COST ACCNT Chap 4

The ideal criterion for choosing an allocation base for overhead is:

a cause-and-effect relationship

The two main advantages of using predetermined factory overhead rates are to provide more accurate unit cost information and to:

provide cost information on a timely basis

Normal spoilage is defined as:

spoilage that occurs under efficient operations

The key distinction between job costing and process costing is:

the accumulation of costs to assign to cost objects.

Volume-based cost accounting systems often do not provide sufficiently accurate product costing because they:

too often use an allocation base that does not have a cause-effect relationship to resource usage

Sutherland Company listed the following data for 2019: Budgeted factory overhead: $2,100,000 Budgeted direct labor hours: 89,000 Budgeted machine hours: 51,000 Actual factory overhead: 2,201,000 Actual direct labor hours: 83,700 Actual machine hours: 48,900 Assuming Sutherland applied overhead based on machine hours, the company's predetermined overhead rate for 2019 is (round to two significant digits):

$41.18 per machine hour 2,100,000/51,000 budgeted OH/bedgeted MA hrs

ABC Company listed the following data for the current year: Budgeted factory overhead:$1,044,000 Budgeted direct labor hours: 69,600 Budgeted machine hours: 24,000 Actual factory overhead: 1,037,400 Actual labor hours: 72,600 Actual machine hours: 23,600 Assuming ABC applied overhead based on machine hours, the company's predetermined overhead rate for the year is:

$43.50 per machine hr =1,044,000/24,000

ABC Company listed the following data for the current year: Budgeted factory overhead:$1,044,000 Budgeted direct labor hours: 69,600 Budgeted machine hours: 24,000 Actual factory overhead: 1,037,400 Actual labor hours: 72,600 Actual machine hours: 23,600 If overhead is applied based on direct labor hours, the overapplied/underapplied overhead is:

$51,600 overapplied (15*72,600) - 1,037,400 (predetermined OH rate * actual DL hrs) - actual OH ttl

The total cost of direct materials, direct labor, and factory overhead transferred from the Work-in-Process Inventory account to the Finished Goods Inventory account during an accounting period is:

cost of goods manufactured

All of the following items are debited to the Work-in-Process Inventory account except:

cost of the completed goods being transferred out of the plant

Cost system design/selection should consider all except which one of the following?

customer needs

When completed units are transferred to the warehouse:

finished goods invventory account is debited

Product costing provides useful cost info for all the following except:

identifying and hiring competent managers

Volume-based rates are appropriate in situations where the incurrence of factory overhead:

is related to a single, common cost driver

Abnormal spoilage:

is unacceptable spoilage that should not occur under efficient operating conditions

Which one of the following documents records and summarizes the costs of direct materials, direct labor, and factory overhead for a particular job?

job cost sheet

Operation costing is a hybrid costing system for products and services that uses:

job costing for direct materials costs and process costing for conversion cost

Which one of the following is used by the production department supervisor to request the materials for production?

material requisition

Which of the following industries is more suitable for using a job costing system?

medical clinics

A hybrid costing system that uses job costing to assign direct materials costs, and process costing to assign conversion costs to products or services is:

operation costing

Which one of the following is the amount of factory overhead applied that exceeds the actual factory overhead cost?

overapplied OH

Standard costs are:

planned costs the firm should attain

Sutherland Company listed the following data for 2019: Budgeted factory overhead: $2,100,000 Budgeted direct labor hours: 89,000 Budgeted machine hours: 51,000 Actual factory overhead: 2,201,000 Actual direct labor hours: 83,700 Actual machine hours: 48,900 Assuming Sutherland applied overhead based on direct labor hours, the company's predetermined overhead rate for 2019 is (round to two significant digits):

$23.60 per direct labor hour 2,100,000/89,000 budgeted OH/bedgeted DL hrs

The journal entry to dispose of a small amount of overapplied or underapplied overhead, if overhead is applied based on direct labor hours, would be charged to:

COGS

For job costing in service industries, overhead costs are usually applied to jobs based on:

direct labor-hrs or dollars

A normal costing system uses actual costs for direct materials and direct labor, and:

estimated costs for factory overhead

When completed units are sold:

finished goods inventory account is credited

Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 114,000 and estimated factory overhead was $695,400. The following information was for September. Job X was completed during September, while Job Y was started but not finished. The total cost of Job X is:

ttl cos= materials + labor + applied OH + Beg WIP applied OH= DL hrs for job x * OH rate OH rate= ttl OH/estimated DL hrs

Which one of the following is the amount that actual factory overhead exceeds the factory overhead applied?

underapplied OH

Under job costing, factory overhead costs are assigned to products or services using labor or machine hours which are:

volume-baed cost drivers

The three major differences between process and job order costing systems are those relating to:

cost object, producet or service variety, and timting of unit cost calculation

ABC Company listed the following data for the current year: Budgeted factory overhead:$1,044,000 Budgeted direct labor hours: 69,600 Budgeted machine hours: 24,000 Actual factory overhead: 1,037,400 Actual labor hours: 72,600 Actual machine hours: 23,600 If overhead is applied based on machine hours, the overapplied/underapplied overhead is:

