ACCT EXAM 2
Which of the following is an example of an industry that would use a process costing-rather than a job costing-system?
Coca-Cola
Which of the following industries would be most likely to use a job costing system?
Commercial building construction
The following information is provided by Alexandria Corporation: WIP Inventory, January 1 0 units Units started 14,000 Units completed and transferred out 9,000 WIP Inventory, December 31 5,000 Direct materials $28,200 Direct labor $18,000 Manufacturing Overhead $7,500 The units in ending WIP Inventory were 75% complete for materials and 50% complete for conversion costs. What are the total equivalent units for direct materials?
12,750
When using cost-plus pricing, the markup is added to the job cost to help A. determine the price to charge for the job. B. cover operating expenses. C. generate a profit. D. all of the above.
D. all of the above.
Which of the following would be an example of a typical manufacturing overhead cost?
Depreciation on factory equipment
Which of the following is a measure of the amount of work done, expressed in complete units of output?
Equivalent units
Equivalent units express the amount of work done during a period in terms of partially completed units.
False
Process costing would likely be used by which of the following?
PepsiCo
Which of the following product costing systems is normally used to assign costs to goods that are mass-produced goods?
Process costing
Conversion costs are generally added evenly throughout a process.
True
Manufacturing overhead would include
all manufacturing costs except direct materials and direct labor
Management can use job cost information for each of the following except
all of the listed choices are possible uses of job cost information.
The first three steps to allocating manufacturing overhead are taken before the year begins and include all of the following except
allocating some manufacturing overhead to each individual job.
Assigning manufacturing overhead costs and other indirect costs is called
cost allocation.
Manufacturing costs are usually combined into two categories in a process costing system. These two categories are
direct materials and conversion costs.
The two basic types of product costing systems are
job and process.
The two basic types of costing systems are
job costing and process costing.
The costing system used by a company producing custom fireplace mantels would be
job costing.
The costing system used by an oil refinery would be
process costing.
When direct materials are requisitioned, they flow directly into
work in process inventory account.
Greatwater Manufacturing uses job costing. In May, material requisitions were $44,000 ($39,000 of these were direct materials), and raw material purchases were $57,700. The end of month balance in raw materials inventory was $24,300. What was the beginning raw materials inventory balance?
$10,600
Which product costing system would be better for custom-order products?
Job costing system
A business has 175 full-time workers who work 8 hours per day. They have 130 part-time workers who work 4 hours per day. What is the number of full-time equivalent employees?
240
If manufacturing overhead has been overallocated during the period, then
the jobs produced during the period have been overcosted.
At Hodgson Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: Beginning WIP direct materials $32,000 Beginning WIP conversion costs $20,250 Costs of materials added $384,100 Costs of conversion added $271,125 WIP beginning (50% for conversion) 19,200 units Units started 119,500 units Units completed and transferred out 115,700 units WIP ending (60% for conversion) 23,000 units What is the total cost of units remaining in ending WIP?
$100,050
At Sunrise Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: WIP beginning (50% for conversion) 19,200 units Units started 120,500 units Units completed and transferred out 116,700 units WIP ending (60% for conversion) 23,000 units Beginning WIP direct materials $35,000 Beginning WIP conversion costs $22,500 Costs of materials added $384,100 Costs of conversion added $271,125 What is the total cost of units remaining in ending WIP?
$100,050
Job 590 has an ending balance of $28,500. It has been charged manufacturing overhead costs of $7,000. The rate is 70% of direct labor. What was the amount of direct materials charged to the job?
$11,500
Before the year began, Murphy Manufacturing estimated that manufacturing overhead for the year would be $175,500 and that 13,000 direct labor hours would be worked. Actual results for the year included the following: Actual manufacturing overhead cost $184,000 Actual direct labor hours 14,500 The predetermined manufacturing overhead rate per direct labor hour is closest to
$13.50.
