Accounting 112 Exam 1

A. $9,097.41

Gould corporation uses the following activity rates from its activity-based costing to assign overhead costs to products: Activity cost pools: Setting up batch AR: $59.06 per batch processing customer orders AR: $72.66 per customer order Assembling products AR: $3.75 per assembly hour Data concerning two products appear below: Number of batches Product K91B: 81 Product F65O: 50 Number of customer orders K91B: 32 Product F65O: 43 Number of assembly hours Product K91B: 483 Product F65O: 890 How much overhead cost would be assigned to product K91B using the activity-baased costing system? A. $9,097.41 B. $81,146.53 C. $4,961.04 D. $135.47

A

A good description of "cost of goods manufactured" is the recorded cost of the: A. Units completed during the period B. Units started and completed during the period C. Work done on all units during he period D. Work done this period on units completed this period

Y/Y

A security guard's wages at a factory would be an example of: Indirect labor/ Fixed manufacturing overhead? A. N/N B. Y/Y C. Y/N D. N/Y

B. $34.90

Acheson Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. Estimated manufacturing overhead $157,050 Estimated machine-hours 4,500 Actual manufacturing overhead $156,000 Actual machine-hours 4,580 The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year. The predetermined overhead rate is closest to: A. $34.06 B. $34.90 C. $34.67 D. $35.52

Depreciation on the company's retail outlets

All of the following are examples of product cost except: A. Depreciation on the company's retail outlets B. Salary of the plant manager C. Insurance on the factory equipment D. Rental costs of the factory facility

C

An example of a fixed cost that would be considered a direct cost is: A. A cost accountant's salary when the cost object is a unit of product B. The rental cost of a warehouse to store finished goods when the cost object is the purchasing department C. A production supervisor's salary when the cost objective is the production department D. Board of directors' fees when the cost object is the marketing department

D

At the beginning of December, Altro Corporation had $26,000 of raw materials on hand. During the month, the company purchased an additional $76,000 of raw materials. During December, $72,000 of raw materials were requisitioned from the storeroom for use in production. The credits to the raw materials account for the month of December total: A. $26,000 B. $102,000 C. $76,000 D. $72,000

A. 22,200 direct labor-hours

At the beginning of the year, manufacturing overhead for the year was estimated to be $250,860. At the end of the year, actual direct labor-hours for the year were 20,800 hours, the actual manufacturing overhead for the year was $245,860 and manufacturing overhead for the year was underapplied by $10,820. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning f the year used in the predetermined overhead rate must have been: A. 22,200 direct labor-hours B. 20,800 direct labor-hours C. 21,758 direct labor-hours D. 22,715 direct labor-hours

D. $45,000

Bottum Corporation, a manufacturing company, has provided data concerning its operations for May. The beginning balance in the raw materials account was $20,000 and the ending balance was $36,000. Raw materials purchases during the month totaled $63,000. Manufacturing overhead cost incurred during the month was $111,000, of which $2,000 consisted of raw materials classified as indirect materials. The direct materials cost for May was: A. $63,000 B. $47,000 C. $79,000 D. $45,000

C. $8,880 overapplied

Brusveen Corporation applied manufacturing overhead to jobs on the basis of direct labor-hours. The following information related to Brusveen for lat year: Direct labor Hours Estimated: 15,000 Actual:14,800 Manufacturing overhead cost Estimated: $300,000 Actual $287,120 What was Brusveen's underapplied or overapplied overhead for last year? A. $4,000 underapplied B. $8,880 underapplied C. $8,880 overapplied D. $9,000 underapplied

B. $7,626 underapplied

Caple Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $16,600. Actual manufacturing overhead for the year amounted to $25,000 and actual machine-hours were 1,460. The company's predetermined overhead rate for the year was $11.90 per machine-hour. The overhead for the year was: A. $714 overapplied B. $7,626 underapplied C. $714 underapplied D. $7,626 overapplied

A. 1,400

Caple Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $16,600. Actual manufacturing overhead for the year amounted to $25,000 and actual machine-hours were 1,460. The company's predetermined overhead rate for the year was $11.90 per machine-hour. The predetermined overhead rate was based on how many estimated machine-hours? A. 1,400 B. 2,101 C. 2,742 D. 1,460

D. $189,000

Chavez Corporation reported the following data for the month of July: Inventories: Raw materials Beg. $27,000 End: $30,000 Work in process Beg. $16,000 End: $17,000 Finished goods Beg. $32,000 End: $47,000 Additional information: Raw materials purchases $66,000 Indirect labor cost $91,000 Manufacturing overhead cost incurred $59,000 Indirect materials included in manufacturing overhead cost incurred $8,000 Manufacturing overhead cost applied to work in process $58,000 The adjusted cost of goods sold that appears on the income statement for July is: A. $218,000 B. $188,000 C. $203,000 D. $189,000

A. $55,000

Chavez Corporation reported the following data for the month of July: Inventories: Raw materials Beg. $27,000 End: $30,000 Work in process Beg. $16,000 End: $17,000 Finished goods Beg. $32,000 End: $47,000 Additional information: Raw materials purchases $66,000 Indirect labor cost $91,000 Manufacturing overhead cost incurred $59,000 Indirect materials included in manufacturing overhead cost incurred $8,000 Manufacturing overhead cost applied to work in process $58,000 The direct materials for July is: A. $55,000 B. $69,000 C. $63,000 D. $66,000

B. $820 underapplied

Chipata Corporation applies manufacturing overhead to jobs on the basis of machine-hours. Chipata estimated 25,000 machine-hours and $10,000 of manufacturing overhead cost for the year. During the year, Chipata incurred 26,200 machine-hours and $11,400 of manufacturing overhead. What was Chipata's underapplied or overapplied overhead for the year? A. $480 overapplied B. $820 underapplied C. $1,300 overappllied D. $1,300 underapplied

Direct labor and manufacturing overhead

Conversion cost consist of?

