Test Questions & Answers Job Costing Tietz Ch.3

Managerial Accounting, 6e (Braun et al.)

Chapter 3 Job Costing

3.1 Distinguish between job costing and process costing

1) A paper mill company like International Paper would most likely use job costing.

Diff: 2

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

2) A food and beverage company like Coca-Cola would most likely use job costing.

Diff: 2

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

3) Process costing is used by companies that produce large numbers of identical units of production in a continuous fashion.

Diff: 1

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

4) Job costing systems accumulate the costs for each individual job.

Diff: 1

LO: 3-1

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

5) Companies should always use job costing rather than process costing.

Diff: 1

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

6) Generally Accepted Accounting Principles (GAAP) mandates the type of product costing system (job costing or process costing) that must be used by a manufacturer.

Diff: 1

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

7) Job costing should only be used by manufacturers.

Diff: 1

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

8) The end goal of process costing and job costing at a manufacturing company is the same: to find the cost of producing one unit of product.

Diff: 1

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

9) Job costing is often used by professional service providers, such as law firms.

Diff: 1

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

10) All manufacturers use either a pure process costing system or a pure job costing system.

Diff: 1

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

11) Companies use job costing when their products or services vary in terms of materials needed, time required to complete the product, and/or the complexity of the production process.

Diff: 1

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

12) A receiving report is typically a duplicate of the purchase order but without the prices and quantities pre-listed on the form.

Diff: 2

LO: 3-1

EOC: S3-3

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

13) Which product costing system would be better for custom-order products?

A) Product costing system

B) Company costing system

C) Job costing system

D) Overhead costing system

Diff: 1

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

14) A job costing system can be used by which types of companies?

A) Manufacturing and merchandising businesses

B) Service and manufacturing businesses

C) Service, manufacturing, and merchandising businesses

D) Service and merchandising businesses

Diff: 1

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

15) Which product costing system would better account for a unique product?

A) Overhead costing system

B) Job costing system

C) Process costing system

D) Product costing system

Diff: 1

LO: 3-1

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

16) The two basic types of costing systems are

A) product costing and materials inventory costing.

B) periodic costing and perpetual costing.

C) job costing and process costing.

D) periodic costing and process costing.

Diff: 1

LO: 3-1

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

17) Which of the following industries would be most likely to use a job costing system?

A) Chemicals

B) Food and beverage

C) Commercial building construction

D) Pharmaceuticals

Diff: 1

LO: 3-1

EOC: S3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

18) Which of the following is an example of an industry that would use a process costing—rather than a job costing—system?

A) Coca-Cola

B) Boeing Jets

C) Centex Custom Homes

D) Snyder & Lewis, Attorneys at Law

Diff: 1

LO: 3-1

EOC: E3-16A

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

19) Which of the following is an example of an industry that would use a process costing—rather than a job costing—system?

A) Brugman Custom Cabinetry

B) Computer Repair

C) Pepsi

D) Smith & Zu Certified Public Accountants

Diff: 1

LO: 3-1

EOC: E3-16A

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

20) Which of the following is most likely not to use process costing?

A) DuPont Chemical

B) Exxon-Mobile (gasoline)

C) Ashley Custom Furnishings

D) General Mills (cereal)

Diff: 1

LO: 3-1

EOC: E3-16A

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

21) A manufacturer of plywood would use what type of product costing system?

A) Process costing

B) Job costing

C) Neither process nor job

D) Both job and process

Diff: 1

LO: 3-1

EOC: E3-16A

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

22) A manufacturer of luxury yachts would use which type of costing system?

A) Process costing

B) Job costing

C) Neither job nor process

D) Both job and process

Diff: 1

LO: 3-1

EOC: E3-16A

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

23) An example of an industry that uses process costing might be a

A) custom printer.

B) homebuilder.

C) shipbuilder.

D) company that makes bottled soft drinks.

Diff: 1

LO: 3-1

EOC: E3-16A

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

24) Job costing might be used by a

A) greeting card manufacturer.

B) custom home builder.

C) crude oil refinery.

D) paper company.

Diff: 1

LO: 3-1

EOC: E3-16A

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

25) Job costing might be used by a

A) water bottling plant.

B) balloon manufacturer.

C) hospital.

D) saltine cracker manufacturer.

Diff: 1

LO: 3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

26) Job costing would most likely be used in which of the following companies?

A) Airplane manufacturer

B) Homebuilder

C) Doctor's office

D) All of the above would use job costing.

Diff: 1

LO: 3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

27) Process costing would be most likely used by a

A) cereal company.

B) salsa company.

C) soft drink manufacturer.

D) All of the above would use process costing.

Diff: 1

LO: 3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

28) Which of the following would not use process costing?

A) Furniture maker

B) Mulch manufacturer

C) Paint manufacturer

D) Cement manufacturer

Diff: 1

LO: 3-1

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

29) ________ is the system for assigning costs to unique cost objects.

A) Time costing

B) Process costing

C) Job costing

D) Service costing

Diff: 1

LO: 3-1

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

30) Which of the following types of costing is used for many similar products?

A) Process costing

B) Batch costing

C) Service costing

D) Job costing

Diff: 1

LO: 3-1

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

31) State whether each company below would be more likely to use a job costing system or a process costing system.

A) ________ custom home builder

B) ________ paint manufacturer

C) ________ carpet manufacturer

D) ________ concrete manufacturer

E) ________ jumbo jet manufacturer

Diff: 1

LO: 3-1

EOC: E3-16A

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

32) State whether each company below would be more likely to use a job costing system or a process costing system.

A) ________ soft drink bottler

B) ________ yacht builder

C) ________ hospital

D) ________ printing firm

E) ________ flour mill

Diff: 1

LO: 3-1

EOC: E3-16A

AACSB: Reflective thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

33) Briefly explain the difference between job order and process costing and give examples of each.

Diff: 1

LO: 3-1

EOC: S3-15

AACSB: Analytical thinking

Learning Outcome: Describe the basics of managerial accounting and its function within an organization.

3.2 Understand the flow of production and how direct materials and direct labor are traced to jobs

1) For a manufacturing system, inventory flows from raw materials inventory to work in process inventory to finished goods inventory.

Diff: 1

LO: 3-2

EOC: S3-2

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

2) A job cost record is a document that accumulates direct materials costs, direct labor costs and manufacturing overhead costs assigned to each individual job.

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

3) At a manufacturing company, inventory flows from work in process inventory, to raw materials inventory, to finished goods inventory.

Diff: 1

LO: 3-2

EOC: S3-2

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

4) When raw materials are transferred out of the storeroom to the factory, their cost is transferred out of raw materials inventory and into work in process inventory.

Diff: 1

LO: 3-2

EOC: S3-2

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

5) When the products are shipped to customers, the cost of manufacturing those products becomes Cost of Goods Sold (COGS) shown on the company's balance sheet.

Diff: 1

LO: 3-2

EOC: S3-2

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

6) A production schedule indicates the quantity and types of inventory that are scheduled to be manufactured during the period.

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

7) The bill of materials lists all of the raw materials needed to manufacture the job.

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

8) A labor time record identifies the employee and the amount of time the employee spent on a particular job.

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

9) A production schedule always covers a one-year period of time.

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

10) A purchase order is used to order needed materials from suppliers.

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

11) The quantities of incoming shipments of raw materials are counted and recorded on a purchase order.

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

12) Which of these documents authorizes the purchase of specific raw materials from a specific supplier?

A) Labor time record

B) Materials inventory requisition form

C) Job cost record

D) Purchase order

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

13) A ________ is used to accumulate the costs of a job.

A) labor time record

B) materials inventory requisition form

C) bill of materials

D) job cost record

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

14) The ________ substantiates the total of the raw materials inventory account shown on the company's balance sheet.

A) bill of materials

B) raw materials records

C) materials requisition

D) labor time record

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

15) Which of these documents informs the storeroom to send specific materials to the factory floor?

A) Receiving report

B) Bill of materials

C) Purchase order

D) Materials requisition

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

16) A bill of materials indicates

A) what materials are needed to be ordered for the month.

