Cost Accounting Chapter 4 Quiz Test 1

For 2014, Frank Manufacturing uses machine-hours as the only overhead cost-allocation base. The estimated manufacturing overhead costs are $300,000 and estimated machine hours are 50,000. The actual manufacturing overhead costs are $420,000 and actual machine hours are 70,000. What is the difference between the budgeted and the actual manufacturing overhead using job costing?

$0

Sky High Company has two departments, X and Y. The following estimates are for the coming year: X Y Direct manufacturing labor-hours 20,000 40,000 Machine-hours 40,000 20,000 Manufacturing overhead $200,000 $400,000 A single indirect-cost rate based on direct manufacturing labor-hours for the entire plant is ________.

$10 per direct labor hour

Tiscara Company manufactures insulation and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $15 per direct labor-hour. The following data are obtained from the accounting records for June 2014: Direct materials $440,000 Direct labor (3,500 hours @ $11/hour) 38,500 Indirect labor 15,000 Plant facility rent 50,000 Depreciation on plant machinery and equipment 35,000 Sales commissions 10,000 Administrative expenses 25,000 The actual amount of manufacturing overhead costs incurred in June 2014 totals ________.

$100,000

Jenny Corp. applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of a necklace. Estimates for this order include: Direct materials of $50,000; 400 direct manufacturing labor-hours at $20 per hour; and a 30% markup rate on total manufacturing costs. The bid price for this special order is ________.

$106,600

Bully Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Jackson High School band jacket job. Company Jackson High School Job Direct materials $40,000 $2,000 Direct labor $10,000 $400 Manufacturing overhead costs $45,000 Machine-hours 100,000 mh 900 mh What are the total manufacturing costs of this job?

$2805

Bully Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Jackson High School band jacket job. Company Jackson High School Job Direct materials $40,000 $2,000 Direct labor $10,000 $400 Manufacturing overhead costs $45,000 Machine-hours 100,000 mh 900 mh What amount of manufacturing overhead costs will be allocated to this job?

$405

Saint Company's budgeted manufacturing overhead is $3,300,000. Overhead is allocated on the basis of direct labor hours. The budgeted direct labor hours for the period are 60,000. What is the manufacturing overhead rate?

$55,000

For 2014, Lee Manufacturing uses machine-hours as the only overhead cost-allocation base. The direct cost rate is $3.00 per unit. The selling price of the product is $20.00. The estimated manufacturing overhead costs are $240,000 and estimated 40,000 machine hours. The actual manufacturing overhead costs are $300,000 and actual machine hours are 50,000. Using job costing, the 2014 actual indirect-cost rate is ________.

$6 per machine hour

Roiann and Dennett Law Office employs 12 full-time attorneys and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 2014: Budget Actual Indirect costs $270,000 $300,000 Annual salary of each attorney $100,000 $110,000 Annual salary of each paraprofessional $29,000 $30,000 Total professional labor-hours 50,000 dlh 60,000 dlh How much should the client be billed in an actual costing system if 200 professional labor-hours are used?

$6400

A local accounting firm employs 20 full-time professionals. The budgeted annual compensation per employee is $40,500. The average chargeable time is 500 hours per client annually. All professional labor costs are included in a single direct-cost category and are allocated to jobs on a per-hour basis. Other costs are included in a single indirect-cost pool, allocated according to professional labor-hours. Budgeted indirect costs for the year are $787,500, and the firm expects to have 90 clients during the coming year. What is the budgeted direct labor cost rate per hour?

18

The ________ approach carries the underallocated or overallocated amounts to overhead accounts in the following year. None of these answers are correct. write-off to cost of goods sold adjusted allocation-rate proration

None of these answers are correct.

In a costing system, ________.

a cost-allocation base can be either financial or nonfinancial

Job-costing is likely to be used by________.

advertising agencies

Which of the following statements about normal costing is true?

direct costs are traced using an actual rate, and indirect costs are allocated using a budgeted rate

Job costing information is used ________.

for internal financial reporting

An example of a denominator reason for calculating annual indirect-cost rates includes ________.

higher levels of output demanded during the fall months

An increase in direct labor cost per unit ________.

increases the variable cost

The advantage of using normal costing instead of actual costing is ________.

indirect cost are assigned to a job on a timely basis

A job that shows low profitability may be the result of ________.

inefficient direct manufacturing labor

Davis Company manufactures pipes and applies manufacturing overhead costs to production at a budgeted indirect-cost rate of $18 per direct labor-hour. The following data are obtained from the accounting records for June 2014: Direct materials $140,000 Direct labor (4,000 hours @ $10/hour) 40,000 Indirect labor 13,000 Plant facility rent 30,000 Depreciation on plant machinery and equipment 22,500 Sales commissions 24,000 Administrative expenses 28,000 For June 2014, manufacturing overhead is ________.

over allocated by $6500