job costing q's final

- The following information relates to October: Production supervisor's salary $2,500 Factory maintenance wage 250 hours at $8 per hour The journal entry to record the preceding information is: A. Manufacturing Overhead 4,500 Wages Payable 4,500 B. Wages Payable 4,500 Manufacturing Overhead 4,500 C. Work-in-Process Inventory 4,500 Wages Payable 4,500 D. Wages Payable 4,500 Work-in-Process Inventory 4,500 E. Work-in-Process Inventory 2,500 Manufacturing Overhead 2,000 Wages Payable 4,500

a

An accountant recently debited Work-in-Process Inventory and credited Manufacturing Overhead. The accountant was: A. applying a predetermined overhead amount to production. B. recognizing receipt of the factory utilities bill. C. recording a year-end adjustment for an insignificant amount of underapplied overhead. D. recognizing actual overhead incurred during the period. E. recognizing the completion of production.

a

Howard Manufacturing's overhead at year-end was underapplied by $5,800, a small amount given the firm's size. The year-end journal entry to record this amount would include: A. a debit to Cost of Goods Sold. B. a debit to Manufacturing Overhead. C. a debit to Work-in-Process Inventory. D. a credit to Cost of Goods Sold. E. a credit to Work-in-Process Inventory

a

If a company sells goods that cost $70,000 for $82,000, the firm will: A. reduce Finished-Goods Inventory by $70,000. B. reduce Finished-Goods Inventory by $82,000. C. report sales revenue on the balance sheet of $82,000. D. reduce Cost of Goods Sold by $70,000. E. follow more than one of the above procedures.

a

Job no. C12 was completed in November at a cost of $18,500, subdivided as follows: direct material, $3,500; direct labor, $6,000; and manufacturing overhead, $9,000. The journal entry to record this information is: A. Finished-Goods Inventory 18,500 Work-in-Process Inventory 18,500 B. Work-in-Process Inventory 18,500 Finished-Goods Inventory 18,500 C. Work-in-Process Inventory 18,500 Raw-Material Inventory 3,500 Wages Payable 6,000 Manufacturing Overhead 9,000 D. Cost of Goods Sold 18,500 Finished-Goods Inventory 18,500 E. Finished-Goods Inventory 18,500 Cost of Goods Sold 18,500

a

Media, Inc., an advertising agency, applies overhead to jobs based on direct professional hours. Overhead was estimated to be $150,000, direct professional labor hours were estimated to be 15,000, and direct professional labor cost was projected to be $225,000. During the year, Media incurred actual overhead costs of $146,000, actual direct professional labor hour of 14,500, and actual direct labor cost of $222,000. By year-end, the firm's overhead was: A. $ 1,000 under-applied. B. $ 1,000 overapplied. C. $4,000 underapplied. D. $4,000 overapplied. E. $5,000 underapplied.

a

The Kraig Corporation manufactures custom-made purses. The following data pertains to Job XY5: Direct materials placed into production $4,000 Direct labor hours worked 50 hours Direct labor rate per hour $ 15 Machine hours worked 100 hours Factory overhead is applied using a plant-wide rate based on direct labor hours. Factory Overhead was budgeted at $60,000 for the year and the direct labor hours were estimated to be 15,000. Job XY5 consists of 50 units. What is overhead cost assigned to Job XY5? a. $200 b. $400 c. $750 d. $1,500

a

The completion of production would require a company to: A. debit Finished-Goods Inventory and credit Work-in-Process Inventory. B. debit Work-in-Process Inventory and credit Finished-Goods Inventory. C. add direct labor to Work-in-Process Inventory. D. add direct materials, direct labor, and manufacturing overhead to Work-in-Process Inventory. E. add direct materials to Finished-Goods Inventory.

a

The journal entry needed to record $5,000 of advertising for Westwood Manufacturing would include: A. a debit to Advertising Expense. B. a credit to Advertising Expense. C. debit to Manufacturing Overhead. D. a credit to Manufacturing Overhead. E. a debit to Projects-in-Process.

a

The left side of the Manufacturing overhead account is used to accumulate : A. Actual manufacturing overhead costs as incurred throughout the accounting period. B. overhead applied to Work-in-Process Inventory. C. underapplied overhead. D. predetermined overhead. E. overapplied overhead.

a

Which of the following statements about materials is false? A. Acquisitions of materials are normally charged to the Purchases account. B. The use of direct materials gives rise to a debit to Work-in-Process Inventory. C. The use of indirect materials gives rise to a debit to Manufacturing Overhead. D. The use of indirect materials gives rise to a credit to Manufacturing Supplies Inventory. E. Direct materials are accounted for in a different manner than indirect materials.