A. $31,730 overapplied

Crichman Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 14,900 hours and the total estimated manufacturing overhead was $362,070. At the end on the year, actual direct labor-hours for the year were 16,000 hours and the actual manufacturing overhead for the year was $357,070. Overhead at the end of the year was: A. $31,730 overapplied B. $26,730 overapplied C. $31,730 underapplied D. $26,730 underapplied

A. $77,700

Hamilton Company uses job-order costing. Manufacturing overhead is applied using a predetermined rate of 150% of direct labor cost. Any over or underapplied manufacturing overhead is closed to the Cost of Goods Sold account at the end of each month. Additional information is available as follows: Job 101 was the only job in process at January 31. The job cost sheet for this job contained the following costs at the beginning of the month: Direct materials $4,000 Direct labor $2,000 Manufacturing overhead $3,000 Job 102, 103, and 104 were started during February Direct material requisitions for February totaled $26,000 Direct labor cost of $20,000 was incurred for February Actual manufacturing overhead was $32,000 for February The only job still in process at February 28 was Job 104, with costs of $2,800 for direct materials and $1,800 for direct labor The cost of goods manufactured for February was: A. $77,700 B. $78,000 C. $79,700 D. $85,000

B. $4,500 underapplied

Heller Cannery, Inc., uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company estimated that it would incur $510,000 in manufacturing overhead during the year and that it would wrk 100,000 machine-hours. The company actually worked 105,000 machine-hours and incurred $540,000 in manufacturing overhead costs. By how much was manufacturing overhead underapplied or overapplied for the year? A. $4,500 overapplied B. $4,500 underapplied C. $30,000 overapplied D. $30,000 underapplied

B

If overhead is underapplied, then: A. Actual overhead cost is less than estimated overhead cost B. The amount of overhead cost applied to work in process is less than the actual overhead cost incurred C. The predetermined overhead rate is too high D. The manufacturing overhead account will have a credit balance at the end of the year

D

In a decision-making situation involving an asset, which of the following costs in generally NOT considered relevant to the decision and should be ignored? A. incremental costs of selecting one over another B. Opp cost C. Differential cost D. The original cost of the asset

D

In a job-oder cost system, which of the following events would trigger recording data on a job cost sheet? A. The purchase of direct materials B. The payment of fire insurance on the factory building C. The payment for product advertising D. None of these

A

In a job-oder costing system, the incurrence of indirect labor costs would usually be recorded as a debit to: A. Manufacturing overhead B. Finished goods C. Work in process D. Cost of goods sold

Overstate the cost of goods sold on the income statement

In preparation of the schedule of Cost of Goods Manufactured, the accountant incorrectly includes as part of manufacturing overhead the rental expense on the firms retail facilities. This inclusion would?

C. $208,000

Koczela Inc. has provided the following data for the month of May: Inventories: Work in process Beg. $17,000 End: $12,000 Finished goods Beg. $46,000 End: $50,000 Additional information: Direct materials $57,000 Direct labor cost $87,000 Manufacturing overhead cost incurred $63,000 Manufacturing overhead cost applied to work in process $61,000 The adjusted cost of goods sold that appears on the income statement for May is: A. $206,000 B. $214,000 C. $208,000 D. $210,000

T

T or F? If direct labor-hours is used as the allocation base in a job-order costing system, but overhead costs are not caused by direct-labor-hours, then jobs with high direct labor requirements will tend to be overcosted relative to jobs with low direct labor requirements

T

T or F? Indirect materials are not changed to a specific job but rather are included in manufacturing overhead

F

T or F? Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job

F

T or F? Period costs are also known as inventoriable costs

F

T or F? Prime cost is the sum of direct labor and manufacturing overhead

T

T or F? The amount that was paid by a company for a building to house its operations is an example of a sunk cost

T

T or F? The cost of goods sold of a manufacturing company equals beginning finished goods inventory + cost of goods manufactured - ending finished goods inventory

F

T or F? The following entry would be used to record depreciation on manufacturing equipment: Depreciation Expenses XXX Work in process XXX

F

T or F? The sum of all costs of manufacturing costs except direct materials is called manufacturing overhead

T

T or F? Thread used in the production of mattresses, an indirect material, is classified as manufacturing overhead

T

T or F? Two of the reasons why overhead may be underapplied are: (1) the estimated overhead cost may be too low, and (2) The estimated base may be too high

C. $41.46

Abrams Company uses activity-based costing. The company has two products: A. and B. the annual production and sales product A is 300 and of product B is 1,000 units. There are three activity cost pools, with estimated costs and expected activity as follows: Activity cost pool: Activity 1 EOC: $7,356 PA: 200 PB: 200 Total: 400 Activity 2 EOC: $30,555 PA: 1,400 PB: 700 Total: 2,100 Activity 3 EOC: $16,169 PA: 90 PB: 300 Total: 390 The activity rate for Activity 3 is closest to: A. $53,906 B. $138.67 C. $41.36 D. $18.71

C. $5,778.31

Activity rates from Lippard Corporation's activity-based costing system are listed below. The company uses the activity rates to assign overhead costs to products: Activity costs products: Processing customer orders AR: $31.62 per customer order Assembling products AR: $2.86 per assembly hour Setting up batches AR: $46.61 per batch Last year, Product H50E involved 9 customer orders, 666 assembly hours, and 77 batches. How much overhead cost would be assigned to product H50E using the activity-based costing system? A. $60,979.68 B. $3,588.97 C. $5,778.31 D. $81,09

B. $56.62

Addison Company has two products: A and B. The annual production and sales of Product A is 800 units and of Product B is 700 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.2 direct labor-hours per unit and product B requires 0.6 direct labor-hours per unit The total estimated overhead for next period is $71,286 . The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-activity1, activity 2, and general factory-with estimated overhead costs and expected activity as follows: Activity cost pool: Activity 1 EOC: $20,272 PA: 300 PB: 500 Total: 800 Activity 2 EOC: $29,380 PA: 500 PB: 1,400 Total: 1,300 General factory EOC: $21,634 PA: 160 PB:420 Total: 580 Total EOC: $71,286 The general factory activity cost pool's costs are allocated on the basis of direct labor-hours The overhead cost per unit of Product B under the activity-based costing system is closest to: A. $73.74 B. $56.62 C. $22.38 D. $47.52