$10,800 underapplied (43.50 * 23,600) - 1,037,400 (predetermined OH rate * actual MA hrs) - actual OH ttl

Jackson Inc. listed the following data for 2019: Budgeted factory overhead: $1,271,000 Budgeted direct labor hours: 82,000 Budgeted machine hours: 41,000 Actual factory overhead: 1,201,000 Actual direct labor hours: 86,300 Actual machine hours: 39,400 If overhead is applied based on direct labor hours, overapplied/underapplied overhead is (round calculations to 2 significant digits):

$136,650 overapplied (predetermined OH rate * actual DL hrs) - actual OH ttl estimated>actual= overapplied extimated<actual=underapplied

ABC Company listed the following data for the current year: Budgeted factory overhead:$1,044,000 Budgeted direct labor hours: 69,600 Budgeted machine hours: 24,000 Actual factory overhead: 1,037,400 Actual labor hours: 72,600 Actual machine hours: 23,600 Assuming ABC Company applied overhead based on direct labor hours, the company's predetermined overhead rate for the year is:

$15 per direct labor hr =1,044,000/69,600

Jackson Inc. listed the following data for 2019: Budgeted factory overhead: $1,271,000 Budgeted direct labor hours: 82,000 Budgeted machine hours: 41,000 Actual factory overhead: 1,201,000 Actual direct labor hours: 86,300 Actual machine hours: 39,400 Assuming Jackson Inc. applied overhead based on direct labor hours, the firm's predetermined overhead rate for 2019 is (round calculations to 2 significant digits):

$15.50 per direct labor hour =1,271,000/82,000

Jackson Inc. listed the following data for 2019: Budgeted factory overhead: $1,271,000 Budgeted direct labor hours: 82,000 Budgeted machine hours: 41,000 Actual factory overhead: 1,201,000 Actual direct labor hours: 86,300 Actual machine hours: 39,400 If overhead is applied based on machine hours, the overapplied/underapplied overhead is (round calculations to 2 significant digits):

$20,400 overapplied (predetermined OH rate * actual MA hrs) - actual OH ttl estimated>actual= overapplied extimated<actual=underapplied

Jackson Inc. listed the following data for 2019: Budgeted factory overhead: $1,271,000 Budgeted direct labor hours: 82,000 Budgeted machine hours: 41,000 Actual factory overhead: 1,201,000 Actual direct labor hours: 86,300 Actual machine hours: 39,400 Assuming Jackson Inc. applied overhead based on machine hours, the firm's predetermined overhead rate for 2019 (round calculations to 2 significant digits) is:

$31.00 per machine hour 1,271,000/41,000

Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 114,000 and estimated factory overhead was $695,400. The following information was for September. Job X was completed during September, while Job Y was started but not finished. The total factory overhead applied during September is:

= (DL hrs for job X + DL hrs for job Y)* predetermined OH rate predetermined OH rate= estimated OH/estimated DL hrs

Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 133,000 and estimated factory overhead was $784,700. The following information was for September. Job X was completed during September, while Job Y was started but not finished. The total factory overhead applied during September is:

= (DL hrs for job X + DL hrs for job Y)* predetermined OH rate predetermined OH rate= estimated OH/estimated DL hrs

Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 114,000 and estimated factory overhead was $695,400. The following information was for September. Job X was completed during September, while Job Y was started but not finished. The underapplied or overapplied overhead for September is:

= estimated OH-actual OH estimated>actual= overapplied estimated<actual=underapplied

Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 133,000 and estimated factory overhead was $784,700. The following information was for September. Job X was completed during September, while Job Y was started but not finished. The underapplied or overapplied overhead for September is:

= estimated OH-actual OH estimated>actual= overapplied estimated<actual=underapplied

Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 133,000 and estimated factory overhead was $784,700. The following information was for September. Job X was completed during September, while Job Y was started but not finished. The total ending work-in-process for September is:

=Job Y materials requi + ($ DL per hr * Job Y DL hrs) + (predtermined OH rate * Job Y DL hrs)

Badour Inc. is a job-order manufacturer. The company uses a predetermined overhead rate based on direct labor hours to apply overhead to individual jobs. For the current year, estimated direct labor hours were 133,000 and estimated factory overhead was $784,700. The following information was for September. Job X was completed during September, while Job Y was started but not finished. Cost of goods manufactured for September is:

Beg WIP + Job X DM req + (Job X DL hrs * $) + (Job X DL hrs * predetermined OH rate)

The journal entry required to record factory depreciation includes:

a debit to Factory OH account

The system where the cost of a product or service is obtained by assigning costs to masses of similar units in each department and then computing unit cost on an average basis is called:

a process costing system

Which of the following can produce unit product costs that fluctuate significantly?

actual costing system

Departmental rates are appropriate when all the following exist except:

all departments have similiar cost drivers and cost usage characteristics

Product costing system design or selection: -involves cost management expertise -requires an understanding of the nature of the business -should provide useful cost info for strategic and operational decision needs -should be cost effective in design and operation -all of these answer choices are correct

all of these answer choices are correct

Factory overhead can be over- or under-applied because: - some actual factory OH cost varies from the expected - some actual factory OH costs are incurred unexpectedly - production volume may vary from expected volume - all of these choices are correct

all of these choices are correct