Smartbook Chapter 2
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?
$15,000
SPL Enterprises assigns overhead based on number of machine hours. For the upcoming year, they plan to use a total of 250,000 machine hours and 50,000 direct labor hours. Total overhead cost is expected to be $500,000. The predetermined overhead rate per machine hour is
$2
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 ______.
$2.00 Reason: Total cost of Job #420 = Direct materials + direct labor + overhead (predetermined overhead rate × direct labor cost) = $4,000 + $5,000 + (1.20 × $5,000) = $15,000 Unit product cost = $15,000 ÷ 7,500 units = $2.00
Based on this information, the predetermined overhead rate per direct labor dollar for Dept. A is ______.
$2.60
Smith, Inc. uses a job-order costing system with the predetermined overhead rate of $12 per machine-hour. The job cost sheet for Job #42A listed $12,000 in direct labor cost, $18,000 in direct materials cost, 1,200 direct labor-hours and 1,100 machine-hours. The total cost of Job #42A is $
$43200
Based on the table, cost of goods sold for July is ______.
$476 Reason: Job W: ($50 + $150 + $200 + $100) ÷ 25 = $20 × 10 = $200 + Job Y: ($70 + $120 + $180 + $90) ÷ 50 = $9.20 × 30 = $276 or $476 total
Based on the table, the finished goods inventory is ______.
$484 Reason: Job W: ($50 + $150 + $200 + $100) ÷ 25 = $20 × 10 = $200 + Job Y: ($70 + $120 + $180 + $90) ÷ 50 = $9.20 × 30 = $276 or $484 total
Based on this information, the overhead applied to Job ABC using multiple predetermined overhead rates is ______.
$64.20
Based on the table, the cost of ending work-in-process is Blank______.
$755 Reason: Job X: $60 + $95 + $130 + $65 = $350 and Job Z: $100 + $80 + $150 + $75 = $405 for a total of $755
A bill of materials contains the ______.
- quantity of each direct material needed to complete a unit of product - type of each direct material needed to complete a unit of product
Based on this information, the predetermined overhead rate per direct labor dollar for Dept. B is $
1.35
Based on the table, finished goods inventory at July 31 is $ 2
359
Murphy Manufacturing estimated total manufacturing overhead for the year to be $100,000 and that 5,000 direct-labor hours would be used. Actual overhead was $120,000 and actual direct labor-hours were 7,500. The overhead applied to a job completed during the year that used 200 direct labor-hours was ______.
4,000
Based on the table, the cost of goods sold for July is $
566
Based on the table, finished goods inventory at July 31 is $
825
Based on the table, the ending work-in-process on July 31 is $
825
Job XYZ has a total manufacturing cost of $600. If the mark-up percentage is 40%, the job will sell for $
840
Which of the following would not be a good allocation base for manufacturing overhead?
Accounting hours
When a company uses cost-plus pricing, they consider both the costs of production and the desired profit.
False
Companies that make many different products each period use - costing.
Job order
A single predetermined overhead rate is called a(n) _______ overhead rate.
Plantwide
Which of the following is not a manufacturing cost category?
Selling & administrative costs
Which of the following would not be considered a direct labor cost in a service firm that uses job-order costing?
The salary of the manager at a hair salon.
Why is the unit product cost different from the cost that would be incurred if another (additional) unit were produced?
The unit product cost is an average, not an incremental cost.
One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors.
True
A cost driver is ______.
a factor that causes overhead costs to occur
Cost-plus pricing occurs when ______.
a markup percentage is added to the cost of a job
A normal cost system assigns overhead to jobs using ______.
a predetermined overhead rate
All manufacturing costs are assigned to units of product and all nonmanufacturing costs are treated as period cost under ________ costing.
absorption
Companies use a predetermined overhead rate rather than an actual overhead rate because ______.
an actual rate is not known until the end of the period
Overhead application is the process of Blank______.
assigning manufacturing overhead cost to jobs
Overhead application is the process of ______.
assigning manufacturing overhead cost to jobs
The unit product cost is the same as the ______.
average product cost per unit total job cost divided by number of units
An essential quality of an overhead allocation base is that it must ______.
be common to all the company's products and services
The predetermined overhead rate is calculated ______.
before the period begins
The type and quantity of each type of direct material needed to complete a unit of product is listed on the
bill of materials
Costs assigned to units of product in absorption costing include ______ manufacturing costs.
both variable and fixed
An allocation base is a(n) ______.
common measure used to assign overhead costs to products and services
Manufacturing overhead ______.
contains both fixed and variable costs consists of many different types of costs is an indirect cost
When a predetermined markup is applied to a base to determine the target selling price, the company is using - pricing.
cost - plus
decreases both cost of goods sold and
decreases cost of goods sold and increases
When a company uses a departmental approach rather than a plantwide approach to applying overhead, the selling price of the product will always be ______.
different
Widely used allocation bases in manufacturing include Blank______.
direct labor hours machine hours direct labor cost units of product
To calculate the unit product cost using the job cost sheet ______ by the number of units produced.
divide the total job cost
he appeal of using predetermined departmental overhead rates is they presumably provide Blank______.
enhanced information for decision making a more accurate accounting of costs
The appeal of using predetermined departmental overhead rates is they presumably provide ______.
enhanced information for decision making a more accurate accounting of costs
To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the ______.
estimated total amount of the allocation
The formula for a predetermined overhead rate is ______.
estimated total manufacturing overhead cost ÷ estimated total allocation base
All hours on computerized time tickets are automatically posted directly to job cost sheets.
false
The adjustment for underapplied overhead ______ net income.
increases cost of goods sold and decreases
Assigning manufacturing overhead to product is complicated because ______.
it is an indirect cost it consists of many types of costs
The document that records the materials, labor, and manufacturing overhead costs charged to a job is the
job cost sheet
A job cost sheet contains ______ the job.
labor costs charged to manufacturing overhead charged to materials costs charged to
Categories of manufacturing costs include ______.
manufacturing overhead, direct materials, direct labor
Companies that use job-order costing make ______.
many different products
When compared to a departmental approach, using activity-based costing results in ______ overhead rates.
more
Compared to a plantwide overhead rate system, a multiple predetermined overhead rate system is ______ accurate.
more complex and more
The approach used when overhead is applied to jobs by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the jobs is called costing.
normal
The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find ______.
overhead applied to the job
When a company assumes that direct labor-hours is the only manufacturing overhead cost driver, the company will choose to use a(n) predetermined overhead rate.
plantwide
The formula for applying overhead to a specific job is: ______ amount of allocation base incurred by job.
predetermined overhead rate ×
A multiple predetermined overhead rate system is more accurate than a plantwide overhead rate system because it
reflects differences in how overhead costs are incurred within departments
When companies have large amounts of fixed manufacturing overhead, total manufacturing overhead costs tend to Blank______.
remain fairly constant from one period to the next
When a company assumes that direct labor-hours is the only manufacturing overhead cost driver, the company will choose to use a(n) predetermined _______ overhead rate.
single
Overhead application is used to apply overhead costs to jobs ______.
throughout the accounting period
The document that provides an hour-by-hour summary of the employee's activities throughout the day is called a
time ticket
The document that provides an hour-by-hour summary of the employee's activities throughout the day is called a ______.
time ticket
In the formula Y = a + bX, b represents the estimated ______.
variable manufacturing overhead cost per unit
The average manufacturing overhead cost per unit tends to ______.
vary from one period to the next
Allocation bases that do not drive overhead costs ______.
will not accurately measure costs used by jobs