C. $73.74

Addison Company has two products: A and B. The annual production and sales of Product A is 800 units and of Product B is 700 units. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.2 direct labor-hours per unit and product B requires 0.6 direct labor-hours per unit The total estimated overhead for next period is $71,286 . The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools-activity1, activity 2, and general factory-with estimated overhead costs and expected activity as follows: Activity cost pool: Activity 1 EOC: $20,272 PA: 300 PB: 500 Total: 800 Activity 2 EOC: $29,380 PA: 500 PB: 1,400 Total: 1,300 General factory EOC: $21,634 PA: 160 PB:420 Total: 580 Total EOC: $71,286 The general factory activity cost pool's costs are allocated on the basis of direct labor-hours The overhead cost per unit of Product B under the traditional costing system is closest to: A. $22.38 B. $13.56 C. $73.74 D. $15.20

A. $96,254

Albers Company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applies overhead using predetermined overhead rates for eat activity cost pool. Estimated costs and activities for the current year are presented below for the three activity cost pools: Activity 1 EOC: $45,201 EA: 1,900 Activity 2 EOC: $10,153 EA: 1,100 Activity 3 EOC: $40,680 EA: 1,800 Actual costs and activities for the current year were as follows: Activity 1 EOC: $45,271 AA: 1,885 Activity 2 EOC: $10,273 AA: 1,105 Activity 3 EOC: $40,710 AA: 1,840 The total debits to the manufacturing overhead account during the year were closest to: A. $96,254 B. $95,943 C. $96,034 D. $96,627

C

All of the cost categories listed below are usually found in a company's accounting records except for: A. Sunk cost B. Inventoriable C. Opportunity D. Marketing

D. $64.80

Andry Corporation uses activity-based costing to determine products costs for external financial reports. The company has provided the following data concerning its activity-based costing system: Activity cost pools (and activity measures) Machine related (machine-hours) EOC: $177,000 PX: 7,000 PY: 3,000 Total: 10,000 Batch setup (setups) EOC: $453,600 PX: 5,000 PY: 2,000 Total: 7,000 General factory (direct labor-hours) EOC: $227,000 PX: 6,000 PY: 4,000 Total: 10,000 The activity rate for the batch setup activity cost pool is closest to: A. $122.50 B. $226.80 C. $90.70 D. $64.80

$30.00

Arthur Company has two products: S and D. The company uses activity-based costing and has prepared the following analysis showing the estimated total cost and expected activity for each of its three activity cost pools: Activity cost pool: Activity 1 EOC: $20,000 PS: 100 PD: 400 Total: 500 Activity 2 EOC: $14,600 PS: 500 PD: 250 Total: 750 Activity 3 EOC: $90,000 PS: 300 PD: 2,700 Total: 3,000 The annual production and sales of product S is 4,547 units. The annual production and sales of Product D is 7,913. The activity rate under the activity-based costing system for Activity 3 is closest to: A. $33.33 B. $30.00 C. $29.32 D. $41.53

A. 1, 736,700

Brecket Corporation uses activity-based costing to determine product costs for external financial reports. Activity rates computed at the beginning of the year are used to apply manufacturing overhead costs to products. the company uses the following data concerning its activity-based costing system. The data used to develop the activity rates were: Activity cost pools: Machine related (machine-hours) EOC: $395,200 EA: 16,000 MHs Batch setup (setups) EOC: $790,000 EA: 20,000 setups General factory (direct labor-hours) EOC: $556,800 EA: 24,000 DLHs The actual activity for the year was: Activity cost pools: Machine related (machine-hours) PX: 6,000 PY: 10,000 Total: 16,000 Batch setup (setups) PX: 13,000 PY: 5,000 Total: 18,000 General factory (direct labor-hours) PX: 14,000 PY: 11,000 Total: 25,000 The actual total manufacturing overhead cost incurred for the year was $1,736,700 The debits to the manufacturing overhead control account during the year (prior to closing out the balance) would have totaled: A. $1,736,700 B. $1,686,200 C. $1,655,800 D. $1,694,900

D. $986,500

Brecket Corporation uses activity-based costing to determine product costs for external financial reports. Activity rates computed at the beginning of the year are used to apply manufacturing overhead costs to products. the company uses the following data concerning its activity-based costing system. The data used to develop the activity rates were: Activity cost pools: Machine related (machine-hours) EOC: $395,200 EA: 16,000 MHs Batch setup (setups) EOC: $790,000 EA: 20,000 setups General factory (direct labor-hours) EOC: $556,800 EA: 24,000 DLHs The actual activity for the year was: Activity cost pools: Machine related (machine-hours) PX: 6,000 PY: 10,000 Total: 16,000 Batch setup (setups) PX: 13,000 PY: 5,000 Total: 18,000 General factory (direct labor-hours) PX: 14,000 PY: 11,000 Total: 25,000 The actual total manufacturing overhead cost incurred for the year was $1,736,700 The total amount of overhead cost allocated to Product X during the year would be closest to: A. $1, 258,000 B. $790,000 C. $871,000 D. $986,500

N/N

Chezpere Company manufactures and sells washing machines. In order to make assembly of these machines faster and easier, some of the metal parts in the machines are coated with grease. How should this cost be classified as DM/FC? A. Y/Y B. Y/N C. N/Y D. N/N

C

Departmental overhead rates may not correctly assign overhead costs due to: A. the use of direct labor hours in allocating overhead costs to products rather than machine time or quantity of materials used B. the high correlation between direct labor-hours and the incurrence of overhead costs C. overreliance on volume as a basis for allocating overhead costs where products differ regarding the number of units produced, lot size, or complexity of production D. difficulties associated with identifying cost pools for the first stage of the allocation process

A. $95.34 per unit

Dobles Corporation has provided the following data from its activity-based costing system: Activity cost pool: Assembly TC: $228,060 TA: 18,000 machine-hours Processing orders TC: $34,068 TA: 1,200 orders Inspection TC: $125,560 TA: 1,720 inspection-hours The company makes 420 units of product D28K a year, requiring a total of 460 machine-hours, 80 orders, and 10 inspection-hours per year. The product's direct material cost is $48,96 per unit and its direct labor cost is $25,36 per unit. According to the activity-based costing system, the unit product cost of product D28K is closest to: A. $95,34 per unit B. $93.60 per unit C. $74.32 per unit D. $89.93 per unit

