Question 1

The following information is available for the first month of operations for Brandt, Inc.: ?? $$\begin{array} { l r } 
\text { Sales } & \$ 570,000 \
\text { Gross profit } & 210,000 \
\text { Indirect labor } & 20,000 \
\text { Indirect materials } & 5,000 \
\text { Other factory overhead } & 37,000 \
\text { Direct materials cost } & 390,000 \
\text { Total manufacturing costs } & 658,000
\end{array}$$ ?
Calculate direct labor cost for Brandt, Inc.

Accepted Answer

A)  $226,000 
B)  $206,000 
C)  $231,000 
D)  $218,000

Question 2

For which of the following businesses would the job order cost system be most appropriate?

Accepted Answer

A)  Custom cabinet manufacturer 
B)  Automobile manufacturer 
C)  Lumber mill 
D)  Meat processor

Question 3

Materials inventory consists of the costs of direct and indirect materials that have not yet entered the manufacturing process.

Accepted Answer

A) True 
 B)False

Question 4

Increase in the Work-in-Process account occur when:

Accepted Answer

A)  materials are received into the storeroom. 
B)  factory overhead costs are incurred. 
C)  direct labor is recorded from the time sheets. 
D)  materials are ordered.

Question 5

Heedy Winery accumulates the costs incurred in the labeling process in an activity cost pool.Costs for the labeling process are estimated to be $320,000, and the winery expects to generate 640,000 labels for the coming year.Production for its top-selling wine is estimated at 160,000 bottles.How much overhead from the labeling process will be allocated to this particular variety of wine?

Accepted Answer

A)  $40,000 
B)  $80,000 
C)  $160,000 
D)  $320,000

Question 6

Which of the following information is provided by job cost sheets?

Accepted Answer

A)  Cost of depreciation on office computers 
B)  Managerial salary 
C)  Cost of utilities 
D)  Cost impact of materials changes

Question 7

Factory overhead is applied to production using a predetermined overhead rate.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is considered a part of factory overhead cost?

Accepted Answer

A)  Sales commissions 
B)  Depreciation of factory buildings 
C)  Depreciation of office equipment 
D)  Direct materials used

Question 9

For an automobile company, the total overhead applied was $48,000,000 at the end of the year.Actual overhead was $52,850,000.Closing over/under applied overhead into cost of goods sold would cause net income to:

Accepted Answer

A)  increase by $4,850,000. 
B)  decrease by $4,850,000. 
C)  stay the same. 
D)  decrease by $400,000.

Question 10

Predetermined Factory Overhead Rate is calculated as:

Accepted Answer

A)  ​Estimated Total Factory Overhead Costs + Estimated Activity Base. 
B)  ​Estimated Total Factory Overhead Costs - Estimated Activity Base. 
C)  ​Estimated Total Factory Overhead Costs × Estimated Activity Base. 
D)  ​Estimated Total Factory Overhead Costs ÷ Estimated Activity Base.

Question 11

The document authorizing the issuance of materials from the storeroom for use in manufacturing is called:

Accepted Answer

A)  materials requisition. 
B)  purchase requisition. 
C)  receiving report. 
D)  purchase order.

Question 12

Which of the following is a product cost?

Accepted Answer

A)  Administrative cost 
B)  Direct labor cost 
C)  Selling cost 
D)  Opportunity cost

Question 13

If the actual overhead incurred is less than the applied factory overhead, it is called overapplied factory overhead.

Accepted Answer

A) True 
 B)False

Question 14

The finished goods account is a controlling account for the subsidiary:

Accepted Answer

A)  sales ledger. 
B)  materials ledger. 
C)  work-in-process ledger. 
D)  stock ledger.

Question 15

​Which of the following statements is true of a traditional production process?

Accepted Answer

A)  ​It focuses on reducing time and cost and eliminating poor quality. 
B)  ​It emphasizes on continually improving the manufacturing process and product quality. 
C)  ​In a traditional production process, supervisors enter materials into manufacturing so as to keep all the manufacturing departments (processes) operating. 
D)  ​In a traditional production process, service activities may be assigned to individual work centers, rather than to centralized service departments.

Question 16

Elite, Inc.has estimated total factory overhead costs of $900,000, and 25,000 direct labor hours for the current fiscal year.If the direct labor hours for Job N41 is 2,000, calculate the total factory overhead applied to this job.

Accepted Answer

A)  $40,000 
B)  $25,000 
C)  $4,000 
D)  $72,000

Question 17

Contia Inc.forecasts that total overhead for the current year will be $12,600,000, and total machine hours will be 300,000 hours.However, the actual overhead is $3,250,000, and the actual machine hours are 98,500 hours.If the company uses a predetermined overhead rate based on machine hours for applying overhead, the overhead will be:

Accepted Answer

A)  overapplied by $887,000. 
B)  underapplied by $887,000. 
C)  overapplied by $9,350,000. 
D)  underapplied by $9,350,000.

Question 18

The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 19

The recording of the jobs completed would increase:

Accepted Answer

A)  Factory Overhead. 
B)  Finished Goods. 
C)  Work-in-Process. 
D)  Cost of Goods Sold.

Question 20

In a job order cost system, materials and supply costs for a service business are normally included as part of overhead cost.

Accepted Answer

A) True 
 B)False

Exam 10: Accounting for Manufacturing Operations

For which of the following businesses would the job order cost system be most appropriate?

Materials inventory consists of the costs of direct and indirect materials that have not yet entered the manufacturing process.

Increase in the Work-in-Process account occur when:

Which of the following information is provided by job cost sheets?

Factory overhead is applied to production using a predetermined overhead rate.

Which of the following is considered a part of factory overhead cost?

For an automobile company, the total overhead applied was $48,000,000 at the end of the year.Actual overhead was $52,850,000.Closing over/under applied overhead into cost of goods sold would cause net income to:

Predetermined Factory Overhead Rate is calculated as:

The document authorizing the issuance of materials from the storeroom for use in manufacturing is called:

Which of the following is a product cost?

If the actual overhead incurred is less than the applied factory overhead, it is called overapplied factory overhead.

The finished goods account is a controlling account for the subsidiary:

​Which of the following statements is true of a traditional production process?

Elite, Inc.has estimated total factory overhead costs of $900,000, and 25,000 direct labor hours for the current fiscal year.If the direct labor hours for Job N41 is 2,000, calculate the total factory overhead applied to this job.

The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

The recording of the jobs completed would increase:

In a job order cost system, materials and supply costs for a service business are normally included as part of overhead cost.

Which of the following statements is true of a traditional production process?