  Employee time cards. 
B)  Materials requisitions. 
C)  Work-in-Process Inventory records for each department or process. 
D)  Job cost sheets. 
A)  Employee time cards. 
B)  Materials requisitions. 
C)  Work-in-Process Inventory records for each department or process. 
D)  Job cost sheets.

Question 16

A job cost sheet will include:

Accepted Answer

A)  All raw materials purchased. 
B)  Actual overhead. 
C)  Direct labor applied to production. 
D)  Selling costs. 
A)  All raw materials purchased. 
B)  Actual overhead. 
C)  Direct labor applied to production. 
D)  Selling costs.

Exam 17: Job Order Cost Systems and Overhead Allocations

Overhead applied to the Jefferson Apartments project amounted to:

Which of the following is a characteristic of manufacturing overhead in a job order cost system?

Under-applied overhead at the end of a month:

The amount of overhead costs applied to Job #007 during March was:

A credit balance in the manufacturing overhead account at month end indicates that the actual overhead costs were less than the amount of overhead costs applied to jobs.

The journal entry made by Canfield to record the sale of the Jefferson Apartments project to King Development Company for $5,250,000 would include:

An activity-based costing system would probably not be appropriate if:

If manufacturing overhead is materially over-applied, it is best to close it to:

Under a job order cost system, costs are accumulated for:

At the end of the accounting period, applied overhead was larger than actual overhead by a material amount. The over-applied overhead should be:

Under- and over-applied overhead What is meant by under-applied overhead? By over-applied overhead? Briefly explain each term.

The advantage of using a predetermined overhead application rate is that:

In a job cost system, the Work-in-Process Inventory controlling account may be reconciled to the total of the:

A job cost sheet will include:

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values Answer Key

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