D. $187,200

Echher corporation uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. During the year the company's finished goods inventory account was debited for 4218,000 and credited for $218,500. The ending balance in the finished goods inventory account was $13,000. At the end of the year, manufacturing overhead was overapplied by $36,700. If the applied manufacturing overhead was $223,900, the actual manufacturing overhead cost for the year was: A. $200,700 B. $260,600 C. $200,200 D. $187,200

C

In activity-based costing, the activity rate for an activity cost pool is computed by dividing the total overhead cost in the activity cost pool by: A. the direct labor-hours required by the product B. the machine-hours required by the product C. the total activity for the activity cost pool D. the total direct labor-hours for the activity cost pool

All manufacturing costs except direct labor and direct materials

Manufacturing overhead includes:

A. $1,021

Merone Company allocates materials handling cost to the company's two products using the below data: Total expected units produced Modular homes: 5,000 Prefab barns: 8,000 Total expected material moves Modular homes:500 Prefab barns: 100 Expected direct labor-hours per unit Modular homes: 700 Prefab barns: 200 The total materials handling cost for the year is expected to be $218,790. If the materials handling cost is allocated on the basis of material moves, how much of the total materials handling cost should be allocated to the specialty windows? (round off your answer to the nearest whole dollar) A. $1,021 B. 43,674 C. $3,062 D. $1,980

C. $176 per product design hour

Millner corporation has provided the following data from its activity-based costing accounting system: Activity cost pools: Designing products TC: $1,372,448 TA: 7,798 product design hours Setting up batches TC: $33,330 TA: 740 batch set-up Assembling products TC: $126,160 TA: 6,640 assembly hours The activity rate for the "designing products" activity cost pool is closest to: A. $101 per product design hour B. $1,372,448 per product design hour C. $176 per product design hour D. $57 per product design hour

C. $8,000

Raw materials: Bal. 4,500 8,000 4,700 Finished goods: Bal. 1,700 19,900 21,700 Work in process: Bl. 3,600 21,700 5,700 8,000 7,00 Manufacturing overhead: 2,300 7,800 3,000 2,700 Wages and salaries payable: 19,900 Bal. 2,000 11,000 Cost of goods sold: 19,900 The direct labor cost was: A. $11,600 B. $19,900 C. $8,000 D. $11,000

C. $7,800

Raw materials: Bal. 4,500 8,000 4,700 Finished goods: Bal. 1,700 19,900 21,700 Work in process: Bl. 3,600 21,700 5,700 8,000 7,00 Manufacturing overhead: 2,300 7,800 3,000 2,700 Wages and salaries payable: 19,900 Bal. 2,000 11,000 Cost of goods sold: 19,900 The manufacturing overhead applied was: A. $2,700 B. $3,000 C. $7,800 D. $13,700

B

Setting up a machine to fill an order for a particular product is an example of a: A. Unit-level activity B. Batch-level activity C. Product-level activity D. Facility-level activity

C

Testing a prototype of a new product is an example of a: A. Unit-level activity B. Batch-level activity C. Product-level activity D. Facility-level activity

C. $180,000

Summit corporation had provided the following inventory balances and manufacturing cost data for the month of January: Inventories: Direct materials Jan.1: $30,000 Jan. 30: $40,000 Work in process Jan.1: $15,000 Jan. 30: $20,000 Finished goods Jan.1: $65,000 Jan. 30: $50,000 Month of January: Cost of goods manufactured $515,000 Manufacturing overhead applied: $150,000 Direct materials used $190,000 Actual manufacturing overhead $144,000 Under Summit's job-order costing system, any over underapplied overhead is closed to the cost of goods sold account at the end of the calendar year (i.e. Dec. 31) How much direct labor cost was incurred during January? A. $170,000 B. $175,000 C. $180,000 D. $186,000

T

T or F? Activity rates in activity-based costing are computed by dividing costs from the first-stage cost assignments by the activity measure for each activity cost pool

F

T or F? Activity-based costing uses a number of activity cost pools, each of which is allocated to products on the basis of direct-labor hours

F

T or F? Facility-level are activities that support specific products

F

T or F? In activity-based costing, manufacturing overhead is applied to products using activity rates

T

T or F? Unit-level activities are performed each time a unit is made

T

T or F? When a company changes from a traditional costing system to an activity0based costing system, costs will ordinarily shift from high-volume to low-volume products when the activity-based costing system batch-level or product-level

C. 7

The following journal entries without dollar data were taken from the accounting records of a company that has a job-order costing system in which overhead is applied to job using a predetermined overhead rate: 1. Work in process XXX Manufacturing overhead XXX Wages payable XXX 2. Salary Expense XXX Wages payable XXX 3. Manufacturing overhead XXX Accumulated depreciation XXX 4. Work in process XXX Raw materials XXX 5. Work in process XXX Manufacturing overhead XXX 6. Manufacturing overhead XXX Raw materials XXX 7. Finished goods XXX Work in process XXX 8. Raw materials XXX Accounts payable XXX The entry to transfer cost of goods manufactured for the period is: A. 1 B. 4 C. 7 D. 5

Direct material

The one cost that would be classified as part of both prime cost and conversion cost would be? A. Indirect material B. Direct labor C. Direct material D. Indirect material

D

The plant manager's salary is an example of a: A. Unit-level activity B. Batch-level activity C. Product-level activity D. Facility-level activity

D

When switching from a traditional costing system to an activity-based costing system that contains some batch-level costs: A. the unit product costs of both high and low volume products typically increases B. the unit product costs of both high and low volume products typically decrease C. the unit product costs of high volume products typically increase and the unit product costs of low volume products typically decrease D. the unit product costs of high volume products typically decrease and the unit product costs of low volume products typically increase

B

Which of the following activities would be classified as a batch-level activity? A. Setting up equipment B. Designing a new product C. Training employees D. Milling a part required for the final product

A. $35,403.20

kelly company uses activity-based costing to compute product costs for external reports. The company has three activity cost pools and applied overhead using predetermined overhead rates for each activity cost pool. Estimated costs and activities for the current year are presented below for the three cost pools: Activity 1 EOC: $10,152 EA: 800 Activity 2 EOC: $20,394 EA: 2,200 Activity 3 EOC $34,880 EA: 1,000 Actual activity for the current year was as follows: Activity 1 AA: 805 Activity 2 AA: 2,180 Activity 3 AA: 1,015 The amount of overhead applied for activity 3 during the year was closest to: A. $35,403.20 B. $34,880.00 C. $16,601.85 D. $34,810.00

