ACCT 3030 Weaver

Job #4260 consisted of 1,000 units at a total cost of $200,000. The cost transferred to Cost of Goods Sold for the sale of 600 of the units is

120,000

Jones Company uses a job-order costing system with a predetermined overhead rate of 120% of direct labor cost. The job cost sheet for Job #420 showed that Jones Company spent $4,000 on direct materials and $5,000 on direct labor on the job. What is the total cost of Job #420?

15,000

Raw materials inventory was $5,000 at the beginning of the year and $12,000 at the end of the year. During the year, a total of $27,000 in raw materials were purchased, including $4,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.

16,000

Murphy Manufacturing estimated total manufacturing overhead for the year to be $100,000 and that 5,000 direct-labor hours would be used. Actual overhead was $120,000 and actual direct labor-hours were 7,500. The overhead applied to a job completed during the year that used 200 direct labor-hours was

4000

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 $

900

Given: Cost of goods manufactured of $234,000; beginning finished goods inventory of $18,000; and ending finished goods inventory of $24,000, calculate unadjusted cost of goods sold.

= $18,000+ 234,000 - 24,000 = 228,000.

Which of the following statements are true?

A regional sales manager's salary is a direct cost of the regional office in which the sales manager works. A direct cost can be easily and conveniently traced to a specific cost object.

Job-order costing would most likely be used in a(n)

Construction Company

A(n) is anything for which cost data are desired—including products, customers, plants, office locations, and departments.

Cost objects

Underapplied or overapplied manufacturing overhead can be disposed of by closing it to

Cost of goods sold or allocating it to Work in process, Finished goods, and Cost of goods sold

Labor costs that can be easily and conveniently traced to specific products are _____ costs.

Direct labor

Which of the following are most likely fixed costs?

Factory rent Factory insurance Administrative salaries

Within the relevant range of activity, ______ costs remain constant in total.

Fixed

The contribution approach to constructing income statements distinguishes between ____ costs.

Fixed and variable

Product costs flow through the inventory accounts until the goods are sold, at which time they are matched against sales on the Blank

Income statement

Direct materials and direct labor are both _____ costs.

Manufacturing

Direct materials and direct labor are both ______ costs.

Manufacturing

If a company incurs $2,000 of factory rent, $1,000 of factory utilities, and $5,000 of miscellaneous factory costs, the journal entry to record these transactions would be to debit

Manufacturing overhead $8,000 and credit Accounts payable $8,000

A cost that contains both variable and fixed costs elements is called

Mixed

Which of the following statements are true?

Period costs do not flow through the inventory accounts. Period costs are expensed when incurred.

A journal entry that debits Raw Materials and credits Accounts Payable is recording the

Purchase of materials

Which of the following statements are true?

Raw materials inventory represents the cost of materials not yet used in production. When materials are purchased they are recorded in the Raw materials inventory account.

Luver Corporation's Gross margin is $100,000, Cost of goods sold equals $70,000, and Selling and administrative expenses total $45,000. Net operating income is

Reason: $100,000 - $45,000 = $55,000 $55,000

Given: Cost of goods manufactured of $410,000; beginning finished goods inventory of $110,000 and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.

Reason:Unadjusted cost of goods sold=$110,000 + $410,000 - $125,000=$395,000.

Which of the following is not a manufacturing cost category?

Selling and admin costs

Which of the following are differences between the traditional and contribution format to income statements?

Traditional income statements focus on cost classifications. Contribution format statements focus on cost behavior. Contribution format statements make it easier to predict how decisions affect the future.

A cost may be direct or indirect, depending on the cost object.

True

One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors. True false question.

True

When using the high-low method, the slope of the line equals the cost per unit of activity.

Variable

Within the relevant range, a cost that changes in direct proportion to changes in the activity level is a cost.

Variable

An allocation base should be:

a cost driver

All manufacturing costs are assigned to units of product and all nonmanufacturing costs are treated as period cost under costing.

absorption

The journal entry to record the purchase of materials credits

accounts payable

Work in Process consists of

actual direct materials cost applied manufacturing overhead actual direct labor cost

The contribution approach to constructing income statements

aids in decision making distinguishes between fixed and variable costs

Methods to dispose of underapplied or overapplied manufacturing overhead are

allocate it to Work in process, Finished goods, and Cost of goods sold close it to Cost of goods sold

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 a(n)

allocation base

What side of the Manufacturing overhead account is actual manufacturing overhead entered on?

always debit

Companies use a predetermined overhead rate rather than an actual overhead rate because

an actual rate is not known until the end of the period

Cost objects include

anything for which cost data is desired customers organizational subunits / departments

A journal entry that debits Work in process and credits Manufacturing overhead is recording the

application of manufacturing overhead costs

Manufacturing overhead costs Blank______.

