ACC 202 Part Two

Estimated manufacturing overhead: $500,000 estimated direct labor hours: $250,000 actual manufacturing overhead: $720,000 actual direct labor hours: $300,000

(500,000/250,000) = 2.00 per diret labor dollar

A predetermined overhead rate is calculated by dividing the ____ total manufacturing overhead by the _____ total amount of the allocation base a. estimated; actual b. actual; actual c. estimated; estimated d. actual; estimated

c.

Allocation bases that do not drive overhead costs: a. are difficult to keep track of b. cannot be used to calculate overhead c. can cause product costs to be distorted

c.

the amount transferred from work in process to finished goods is referred to as the

cost of goods manufactured

Which of the following would not be a good allocation base for manufacturing overhead? a. machine hours b. direct labor hours c. units of product d. accounting hours

d

In job-order costing a company's ______ costs flow through three inventory accounts on the balance sheet and then on cost of goods sold in income statement

product

During April, materials requisition forms were prepared to authorize withdrawing $52,000 in raw materials from the storeroom for use in production. These raw materials included $50,000 of direct and $2,000 of indirect materials to production departments

work in process debit 50,000; manufacturing overhead 2000; and credit raw materials 52,000

Jones company uses a job-order costing system with a predetermined overhead rate of 120% of direct labor costs. The job cost sheet listed $4,000 in direct materials cost and $5,000 in direct labor cost to manufacture 7,500 units. The unit cost is

4,000 + 5,000 +(1.2 * 5000)= $15,000 15,000/7,500 =2.00

Smith INC, uses a job order costing system with the predetermined overhead rate of $12 per machine hour. The job cost sheet for Job listed 12,000 direct labor costs, 18,000 direct materials, 1,200 direct labor hours and 1,1000 machine hours. The total cost of Job is

43200

Job XYZ has a total manufacturing cost of $600. If the markup percentage is 40%, the job will sell for

600+(600* 40%) =$840

A job sheet contains: a. manufacturing overhead costs charged to the job b. selling costs charged to the job c. labor costs charged to the job d. materials costs charged to the job e. the selling price of the job

A, C, D

Typical cost drivers include: a. flight hours b. machine hours c. computer time d. machine depreciation e. utilities cost

a , b, c

All manufacturing costs are assigned to units of product and all non-manufacturing costs are treated as period costs under _____ costing

absorption

When a company creates overhead rates based on the action it performs, it is employing an approach called _____-____ costing

activity based

the process used to assign overhead costs to products is called overhead _____

allocation

A measure such as direct labor hours or machine hours used to assign overhead costs to products and services is called a cost driver or ____ _____

allocation base

raw materials is an ____ account thus when they are purchases they are initially recorded as a ____ not an expense

asset

includes the manufacturing costs associated with units of product that were finished during the period

cost of goods manufactured

The adjustment for overapplied overhead: a. increase COGS and decreases net income b. increase both COGS and NI c. Decreases both COGS and NI d. decrease COGS and increase NI

d.

consist of completed units of product that have not yet been sold to customers

finished goods

when goods are sold on account, what accounts are credited?

finished goods and sales

as jobs are sold their costs are transferred from

finished goods to cost of goods sold

Companies that make different product each period use ____ ____ costing

job order

do period costs flow through inventories on the balance sheet?

no

A single predetermined overhead rate is called a _____ overhead rate

plantwide

A normal costing system applies overhead by job by multiplying a ____ ___ rate by the _____ amount of the allocation base incurred by the job

predetermined overhead, actual

When all of a company's job cost sheets are viewed collectively, they form what is known as a ____ ___

subsidiary ledger

An hour-by-hour summary of an employees activities throughout the day is found on the ____ ______

time ticket

true or false: undersupplied or oversupplied overhead occurs because overhead is applied to jobs using a predetermined rate based on estimates of costs and activity levels

true

When a job is completed, which account is credited?

work in process

Labor charges cannot be easily traced to a job are considered: a. indirect labor b. manufacturing overhead c. direct labor

a and b

The unit product cost is the same as the: a. average product cost per unit b. total cost divided by the number of units c. cost that would be incurred if another unit were produced d. incremental unit cost

a and b

Compared to a plant wide overhead rate system, a multiple predetermined overhead rate system is a. more complex, but more accurate b. more complex and less accurate c. simpler, but less accurate d. simpler and more accurate

a.

The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find: a. overhead applied to the job b. the predetermined overhead rate for the job c. total cost of the job d. actual overhead

a.

Which of the following is not a manufacturing cost category a. selling and administrative costs b. manufacturing overhead c. direct labor d. direct materials

a.

Why do companies use a predetermined overhead rate rather than actual overhead rate a. an actual overhead rate is not known until the end of the period b. a predetermined overhead rate is more accurate c. an actual overhead rate can never be calculated d. a predetermined overhead rate is easier to use

a.

total manufacturing overhead costs tend to: a. remain fairly constant b. vary greatly with production c. be easily traceable to jobs d. be impossible to assign to jobs

a.

a bill of materials contains the: a. type of materials to be drawn from the storeroom b. quantity of materials to be drawn from the storeroom c. quantity of each direct material needed to complete a unit of product d. type of each direct material needed to complete a unit of product

c and d

The average manufacturing cost per unit tends to a. remain fairly constant b. contain direct materials costs c. be more than direct materials cost per unit d. vary from one period to the next

d.

The total cost of a job is calculated by adding the total direct labor cost, direct materials cost and a. actual manufacturing overhead cost, and applied manufacturing cost b. actual manufacturing overhead cost c. applied manufacturing overhead cost and applied nonmanufacturing cost d. applied manufacturing overhead cost

d.

include any materials that go into the final product

raw materials

On April 1, Ruger Corporation had $7,000 in raw materials on hand. During the month, the company purchased on account additional $60,000 in raw materials. The purchase is recorded in journal entry like

raw materials debit $60,000; Accounts Payable credit 60,000

at the point where the jobs are sold the various costs attached to each job are finally

recorded as an expense

consists of units of product that are only partially complete and will require further work before they are ready for sale to the customer

work in process

when raw materials are used in production as direct materials, their costs are transferred to ______ inventory

work in process

To transform direct materials into completed jobs, direct labor is added to ______ and manufacturing overhead cost is applied to ______ by multiplying the predetermined overhead rate by the actual quantity of the allocation base consumed by each job

work in process, work in process

undersupplied or overapplied overhead is the: a. difference between overhead applied to work in process and actual overhead b. difference between estimated and actual overhead c. overhead applied to work in process d. sum of overhead applied to work in process and actual overhead

a.

Estimated manufacturing overhead: $450,000 estimated direct labor hours: 150,000 actual manufacturing overhead: $405,000 actual direct labor hours: 180,000 Based on this information, the amount of overhead allocated to a job that used 300 direct labor hours is ____

(450,000/150,000)= 3.00 * 300 hours =900

Companies assign costs to products and services to: a. understand product profitability b. determine the best supplier of raw materials c. value ending inventory d. establish selling prices

a, c, d

Labor charges that cannot be easily traced to a job are considered a. direct labor b. manufacturing overhead c. indirect labor

b and c

manufacturing overhead costs: a. tend to vary significantly, in total, from one period to the next b. are indirect costs c. do not impact the average cost per unit d. consists of many different items

b and c