T

T or F? Conversion cost is the sum of direct labor and manufacturing overhead

F

T or F? Direct costs are often difficult to trace to the specific cost object under consideration

D. $100,535

Dacosta Company had only one job in process on May 1. The job had been charges with $1,800 of direct materials, $6,900 of direct labor, and $9,936 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $18.40 per direct labor-hours. During May, the activity was recorded: Raw materials (all direct material): Beginning balance $8,500 Purchased during the month $38,000 Used in production $39,300 Labor: Direct labor-hours worked during the month 1,900 Direct labor cost incurred $24,510 Actual manufacturing overhead costs incurred $33,300 Inventories: Raw materials, May 30 ? Work in process, May 30 $16,937 Work in process inventory on May 30 contains $3,741 of direct labor cost. Raw materials consist solely of items that are classified as direct materials. The cost of goods manufactured for May was: A. $97,000 B. $110,600 C. $98,000 D. $100,535

A. $7.80

Darrow Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Last year, the company worked 10,000 direct labor-hours and incurred $80,000 of actual manufacturing overhead cost. If overhead was underapplied by $2,000, the predetermined overhead rate for the company for the year must have been: A. $7.80 B. $8.00 C. $8.20 D. $8.40

A. Debit to work in process of $70,000

During July at Loeb Corporation, $83,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,000. The journal entry to record the requisition form the storeroom would include a: A. Debit to work in process of $79,000 B. Debit to work in process of $83,000 C. Credit to manufacturing overhead of $4,000 D. Debit to raw materials of $83,000

A

During March, Pendergraph Corporation incurred $60,000 of actual manufacturing overhead costs. During the same period, the manufacturing overhead applied to work in process was $62,000. The journal entry to record the application of manufacturing overhead to work in process would include a: A. credit to manufacturing overhead of $62,000 B. debit to work in process of $60,000 C. credit to work in process of $60,000 D. debit to manufacturing overhead of $62,000

C. Credit to work in process of $50,000

During March, Zea Inc. transferred $50,000 from work in process to finished goods and recorded a cost of goods sold of $56,000. The journal entries to record these transactions would include a: A. Credit to cost of goods sold of $56,000 B. Debit to finished goods of $56,000 C. Credit to work in process of $50,000 D. Credit to finished goods of $50,000

B

During September at Renfro Corporation, $65,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,000. The journal entry to record this requisition would include a debit to manufacturing overhead of: A. $65,000 B. $4,000 C. $0 D. $61,000

B. $9,600

Elliot Company uses a predetermined overhead rate based on machiine-hours to apply manufacturing overhead to jobs. The company manufactured tools to customer specification. The following data pertain to Job 1501: Direct materials used $4200 Direct labor-hour worked 300 Direct labor rate per hour $8.00 Machine-hours used $200 Predetermined overhead rate per machine-hour $15.00 What is the total manufacturing cost recorded on Job 1501? A. $8,800 B. $9,600 C. $10,300 D. $11,100

C. Debit to manufacturing overhead of $87,000

Epolito Corporation incurred $87,000 of actual manufacturing overhead costs during September. During the same period, the Manufacturing Overhead applied to Work In Process was $89,000. The journal entry to record the incurrence of the actual Manufacturing Overhead cost would include a: A. Debit to work in process of $89,000 B. Credit to manufacturing overhead of $87,000 C. Debit to manufacturing overhead of $87,000 D. Credit to work in process of $89,000

A. $231,000

Luebke Inc. has provided the following data for the month of November. The balance in the finished goods inventory account at the beginning of the month was $52,000 and at the end of the month was $30,000. The cost of goods manufactured for the month was $212,000. The actual manufacturing overhead cost incurred was $55,000 and the manufacturing overhead cost applied to work in process was $58,000. The adjusted cost of goods sold that would appear on the income statement for November is: A. $231,000 B. $190,000 C. $234,000 D. $212,000

A.

Mackinaw manufacturing company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead jobs. Last year, the company worked 17,000 actual direct labor-hours and incurred $145,000 of actual manufacturing overhead cost. They had estimated at the beginning of the year that 16,000 direct labor-hours would be worked and $144,000 of manufacturing overhead cost incurred. The company had calculated a predetermined overhead rate of $9 per direct labor-hours. The company's manufacturing overhead for the year was: A. overapplied by $8,000 B. underapplied by $8,000 C. overapplied by $1,000 D. underapplied by $1,000

D. $8,500

Mallet Company has only Job 844 in process on March 1 of the current year. The job has been charges with $2,000 of direct materials cost, $2,500 of direct labor cost, and $1,750 of manufacturing overhead cost. The company assigns overhead cost to jobs at a predetermined rate of 70% of direct labor cost. Any underapplied or overapplied cost is closed to cost of goods sold at the end of the month. During March, the following activity and amounts were recorded by the company: Raw materials (all direct materials): Purchased during the month $29,500 Used in production $30,500 Labor: Direct labor-hours worked during the month 2,500 Direct labor cost incurred $26,500 Indirect labor cost incurred $5,500 manufacturing overhead costs incurred (total) $185,00 Inventories: Raw materials (all direct) March 31 $7,500 work in process, March 31 $14,500 The balance in the March 1 raw materials inventory was: A. $10,500 B. $9,500 C. $6,500 D. $8,500

A. $67,300

Mallet Company has only Job 844 in process on March 1 of the current year. The job has been charges with $2,000 of direct materials cost, $2,500 of direct labor cost, and $1,750 of manufacturing overhead cost. The company assigns overhead cost to jobs at a predetermined rate of 70% of direct labor cost. Any underapplied or overapplied cost is closed to cost of goods sold at the end of the month. During March, the following activity and amounts were recorded by the company: Raw materials (all direct materials): Purchased during the month $29,500 Used in production $30,500 Labor: Direct labor-hours worked during the month 2,500 Direct labor cost incurred $26,500 Indirect labor cost incurred $5,500 manufacturing overhead costs incurred (total) $185,00 Inventories: Raw materials (all direct) March 31 $7,500 work in process, March 31 $14,500 The cost of goods manufactured for March was: A. $67,300 B. $67,250 C. $81,800 D. $75,550