B) what materials the production department needs on the factory floor at that specific moment in time.

C) what materials are needed to complete the job.

D) what materials are needed for the entire year.

Diff: 1

LO: 3-2

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

17) When direct materials are requisitioned, they flow directly into

A) cost of goods sold account.

B) finished goods inventory account.

C) work in process inventory account.

D) manufacturing overhead account.

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

18) The assignment of direct and indirect materials to a cost object reduces the

A) finished goods inventory account.

B) raw materials inventory account.

C) manufacturing overhead account.

D) work in process inventory account.

Diff: 2

LO: 3-2

EOC: S3-3

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

19) A ________ is a source document used to track employee hours.

A) labor time record

B) process costing

C) job cost record

D) job costing

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

20) A ________ is used to accumulate all of the direct materials and direct labor used on the job, as well as the manufacturing overhead allocated to the job.

A) bill of materials

B) job cost record

C) labor time record

D) production schedule

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

21) The job cost record summarizes which of the following sets of information for each job?

A) Direct materials, direct labor, and manufacturing overhead

B) Direct materials and direct labor

C) Manufacturing overhead only

D) Indirect materials, indirect labor, and direct labor

Diff: 1

LO: 3-2

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

22) In the basic flow of inventory through a manufacturing system, which of the following occurs first in a job costing system?

A) Cost of goods sold

B) Finished goods inventory

C) Work in process inventory

D) Raw materials inventory

Diff: 1

LO: 3-2

EOC: S3-2

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

23) In the basic flow of inventory through a manufacturing system, which of the following occurs second in the job costing system?

A) Cost of goods sold

B) Finished goods inventory

C) Work in process inventory

D) Raw materials inventory

Diff: 1

LO: 3-2

EOC: S3-2

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

24) In the basic flow of inventory through a manufacturing system, which of the following occurs third in the job costing system?

A) Finished goods inventory

B) Cost of goods sold

C) Raw materials inventory

D) Work in process inventory

Diff: 1

LO: 3-2

EOC: S3-2

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

25) In the basic flow of inventory through a manufacturing system, which of the following occurs last in the job costing system?

A) Finished goods inventory

B) Cost of goods sold

C) Raw materials inventory

D) Work in process inventory

Diff: 1

LO: 3-2

EOC: S3-2

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

26) A ________ is a document manufacturing production personnel use to request that the itemized materials be sent from the showroom into the factory.

A) cost ticket

B) job cost record

C) materials requisition

D) manufacturing ticket

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

27) An internal request to transfer raw materials requires personnel to complete a

A) materials requisition document.

B) bill of materials document.

C) purchase order document.

D) labor time record document.

Diff: 1

LO: 3-2

EOC: S3-3

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

28) Payroll-related costs for factory employees who do not work directly on the product are considered

A) direct labor.

B) selling expenses.

C) manufacturing overhead.

D) administrative costs.

Diff: 1

LO: 3-2

EOC: S3-15

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

29) On the line in front of each statement, enter the letter corresponding to the term that best fits that statement. You may use a letter more than once and some letters may not be used at all.

________ a bill from a supplier

________ a list of all of the raw materials needed to manufacture a job

________ system for assigning costs to a specific unit or to a small batch of products or services that pass through production steps as a distinct identifiable job

________ a written or electronic document authorizing the purchase of specific raw materials from a specific supplier

________ system for assigning costs to large numbers of identical units that usually proceed in a continuous fashion through a series of uniform production steps or processes

________ a written or electronic document that requests specific materials be transferred from the raw materials inventory storeroom to the production floor

________ a written or electronic document listing the quantity and type of raw materials received in an incoming shipment

________ a primary factor that causes a cost

________ a written or electronic document that lists the direct materials, direct labor, and manufacturing overhead costs assigned to each individual job

________ a written or electronic document that identifies the employee, the amount of time spent on a particular job, and the labor cost charged to a job

Diff: 2

LO: 3-2

EOC: S3-3; S3-15

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

30) For a manufacturer that uses job costing, show the order of the cost flow through the following accounts by numbering them from 1 to 4.

________ finished goods inventory

________ raw materials inventory

________ cost of goods sold

________ work in process inventory

Diff: 1

LO: 3-2

EOC: S2-2

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

31) For each of the following items, determine whether it would be more appropriate to increase A) manufacturing overhead, or B) work in process inventory. Enter either the letter A or the letter B on the line in front of each of the following statements.

________ indirect materials used

________ direct materials used

________ indirect labor used

________ direct labor used

________ plant utilities

Diff: 2

LO: 3-2

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

32) Briefly explain the flow of inventory through a manufacturing system into a company's job costing system from the purchase of materials to the sale of the products.

Diff: 2

LO: 3-2

EOC: S3-2

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

3.3 Compute a predetermined manufacturing overhead rate and use it to allocate MOH to jobs

1) Manufacturing overhead may include depreciation on the factory plant and equipment, utilities to run the plant, property taxes and insurance on the plant, and salaries of plant janitors.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

2) Generally accepted accounting principles (GAAP) mandate that manufacturing overhead must be treated as a product cost for financial reporting purposes.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

3) Manufacturing overhead costs cannot be directly traced to jobs.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

4) The key to allocating indirect manufacturing costs to jobs is to identify an appropriate allocation base.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

5) Allocating manufacturing overhead to jobs simply means "splitting up" the total manufacturing overhead costs among the jobs produced during the year.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

6) An equal amount of manufacturing overhead should be allocated to each job.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

7) Manufacturers follow four steps to implement a manufacturing overhead allocation system. In the first step, the company estimates its total manufacturing overhead costs for the coming year.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

8) Manufacturers follow four steps to implement a manufacturing overhead allocation system. In the last step, to the company allocates some manufacturing overhead to each individual job.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

9) Manufacturers follow four steps to implement a manufacturing overhead allocation system. In the last step, the company estimates the total amount of manufacturing overhead costs for the year.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

10) The predetermined manufacturing overhead rate is calculated by dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

11) The predetermined manufacturing overhead rate is calculated by multiplying the total estimated manufacturing overhead costs by the total estimated amount of the allocation base.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

12) The cost of wages paid to assembly-line workers should be treated as a manufacturing overhead cost.

Diff: 1

LO: 3-3

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

13) The overhead allocation base should be the cost driver of manufacturing overhead costs.

Diff: 1

LO: 3-3

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

14) The first three steps to allocating manufacturing overhead are taken before the year begins and include all of the following except

A) estimating total manufacturing overhead costs for the coming year.

B) selecting an allocation base and estimating the total amount that will be used during the year.

C) allocating manufacturing overhead to each individual job.

D) calculating the predetermined manufacturing overhead rate.

Diff: 1

LO: 3-3

EOC: S3-15

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

15) A ________ is the primary factor that causes a cost to be incurred.

A) cost driver

B) cost allocation

C) materials requisition

D) predetermined manufacturing overhead rate

Diff: 1

LO: 3-3

EOC: S3-15

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

16) A(n) ________ is an estimated manufacturing overhead rate computed at the beginning of the year.

A) cost allocation

B) cost driver

C) predetermined manufacturing overhead rate

D) actual manufacturing overhead rate

Diff: 1

LO: 3-3

EOC: S3-15

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

17) Assigning manufacturing overhead costs and other indirect costs is called

A) cost driver.

B) cost allocation.

C) materials requisition.

D) predetermined manufacturing overhead rate.

Diff: 1

LO: 3-3

EOC: S3-15

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

18) Manufacturers follow four steps to implement a manufacturing overhead allocation system. The last step is

A) allocate some manufacturing overhead to each individual job.

B) select an allocation base and estimate the total amount that will be used during the year.

C) estimate total manufacturing overhead costs for the coming year.

D) calculate a predetermined manufacturing overhead rate.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

19) Manufacturers follow four steps to implement a manufacturing overhead allocation system. What is the first step?

A) Select an allocation base and estimate the total amount that will be used during the year.

B) Allocate some manufacturing overhead to each individual job.

C) Calculate a predetermined manufacturing overhead rate.