Here are selected data for Sally Day Corporation: Beginning raw materials inventory $37,000 Beginning work in process inventory 61,500 Beginning finished goods inventory 56,300 Cost of materials purchased 151,000 Cost of direct materials requisitioned 91,300 Direct labor incurred 125,000 Actual manufacturing overhead 160,000 Cost of goods manufactured 287,000 Cost of goods sold 265,000 Manufacturing overhead rate (% of direct labor) 125% What is the ending work in process inventory balance?
$147,050
Here are selected data for Campbell Company: Cost of goods manufactured $320,000 Work in process inventory, beginning 109,000 Work in process inventory, ending 104,000 Direct materials used 73,000 Manufacturing overhead is allocated at 60% of direct labor cost. What was the amount of direct labor costs?
$151,250
Hilltop Manufacturing uses a predetermined manufacturing overhead rate based on direct labor hours to allocate manufacturing overhead to jobs. Selected data about the company's operations follows: Actual manufacturing overhead cost $500,000 Estimated manufacturing overhead cost $550,000 Estimated direct labor cost $175,000 Estimated direct labor hours 50,000 Actual direct labor hours 60,000 Estimated machine hours 40,000 Actual machine hours 35,000 By how much was manufacturing overhead overallocated or underallocated for the year?
$160,000 overallocated
Hilltop Manufacturing uses a predetermined manufacturing overhead rate based on machine hours to allocate manufacturing overhead to jobs. Selected data about the company's operations follows: Actual manufacturing overhead cost $500,000 Estimated manufacturing overhead cost $550,000 Estimated direct labor cost $175,000 Estimated direct labor hours 50,000 Actual direct labor hours 60,000 Estimated machine hours 40,000 Actual machine hours 35,000 By how much was manufacturing overhead overallocated or underallocated for the year?
$18,750 underallocated
Before the year began, Murphy Manufacturing estimated that manufacturing overhead for the year would be $175,500 and that 13,000 direct labor hours would be worked. Actual results for the year included the following: Actual manufacturing overhead cost $184,000 Actual direct labor hours 14,500 The amount of manufacturing overhead allocated for the year based on direct labor hours would have been
$195,750.
Wet N Wild Sports Equipment Company's work in process inventory on June 1 has a balance of $22,400 representing Job No. 265. During June, $50,000 of direct materials were requisitioned for Job No. 265 and $35,000 of direct labor cost was incurred on Job No. 265. Manufacturing overhead is allocated at 125% of direct labor cost. Actual manufacturing overhead costs incurred in June amounted to $41,000. No new jobs were started during June. Job No. 265 is completed on June 28. Is manufacturing overhead overallocated or underallocated for the month of June? By how much?
$2,750 overallocated
At Hodgson Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: Beginning WIP direct materials $32,000 Beginning WIP conversion costs $20,250 Costs of materials added $384,100 Costs of conversion added $271,125 WIP beginning (50% for conversion) 19,200 units Units started 119,500 units Units completed and transferred out 115,700 units WIP ending (60% for conversion) 23,000 units What is the cost per equivalent unit for conversion costs?
$2.25
Here are selected basic data for Stehli Company: Estimated manufacturing overhead $253,500 Factory utilities $30,200 Estimated labor hours 35,000 Indirect labor $22,400 Actual direct labor hours 36,000 Sales commissions $53,700 Estimated direct labor cost $325,000 Factory rent $47,700 Actual direct labor cost $320,000 Factory property taxes $28,100 Factory depreciation $66,000 Indirect materials $33,000 If the company allocates overhead based on direct labor cost, what are the total actual manufacturing overhead costs?
$227,400
In a department, 26,000 units are completed and transferred out and 7,400 remain in ending WIP at 65% complete. If an equivalent unit costs $9.00 for direct materials, what is the value of materials transferred out?
$234,000
At Sunrise Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: WIP beginning (50% for conversion) 19,200 units Units started 120,500 units Units completed and transferred out 116,700 units WIP ending (60% for conversion) 23,000 units Beginning WIP direct materials $35,000 Beginning WIP conversion costs $22,500 Costs of materials added $384,100 Costs of conversion added $271,125 What is the total cost of units completed and transferred out?
