ACC Exam #1

Which of the following statements about under- or overapplied manufacturing overhead is correct?

A) After the entry to transfer over- or underapplied overhead to Cost of Goods Sold is posted, Manufacturing Overhead will have a zero balance.

The flow of costs in a job order cost system

A) involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done.

Process costing is used when

A) the production process is continuous.

Redman Company manufactures customized desks. 978:

B) $23,450

Barr Mfg. provided the following information from its accounting records for 2013:

B) $30.00 per hour

Vektek, Inc. thinks machine hours is the best activity base for its manufacturing overhead. The estimate of annual overhead costs for its jobs was $1,025,000. The company used 1,000 hours of processing on Job No. B12 during the period and incurred overhead costs totaling $1,050,000. The budgeted machine hours for the year totaled 20,000. How much overhead should be applied to Job No. B12?

B) $51,250

Kinney Company applies overhead on the basis of 150% of direct labor cost. Job No. 176 is charged with $100,000 of direct materials costs and $120,000 of manufacturing overhead. The total manufacturing costs for Job No. 176 is

C) $300,000.

The following information is available for completed Job No. 402: Direct materials, $80,000; direct labor, $120,000; manufacturing overhead applied, $60,000; units produced, 5,000 units; units sold, 4,000 units. The cost of the finished goods on hand from this job is

C) $52,000.

At the end of the year, any balance in the Manufacturing Overhead account is generally eliminated by adjusting

C) Cost of Goods Sold.

13. Which one of the following is a source document that impacts the job cost sheet?

C) Labor time tickets

Job cost sheets constitute the subsidiary ledger for the

C) Work In Process Inventory account.

A manufacturing company reports cost of goods manufactured as a(n)

C) component in the calculation of cost of goods sold on the income statement.

Factory labor costs

C) include vacation pay.

Overapplied manufacturing overhead exists when overhead assigned to work in process is

C) more than overhead incurred and there is a credit balance in Manufacturing Overhead at the end of a period.

During 2013, Cotte Manufacturing expected Job No. 59 to cost $300,000 of overhead, $500,000 of materials, and $200,000 in labor. Cotte applied overhead based on direct labor cost. Actual production required an overhead cost of $290,000, $550,000 in materials used, and $220,000 in labor. All of the goods were completed. How much is the amount of over- or underapplied overhead?

D) $40,000 overapplied

The entry to record the acquisition of raw materials on account is

D) Raw Materials Inventory Accounts Payable

Usually, under- or overapplied overhead is considered to be an adjustment to

D) cost of goods sold.