D) Estimate total manufacturing overhead costs for the coming year.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

20) Manufacturers follow four steps to implement a manufacturing overhead allocation system. Which step is not performed before the year begins?

A) Allocate some manufacturing overhead to each individual job.

B) Select an allocation base and estimate the total amount that will be used during the year.

C) Estimate total manufacturing overhead costs for the coming year.

D) Calculate a predetermined manufacturing overhead rate.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

21) Manufacturing overhead can be allocated on the basis of

A) machine hours.

B) direct labor hours.

C) direct labor costs.

D) all of the above.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

22) Allocating manufacturing overhead costs is done

A) during the period.

B) before the period starts.

C) at the end of the period.

D) never.

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

23) When is the predetermined manufacturing overhead rate computed?

A) During the period

B) Before the period starts

C) At the end of the period

D) Can be done at any time

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

24) How do you calculate the predetermined manufacturing overhead rate used to allocate manufacturing overhead costs?

A) By multiplying the total estimated manufacturing overhead costs by the total estimated amount of the allocation base

B) By dividing the total estimated amount of the allocation base by the total estimated manufacturing overhead costs

C) By dividing the total estimated manufacturing overhead costs by the total actual amount of the allocation base

D) By dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

25) How do you calculate allocated manufacturing overhead to a certain job?

A) By multiplying the total estimated manufacturing overhead by the total estimated allocation base to be used

B) By multiplying the predetermined manufacturing overhead rate by the actual allocation base used by the job

C) By multiplying the predetermined manufacturing overhead rate by the estimated allocation base to be used by the job

D) By multiplying the estimated manufacturing overhead rate by the actual allocation base used by the job

Diff: 1

LO: 3-3

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

26) Which of the following would be an example of a typical manufacturing overhead cost?

A) Direct materials

B) Sales revenue

C) Direct labor

D) Depreciation on factory equipment

Diff: 1

LO: 3-3

EOC: E3-33B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

27) A typical manufacturing overhead cost would be

A) direct labor.

B) depreciation on the plant.

C) net income.

D) direct materials.

Diff: 1

LO: 3-3

EOC: E3-33B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

28) Manufacturing overhead would include

A) all manufacturing costs except direct materials and direct labor.

B) indirect labor costs only.

C) all manufacturing costs.

D) indirect materials only.

Diff: 1

LO: 3-3

EOC: E3-33B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

29) Here are selected data for Whatchamacallit Company:

Manufacturing overhead is allocated at 60% of direct labor cost.

What was the amount of direct labor costs? (Round your answer to the nearest cent.)

A) $85,367.50

B) $164,512.50

C) $151,187.50

D) $241,900.00

Diff: 3

LO: 3-3

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

30) Here are selected data for Crumb Company:

Manufacturing overhead is allocated at 50% of direct labor cost.

What was the amount of direct labor costs? (Round your answer to the nearest cent.)

A) $106,066.67

B) $160,866.67

C) $160,050.00

D) $241,300.00

Diff: 3

LO: 3-3

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

31) Widget Maker Manufacturing uses job costing. In May, material requisitions were $44,700 ($39,500 of these were direct materials), and raw material purchases were $57,900. The end of month balance in raw materials inventory was $24,400. What was the beginning raw materials inventory balance?

A) $11,200

B) $42,800

C) $73,000

D) $26,300

Diff: 3

LO: 3-3

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

32) Green Products Manufacturing uses job costing. In May, material requisitions were $44,100 ($39,200 of these were direct materials), and raw material purchases were $60,000. The end of month balance in raw materials inventory was $24,400. What was the beginning raw materials inventory balance?

A) $74,800

B) $45,200

C) $8,500

D) $23,300

Diff: 3

LO: 3-3

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

33) Shoe Biz allocates overhead based on machine hours. Selected data for the most recent year follow.

The estimates were made as of the beginning of the year, while the actual results were for the entire year.

The predetermined manufacturing overhead rate per machine hour is closest to ________. (Round your answer to the nearest cent.)

A) $10.36

B) $11.25

C) $10.76

D) $11.69

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

34) Shoe Biz allocates overhead based on machine hours. Selected data for the most recent year follow.

The estimates were made as of the beginning of the year, while the actual results were for the entire year.

The amount of manufacturing overhead allocated for the year based on machine hours would have been ________. (Round intermediary calculations to the nearest cent and final answer to the nearest dollar.)

A) $224,829

B) $255,132

C) $235,000

D) $244,100

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

35) Seaside Seafood allocates overhead based on machine hours. Selected data for the most recent year follow.

The estimates were made as of the beginning of the year, while the actual results were for the entire year.

The predetermined manufacturing overhead rate per machine hour is closest to

A) $10.35.

B) $11.76.

C) $10.59.

D) $11.49.

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

36) Seaside Seafood allocates overhead based on machine hours. Selected data for the most recent year follow.

The estimates were made as of the beginning of the year, while the actual results were for the entire year.

The amount of manufacturing overhead allocated for the year based on machine hours would have been ________. (Round intermediary calculations to the nearest cent and final answer to the nearest dollar.)

A) $244,400.

B) $238,500.

C) $271,630.

D) $214,647.

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

37) Here are selected data for Saddle Corporation:

What is the balance in work in process inventory at the end of the year?

A) $24,020

B) $35,380

C) $50,400

D) $24,500

Diff: 3

LO: 3-3

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

38) Curvy Company had a beginning work in process inventory balance of $32,000. During the year, $54,800 of direct materials was placed into production. Direct labor was $63,400, and indirect labor was $20,100. Manufacturing overhead is allocated at 140% of direct labor costs. Actual manufacturing overhead was $87,000, and jobs costing $225,300 were completed during the year. What is the ending work in process inventory balance?

A) $184,160

B) $11,900

C) $13,660

D) $88,760

Diff: 3

LO: 3-3

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

39) Before the year began, Brookville Manufacturing estimated that manufacturing overhead for the year would be $175,600 and that 13,200 direct labor hours would be worked. Actual results for the year included the following:

The predetermined manufacturing overhead rate per direct labor hour is closest to ________. (Round your answer to the nearest cent.)

A) $11.86

B) $12.46

C) $13.30

D) $13.97

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

40) Before the year began, Brookville Manufacturing estimated that manufacturing overhead for the year would be $175,900 and that 13,300 direct labor hours would be worked. Actual results for the year included the following:

The amount of manufacturing overhead allocated for the year based on direct labor hours would have been ________. (Round intermediary calculations to the nearest cent and final answer to the nearest dollar.)

A) $163,413

B) $198,450

C) $175,900

D) $184,300

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

41) Here are selected basic data for Bean Company:

If the company allocates overhead based on direct labor cost, what are the total actual manufacturing overhead costs?

A) $284,900

B) $173,500

C) $261,900

D) $230,500

Diff: 3

LO: 3-3

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

42) Here are selected data for Bean Company:

If the company allocates overhead based on direct labor cost, what is the predetermined manufacturing overhead rate?

A) 83% of direct labor cost

B) 124% of direct labor cost

C) 81% of direct labor cost

D) 103% of direct labor cost

Diff: 3

LO: 3-3

EOC: E3-19A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

43) Here are selected data for Bean Company:

If the company allocates manufacturing overhead based on direct labor cost, what are the allocated manufacturing overhead costs?

A) $254,670

B) $226,800

C) $411,026

D) $250,068

Diff: 3

LO: 3-3

EOC: E3-19A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

44) Here are selected data for Propel Corporation:

What is the ending work in process inventory balance?

A) $148,775

B) $221,100

C) $214,850

D) $200,625

Diff: 3

LO: 3-3

EOC: P3-49A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

4

5) Here are selected data for Propel Corporation:

What is finished goods ending inventory?

A) $67,200

B) $288,000

C) $79,200

D) $497,600

Diff: 2

LO: 3-3

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

46) Here are selected basic data for Polar Fleece Company:

If the company allocates overhead based on direct labor cost, what are the total actual manufacturing overhead costs?