C. $13,000

Marc Corp. has a job-order costing system. The following debits (credits) appeared in the work in process account for the month of May: May 1 Balance $10,000 May 31 Direct materials $60,000 May 31 direct labor $40,000 May 31 manufacturing overhead $32,000 May 31 To finished goods $(120,000) Marc applies overhead to jobs at a predetermined rate of 80% of direct labor cost. Job No.23, the only job still in process at the end of May has been charged with direct labor of $5,000. The amount of direct materials charged to Job No. 23 was: A. $6,250 B. $7,500 C. $13,000 D. $17,000

B. 3,300 hours

Myers Company had the following inventory at the beginning and end of November: Raw materials Nov. 1: $17,000 Nov. 30: $20,000 Finished goods Nov. 1: $50,000 Nov. 30: $44,000 Work in process Nov. 1: $9,000 Nov. 30: $11,000 During November, $39,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $8 per direct labor-hour, and it paid its direct labor workers $10 per hour. A total of 300 hours of direct labor time had been expended on the jobs in the beginning work in process inventory account. The ending work in process inventory account contained $4,700 of direct materials cost. The company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost. The actual direct labor-hours worked during November totaled: A. 2,800 hours B. 3,300 hours C. 3,500 hours D. 3,600 hours

A. $42,000

Myers Company had the following inventory at the beginning and end of November: Raw materials Nov. 1: $17,000 Nov. 30: $20,000 Finished goods Nov. 1: $50,000 Nov. 30: $44,000 Work in process Nov. 1: $9,000 Nov. 30: $11,000 During November, $39,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $8 per direct labor-hour, and it paid its direct labor workers $10 per hour. A total of 300 hours of direct labor time had been expended on the jobs in the beginning work in process inventory account. The ending work in process inventory account contained $4,700 of direct materials cost. The company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost. The raw materials purchased during November totaled: A. $42,000 B. $45,000 C. $36,000 D. $39,000

B

Niebla Corporation has provided data concerning the company's manufacturing overhead account for the month of July. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $72,000 and the total of the credits to the account was $77,000. Which of the following statements is true? A. Manufacturing overhead applied to work in process for the month was $72,000 B. Actual manufacturing overhead for the month was $72,000 C. Manufacturing overhead for the month was underapplied by $5,000 D. Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $77,000

D

On January 1, Schaf Corporation had $23,000 of raw materials on hand. During the month, the company purchased as additional $50,000 of raw materials. During January, $50,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $6,000. The journal entry to record the requisition from the storeroom would include a: A. debit to work in process of $50,000 B. debit to raw materials of $50,000 C. credit to manufacturing overhead of $6,000 D. debit to work in process of $44,000

A. $0

On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased as additional $78,000 of raw material. During November, $95,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $3,000. Prepare journal entries to record these events. Use those journal entries to answer the question: The credits to the manufacturing overhead account as a consequence of the raw materials transaction in November total: A. $0 B. $3,000 C. $92,000 D. $95,000

A. $95,000

On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased as additional $78,000 of raw material. During November, $95,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $3,000. Prepare journal entries to record these events. Use those journal entries to answer the question: The credits to the raw materials account for the month of November total: A. $95,000 B. $78,000 C. $32,000 D. $110,000

C. $0

On November 1, Arvelo Corporation had $32,000 of raw materials on hand. During the month, the company purchased as additional $78,000 of raw material. During November, $95,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $3,000. Prepare journal entries to record these events. Use those journal entries to answer the question: The credits to the work in process account as a consequence of the raw materials transactions in November total: A. $78,000 B. $92,000 C. $0 D. $95,000

B. $62.50

Parker company has a job-oder costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, manufacturing overhead and direct labor-hours for the year were estimated at $50,000 and 20,000 hours, respectively. In June, Job #461 was completed. Materials costs on the on totaled $4,000 and labor costs totaled $1,500 at $5 per hour. At the end of the year it was determined that the company worked 24,000 direct labor-hours for the year and incurred $54,000 in actual manufacturing overhead costs. If Job #461 consisted of 100 units, the unit cost on the completed job cost sheet would be: A. $61,75 B. $62.50 C. $63.10 D. $55.00

T

T or F? All of the following are examples of opportunity costs: salary given up to starts a business; rental income given up when you live in a house you own; interest income that could be earned on money spent for a car

A. $13,000

Raw Materials: Beg. Bal 7,000 (2) 24,000 (1) 19,000 Cost of goods sold: 0 0 Sales Salaries Expenses: (4) 11,000 Work in Process: Beg. Bal 11,000 (2) 15,000 (7) ? (4) 18,000 (6) 31,000 Accounts Payable: (1) 19,000 (5) 5,000 Manufacturing overhead: (2) 9,000 (6) 31,000 (3) 16,000 (4) 8,000 (5) 5,000 Total 7,000 Wages and salareis payable: Beg. Bal 7,000 (4) 37,000 Finished Goods: Beg. Bal 18,000 (7) 62,000 End. Bal 15,000 Accumulated Depreciation-Factory: Beg. Bal 82,000 (3) 16,000 The ending work in process account balance would be: A. $13,000 B. $75,000 C. $20,000 D. $64,000

B. $31,000

Raw Materials: Beg. Bal 7,000 (2) 24,000 (1) 19,000 Cost of goods sold: 0 0 Sales Salaries Expenses: (4) 11,000 Work in Process: Beg. Bal 11,000 (2) 15,000 (7) ? (4) 18,000 (6) 31,000 Accounts Payable: (1) 19,000 (5) 5,000 Manufacturing overhead: (2) 9,000 (6) 31,000 (3) 16,000 (4) 8,000 (5) 5,000 Total 7,000 Wages and salareis payable: Beg. Bal 7,000 (4) 37,000 Finished Goods: Beg. Bal 18,000 (7) 62,000 End. Bal 15,000 Accumulated Depreciation-Factory: Beg. Bal 82,000 (3) 16,000 The manufacturing overhead applied is: A. $24,000 B. $31,000 C. $38,000 D. $42,000