a

- Which of the following is the correct method to calculate a predetermined overhead rate? A. Budgeted total manufacturing cost ÷ budgeted amount of cost driver. B. Budgeted overhead cost ÷ budgeted amount of cost driver. C. Budgeted amount of cost driver ÷ budgeted overhead cost. D. Actual overhead cost ÷ budgeted amount of cost driver. E. Actual overhead cost ÷ actual amount of cost driver.

b

A computer manufacturer recently shipped several laptops to a customer (cost: $25,000) and billed the customer $30,000. Which of the following options correctly expresses the accounts that are debited and credited to record this transaction? A. Debits: Accounts Receivable, Finished-Goods Inventory; credits: Sales Revenue, Cost of Goods Sold. . B. Debits: Accounts Receivable Cost of Goods Sold; credits: Sales Revenue, Finished-Goods Inventory. C. Debits: Sales Revenue, Cost of Goods Sold; credits: Accounts Receivable, Finished-Goods Inventory. C. Debits: Sales Revenue, Finished-Goods Inventory; credits: Accounts Receivable, Cost of Goods Sold. E. Debits: Accounts Receivable; credits: Finished-Goods Inventory, Profit on Sale

b

If the amount of effort and attention to products varies substantially throughout a firm's various manufacturing operations, the firm might consider the use of: A. a plantwide overhead rate. B. departmental overhead rates. C. actual overhead rates instead of predetermined overhead rates. D. direct labor hours to determine the overhead rate. E. machine hours to determine the overhead rate.

b

Total manufacturing-related costs incurred for Miller Company in October for all jobs is as follows: Direct materials $ 900 Insurance on factory building 150 Direct labor 1,200 Property taxes on factory building 400 Other factory overhead costs 1,450 Factory overhead applied 1,650 Assuming Miller uses a normal costing system and applies overhead based on a predetermined rate, what is the credit to Overhead Control to close the account at the end of the year (which mean to find out if it's over applied or under applied manufacturing Overhead by how much is the difference ? a. $900 b. $350 c. $1,450 d. $1,650

b

Under- or overapplied manufacturing overhead at year-end is most commonly: A. charged or credited to Work-in-Process Inventory. B. charged or credited to Cost of Goods Sold. C. charged or credited to a special loss account. D. prorated among Work-in-Process Inventory, Finished-Goods Inventory, and Cost of Goods Sold. E. ignored because there is no effect on the Cash account.

b

Which of the following statements about the use of direct labor as a cost driver is false? A. Direct labor is the most commonly-used cost driver when calculating a predetermined overhead rate. B. Direct labor is gaining in importance in many manufacturing applications with respect to being a significant cost driver. C. Direct labor is an inappropriate cost driver to use if a company is highly automated. D. If direct labor is a good cost driver, increases in direct labor are matched with increases in manufacturing overhead. E. Companies can use either direct labor cost or direct labor hours as a cost driver.

b

The process of assigning overhead costs to the jobs that are worked on is commonly called: A. service department cost allocation. B. overhead cost distribution. C. overhead application (actual) D. transfer costing. E. overhead cost apportionment.

c

Walter Company uses a job-order costing system to account for product costs. The following information pertains to 2010: Materials placed into production $140,000 Indirect labor 40,000 Direct labor (10,000 hours) 160,000 Depreciation of factory building 60,000 Other factory overhead 100,000 Increase in work-in-process inventory 30,000 Factory overhead rate is $18 per direct labor hour. What is the total amount debited to Finished Goods Inventory in 2010? a. $490,000 b. $510,000 c. $450,000 d. $550,000

c

- Olson Corporation constructs new homes. Assume that Olson uses a job costing system. During May 2010, the following transactions occurred: Olson purchased $4,500 of lumber on account. Olson used $3,750 of lumber in production and incurred 50 hours of direct labor hours at $15 per hour. Depreciation of $1,500 on equipment used to build new houses was recorded. A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash. The journal entry to record the requisition of lumber for Olson would include a a. debit to Work-in-Process of $4,500. b. debit to Materials Inventory of $3,750. c. credit to Finished Goods of $3,750. d. debit to Work-in-Process of $3,750.

d

- Which of the following statements about material requisitions is false? A. Material requisitions are often computerized. B. Material requisitions are a common example of source documents. C. Material requisitions contain information that is useful to the cost accounting department. D. Material requisitions authorize the transfer of materials from the production floor to the raw materials warehouse. E. Material requisitions are routinely linked to a bill of materials that lists all of the materials needed to complete a job.