A) $230,600

B) $284,900

C) $261,700

D) $228,100

Diff: 2

LO: 3-3

EOC: E3-19A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

47) Here are selected data for Polar Fleece Company:

If the company allocates overhead based on direct labor cost, what is the predetermined manufacturing overhead rate? (Round your answer to the nearest whole percent.)

A) 78% of direct labor cost

B) 128% of direct labor cost

C) 108% of direct labor cost

D) 93% of direct labor cost

Diff: 3

LO: 3-3

EOC: E3-19A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

48) Here are selected data for Polar Fleece Company:

If the company allocates manufacturing overhead based on direct labor cost, what are the allocated manufacturing overhead costs?

A) $320,200

B) $236,948

C) $227,400

D) $236,800

Diff: 3

LO: 3-3

EOC: E3-19A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

49) The B-side Company allocates manufacturing overhead to jobs based on machine hours. The company has the following estimated costs for the upcoming year:

The company estimates that 2,100 direct labor hours will be worked in the upcoming year, while 1,500 machine hours will be used during the year. The predetermined manufacturing overhead rate per machine hour will be (Round your answer to the nearest cent.)

A) $20.60.

B) $84.82.

C) $166.02.

D) $46.93.

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

50) The B-side Company allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming year:

The company estimates that 1,500 direct labor hours will be worked in the upcoming year, while 1,300 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be ________. (Round your answer to the nearest cent.)

A) $46.60

B) $84.51

C) $164.97

D) $54.73

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

51) Smarty Pants Corporation manufactures high end custom batches of designer pant suits. The company allocates manufacturing overhead based on machine hours. Selected data for costs incurred for Job 612 are as follows:

What amount of manufacturing overhead would be allocated to Job 612?

A) $6,100

B) $9,450

C) $8,360

D) $6,650

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

52) Darkside Company gathered the following information for the year ended December 31:

What would the predetermined manufacturing overhead rate for the year be using direct labor cost as the allocation base?

A) 125% of direct labor cost

B) 85% of direct labor cost

C) 117% of direct labor cost

D) 101% of direct labor cost

Diff: 1

LO: 3-3

EOC: S3-8

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

53) Darkside Company gathered the following information for the year ended December 31:

Darkside Company uses a job costing system.

What would the predetermined manufacturing overhead rate for the year be using direct labor hours as the allocation base? (Round your answer to the nearest cent.)

A) $1.25 per direct labor hour

B) $1.08 per direct labor hour

C) $1.24 per direct labor hour

D) $0.80 per direct labor hour

Diff: 1

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

54) Velvet Tees has the following estimated costs for the upcoming year:

The company estimates that 2,100 direct labor hours will be worked in the upcoming year, while 3,000 machine hours will be used during the year. The predetermined manufacturing overhead rate per machine hour is closest to ________. (Round your answer to the nearest whole dollar.)

A) $22

B) $65

C) $9

D) $36

Diff: 2

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

55) Velvet Tees has the following estimated costs for the upcoming year:

The company estimates that 1,800 direct labor hours will be worked in the upcoming year, while 2,500 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour is closest to ________. (Round your answer to the nearest whole dollar.)

A) $78

B) $60

C) $34

D) $36

Diff: 2

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

56) Digital Underground Company has the following estimated costs for the upcoming year:

The company estimates that 2,400 direct labor hours will be worked in the upcoming year, while 2,100 machine hours will be used during the year. The predetermined manufacturing overhead rate per machine hour is closest to ________. (Round your answer to the nearest whole dollar.)

A) $26

B) $93

C) $13

D) $31

Diff: 2

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

57) Digital Underground Company has the following estimated costs for the upcoming year:

The company estimates that 2,500 direct labor hours will be worked in the upcoming year, while 2,700 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour is closest to ________. (Round your answer to the nearest whole dollar.)

A) $78

B) $26

C) $25

D) $43

Diff: 2

LO: 3-3

EOC: S3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

58) The following is selected financial data from Sunshine Bay Manufacturing for the most recent year.

What is the beginning raw materials inventory?

A) $20,800

B) $6,500

C) $28,300

D) $51,900

Diff: 3

LO: 3-3

EOC: P3-44A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

59) The following is selected financial data from Sunshine Bay Manufacturing for the most recent year.

What is the beginning work in process inventory?

A) $9,867

B) $65,900

C) $31,700

D) $60,700

Diff: 3

LO: 3-3

EOC: P3-44A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

60) The following is selected financial data from Sunshine Bay Manufacturing for the most recent year.

What is the beginning finished goods inventory?

A) $139,100

B) $18,600

C) $70,600

D) $88,200

Diff: 3

LO: 3-3

EOC: P3-46A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

61) The following is selected financial data from Sunshine Bay Manufacturing for the most recent year.

What is the actual manufacturing overhead?

A) $65,500

B) $55,300

C) $5,100

D) $60,400

Diff: 3

LO: 3-3

EOC: P3-44A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

62) Quick Step Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year:

If Quick Step Company uses direct labor cost as the allocation base, what would the predetermined manufacturing overhead rate be?

A) 70%

B) 73%

C) 89%

D) 85%

Diff: 2

LO: 3-3

EOC: E3-19A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

63) Quick Step Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year:

If Quick Step Company uses direct labor hours as the allocation base, what would the predetermined manufacturing overhead rate be? (Round your answer to the nearest cent.)

A) $1.50 per direct labor hour

B) $1.68 per direct labor hour

C) $1.38 per direct labor hour

D) $1.83 per direct labor hour

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

64) Quick Step Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year:

If Quick Step Company uses direct labor cost as the allocation base, what would the allocated manufacturing overhead be for the year?

A) $350,900

B) $684,944

C) $358,512

D) $385,385

Diff: 2

LO: 3-3

EOC: E3-19A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

65) Quick Step Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year:

If Quick Step Company uses direct labor hours as the allocation base, what would the allocated manufacturing overhead be for the year? (Round intermediary calculations to the nearest cent.)

A) $425,900

B) $350,100

C) $395,420

D) $325,733

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

66) Tune Town Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year:

If Tune Town Company uses direct labor cost as the allocation base, what would the predetermined manufacturing overhead rate be?

A) 86%

B) 71%

C) 76%

D) 93%

Diff: 2

LO: 3-3

EOC: E3-19A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

67) Tune Town Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year:

If Tune Town Company uses direct labor hours as the allocation base, what would the predetermined manufacturing overhead rate be? (Round your answer to the nearest cent.)

A) $1.54 per direct labor hour

B) $0.82 per direct labor hour

C) $1.74 per direct labor hour

D) $1.87 per direct labor hour

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

68) Tune Town Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year:

If Tune Town Company uses direct labor cost as the allocation base, what would the allocated manufacturing overhead be for the year?

A) $350,500

B) $354,084

C) $680,680

D) $380,000

Diff: 2

LO: 3-3

EOC: E3-19A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

69) Tune Town Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year:

If Tune Town Company uses direct labor hours as the allocation base, what would the allocated manufacturing overhead be for the year? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)

A) $324,850

B) $350,000

C) $400,300

D) $372,000

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

70) Showboat Corporation had actual manufacturing overhead costs for the most recent year of $30,000. Manufacturing overhead is allocated using a predetermined manufacturing overhead rate of $4.00 per direct labor hour. Direct labor cost is $30 per hour. At the end of the year, Showboat Corporation found it had overallocated manufacturing overhead by $2,050. How much manufacturing overhead was allocated in total during the year?

A) $27,950

B) $30,000

C) $32,050

D) $2,050

Diff: 3

LO: 3-3

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

71) Showboat Corporation had actual manufacturing overhead costs for the most recent year of $29,800. Manufacturing overhead is allocated using a predetermined manufacturing overhead rate of $2.50 per direct labor hour. Direct labor cost is $30 per hour. At the end of the year, Showboat Corporation found it had overallocated manufacturing overhead by $1,550. How many direct labor hours were worked in total during the year? (Round your answer to the nearest hour.)

A) 12,540

B) 11,300

C) 11,920

D) 3,875

Diff: 3

LO: 3-3

EOC: E3-32B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

72) Canvas Board Corporation uses job costing. The following is selected financial data from the company for the most recent year.

