Chapter 2 Smartbook:
Based on this information, the predetermined overhead rate per direct labor dollar for Dept. B is $ est. manu. overhead: company: 500,000 dept a: 338,000 dept b: 162,000 est. direct labor cost: company: 250,000 dept a: 130,000 dept b: 120,000 actual manu. overhead: company: 720.000 dept a: 400,000 dept b 320,000 actual direct labor cost: company: 300,000 dept a: 160,000 dept b: 140,000
1.35
Based on this information, the overhead applied to Job ABC using multiple predetermined overhead rates is $ Predetermined overhead rate per direct labor hour: company: 2.10 dept a: 2.40 dept b: 1.80 direct labor hours worked on job abc: company: 40 dept a: 18 dept b: 22
166.80
Based on this information, the predetermined overhead rate per direct labor dollar is Est manu overhead: 500,000 est direct labor cost 250,000 actual manu overhread 720,000 actual direct labor cost 300,000
2
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 listed $4,000 in direct materials cost and $5,000 in direct labor cost to manufacture 7,500 units. The unit cost of Job #420 is:
2
Based on this information, the predetermined overhead rate per direct labor hour is $. Est. manufacturing overhead: $450,000 Est. direct labor hours: 150,000 Actual manu. overhead: $405,000 Actual direct labor hours: 180.000
3
Based on this information, the overhead applied to Job ABC using multiple predetermined overhead rates is ______. predetermined OH rate per direct labor hour: company: 2.10 dept a: 2.40 dept b: 1.80 direct labor hours worked on job abc: company: 30 dept a: 17 dept b: 13
64.20
Labor charges that cannot be easily traced to a job are considered Blank______. a. manufacturing overhead b. indirect labor c. direct labor d. nonmanufacturing costs
A B
Manufacturing overhead costs Blank______. a. consist of many different items b. are indirect costs c. do not impact the average cost per unit d. tend to vary significantly, in total from one period to the next.
A B
Widely used allocation bases in manufacturing include Blank______. units of product product revenue direct labor cost direct labor hours nonmanufacturing costs machine hours
A C D F
Costs assigned to units of product under absorption costing include: a. variable nonmanufacturing b. fixed manufacturing c. fixed nonmanufacturing d. variable manufacturing
B D
Labor charges that cannot be easily traced to a job are considered ______. a. nonmanufacturing costs b. manufacturing overhead c. direct labor d. indirect labor
B D
A job cost sheet contains ______ the job. a. the selling price of b. selling cost charged to c. manufacturing overhead charged to d. materials cost charged to e. labor costs charged to
C D E
True/False: One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors.
TRUE
True/False: One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors.
True
An allocation base should be:
a cost driver
Cost-plus pricing occurs when ________.
a markup percentage is added to the cost of a job
Which of the following would not be a good allocation base for manufacturing overhead?
accounting hours
The process used to assign overhead costs to products is called overhead ________.
allocation
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.
Overhead application is the process of ____________.
assigning manufacturing overhead cost to jobs
The unit product cost is the same as the _______.
average product cost per unit, total job cost divided by number of units
An essential quality of an overhead allocation base is that it must __________.
be common to all the company's products and services
The type and quantity of each type of direct material needed to complete a unit of product is listed on the _________.
bill of materials
The type and quantity of each type of direct material needed to complete a unit of product is listed on the ____________.
bill of materials
When a predetermined markup is applied to a base to determine the target selling price, the company is using __________-__________ pricing.
cost, plus
Job-order costing would most likely be used in a(n): a. oil refinery b. dairy farm that produces raw milk c. soda bottling factory d. construction company
d. construction company
The adjustment for overapplied overhead Blank______ net income.
decreases cost of goods sold and increases
When a company uses a departmental approach rather than a plantwide approach to applying overhead, the selling price of the product will always be __________.
different
Labor costs that are easily traced to a job are called _______ labor costs.
direct
The total cost of a job includes:
direct labor cost, predetermined manufacturing overhead, direct materials cost
Average manufacturing overhead cost per unit usually varies from one period to the next because ______
fixed manufacturing overhead remains constant in total even when production changes
The adjustment for underapplied overhead ______ net income.
increases cost of goods sold and decreases net operating income
The document that records the materials, labor, and manufacturing overhead costs charged to a job is the ______.
job cost sheet
When compared to a departmental approach, using activity-based costing results in Blank______ overhead rates.
more
Compared to a plantwide overhead rate system, a multiple predetermined overhead rate system is Blank______ accurate.
more complex and more
The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find______.
overhead applied to the job
Why is the unit product cost different from the cost that would be incurred if another (additional) unit were produced?
the unit production cost is an average, not an incremental cost
An hour-by-hour summary of an employee's activities throughout the day is found on the ______ _____.
time ticket
The document used to record the hours workers spend on each job and task is called a ______.
time ticket
The unit product cost is the same as the ___________.
total job cost divided by number of units, average product cost per unit
Costs assigned to units of product in absorption costing include ______ and ________ manufacturing costs.
variable, fixed
The average manufacturing overhead cost per unit tends to ______ when the number of units produced fluctuate.
vary from one period to the next
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
$4,000
Based on this information, the predetermined overhead rate per direct labor dollar for Dept. A is ______. est. manu. overhead: company: 500,000 dept a: 338,000 dept b: 162,000 est. direct labor cost: company: 250,000 dept a: 130,000 dept b: 120,000 actual manu. overhead: company: 720.000 dept a: 400,000 dept b 320,000 actual direct labor cost: company: 300,000 dept a: 160,000 dept b: 140,000
2.60
Job XYZ has a total manufacturing cost of $600. If the mark-up percentage is 40%, the job will sell for $
840
The appeal of using predetermined departmental overhead rates is they presumably provide ________.
a more accurate accounting of cost, enhanced information for decision making
When a company creates overhead rates based on the actions it performs, it is employing an approach called _________-_______ costing.
activity, based
A predetermined overhead rate is calculated by dividing the ______ total manufacturing overhead by the ______ total allocation base.
estimated, estimated
Based on this information, the amount of overhead allocated to a job that used 300 direct labor hours is $ est manu overhead 450,000 est direct labor hours 150,000 actual manu overhead 405,000 actual direct labor hours 180,000
900
A bill of materials contains the Blank______. a. type of each direct material needed to complete a unit of product b. quantity of materials to be drawn from the storeroom c. type of materials to be drawn from the storeroom d. quantity of each direct material needed to complete a unit of product
A D
T/F: When a company uses cost-plus pricing, they consider both the costs of production and the desired profit.
FALSE
A factor that causes overhead costs is called a ________.
cost driver
To calculate the unit product cost using the job cost sheet Blank______ by the number of units produced. Multiple choice question.
divide the total job cost
Which of the following is only true in a multiple predetermined overhead rate system?
each production department may have its own predetermined overhead rate
To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the __________.
estimated allocation base
Companies that make many different products each period use _______-_______ costing.
job order
Manufacturing overhead consists of _______.
many different kinds of indirect costs
Direct materials costs are recorded on the job cost sheet when the ______.
materials are issued to the job
An allocation base is a ______________________________________.
measure of activity used to assign overhead costs to products and services
When all of a company's job cost sheets are viewed collectively, they form what is known as a(n) ________ _________.
subsidiary ledger
Why is the unit product cost different from the cost that would be incurred if another (additional) unit were produced?
the unit product cost is an average, not an incremental cost
Allocation bases that do not drive overhead costs
will not accurately measure the cost of overhead used
A single predetermined overhead rate that is used throughout a plant is called a(n) _______ overhead rate.
plantwide
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 X