d

Carlson Company uses a predetermined rate to apply overhead. At the beginning of the year, Carlson estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000. Actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were 11,000. If the predetermined overhead rate is based on machine hours, what is the total amount credited to the factory overhead account for the year for Carlson? a. $249,280 b. $246,000 c. $240,000 d. $264,000

d

Hill Company, which applies overhead at the rate of 150% of direct labor cost, began work on job no. 101 during February. The job was completed in March and sold during April, having accumulated direct material and labor charges of $14,000 and $6,000, respectively. On the basis of this information, the total overhead applied to job no. 101 amounted to: A. $0. B. $3,000. C. $6,000. D. $9,000. E. $29,000.

d

Horton Company applies overhead based on direct labor hours. At the beginning of 2005, the company estimated that manufacturing overhead would be $500,000, and direct labor hours would be 10,000. Actual overhead by the conclusion of 2005 amounted to $400,000. On the basis of this information, Horton's 2005 predetermined overhead rate is: A. $0.02 per direct labor hour. B. $0.025 per direct labor hour. C. $40 per direct labor hour. D. $50 per direct labor hour. E. none of the above.

d

Phillips Company incurred $80,000 of depreciation for the year. Seventy percent relates to the firm's-production facilities, and 30% relates to sales and administrative offices. If all items are handled in the proper manner, a review of the company's accounting records should reveal a: A. credit to Cash for $80,000. B. debit to Depreciation Expense for $80,000. C. debit to Manufacturing Overhead for $80,000. D. debit to Manufacturing Overhead for $56,000. E. debit to Work-in-Process Inventory for $24,000.

d

Sanger Corporation debited Cost of Goods Sold and credited Manufacturing Overhead at year-end. On the basis of this information, one can conclude that: A. budgeted overhead exceeded actual overhead. B. budgeted overhead exceeded applied overhead. C. budgeted overhead was less than applied overhead. D. actual overhead exceeded applied overhead. E. actual overhead was less than applied overhead.

d

The assignment of direct labor cost to individual jobs is based on: A. an estimate of the total time spent on the job. B. actual total payroll cost divided equally among all jobs in process. C. estimated total payroll cost divided equally among all jobs in process. D. the actual time spent on each job multiplied by the wage rate. E. the estimated time spent on each job multiplied by the wage rate.

d

The term "normal costing" refers to the use of: A. job-costing systems. B. computerized accounting systems. C. targeted overhead rates. D. predetermined overhead rates. E. actual overhead rates.

d

The total production cost of a job is composed of: A. direct material and direct labor. B. direct material, direct labor, manufacturing overhead, and outlays for selling costs. C. direct material, direct labor, manufacturing overhead, and outlays for both selling and administrative costs. D. direct material, direct labor, and applied manufacturing overhead. E. direct material, direct labor, and actual manufacturing overhead.

d

Manufacturing overhead: A. includes direct materials, indirect materials, indirect labor, and factory depreciation. B. is easily traced to jobs. C. includes all selling costs. D. should not be assigned to individual jobs because it bears no obvious relationship to them. E. is a pool of indirect production costs that must somehow be attached to each unit manufactured.

e

The estimates used to calculate the predetermined overhead rate will virtually always: A. prove to be correct. B. result in a zero balance left in the Manufacturing Overhead account at the end of the year. C. result in overapplied overhead that is closed to Cost of Goods Sold if it is immaterial in amount. D. result in underapplied overhead that is closed to Cost of Goods Sold if it is immaterial in amount. E. result in either underapplied or overapplied overhead that is closed to Cost of Goods Sol if it is immaterial in amount.

e

Walton Manufacturing recently sold goods that cost $35,000 for $42,000 cash. The journal entries to record this transaction would include: A. a credit to Work-in-Process Inventory for $35,000. B. a debit to Sales Revenue for $42,000. C. a credit to Profit on Sale for $7,000. D. a debit to Finished-Goods Inventory for $35,000. E. a credit to Sales Revenue for $42,000.

e

Which of the following statements is not correct regarding work in process? A. Work in process is partially completed inventory. B. Work in process consists of direct labor, direct material, and manufacturing overhead. C. Work-in-Process Inventory is debited as product costs are incurred. D. Work-in-Process Inventory appears on the year-end balance sheet. E. Work-in-Process Inventory is credited when goods are sold.

e