Compute:

a) Beginning raw materials inventory

b) Beginning work in process inventory

c) Beginning finished goods inventory

d) Actual manufacturing overhead costs incurred during the year

Diff: 3

LO: 3-3

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

73) Sand Dollar Corporation uses job costing. The following selected financial data from the company is for the most recent year.

Compute:

a) Beginning raw materials inventory

b) Beginning work in process inventory

c) Beginning finished goods inventory

d) Actual manufacturing overhead costs incurred during the year

Diff: 3

LO: 3-3

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

74) Uptown Company is debating the use of direct labor cost or direct labor hours as the cost allocation base for allocating manufacturing overhead. The following information is available for the most recent year:

Estimated direct labor cost $560,000

Actual direct labor cost $475,000

Estimated manufacturing overhead costs $420,000

Actual manufacturing overhead costs $353,000

Estimated direct labor hours 200,000

Actual direct labor hours 280,000

Determine the following:

a) Predetermined manufacturing overhead rate using direct labor cost as the allocation base.

b) Predetermined manufacturing overhead rate using direct labor hours as the allocation base.

c) Allocated manufacturing overhead costs based on direct labor cost for the year.

d) Allocated manufacturing overhead costs based on direct labor hours for the year.

Diff: 2

LO: 3-3

EOC: S3-8

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

75) Prairie Dog Corporation had actual manufacturing overhead costs of $32,500 for the past year. Direct labor cost is $12.00 per hour. Manufacturing overhead is allocated at a rate of $4.00 per direct labor hour. Manufacturing overhead was overallocated for the year by $2,500.

Calculate:

a. Allocated manufacturing overhead costs for year

b. Actual number of direct labor hours worked in year

Diff: 2

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

76) Calculate the unknowns for the following independent situations.

1. Selected data for Dingo Corporation:

Allocated manufacturing overhead is based on 50% of direct labor cost.

a. Calculate the allocated manufacturing overhead cost.

b Calculate the direct labor cost.

2. Selected data for Gray Wolf Corporation:

Manufacturing overhead is allocated at $15 per machine hour.

a. Calculate the allocated manufacturing overhead cost.

b. Calculate the number of machine hours incurred.

Diff: 3

LO: 3-3

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

77) Blue Pine Company uses a job costing system. Blue Pine Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 331.

Allocated manufacturing overhead costs for August amount to $44,600.

What is the amount of work in process inventory (before any adjustment for overallocated or underallocated manufacturing overhead) on August 31?

A) $29,300

B) $165,200

C) $56,000

D) $139,800

Diff: 3

LO: 3-3

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

78) Dogwood Company uses a job costing system. Dogwood Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 31.

Allocated manufacturing overhead costs for August amount to $50,400.

What is the amount of work in process inventory (before any adjustment for overallocated or underallocated manufacturing overhead) on August 31?

A) $60,400

B) $169,800

C) $35,400

D) $139,400

Diff: 3

LO: 3-3

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

3.4 Determine the cost of a job and use it to make business decisions

1) Management can use job cost information to help to determine how it will deal with pricing pressure from competitors.

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

2) Management can use job cost information to control costs on jobs produced in the future.

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

3) The total cost of a job shown on the job cost record is the sum of the direct materials and direct labor traced to the job and the manufacturing overhead allocated to the job.

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

4) The total cost of a job shown on the job cost record is the sum of the direct materials traced to the job and the manufacturing overhead allocated to the job.

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

5) If a job consists of a batch of identical units, managers find the unit cost by dividing the total job cost by the number of units in the job.

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

6) The total cost of a job shown on the job cost record is the sum of the direct labor traced to the job and the manufacturing overhead allocated to the job.

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

7) The total cost of a job shown on the job cost record is the sum of the direct materials and direct labor traced to the job divided by the manufacturing overhead allocated to the job.

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

8) The gross profit on the sale of a job is the difference between the sales price and the total unit cost reported on the job cost record.

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

9) If a job consists of a batch of identical units, how can managers find the unit cost?

A) By tracing direct materials to each unit

B) By multiplying the total job cost by the number of units in the job

C) By dividing the total job cost by the number of units in the job

D) By tracing direct labor to each unit

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

10) Management can use job cost information for each of the following except

A) determining cost of goods sold.

B) determining the profitability of different jobs.

C) bidding on custom jobs.

D) all of the listed choices are possible uses of job cost information.

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

11) Which of the following is not a way in which management can use job cost information?

A) Assessing and comparing the profitability of each product type

B) Using the cost information in determining the bid price for custom orders

C) Preparing the financial statements

D) Determining the balance in raw materials inventory

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

12) The difference between the sales price and the job cost is

A) gross profit.

B) cost of goods sold.

C) net income.

D) operating income.

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

13) How is the cost-plus price determined?

A) Cost - markup on cost

B) Cost + markup on cost

C) Cost × markup on cost

D) Cost ÷ markup on cost

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

14) When using cost-plus pricing, the markup is added to the job cost to help

A) cover operating expenses.

B) generate a profit.

C) determine the price to charge for the job.

D) all of the above

Diff: 1

LO: 3-4

EOC: S3-15

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

15) Badger Corporation charged Job 330 with $14,100 of direct materials and $12,800 of direct labor. Allocation for manufacturing overhead is 75% of direct labor costs. What is the total cost of Job 330?

A) $36,500

B) $9,600

C) $43,967

D) $26,900

Diff: 2

LO: 3-4

EOC: E3-22A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

16) Snyder Corporation uses estimated direct labor hours of 200,700 and estimated manufacturing overhead costs of $920,700 in establishing manufacturing overhead rates. Actual manufacturing overhead was $970,900, and allocated manufacturing overhead was $1,012,300. What was the number of actual direct hours worked? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)

A) 200,700

B) 209,258

C) 190,323

D) 220,545

Diff: 2

LO: 3-4

EOC: E3-32B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

17) Cornwell Corporation uses estimated manufacturing overhead costs of $880,300 and estimated direct labor hours of 200,700 in establishing manufacturing overhead rates. Allocated manufacturing overhead was $1,012,400 and actual manufacturing overhead was $970,400. What were the number of actual direct hours worked? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)

A) 230,615

B) 200,700

C) 182,065

D) 209,387

Diff: 2

LO: 3-4

EOC: E3-32B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

18) Job 740 has a total cost of $28,700. It has been charged manufacturing overhead costs of $8,000. The rate is 70% of direct labor. What was the amount of direct materials charged to the job?

A) $20,700

B) $9,271

C) $32,129

D) $41,000

Diff: 3

LO: 3-4

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

19) Job 563 has a total cost of $29,500. The rate is 80% of direct labor. It has been charged manufacturing overhead costs of $7,300. What was the amount of direct materials charged to the job?

A) $23,600

B) $36,800

C) $22,200

D) $13,075

Diff: 3

LO: 3-4

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

20) King Carts manufactures custom carts for a variety of uses. The following data have been recorded for Job 651, which was recently completed. Direct materials used cost $7,100. There were 184 direct labor hours worked on this job at a direct labor wage rate of $22 per hour. There were 84 machine hours used on this job. The predetermined overhead rate is $32 per machine hour used.

What is the total manufacturing cost of Job 651?

A) $4,048

B) $2,688

C) $13,836

D) $7,368

Diff: 2

LO: 3-4

EOC: E3-20A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

21) Cate's Crates manufactures custom crates for a variety of uses. The following data have been recorded for Job 551, which was recently completed. Direct materials used cost $8,200. There were 88 machine hours used on this job. The predetermined overhead rate is $37 per machine hour used. There were 176 direct labor hours worked on this job at a direct labor wage rate of $33 per hour.

What is the total manufacturing cost of Job 551?

A) $17,264

B) $5,808

C) $11,456

D) $8,464

Diff: 2

LO: 3-4

EOC: E3-20A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

22) Job 662 requires $10,800 of direct materials, $6,400 of direct labor, 630 direct labor hours, and 450 machine hours. Manufacturing overhead is computed at $19 per direct labor hour used and $18 per machine hour used.