$612,675
The following is selected financial data from Turtle Bay Manufacturing for the most recent year. Ending raw materials inventory $21,000 Ending work in process inventory $44,200 Ending finished goods inventory $53,200 Amount of underallocated manufacturing overhead $5,100 Cost of goods sold for year $85,000 Cost of raw materials purchased during year $45,300 Cost of direct materials requisitioned during year $43,800 Cost of indirect materials requisitioned during year $7,200 Cost of goods completed during year $120,000 Manufacturing overhead allocated $60,000 Manufacturing overhead % of direct labor cost 120% What is the beginning raw materials inventory?
$26,700
Ryan's Paints allocates overhead based on machine hours. Selected data for the most recent year follow. Estimated manufacturing overhead cost $235,000 Actual manufacturing overhead cost $244,000 Estimated machine hours 20,000 Actual machine hours 22,500 The estimates were made as of the beginning of the year, while the actual results were for the entire year. The amount of manufacturing overhead allocated for the year based on machine hours would have been
$264,375.
Job 450 requires $9,800 of direct materials, $6,400 of direct labor, 590 direct labor hours, and 400 machine hours. Manufacturing overhead is computed at $14 per direct labor hour used and $10 per machine hour used. The total cost of Job 450 is
$28,460.
Stanley Company uses a job cost system. Manufacturing overhead has been overapplied by $5,600 for the year. Actual overhead incurred was $105,000. Other balances are: Raw materials inventory at end of year $14,000 Work in process inventory at end of year $31,500 Finished goods inventory at end of year $41,500 Unadjusted cost of goods sold for the year $290,000 What will be adjusted cost of goods sold after closing manufacturing overhead?
$284,400
At Hodgson Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: Beginning WIP direct materials $32,000 Beginning WIP conversion costs $20,250 Costs of materials added $384,100 Costs of conversion added $271,125 WIP beginning (50% for conversion) 19,200 units Units started 119,500 units Units completed and transferred out 115,700 units WIP ending (60% for conversion) 23,000 units What is the cost per equivalent unit for direct materials?
$3.00
At Sunrise Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: WIP beginning (50% for conversion) 19,200 units Units started 120,500 units Units completed and transferred out 116,700 units WIP ending (60% for conversion) 23,000 units Beginning WIP direct materials $35,000 Beginning WIP conversion costs $22,500 Costs of materials added $384,100 Costs of conversion added $271,125 What is the cost per equivalent unit for direct materials?
$3.00
Squire Corporation charged Job 110 with $13,400 of direct materials and $11,900 of direct labor. Allocation for manufacturing overhead is 75% of direct labor costs. What is the total cost of Job 110?
$34,225
Federer Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year: Estimated direct labor cost $500,000 Actual direct labor cost $465,000 Estimated manufacturing overhead costs $425,000 Actual manufacturing overhead costs $350,000 Estimated direct labor hours 250,000 Actual direct labor hours 232,000 If Federer Company uses direct labor hours as the allocation base, what would the allocated manufacturing overhead be for the year?
$394,400
The managerial accountant at Duck Manufacturing reported the following information: Units: Beginning WIP 54,500 75% for materials 45% for conversion Transferredminusin 225,000 Completed 232,000 Ending WIP 60% for materials 20% for conversion 47,500
$414,200.
Twinkle Ornaments Company uses job costing. Twinkle Ornaments Company has two departments, Trimming and Finishing. Manufacturing overhead is allocated based on direct labor cost in the Trimming Department and direct labor hours in the Finishing Department. The following additional information is available: Estimated amounts Trimming Dept Finishing Dept Direct labor cost $320,000 $400,000 Direct labor hours 25,000 40,000 Manufacturing overhead costs $400,000 $300,000 Actual data for completed Job No. 650 is as follows: Actual amounts Trimming Dept Finishing Dept Direct materials requisitioned $22,500 $52,500 Direct labor cost $35,400 $37,100 Direct labor hours 5,400 5,000 If Job No. 650 consists of 500 units of product, the average unit cost of this job is closest to:
$458.50.
