Question 1

Quillen
Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to the company: $\begin{array}{lcccc}&\text { Support Departments } & \text { Producing Departments } \
&\text { S1 } & \mathrm{S} 2 & \text { Cutting }&\text { Sewing }\
\text { Direct Costs } & \$ 180,000 & \$ 150,000 & \$ 122,000 & \$ 90,500 \
\text { Normal Activity: }  & & & \
\text { \# of employees }  & -& 30 & 63 & 147 \
\text { Maintenance hours } & 1,200& - & 16,000 & 4,000
\end{array}$
-Refer to Quillen Company. Allocating S1 costs first, how much of the support department costs will be allocated from Department S2 to the Cutting Department?

Accepted Answer

A)  $0 
B)  $34,500 
C)  $138,000 
D)  $172,500

Question 2

Which costs are easy to trace to individual jobs?

Accepted Answer

A)  direct materials and direct labour 
B)  direct labour and manufacturing overhead 
C)  manufacturing overhead and indirect labour 
D)  direct materials and manufacturing overhead

Question 3

Valley Water Slides
Valley Water Slides makes custom water slides for hotels. On September 1, three jobs were in process: Jobs 812, 813, and 814. Two more jobs, Jobs 815 and 816, were started during September. By September 30, Jobs 812, 814, and 816 were finished. The following data were collected: $\begin{array}{lrrrrr}&\text { Job } 812&\text { Job } 813&\text { Job } 814&\text { Job } 815&\text { Job } 816\
9 / 1 \text { Balance } & \$ 615 & \$ 830 & \$ 945 & --- & --- \
\text { Direct Materials } & 750 & 235 & 1,280 & \$ 200 & \$ 915 \
\text { Direct Labour } & 420 & 115 & 560 & 320 & 875
\end{array}$ Overhead is applied at the rate of 120% of direct labour cost. Jobs are sold at cost plus 60%. Selling and administrative expenses for September totalled $2,950. By September 30, Jobs 812 were 816 are sold, but the customer who ordered Job 814 cancelled the order so the slide is still in the warehouse.
-Refer to Valley Water Slides. What is the Cost of Goods Sold for September?

Accepted Answer

A)  $3,575.00 
B)  $5,129.00 
C)  $5,720.00 
D)  $8,206.40

Question 4

Match each following terms with their correct description from the items listed below.
-An approach that assigns the actual costs of direct materials and direct labour to products but uses a predetermined rate to assign overhead costs

Accepted Answer

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

Question 5

In an actual cost system, actual direct materials, actual direct labour and actual overhead are used to calculate the unit cost.

Accepted Answer

A) True 
 B)False

Question 6

Match each following terms with their correct description from the items listed below.
-A costing system that accumulates production costs by process by department for a given period of time

Accepted Answer

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

Question 7

In job-order costing, the journal entry for overhead applied at the rate of $3 per direct labour hour when 210 direct labour hours were worked is:
Work-in-Process Inventory 630
Applied Overhead 630

Accepted Answer

A) True 
 B)False

Question 8

Big Red Truck Company designs and builds fire trucks. During June, it had applied overhead of $125,000. Overhead is applied at the rate of 80% of direct labour cost. Direct labour wages average $10 per hour. How many direct labour hours did Big Red Truck Company have for the month of June?

Accepted Answer

A)  4,500 
B)  10,500 
C)  12,500 
D)  15,625

Question 9

Overhead costs are assigned to Work-in-Process Inventory using a predetermined rate.

Accepted Answer

A) True 
 B)False

Question 10

The three manufacturing cost elements are direct materials, direct labour, and overhead.

Accepted Answer

A) True 
 B)False

Question 11

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. Assuming the variance is insignificant, calculate adjusted Cost of Goods Sold.

Accepted Answer

The answer of Budgeted overhead is $40,000, budgeted direct labour...

Question 12

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

Accepted Answer

A)  the schedule of Raw Materials used 
B)  the schedule of the Cost of Goods Sold 
C)  the schedule of the Manufacturing Overhead 
D)  the schedule of the Cost of Goods Manufactured

Question 13

Match each following terms with their correct description from the items listed below.* Each term may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Form filled out by each employee every day

Accepted Answer

A) Job-order cost sheet 
B) Time ticket 
C) Materials requisition form

Question 14

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 60cm. 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: $\begin{array}{lrrr}&\text { Job } 50 \mathrm{~cm}&\text { Job } 56\mathrm{~cm}&\text { Job } 60 \mathrm{~cm}\
\text { Direct Materials } & \$ 90 & \$ 85 & \$ 95 \
\text { Direct Labour } & 100 & 110 & 95 \
\text { Applied Overhead } & 140 & 154 & 133 \
\text { Total }&\$330&\$349&\$323
\end{array}$ A. Overhead is applied based on direct labour dollars. Calculate the overhead rate.
B. What rate does Giant use to price its jobs?
C. Calculate the gross margin on Job 60cm.