The total cost of Job 662 is

A) $20,070.

B) $37,270.

C) $17,200.

D) $29,170.

Diff: 3

LO: 3-4

EOC: E3-18A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

23) Fossilswork Company manufactures custom engines for use in the lawn and garden equipment industry. The company allocates manufacturing overhead based on machine hours. Selected data for costs incurred for Job 798 are as follows:

What is the total manufacturing cost of Job 798?

A) $23,125

B) $7,350

C) $11,375

D) $5,205

Diff: 2

LO: 3-4

EOC: E3-20A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

24) Black Cat Corporation produced 2,000 units in Job 903. The following data is provided for Job 903 for the year:

What is the total cost of Job 903? (Round intermediary calculations to the nearest cent and final answer to the nearest dollar.)

A) $3,692

B) $4,350

C) $34,300

D) $4,326

Diff: 2

LO: 3-4

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

25) Black Cat Corporation produced 2,300 units in Job 903. The following data is provided for Job 903 for the year:

What is the unit cost for Job 903? (Round to two decimal places.)

A) $11.16

B) $1.85

C) $1.54

D) $18.60

Diff: 3

LO: 3-4

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

26) Black Cat Corporation produced 2,600 units in Job 903. The following data is provided for Job 903 for the year:

What is the gross profit for Job 903 before adjustment for over- or underallocated overhead? (Round to two decimal places.)

A) $5,197.00

B) $9,620.00

C) $5,820.00

D) $6,443.00

Diff: 3

LO: 3-4

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

27) Yogi Company uses a job costing system. Yogi Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 31.

Manufacturing overhead cost is allocated at the rate of $22 per direct labor hour.

What is the amount of allocated manufacturing overhead costs for August?

A) $56,320

B) $76,800

C) $125,000

D) $42,600

Diff: 2

LO: 3-4

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

28) Perch Company uses a job costing system. Perch Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 31.

Manufacturing overhead cost is allocated at the rate of $22 per direct labor hour.

What is the amount of allocated manufacturing overhead costs for August?

A) $42,100

B) $75,000

C) $124,900

D) $66,000

Diff: 2

LO: 3-4

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

29) Finnish Corporation manufactures custom molds for use in the extrusion industry. The company allocates manufacturing overhead based on machine hours. Selected data for costs incurred for Job 532 are as follows:

What is the manufacturing cost of Job 532?

A) $3,680

B) $42,100

C) $101,300

D) $45,780

Diff: 2

LO: 3-4

EOC: E3-20A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

30) Fido Corporation uses a job costing system. On January 1, Fido Corporation's work in process inventory account had a balance of $75,500. During the year, materials requisitioned for use in production amounted to $120,900, of which $82,600 represented direct materials. Factory wages for the period were $231,300, of which $219,000 were for direct labor. Manufacturing overhead is allocated on the basis of 80% of direct labor cost. Actual overhead cost for the year was $125,300. Jobs costing $332,700 were completed during the year.

The December 31 work in process inventory balance is

A) $427,700.

B) $219,600.

C) $155,800.

D) $172,220.

Diff: 3

LO: 3-4

EOC: E3-22A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

31) Wander Company uses a job costing system. The company's schedule of cost of goods manufactured showed the following amounts for September.

Manufacturing overhead cost is allocated at the rate of $15 per direct labor hour.

What is the amount of allocated manufacturing overhead costs for the month?

A) $24,600

B) $63,400

C) $19,650

D) $26,200

Diff: 2

LO: 3-4

EOC: E3-23A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

32) Wander Company uses a job costing system. The company's schedule of cost of goods manufactured showed the following amounts for September.

Actual manufacturing overhead costs for September amount to $24,300.

What is the amount of work in process inventory on September 30?

A) $14,300

B) $67,100

C) $74,000

D) $20,600

Diff: 3

LO: 3-4

EOC: E3-23A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

33) Portland Company uses a job costing system. The work in process inventory on December 31 consisted of Job No. 173 with a balance of $66,200. Job No. 173 has been charged with manufacturing overhead costs of $20,300. Portland Company allocates manufacturing overhead costs at a rate of 55% of direct labor cost.

What was the amount of direct materials charged to Job No. 173? (Round intermediary calculations and final answer to the nearest dollar.)

A) $11,165

B) $16,110

C) $8,991

D) $7,119

Diff: 3

LO: 3-4

EOC: E3-23A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

34) Blue Steel uses a job costing system. Blue Steel uses estimated direct labor hours of 97,000 and estimated manufacturing overhead costs of $329,800 in establishing its predetermined manufacturing overhead rate. Actual results for the year showed:

The number of direct labor hours worked during the period was

A) 103,235.

B) 91,611.

C) 97,000.

D) 97,500.

Diff: 3

LO: 3-4

EOC: E3-23A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

35) Vertical Climbing Company's work in process inventory on June 1 has a balance of $22,800 representing Job No. 265. During June, $50,400 of direct materials were requisitioned for Job No. 265 and $35,200 of direct labor cost was incurred on Job No. 265. Manufacturing overhead is allocated at 120% of direct labor cost. Actual manufacturing overhead costs incurred in June amounted to $41,600. No new jobs were started during June. Job No. 265 is completed on June 28.

What is the total cost assigned to Job No. 265?

A) $150,000

B) $134,240

C) $150,640

D) $42,240

Diff: 2

LO: 3-4

EOC: E3-17A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

36) Classic Tile Company makes custom ceramic tiles. During March, the company started and finished Job #266. Job #266 consists of 3,300 tiles; each tile sells for $13.00. The company's records show the following direct materials were requisitioned for Job #266.

Basic terra cotta tiles: 3,300 units at 7.00 per unit

Specialty paint: 8 quarts at $11.00 per quart

High gloss glaze: 9 quarts at $15.00 per quart

Labor time records show the following employees worked on Job #266:

Alice Cooper: 20 hours at $32 per hour

Matthew Kline: 21 hours at $23 per hour

Classic Tile Company allocates manufacturing overhead at a rate of $36 per direct labor hour.

What is the total amount of direct materials, direct labor, and manufacturing overhead that should be shown on Job #266's job cost record?

A) $24,399

B) $1,476

C) $42,900

D) $25,922

Diff: 2

LO: 3-4

EOC: E3-22A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

37) Classic Tile Company makes custom ceramic tiles. During March, the company started and finished Job #266. Job #266 consists of 3,200 tiles; each tile sells for $14.00. The company's records show the following direct materials were requisitioned for Job #266.

Basic terra cotta tiles: 3,200 units at $4.00 per unit

Specialty paint: 12 quarts at $14.00 per quart

High gloss glaze: 10 quarts at $18.00 per quart

Labor time records show the following employees worked on Job #266:

Alice Cooper: 23 hours at $30 per hour

Matthew Kline: 23 hours at $16 per hour

Classic Tile Company allocates manufacturing overhead at a rate of $33 per direct labor hour.

What is the gross profit per tile on Job #266? (Round intermediate and the final answer to the nearest cent.)

A) $14.00

B) $9.09

C) $9.89

D) $13.53

Diff: 3

LO: 3-4

EOC: E3-22A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

38) Records for Flipside Gaming contained the following data.

Compute:

a. Work in process inventory on June 30

b. Finished goods inventory on June 30

c. Cost of goods sold for June

Diff: 2

LO: 3-4

EOC: P3-49A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

39) Bronx System's work in process inventory on June 1 has a balance of $27,200 representing Job No. 72. During June, $68,900 of direct materials were requisitioned for Job No. 72 and $5,500 of direct labor cost was incurred on Job No. 72. Manufacturing overhead is allocated at a rate of $16.00 per direct labor hour. Actual manufacturing overhead costs incurred in June amounted to $15,000. There were 700 actual direct labor hours worked in June. No new jobs were started during June. Job No. 72 is completed on June 28.

a. Determine the total cost assigned to Job No. 72.

b. Is manufacturing overhead overallocated or underallocated for the month of June? By how much?