Ready Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. Data for the Finishing Department follows: WIP, April 1 14,000 units Transferredminusin costs in WIP, April 1 $79,940 Direct materials (100%) in WIP, April 1 $24,420 Conversion costs (75%) in WIP, April 1 $23,400 Units transferredminusin 47,000 Transferredminusin costs during April $550,900 Units completed 41,000 April direct materials cost $155,500 April conversion costs $239,250 WIP, April 30 20,000 units (100% for materials and 50% for conversion costs) The cost per equivalent unit for conversion costs would be closest to
$5.15.
Perry Moldings has the following estimated costs for the upcoming year: Direct labor costs $62,000 Direct materials used $25,000 Salary of factory supervisor $39,000 Sales commissions $8,000 Heating and lighting costs for factory $22,000 Depreciation on factory equipment $5,000 Advertising expense $33,000 The company estimates that 1,200 direct labor hours will be worked in the upcoming year, while 2,000 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour is closest to
$55.
At Hodgson Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: Beginning WIP direct materials $32,000 Beginning WIP conversion costs $20,250 Costs of materials added $384,100 Costs of conversion added $271,125 WIP beginning (50% for conversion) 19,200 units Units started 119,500 units Units completed and transferred out 115,700 units WIP ending (60% for conversion) 23,000 units What is the total cost of units completed and transferred out?
$607,425
The following is selected financial data from Turtle Bay Manufacturing for the most recent year. Ending raw materials inventory $21,000 Ending work in process inventory $44,200 Ending finished goods inventory $53,200 Amount of underallocated manufacturing overhead $5,100 Cost of goods sold for year $85,000 Cost of raw materials purchased during year $45,300 Cost of direct materials requisitioned during year $43,800 Cost of indirect materials requisitioned during year $7,200 Cost of goods completed during year $120,000 Manufacturing overhead allocated $60,000 Manufacturing overhead % of direct labor cost 120% What is the actual manufacturing overhead?
$65,100
Here are selected data for Sunny Sky Corporation: Beginning raw materials inventory $37,000 Beginning work in process inventory 62,200 Beginning finished goods inventory 58,300 Cost of materials purchased 151,000 Cost of direct materials requisitioned 91,300 Direct labor incurred 135,000 Actual manufacturing overhead 160,000 Cost of goods manufactured 287,000 Cost of goods sold 265,000 Manufacturing overhead rate (% of direct labor) 125% What is the finished goods ending inventory?
$80,300
Twinkle Ornaments Company uses job costing. Twinkle Ornaments Company has two departments, Trimming and Finishing. Manufacturing overhead is allocated based on direct labor cost in the Trimming Department and direct labor hours in the Finishing Department. The following additional information is available: Estimated amounts Trimming Dept Finishing Dept Direct labor cost $320,000 $400,000 Direct labor hours 25,000 40,000 Manufacturing overhead costs $400,000 $300,000 Actual data for completed Job No. 650 is as follows: Actual amounts Trimming Dept Finishing Dept Direct materials requisitioned $22,500 $52,500 Direct labor cost $35,400 $37,100 Direct labor hours 5,400 5,000 What is the total manufacturing overhead cost for Job No. 650?
$81,750
Baron Corporation has two sequential processing departments: Assembly and Shaping. The Shaping Department reports the following information. Conversion costs are applied evenly throughout the process. Beginning WIP Inventory 8,000 units Transferredminusin costs in beginning WIP Inventory $110,200 Direct materials cost in beginning WIP Inventory $24,500 Conversion costs in beginning WIP Inventory $22,750 Units transferredminusin 57,000 units Transferredminusin costs $546,300 Units completed 52,000 Costs added: direct materials $167,120 Costs added: conversion costs $245,570 Ending WIP Inventory 13,000 units (40% complete for materials and 30% complete for conversion) The total cost of units transferred out to Finished Goods Inventory would be closest to
$949,000.
If all direct materials are added at the end of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is
0%.
If all direct materials are added at the beginning of the production process, and the units have made it 50% of the way through the production process, then the percentage completion for direct materials is
100%.