D. $3.40

Reamer Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs The company has provided the following estimated costs for next year: Direct materials $1,000 Direct labor $3,000 Sales commissions $4,000 Salary of production supervisor $2,000 Indirect material $400 Advertising expense $800 Rent on factory equipment $1,000 Reamer estimated that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be: A. $6.80 B. $6.00 C. $3.00 D. $3.40

N/Y

Rotonga Manufacturing Company leases a vehicle that it uses to deliver its finished product to customers. Which of the following terms could be used to correctly describe the monthly lease payment made on the delivery vehicle Direct cost/Fixed cost? A. Y/Y B. Y/N C. N/Y D. N/N

D

Sagon Corporation has provided data concerning the company's manufacturing overhead account for the month of September. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the manufacturing overhead account was $76,000 and the total of the credits to the account was $66,000. Which of the following statements is true? A. Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $76,000 B. Actual manufacturing overhead incurred during the month was $66,000 C. Manufacturing overhead applied to work in process for the month was $76,000 D. Manufacturing overhead for the month was underapplied by $10,000

T

T or F? A debit balance in the manufacturing overhead account at year end means that overhead was underapplied?

T

T or F? A flour manufacturer is more likely to use process costing than job-oder costing whereas a manufacturer of customized leather jackets is more likely to use job-order costing than process costing

T

T or F? A variable cost is constant if expressed on a per unit basis but the total dollar amount changes as the number of units increases or decreases

F

T or F? All costs in a merchandising company are period costs

F

T or F? As activity increases within the relevant range, fixed costs remain constant on a per unit basis

C. $5,925

The Bus Company uses a job-order costing system. The following information was recorded for Sept.: Job # 1 Invenotry $1,000 DM: $300 DL: $200 Job #2 Inventory $1,400 DM: $250 DL: $300 Job #3 Inventory $500 DM: $1,500 DL: $150 Job #4 Inventory $750 DM: $4,000 DL: $400 The direct labor wage rate is $10 per hour. Overhead is applied at the rate of $5 per direct labor-hour. Jobs 1, 2, and 3, have been completed and transferred to finished goods. Job 2 has been delivered to the customer. The cost of goods manufactured for Sept. is: A. $10,750 B. $11,275 C. $5,925 D. $7,625

C. $40,000

The Milo Company's records for May contained the following information: Actual direct labor-hours 9,000 hours Actual direct labor cost $47,000 Direct materials purchased $16,000 Direct materials used $14,000 Cost of goods sold $100,000 Overapplied overhead $5,000 Ending inventories: raw materials $30,000 work in process $50,000 finished goods $70,000 The company uses a predetermined overhead rate of %5.00 per direct labor-hour to apple to manufacturing overhead to jobs. The actual overhead cost incurred during the month was: A. $50,000 B. $ 55,000 C. $40,000 D. $45,000

B. $22,000

The TSE manufacturing company uses a job-order costing system and applied overhead to jobs using predetermined overhead rate. The company closes any balance in the manufacturing overhead account to cost of goods sold. During the year the company's finished goods inventory account was debited for $125,000 and credited for $110,000. The ending balance in the finished goods inventory account was $28,000. At the end of the year, manufacturing overhead was overapplied by $45,00 If the estimated manufacturing for the year was $24,000 and the applied overhead was $26,500 the actual manufacturing overhead cost for the year was: A. $19,500 B. $22,000 C. $28,500 D. $31,000

C

The actual manufacturing overhead incurred at Gutekunst Corporation during March was $53,000, while the manufacturing overhead applied to work in process was $73,000. The company's cost of goods sold was $451,000 prior to closing out its manufacturing overhead account. The company closes out its manufacturing overhead account to cost of goods sold. Which of the following is TRUE? A. Manufacturing overhead was overapplied by $20,000; cost of goods sold after closing out the manufacturing overhead account is $471,000 B. Manufacturing overhead was underapplied by $20,000; cost of goods sold after closing out the manufacturing overhead account is $431,000 C. Manufacturing overhead was overapplied by $20,000; cost of goods sold after closing out the manufacturing overhead account is $431,000 D. Manufacturing overhead was underapplied by $20,000; cost of goods sold after closing out the manufacturing overhead account is $471,000

Fixed cost, product cost, indirect cost with regards to units of product

The annual insurance premium for the factory building would be? A. fixed cost, period cost, and indirect cost with regards to units of product B. fixed cost, product cost, and direct cost with regards to units of product C. variable cost, product cost, direct cost with regards to units of product D. fixed cost, product cost, indirect cost with regards to units of product

B. $234,600

The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year The applied manufacturing overhead for the year was closest to: A. $229,586 B. $234,600 C. $242,006 D. $236,854

B. $3,842 overapplied

The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year The overhead for the year was: A. $2,792 underapplied B. $3,842 overapplied C. $2,792 overapplied D. $3,842 underapplied

B. $7,400 underapplied

The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year The overhead for the year was: A. $5,100 underapplied B. $7,400 underapplied C. $5,100 overapplied D. $7,400 overapplied

N/Y

The fixed portion of the cost of electricity for a manufacturing plant is a Period/Product Cost? A. Y/N B. Y/Y C. N/Y D. N/N

D. $111,000

The following data are for Potras Company: Finished goods inventory $30,000 $40,000 Work in process inventory $20,000 $13,000 Raw materials inventory $21,000 $26,000 Purchases of raw materials $71,000 Factory depreciation $5,000 Other factory costs $10,000 Direct labor $27,000 Indirect labor $6,000 Selling expense $12,000 Underapplied or overapplied overhead $0 The cost of goods sold was: A. $131,000 B. $91,000 C. $81,000 D. $111,000

D. $66,000

The following data are for Potras Company: Finished goods inventory $30,000 $40,000 Work in process inventory $20,000 $13,000 Raw materials inventory $21,000 $26,000 Purchases of raw materials $71,000 Factory depreciation $5,000 Other factory costs $10,000 Direct labor $27,000 Indirect labor $6,000 Selling expense $12,000 Underapplied or overapplied overhead $0 The cost of raw materials used in production was: A. $26,000 B. $71,000 C. $76,000 D. $66,000

