Question 1

The debit to factory overhead for the cost of indirect materials is obtained from the summary of the materials requisitions.

Accepted Answer

A) True 
 B)False

Question 2

The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year was 54,300. The actual factory overhead for the year was $1,375,000.
a) Determine the total factory overhead amount applied.
b) Calculate the over or under applied amount for the year.
c) Prepare the journal entry to close factory overhead into Cost of Goods Sold.

Accepted Answer

a) 54,300 hours * $25 = $1,357

Question 3

The following budget data are available for Oldest Company:   If factory overhead is to be applied based on direct labor hours, the predetermined overhead rate is

Accepted Answer

A)  $7.50 
B)  $.13 
C)  $.061 
D)  $16.50 
A)  $7.50 
B)  $.13 
C)  $.061 
D)  $16.50

Question 4

Define and discuss the two main types of cost accounting systems for manufacturing operations. What are their similarities and differences?

Accepted Answer

The two main cost accounting systems are

Question 5

Cost accounting systems are used to supply cost data information on costs incurred by a manufacturing process or department.

Accepted Answer

A) True 
 B)False

Question 6

The Thomlin Company forecasts that total overhead for the current year will be $15,000,000 and that total machine hours will be 300,000 hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. If the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, what is that overhead rate?

Accepted Answer

A)  $48 per machine hour 
B)  $53 per machine hour 
C)  $45 per machine hour 
D)  $50 per machine hour 
A)  $48 per machine hour 
B)  $53 per machine hour 
C)  $45 per machine hour 
D)  $50 per machine hour

Question 7

The recording of the jobs shipped and customers billed would include a debit to:

Accepted Answer

A)  Accounts Payable 
B)  Cash 
C)  Finished Goods 
D)  Cost of Goods Sold 
A)  Accounts Payable 
B)  Cash 
C)  Finished Goods 
D)  Cost of Goods Sold

Question 8

Job order cost accounting systems may be used for planning and controlling a service business.

Accepted Answer

A) True 
 B)False

Question 9

Selected accounts with a credit amount omitted are presented as follows:     What was the balance of Work in Process as of April 30?

Accepted Answer

A)  $8,100 
B)  $35,000 
C)  $29,900 
D)  $22,900 
A)  $8,100 
B)  $35,000 
C)  $29,900 
D)  $22,900

Question 10

Technics Inc., a manufacturing company, utilizes job order costing. Each division establishes its own estimates regarding overhead which are as follows:
Division A Division B
Total estimated overhead $128,000 $261,000
Total estimated machine hours 16,000 72,500
Total estimated direct labor costs $155,000 $290,000
Required:
If Division A allocates overhead on the basis of machine hours, and Division B allocates overhead as a percentage of direct labor costs, what would the predetermined overhead rate be for each division?

Accepted Answer

$128,000 / 16,000 =

Question 11

Zeke Company is a manufacturing company that has worked on several production jobs during the 1st quarter of the year. Below is a list of all the jobs for the quarter:   Job 356, 357, 358 & 359 were completed. Jobs 356 & 357 were sold at a profit of $500 on each job.
What is the ending balance of Finished Goods for Zeke Company as of the end of the 1st quarter?

Accepted Answer

A)  $456 
B)  $1,067 
C)  $1,685 
D)  $2,752 
A)  $456 
B)  $1,067 
C)  $1,685 
D)  $2,752

Question 12

During the month of April, Cavy Company incurred factory overhead as follows:
   Journalize the entry to record the factory overhead incurred during April.

Accepted Answer

The answer of During the month of April, Cavy Company...

Question 13

Crain Company budgeted 35,000 direct labor hours and incurred 40,000 direct labor hours. It incurred $780,000 of overhead and estimated overhead was $735,000.
What is Crain's predetermined overhead rate? Was overhead overapplied or underapplied for the year? By how much?

Accepted Answer

Predetermined overhead rate: $

Question 14

Present entries to record the following summarized operations related to production for a company using a job order cost system:

Accepted Answer

The answer of Present entries to record the following summarized...

Question 15

Which of the following would most likely be a period cost?

Accepted Answer

A)  Depreciation on factory lunchroom furniture. 
B)  Salary of telephone receptionist in the sales office. 
C)  Salary of a security guard for the factory parking lot. 
D)  Computer chips used by a computer manufacturer. 
A)  Depreciation on factory lunchroom furniture. 
B)  Salary of telephone receptionist in the sales office. 
C)  Salary of a security guard for the factory parking lot. 
D)  Computer chips used by a computer manufacturer.

Question 16

Flagler Company allocates overhead based on machine hours. They estimated overhead costs for the year to be $420,000. Estimated machine hours were 50,000. Actual hours and costs for the year were 46,000 machine hours and $380,000 of overhead.
Required:
a. Calculate the overhead application rate for the year.
b. What is the amount of applied overhead for the year?
c. What is the amount of under or overapplied overhead for the year? Indicate whether it is over- or underapplied.

Accepted Answer

a. $420,000/50,000 = $8.40/mac

Question 17

A receiving report is prepared when purchased materials are first received by the manufacturing department.

Accepted Answer

A) True 
 B)False

Question 18

In a job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

Accepted Answer

A)  Materials 
B)  Direct labor 
C)  Rent 
D)  Supplies 
A)  Materials 
B)  Direct labor 
C)  Rent 
D)  Supplies

Question 19

Depreciation expense on factory equipment is part of factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 20

Poobah Manufacturers Inc. has estimated total factory overhead costs of $95,000 and 10,000 direct labor hours for the current fiscal year. If job number 117 incurred 2,300 direct labor hours, the work in process account will be debited and factory overhead will be credited for:

Accepted Answer

A)  $21,850 
B)  $2,300 
C)  $95,000 
D)  cannot be determined 
A)  $21,850 
B)  $2,300 
C)  $95,000 
D)  cannot be determined

Exam 19: Job Order Costing

The debit to factory overhead for the cost of indirect materials is obtained from the summary of the materials requisitions.

The following budget data are available for Oldest Company: If factory overhead is to be applied based on direct labor hours, the predetermined overhead rate is

Define and discuss the two main types of cost accounting systems for manufacturing operations. What are their similarities and differences?

Cost accounting systems are used to supply cost data information on costs incurred by a manufacturing process or department.

The recording of the jobs shipped and customers billed would include a debit to:

Job order cost accounting systems may be used for planning and controlling a service business.

Selected accounts with a credit amount omitted are presented as follows: What was the balance of Work in Process as of April 30?

During the month of April, Cavy Company incurred factory overhead as follows: Journalize the entry to record the factory overhead incurred during April.

Crain Company budgeted 35,000 direct labor hours and incurred 40,000 direct labor hours. It incurred $780,000 of overhead and estimated overhead was $735,000. What is Crain's predetermined overhead rate? Was overhead overapplied or underapplied for the year? By how much?

Present entries to record the following summarized operations related to production for a company using a job order cost system:

Which of the following would most likely be a period cost?

A receiving report is prepared when purchased materials are first received by the manufacturing department.

In a job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

Depreciation expense on factory equipment is part of factory overhead cost.

Poobah Manufacturers Inc. has estimated total factory overhead costs of $95,000 and 10,000 direct labor hours for the current fiscal year. If job number 117 incurred 2,300 direct labor hours, the work in process account will be debited and factory overhead will be credited for:

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Filters