Diff: 2

LO: 3-4

EOC: P3-49A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

40) Queen System's work in process inventory on June 1 has a balance of $27,200 representing Job No. 36. During June, $68,900 of direct materials were requisitioned for Job No. 36 and $5,500 of direct labor cost was incurred on Job No. 36. Manufacturing overhead is allocated at a rate of $16.00 per direct labor hour. Actual manufacturing overhead costs incurred in June amounted to $15,000. There were 825 actual direct labor hours worked in June. No new jobs were started during June. Job No. 36 is completed on June 28.

a. Determine the total cost assigned to Job No. 36.

b. Is manufacturing overhead overallocated or underallocated for the month of June? By how much?

Diff: 2

LO: 3-4

EOC: P3-49A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

41) Looking up Corporation makes custom stained glass art. During March, the company started and finished Job #755. The company's records show the following direct materials were requisitioned for Job #755.

Glass Panes: 1,200 units at $5.00 per unit

Specialty paint: 9 quarts at $8.00 per quart

High gloss glaze: 5 quarts at $12.00 per quart

Labor time records show the following employees worked on Job #755:

Steven Hightop: 20 hours at $27 per hour

Andy Pickering: 10 hours at $17 per hour

Looking up Corporation allocates manufacturing overhead at a rate of $14 per direct labor hour.

a. Compute the total amount of direct materials, direct labor, and manufacturing overhead that should be shown on Job #755's job cost record.

b. Job #755 consists of 1,200 tiles. If each tile sells for $12.00, what is the gross profit per tile?

Diff: 2

LO: 3-4

EOC: E3-22A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

3.5 Compute and dispose of overallocated or underallocated manufacturing overhead

1) If a manufacturer finds that the amount of manufacturing overhead allocated to a job is less than the actual amount of manufacturing overhead incurred, then the jobs are overcosted.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

2) Overallocated and underallocated manufacturing overhead is calculated by comparing estimated manufacturing overhead to actual manufacturing overhead.

Diff: 1

LO: 3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

3) Overallocated and underallocated manufacturing overhead is calculated by comparing allocated manufacturing overhead to estimated manufacturing overhead.

Diff: 1

LO: 3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

4) Overallocated and underallocated manufacturing overhead is calculated by comparing allocated manufacturing overhead to actual manufacturing overhead.

Diff: 1

LO: 3-5

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

5) Overallocated manufacturing overhead costs occur when the manufacturing overhead costs allocated are greater than the amount actually incurred.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

6) If manufacturing overhead has been underallocated during the year, it means the jobs have been undercosted.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

7) If manufacturing overhead has been overallocated during the year, it means the jobs have been overcosted.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

8) If the actual amount of the manufacturing overhead allocation base is greater than the estimated amount of the allocation base used to calculate the predetermined rate, then manufacturing overhead must have been underallocated.

Diff: 3

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

9) The underallocation or overallocation of overhead is a direct result of using a predetermined manufacturing overhead rate rather than the actual manufacturing overhead rate.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

10) The amount of overallocation or underallocation is found by taking the difference between the amount of overhead allocated during the year and the amount of overhead estimated for the year.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

11) The amount of overallocation or underallocation is found by taking the difference between the amount of overhead allocated during the year and the amount of overhead incurred during the year.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

12) The amount of overallocation or underallocation is typically corrected by adjusting Cost of Goods Sold on the income statement.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

13) An overallocation of manufacturing overhead is typically corrected by decreasing Cost of Goods Sold on the income statement.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

14) An underallocation of manufacturing overhead is typically corrected by decreasing Cost of Goods Sold on the income statement.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

15) Sales revenue is $750,900; actual manufacturing overhead is $120,900; allocated manufacturing overhead is $95,700; and cost of goods sold before adjustment is $380,100. What is the actual gross profit?

A) $396,000

B) $370,800

C) $345,600

D) $249,900

Diff: 3

LO: 3-5

EOC: E3-36B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

16) Sales revenue is $725,200; allocated manufacturing overhead is $95,600; actual manufacturing overhead is $120,800; and cost of goods sold before adjustment is $380,200. What is the actual gross profit?

A) $319,800

B) $370,200

C) $345,000

D) $224,200

Diff: 3

LO: 3-5

EOC: E3-36B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

17) Boiler Company has sales revenue of $585,600. Cost of goods sold before adjustment is $336,000. The company's actual manufacturing overhead is $91,000, while allocated manufacturing overhead is $105,200. What is the actual gross profit?

A) $158,600

B) $235,400

C) $249,600

D) $263,800

Diff: 3

LO: 3-5

EOC: E3-36B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

18) Manufacturing overhead has an underallocated balance of $12,300; raw materials inventory balance is $145,200; work in process inventory is $122,700; finished goods inventory is $140,700; and cost of goods sold is $170,600. After adjusting for the underallocated manufacturing overhead, what is cost of goods sold?

A) $170,600

B) $12,300

C) $182,900

D) $158,300

Diff: 2

LO: 3-5

EOC: E3-32B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

19) Manufacturing overhead has an overallocated balance of $8,500; raw materials inventory balance is $62,300; work in process inventory is $35,000; finished goods inventory is $26,000; and cost of goods sold is $135,300. After adjusting for the overallocated manufacturing overhead, what is cost of goods sold?

A) $126,800

B) $97,300

C) $143,800

D) $135,300

Diff: 2

LO: 3-5

EOC: E3-32B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

20) If jobs have been undercosted due to underallocation of manufacturing overhead, then Cost of Goods Sold (COGS) is too low and which of the following corrections must be made?

A) Decrease COGS for the amount of the underallocation

B) Increase COGS for double the amount of the underallocation

C) Decrease COGS for double the amount of the underallocation

D) Increase COGS for the amount of the underallocation

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

21) Underallocated manufacturing overhead results when

A) production is greater than last year.

B) actual overhead is greater than expected.

C) actual overhead is greater than allocated overhead.

D) estimated overhead is greater than actual overhead.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

22) Overallocated manufacturing overhead results when

A) production is less than last year.

B) estimated overhead is less than actual overhead.

C) actual overhead is less than allocated overhead.

D) actual overhead is less than expected.

Diff: 2

LO: 3-5

EOC: E3-25A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

23) When is the adjusting of cost of goods sold for the underallocation or overallocation of manufacturing overhead generally done?

A) At the end of the period

B) During the period

C) Before the period starts

D) Never

Diff: 1

LO: 3-5

EOC: E3-25A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

24) Determining how much manufacturing overhead is overallocated or underallocated

A) is done before the period starts.

B) is done during the period.

C) can be done at any time.

D) is done at the end of the period.

Diff: 1

LO: 3-5

EOC: E3-25A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

25) If manufacturing overhead has been overallocated during the period, then

A) the jobs produced during the period have been undercosted.

B) the jobs produced during the period have been overcosted.

C) the jobs produced during the period have been costed correctly.

D) none of the above

Diff: 2

LO: 3-5

EOC: E3-25A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

26) If manufacturing overhead has been underallocated during the period, then which of the following is true?

A) The jobs produced during the period have been overcosted.

B) The jobs produced during the period have been costed correctly.

C) The jobs produced during the period have been undercosted.

D) None of the above

Diff: 2

LO: 3-5

EOC: E3-25A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

27) If manufacturing overhead has been overallocated during the period, and most of the jobs produced have been sold, then

A) Cost of Goods Sold on the income statement should be increased.

B) Cost of Goods Sold on the income statement should be decreased.

C) finished goods inventory should be increased.

D) work in process inventory should be decreased.

Diff: 2

LO: 3-5

EOC: E3-25A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

28) If manufacturing overhead has been underallocated during the period, and most of the jobs produced have been sold, then

A) Cost of Goods Sold on the income statement should be increased.

B) Cost of Goods Sold on the income statement should be decreased.

C) finished goods inventory should be increased.

D) work in process inventory should be decreased.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

29) Manufacturing overhead is underallocated if the amount

A) estimated for the period is greater than the actual amount incurred.

B) estimated for the period is less than the actual amount incurred.

C) allocated during the period is less than the actual amount incurred.

D) allocated during the period is greater than the actual amount incurred.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

30) Manufacturing overhead is overallocated if the amount

A) estimated for the period is greater than the actual amount incurred.