are indirect costs consist of many different items

Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account

as they are incurred

Overhead application is the process of Blank

assigning manufacturing overhead cost to jobs

How individual costs react to changes in activity level is referred to as cost

behavior

cost behavior

categorizes costs as fixed, mixed and variable refers to how a cost will change as activity level changes

Actual manufacturing overhead is Blank______ to the Manufacturing overhead account.

debited

The adjustment for overapplied overhead Blank______ net income.

decreases cost of goods sold and increases

Underapplied or overapplied overhead is the Blank

difference between overhead applied to work in process and actual overhead

Costs that can be easily and conveniently traced to a specific product are called ______ costs.

direct

Materials that become an important component of the finished product whose cost can be easily and conveniently traced to the finished product are. materials.

direct

A journal entry that debits Manufacturing overhead and credits Accounts payable would not be used to record

direct labor costs

A laptop computer manufacturer would consider the computer's processor chip to be a(n) Blank______ cost.

direct material

Manufacturing costs include

direct materials manufacturing overhead direct labor

To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the Blank

estimated total amount of the allocation base.

The formula for a predetermined overhead rate is

estimated total manufacturing overhead cost ÷ estimated total allocation base

Manufacturing overhead costs include

factory insurance the factory supervisor's salary

Manufacturing overhead costs include

factory maintenance wages factory utilities factory rent

When a job is completed, its costs are transferred into

finished goods

Within the relevant range of activity, Blank______ costs remain constant in total.

fixed

Costs assigned to units of product under absorption costing include:

fixed manufacturing. variable manufacturing.

Period costs

include all costs that are not product costs are expensed in the period incurred

The adjustment for underapplied overhead Blank______ net income.

increases cost of goods sold and decreases

Labor costs charged to Manufacturing Overhead represent Blank______ labor costs.

indirect

Companies that make many different products each period use

job order

The best fitting line minimizes the sum of the squared errors when using

least-square regression

A method that uses all the available data points to divide a mixed cost into its fixed and variable components is called Blank

least-squares regression

The schedule of cost of goods soldBlank 1Blank 1 sold , Incorrect Unavailable summarizes costs that remain in Work in process inventory and that have been transferred from Work in process to Finished goods inventory.

manufactured or produced

Categories of manufacturing costs include

manufacturing overhead direct materials direct labor

Manufacturing overhead consists of

many different kinds of indirect costs

Manufacturing costs can be divided into three categories: direct , labor and manufacturing .

materials direct overhead

An allocation base is a(n) Blank____

measure of activity used to assign overhead costs to products and services

Gross margin minus selling and administrative expenses equals

net operating income

Which of the following would not be charged to the Manufacturing overhead account?

nonmanufacturing costs

When labor costs are incurred, Blank______ labor costs are added directly to the Work in Process account.

only direct

The difference between overhead applied to work in process and actual overhead is Blank_

overapplied or underapplied overhead

The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find Blank

overhead applied to the job

Selling and administrative costs incurred are treated as Blank

period expenses

The total cost of a job is calculated by adding the total of direct labor cost, direct materials cost, and:

predetermined manufacturing overhead cost.

The total cost of a job includes:

predetermined manufacturing overhead. direct labor cost. direct materials cost.

The formula for applying overhead to a specific job is: Blank______ amount of allocation base incurred by job.

predetermined overhead rate ×

Inventoriable costs is another term for costs.

product

Any purchased materials that will go into the finished product are first recorded in the inventory account.

raw material

The schedule of cost of goods summarizes the portions of those costs that remain in ending Finished Goods inventory and that are transferred out of Finished Goods into Cost of Goods Sold.

sold

When calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is Blank

subtracted from raw materials used in production

The rise-over-run formula for the slope of a straight line is the basis of Blank

the high-low method

Period costs are always expensed on the income statement in the period in which

they are incurred

Direct labor is also called labor.

touch

An income statement focusing on product and period costs has been prepared using a(n) format, while a(n) format income statement makes a distinction between fixed and variable costs.

traditional or GAAP, contribution or contribution margin

The transfer of costs from one inventory account to the next parallels the physical transfer of goods from one inventory to the next.

true

When only a portion of the units involved in a job are sold, the Blank

unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold

Cost of goods sold for a merchandising company, direct materials and commissions are all examples of

variable

Which type of cost changes in total, in direct proportion to changes in activity level?

variable

Allocation bases that do not drive overhead costs

will not accurately measure the cost of overhead used

Units of product that are only partially complete are contained in process inventory.

work in

The journal entry to record $10,000 in manufacturing overhead applied to Job #40 debits

work in process 10,000 and credit manufacturing

Costs of partially completed units are accounted for in

work in progress