Accepted Answer

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

Question 15

Quillen
Quillen Company manufactures a product in a factory that has two producing departments, Cutting and Sewing, and two support departments, S1 and S2. The activity driver for S1 is number of employees, and the activity driver for S2 is number of maintenance hours. The following data pertain to the company: $\begin{array}{lcccc}&\text { Support Departments } & \text { Producing Departments } \
&\text { S1 } & \mathrm{S} 2 & \text { Cutting }&\text { Sewing }\
\text { Direct Costs } & \$ 180,000 & \$ 150,000 & \$ 122,000 & \$ 90,500 \
\text { Normal Activity: }  & & & \
\text { \# of employees }  & -& 30 & 63 & 147 \
\text { Maintenance hours } & 1,200& - & 16,000 & 4,000
\end{array}$
-Refer to Quillen Company. Allocating S1 costs first, what are the cost assignment ratios to be used under the sequential method for Department S2?

Accepted Answer

A)  S1 = 0, Cutting = 0.20, Sewing = 0.80 
B)  S1 = 0, Cutting = 0.2625, Sewing = 0.6125 
C)  S1 = 0, Cutting = 0.80, Sewing = 0.20 
D)  S1 = 0.1250, Cutting = 0.6125, Sewing = 0.2625

Question 16

Blackfoot Softball Glove Company
Blackfoot Softball Glove Company estimated the following yearly data at the beginning of the year: $\begin{array}{lccc}&\text { Assembly }\&\text { Department }&\text { Testing Department }&\text { Total }\
\text { Overhead } & \$ 570,000 & \$ 130,000 & \$ 700,000 \
\text { Direct Labour Hours } & 142,500 & 32,500 & 175,000 \
\text { Machine Hours } & 32,000 & 65,000 & 97,000
\end{array}$ The company uses departmental overhead rates. In the assembly department, direct labour hours are used to apply overhead. Machine hours are used to apply overhead in the testing department.Actual data for August are as follows: $\begin{array}{lccc}
& \text { Assembly } & \text { Testing } & \text { Total } \
 & \text { Department } & \text { Department } & \
\text { Overhead } & \$ 42,000 & \$ 12,000 & \$ 54,000 \
\text { Direct Labour Hours } & 13,500 & 2,430 & 15,930 \
\text { Machine Hours } & 4,020 & 11,000 & 15,020
\end{array}$
-Refer to Blackfoot Softball Glove Company. Suppose the company decides to continue using departmental overhead rates. What are the predetermined rates for the assembly and testing departments, respectively?

Accepted Answer

A)  assembly: $2 per direct labour hour; testing: $4 per machine hour 
B)  assembly: $4 per direct labour hour; testing: $2 per machine hour 
C)  assembly: $4 per direct labour hour; testing: $4 per direct labour hour 
D)  assembly: $7.22 per machine hour; testing: $7.22 per machine hour

Question 17

If the overhead variance is insignificant, it is allocated among the ending balances of Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Question 18

Match each following terms with their correct description from the items listed below.
-The amount by which applied overhead exceeds actual overhead

Accepted Answer

A) Predetermined overhead rate 
B) Plantwide overhead rate 
C) Departmental overhead rate 
D) Overhead variance 
E) Overapplied overhead
F)Underapplied overhead
G)Applied overhead
H)Normal Cost of Goods Sold

Question 19

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 insignificant.

Accepted Answer

The answer of If actual overhead for the year is...

Question 20

Refer to Michelle's. What is the journal entry to record actual overhead for the month?

Accepted Answer

A)  Overhead Control 33,000
Various Payables 33,000 
B)  Work-in-Process Inventory 33,000
Various Payables 33,000 
C)  Various Payables 33,000
Work-in-Process Inventory 33,000 
D)  Various Payable 33,000
Overhead Control 33,000

Exam 5: Job-Order Costing

Which costs are easy to trace to individual jobs?

Match each following terms with their correct description from the items listed below. -An approach that assigns the actual costs of direct materials and direct labour to products but uses a predetermined rate to assign overhead costs

In an actual cost system, actual direct materials, actual direct labour and actual overhead are used to calculate the unit cost.

Match each following terms with their correct description from the items listed below. -A costing system that accumulates production costs by process by department for a given period of time

In job-order costing, the journal entry for overhead applied at the rate of $3 per direct labour hour when 210 direct labour hours were worked is: Work-in-Process Inventory 630 Applied Overhead 630

Big Red Truck Company designs and builds fire trucks. During June, it had applied overhead of $125,000. Overhead is applied at the rate of 80% of direct labour cost. Direct labour wages average $10 per hour. How many direct labour hours did Big Red Truck Company have for the month of June?

Overhead costs are assigned to Work-in-Process Inventory using a predetermined rate.

The three manufacturing cost elements are direct materials, direct labour, and overhead.

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

Match each following terms with their correct description from the items listed below.* Each term may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Form filled out by each employee every day

If the overhead variance is insignificant, it is allocated among the ending balances of Work-in-Process Inventory, Finished Goods Inventory, and Cost of Goods Sold.

Match each following terms with their correct description from the items listed below. -The amount by which applied overhead exceeds actual overhead

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 insignificant.

Refer to Michelle's. What is the journal entry to record actual overhead for the month?