D. $5,086

The following data have been recorded for recently completed Job 450 on its job cost sheet. Direct materials cost was $3,044. A total of 46 direct labor-hours and 104 machine-hours were worked on the job. The direct labor wage rate is $15 per labor-hour. The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $13 per machine-hour. The total cost for the job on its job cost sheet would be: A. $4,332 B. $3,734 C. $3,072 D. $5,086

C. $120,000

The following information relates to Zamudio Manufacturing Company: Predetermined overhead rate (based on direct labor-hours) $5.00 per DLH Total direct labor-hours incurred during the year 25,000 DLHs Manufacturing overhead overapplied for the year $4,600 How much manufacturing overhead cost did Zamudio actually incur? A. $103,000 B. $119,000 C. $120,000 D. $129,000

B. 3

The following journal entries without dollar data were taken from the accounting records of a company that has a job-order costing system in which overhead is applied to job using a predetermined overhead rate: 1. Work in process XXX Manufacturing overhead XXX Wages payable XXX 2. Salary Expense XXX Wages payable XXX 3. Manufacturing overhead XXX Accumulated depreciation XXX 4. Work in process XXX Raw materials XXX 5. Work in process XXX Manufacturing overhead XXX 6. Manufacturing overhead XXX Raw materials XXX 7. Finished goods XXX Work in process XXX 8. Raw materials XXX Accounts payable XXX The entry to record depreciation on manufacturing equipment is: A. 1 B. 3 C. 4 D. 5

C. $736,000

The information below has been taken from the cost records of Tercel Company for the past year: Raw materials used in production $362,000 Total manufacturing costs charged to jobs during the year (including raw materials, direct labor, and manufacturing overhead applied at the rate of 60% of direct labor cost) $686,000 Cost of goods available for sale $826,000 Selling and administrative expenses $25,000 Inventories Raw materials Beg. $75,000 End $85,000 Work in process Beg. $80,000 End $30,000 Finished goods Beg. $90,000 End $110,000 The cost of goods manufactured during the year was: A. $636,000 B. $766,000 C. $736,000 D. $716,000

D. $336,000

The information below has been taken from the cost records of Tercel Company for the past year: Raw materials used in production $362,000 Total manufacturing costs charged to jobs during the year (including raw materials, direct labor, and manufacturing overhead applied at the rate of 60% of direct labor cost) $686,000 Cost of goods available for sale $826,000 Selling and administrative expenses $25,000 Inventories Raw materials Beg. $75,000 End $85,000 Work in process Beg. $80,000 End $30,000 Finished goods Beg. $90,000 End $110,000 The cost of raw materials purchased during the ear amounted to: A. $411,000 B. $360,000 C. $316,000 D. $336,000

An opportunity cost

The potential benefit that is given up when one alternative is selected over another is called?

C. $35,750

Washtenaw Corporation uses a job-order costing system. The following data are for last year: Estimated direct labor-hours 12,000 Estimated manufacturing overhead costs $39,000 Actual direct labor-hours 11,000 Actual manufacturing overhead costs $37,000 Washtenaw applies overhead using a predetermined rate based on direct labor-hours. What amount of overhead was applied to work in process last year? A. $39,050 B. $42,600 C. $35,750 D. $36,960

D. $230,000

Wayne Company uses a job costing system and applied overhead to jobs using a predetermined overhead rate based on direct labor-hours. The company had the following inventories at the beginning and end of March: Direct materials March 1: $36,000 March 31: $30,000 Work in process March 1: $18,000 march 31: $12,000 Finished goods March 1: $54,000 March 31: $72,000 The following additional data pertain to operation during March: Direct materials purchased $84,000 Direct labor cost $60,000 Direct labor rate $7.50 per direct labor-hour Overhead rate $10.00 per direct labor-hour During March total debits to Work in process were: A. $84,000 B. $220,000 C. $144,000 D. $230,000

D. $487,750

Wayne Company's beginning and ending inventories for the month of June were as follows: Direct materials June 1:$67,000 June 30:$62,000 Work in process June 1:$145,000 June 30: $171,000 Finished goods June 1:$85,000 June 30:$78,000 Production data for the month follow: Direct labor cost incurred $200,000 Direct labor-hours 25,000 Actual manufacturing overhead cost incurred $132,000 Direct materials purchases $165,000 Wayne applies manufacturing overhead cost to jobs based on direct labor-hours, and the predetermined rate is $5.75 per direct labor-hour. The company does not close underapplied or overapplied manufacturing overhead to cost of goods sold until the end of the year. What is the amount of cost of goods manufactured? A. $508,750 B. $502,000 C. $585,000 D. $487,750

D

What source document is used to determine the actual amount of direct materials to record on a job cost sheet? A. Bill of materials B. Production order C. Materials purchase order D. Materials requisition form

I/C

Which of the following is correct concerning reactions to INCREASE in activity: Total V.C/Variable cost per unit? A. I/D B. C/D C. D/C D.I/C

C

Which of the following production costs, if expressed on a per unit basis, would be most likely to change significantly as the production level varies? A. Direct materials B. Direct labor C. Fixed manufacturing overhead D. Responses A and B are both correct

D

Which of the following types of firms typically would use process costing rather than job-oder costing? A. A small appliance repair shop B. A manufacturer of commercial passenger aircraft C. A specialty equipment manufacturer D. A breakfast cereal manufacturer

A

Which of the terms below would make the following sentence correct? Multiple overhead rate costing systems are usually more _______ than plantwide overhead rates. Accurate Complex A. Yes Yes B. Yes No C. No Yes D. No No

D. $757,500

Worsley Company has underapplied overhead of $45,000 for the year ended December 31. Before disposition of the underapplied overhead, selected December 31 data from Worley's accounting records are: Sales $1,200,000 Cost of goods sold $270,000 Overhead during the year in ending inventories: Work in process $54,000 Finished goods $90,000 Under Worley's cost accounting system, over- or underapplie overhead is allocated to ending inventories and cost of goods sold based on the amount of overhead applied during the year in the ending balance of each account. In its income statement, Worley should report cost of goods of: A. $682,000 B. $684,000 C. $756,000 D. $757,000