The following information is provided by Zander Corporation: WIP Inventory, January 1 0 units Units started 14,000 Units completed and transferred out 9,000 WIP Inventory, December 31 5,000 Direct materials $28,200 Direct labor $18,000 Manufacturing Overhead $7,500 The units in ending WIP Inventory were 80% complete for materials and 45% complete for conversion costs. At the end of the year, what are the equivalent units for conversion costs?
11,250
Twinkle Ornaments Company uses job costing. Twinkle Ornaments Company has two departments, Trimming and Finishing. Manufacturing overhead is allocated based on direct labor cost in the Trimming Department and direct labor hours in the Finishing Department. The following additional information is available: Estimated amounts Trimming Dept Finishing Dept Direct labor cost $320,000 $400,000 Direct labor hours 25,000 40,000 Manufacturing overhead costs $400,000 $300,000 Actual data for completed Job No. 650 is as follows: Actual amounts Trimming Dept Finishing Dept Direct materials requisitioned $22,500 $52,500 Direct labor cost $35,400 $37,100 Direct labor hours 5,400 5,000 What is the predetermined manufacturing overhead rate for the Trimming Department?
125% of direct labor cost
At Sunrise Corporation, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: WIP beginning (50% for conversion) 19,200 units Units started 120,500 units Units completed and transferred out 116,700 units WIP ending (60% for conversion) 23,000 units Beginning WIP direct materials $35,000 Beginning WIP conversion costs $22,500 Costs of materials added $384,100 Costs of conversion added $271,125 What are the total equivalent units for direct materials?
139,700
Color Wheel has 3,500 gallons of paint in WIP Inventory, with 75% of materials already added. The paint is 60% through the process. Assuming all conversion costs are added evenly throughout the process, what are the equivalent units for conversion costs?
2,100
Perfect Pigments has 3,500 gallons of paint in WIP Inventory, with 80% of materials already added. What are equivalent units in ending WIP Inventory for materials if the paint is 50% through the process?
2,800
Showboat Corporation had actual manufacturing overhead costs for the most recent year of $29,500. Manufacturing overhead is allocated using a predetermined manufacturing overhead rate of $1.50 per direct labor hour. Direct labor cost is $19 per hour. At the end of the year, Cabaret Corporation found it had overallocated manufacturing overhead by $1,250. How many direct labor hours were worked in total during the year?
20,500
Morgan Corporation uses estimated direct labor hours of 200,000 and estimated manufacturing overhead costs of $920,000 in establishing manufacturing overhead rates. Actual manufacturing overhead was $970,000, and allocated manufacturing overhead was $1,012,000. What was the number of actual direct hours worked?
220,000
Beginning WIP Inventory is 900 units; completed and transferred out were 3,400 units; and Ending WIP Inventory is 800 units. What is the number of units started?
3,300
Martinson Company adds direct materials at the beginning of the process and adds conversion costs throughout the process. The following data represents data in the Finishing Department:Finishing Department WIP, April 1 12,000 units Transferredminusin costs in WIP, April 1 $79,940 Direct materials (100%) in WIP, April 1 $24,420 Conversion costs (75%) in WIP, April 1 $23,400 Units transferredminusin 47,000 Transferredminusin costs during April $550,900 Units completed 42,000 April direct materials cost $155,500 April conversion costs $239,250 WIP, April 30 17,000 units (100% for materials and 60% for conversion costs) What are the equivalent units for conversion costs?
52,200
Here are selected data for Wilson Company: Estimated manufacturing overhead $243,750 Factory utilities $30,200 Estimated labor hours 35,000 Indirect labor $22,400 Actual direct labor hours 36,000 Sales commissions $53,700 Estimated direct labor cost $325,000 Factory rent $47,700 Actual direct labor cost $320,000 Factory property taxes $28,100 Factory depreciation $65,400 Indirect materials $33,000 If the company allocates overhead based on direct labor cost, what is the predetermined manufacturing overhead rate?
75% of direct labor cost
A job costing system can be used by which types of companies?
Service, manufacturing, and merchandising businesses