Accounting 202 first exam

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? 10,000 15,000 9,000 11,000

15,000 because Direct materials + Direct labor + Predetermined overhead rate × Direct labor cost = $4,000 + $5,000 + 120% × $5,000 = $15,000

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 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 1.33 1.2

2 because $4,000 + $5,000 + (1.20 × $5,000) = $15,000 Unit product cost = $15,000 ÷ 7,500 units = $2.00

Which of the following statements are true? A direct cost is sometimes referred to as a common cost. An individual cost is either direct or indirect, regardless of the cost object. A direct cost can be easily and conveniently traced to a specific cost object. 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. A regional sales manager's salary is a direct cost of the regional office in which the sales manager works.

the predetermined overhead rate per direct labor dollar equation is

Estimated manufacturing overhead/ Estimated direct labor cost

Which of the following is not a manufacturing cost category? Direct labor Direct materials Selling & administrative costs Manufacturing overhead

Selling & administrative costs

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

True

A cost driver is ______. the amount of overhead assigned to a job something you want to know the cost of a factor that causes overhead costs to occur a measure that is used to assign overhead costs to products and services

a factor that causes overhead costs to occur

Cost-plus pricing occurs when Blank______. non-manufacturing costs are added to manufacturing costs a markup percentage is added to the cost of a job the cost of the job is multiplied by 2

a markup percentage is added to the cost of a job

An essential quality of an overhead allocation base is that it must Blank______. be common to all the company's products and services be calculated using a predetermined overhead rate vary with all overhead costs be a cost associated with producing the firm's goods

be common to all the company's products and services

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

direct

Fantastic Furniture makes custom order couches. The material used to make a couch is a(n) ______ cost of the customer placing the order. common direct overhead indirect

direct

Within the relevant range of activity, Blank______ costs remain constant in total. both fixed and variable fixed neither fixed nor variable variable

fixed

The adjustment for underapplied overhead Blank______ net income. increases both cost of goods sold and decreases cost of goods sold and increases increases cost of goods sold and decreases decreases both cost of goods sold and

increases cost of goods sold and decreases

A job cost sheet contains Blank______ the job. the selling price of labor costs charged to materials costs charged to manufacturing overhead charged to selling costs charged to

labor costs charged to materials costs charged to manufacturing overhead charged to

Factory costs such as cleaning supplies, taxes, insurance, and janitor wages are classified as ______. manufacturing overhead direct materials indirect labor period costs

manufacturing overhead

Direct materials costs are recorded on the job cost sheet when the Blank______. requisition form is submitted to the storeroom clerk job is complete job is sold to a customer materials are issued to the job

materials are issued to the job

An allocation base is a(n) Blank______. measure used to assign all manufacturing costs to products and services measure of activity used to assign overhead costs to products and services activity that causes overhead costs to change

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

Cost objects include Blank______. anything for which revenue data is desired organizational subunits / departments anything for which cost data is desired customers

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

The sum of direct materials and direct labor is called ___ cost

prime

Differential costs are also known as ___ costs

relevant

In the formula Y = a + bX, X represents the estimated Blank______. variable manufacturing cost per unit total amount of the allocation base total fixed manufacturing overhead cost total manufacturing overhead cost

total amount of the allocation base

In the formula Y = a + bX, a represents the estimated Blank______. total manufacturing overhead cost total amount of the allocation base total fixed manufacturing overhead cost variable manufacturing cost per unit

total fixed manufacturing overhead cost

Direct labor is also called _______ labor.

touch

Direct materials and direct labor are both Blank______ costs. manufacturing period selling and administrative nonmanufacturing

manufacturing

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. 228,000 240,000 252,000 258,000

228,000 Reason: $18,000 + $234,000 - $24,000 = $228,000

Estimated manufacturing overhead $500,000 Estimated direct labor hours 200,000 Actual manufacturing overhead $625,000 Actual direct labor hours 260,000 The company applies overhead using direct labor hours as the cost driver. Calculate the amount that overhead was overapplied or underapplied. $25,000 overapplied $187,500 underapplied $25,000 underapplied $125,000 overapplied

25,000 Reason: ($500,000 ÷ 200,000) = $2.50 × 260,000 = $650,000 applied. Actual overhead = $625,000, so overhead is $25,000 overapplied.

The adjustment for overapplied overhead ______ net income. decreases cost of goods sold and increases increases both cost of goods sold and increases cost of goods sold and decreases decreases both cost of goods sold and

decreases cost of goods sold and increases

Labor costs that can be easily and conveniently traced to specific products are Blank______ costs. indirect labor direct labor selling manufacturing overhead

direct labor

Salaries of factory supervisors and factory maintenance personnel are examples of Blank______ labor costs. indirect administrative direct

indirect

A dress manufacturer would consider the cost of relatively inexpensive items like thread to be part of ______. indirect materials administrative costs direct materials manufacturing overhead

indirect materials manufacturing overhead

The type and quantity of materials to be drawn from the storeroom and the job that will be charged for the materials is specified on the Blank______. time ticket production order form materials requisition form bill of materials

materials requisition form

Variable costs ______. vary both in total and per unit remain constant per unit and vary in total remain constant in total and vary per unit remain constant both in total and per unit

remain constant per unit and vary in total

The formula for a predetermined overhead rate is Blank______. estimated total allocation base ÷ estimated total manufacturing overhead cost estimated total manufacturing overhead cost ÷ estimated total allocation base actual total allocation base ÷ actual total manufacturing overhead cost actual total manufacturing overhead cost ÷ actual total allocation base

estimated total manufacturing overhead cost ÷ estimated total allocation base