B) allocated during the period is greater than the actual amount incurred.

C) amount estimated for the period is less than the actual amount incurred.

D) allocated during the period is less than the actual amount incurred.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

31) The amount of overallocation or underallocation should be reflected as an adjustment to cost of goods sold under what circumstances?

A) In all circumstances

B) If most of the inventory produced during the period has not been sold

C) If most of the inventory produced during the period has been sold

D) Under no circumstance

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

32) Timewise Manufacturing uses a predetermined manufacturing overhead rate based on direct labor hours to allocate manufacturing overhead to jobs. Selected data about the company's operations follows:

By how much was manufacturing overhead overallocated or underallocated for the year? (Round intermediary calculations to the nearest cent.)

A) $50,400.00 underallocated

B) $161,074.00 overallocated

C) $161,074.00 underallocated

D) $50,400.00 overallocated

Diff: 1

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

33) Timewise Manufacturing uses a predetermined manufacturing overhead rate based on machine hours to allocate manufacturing overhead to jobs. Selected data about the company's operations follows:

By how much was manufacturing overhead overallocated or underallocated for the year? (Round intermediary calculations to the nearest cent.)

A) $63,836 underallocated

B) $63,836 overallocated

C) $14,136 underallocated

D) $14,136 overallocated

Diff: 1

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

34) Before the year began, Tardis Manufacturing estimated that manufacturing overhead for the year would be $175,400 and that 25,600 direct labor hours would be worked. Actual results for the year included the following:

If the company allocates manufacturing overhead based on direct labor hours, the manufacturing overhead for the year would have been ________. (Round intermediary calculations to the nearest cent.)

A) $38,750.00 overallocated.

B) $7,200.00 underallocated.

C) $7,200.00 overallocated.

D) $38,750.00 underallocated.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

35) Before the year began, Visor Manufacturing estimated that manufacturing overhead for the year would be $200,400 and that 25,100 direct labor hours would be worked. Actual results for the year included the following:

If the company allocates manufacturing overhead based on direct labor hours, the manufacturing overhead for the year would have been ________. (Round intermediary calculations to the nearest cent.)

A) $18,300 overallocated.

B) $20,106 underallocated.

C) $20,106 overallocated.

D) $18,300 underallocated.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

36) Vertical Climbing Company's work in process inventory on June 1 has a balance of $23,400 representing Job No. 265. During June, $50,600 of direct materials were requisitioned for Job No. 265 and $35,700 of direct labor cost was incurred on Job No. 265. Manufacturing overhead is allocated at 135% of direct labor cost. Actual manufacturing overhead costs incurred in June amounted to $41,600. No new jobs were started during June. Job No. 265 is completed on June 28.

Is manufacturing overhead overallocated or underallocated for the month of June? By how much?

A) $6,595 underallocated

B) $10,010 overallocated

C) $10,010 underallocated

D) $6,595 overallocated

Diff: 2

LO: 3-5

EOC: E3-17A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

37) Cupola Company uses a job cost system. Manufacturing overhead has been overallocated by $6,100 for the year. Actual overhead incurred was $106,000. Other balances are:

What will cost of goods sold be after closing manufacturing overhead?

A) $296,800

B) $284,600

C) $226,300

D) $255,200

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

38) Before the year began, Flipside Manufacturing estimated that manufacturing overhead for the year would be $150,200 and that 26,000 direct labor hours would be worked. Actual results for the year included the following:

If the company allocates manufacturing overhead based on direct labor hours, the manufacturing overhead for the year would have been ________. (Round intermediary calculations to the nearest cent.)

A) $61,498 overallocated.

B) $61,498 underallocated.

C) $32,100 overallocated.

D) $32,100 underallocated.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

39) Gloria's Umbrellas allocates overhead based on machine hours. Selected data for the most recent year follow.

The estimates were made as of the beginning of the year, while the actual results were for the entire year.

The manufacturing overhead for the year would have been ________. (Round intermediary calculations to the nearest cent.)

A) $9,800 overallocated.

B) $9,800 underallocated.

C) $34,350 overallocated.

D) $34,350 underallocated.

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

40) Ernie Enterprises uses job costing. Actual overhead for the year was $494,700. The allocated overhead was $524,500. What is the balance in the manufacturing overhead account?

A) $1,019,200 overallocated

B) $29,800 underallocated

C) $29,800 overallocated

D) $494,700 underallocated

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

41) Beta Fish Corporation uses a predetermined overhead rate based on direct labor hours to allocate manufacturing overhead to jobs. The company estimated that it would incur $600,500 of manufacturing overhead during the year and that 150,700 direct labor hours would be worked. During the year, the company actually incurred manufacturing overhead costs of $582,300 and 135,300 direct labor hours were worked.

By how much was manufacturing overhead overallocated or underallocated for the year? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)

A) $18,200 underallocated

B) $43,806 overallocated

C) $43,806 underallocated

D) $18,200 overallocated

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

42) Beta Fish Corporation uses a predetermined overhead rate based on machine hours to allocate manufacturing overhead to jobs. The company estimated that it would incur $600,400 of manufacturing overhead during the year and that 250,500 machine hours would be used. During the year, the company actually incurred manufacturing overhead costs of $583,000 and 240,300 machine hours were used.

By how much was manufacturing overhead overallocated or underallocated for the year? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)

A) $6,280 overallocated

B) $6,280 underallocated

C) $17,400 underallocated

D) $17,400 overallocated

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

43) Morgan Company uses a job costing system. Morgan Company estimated manufacturing overhead costs for the year at $330,000, based on 60,200 estimated direct labor hours. Actual direct labor hours for the year totaled 75,200. Actual manufacturing overhead for the year was $385,100.

By how much was manufacturing overhead overallocated or underallocated for the year? (Round intermediary calculations to the nearest cent.)

A) $26,996 overallocated

B) $26,996 underallocated

C) $55,100 overallocated

D) $55,100 underallocated

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

44) Biltz Company uses a predetermined overhead rate based on direct labor hours to allocate manufacturing overhead to jobs. During the year, the company actually incurred manufacturing overhead costs of $582,700 and 135,400 direct labor hours were worked. The company estimated that it would incur $525,700 of manufacturing overhead during the year and that 150,200 direct labor hours would be worked.

By how much was manufacturing overhead overallocated or underallocated for the year? (Round intermediary calculations to the nearest cent.)

A) $108,800 underallocated

B) $57,000 overallocated

C) $57,000 underallocated

D) $108,800 overallocated

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

45) Biltz Company uses a predetermined overhead rate based on direct labor hours to allocate manufacturing overhead to jobs. During the year, the company actually incurred manufacturing overhead costs of $582,200 and 135,800 direct labor hours were worked. The company estimated that it would incur $525,300 of manufacturing overhead during the year and that 150,200 direct labor hours would be worked.

By how much was manufacturing overhead overallocated or underallocated for the year? (Round intermediary calculations to the nearest cent.)

A) $56,900 overallocated

B) $56,900 underallocated

C) $106,900 underallocated

D) $106,900 overallocated

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

46) The following account balances at the beginning of January were selected from the general ledger of Frozen Juice Manufacturing Company:

Additional data:

1. Actual manufacturing overhead for January amounted to $63,400.

2. Total direct labor cost for January was $63,500.

3. The predetermined manufacturing overhead rate is based on direct labor cost.

The budget for the year called for $250,300 of direct labor cost and $350,800

of manufacturing overhead costs.

4. The only job unfinished on January 31 was Job No. 151, for which total direct labor charges

were $5,900 (1,700 direct labor hours) and total direct material charges were $14,400.

5. Cost of direct materials placed in production during January totaled $123,800.

There were no indirect material requisitions during January.

6. January 31 balance in raw materials inventory was $35,500.

7. Finished goods inventory balance on January 31 was $35,300.

What is the predetermined manufacturing overhead rate?

A) 71%

B) 140%

C) 72%

D) 99%

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

47) The following account balances at the beginning of January were selected from the general ledger of Frozen Juice Manufacturing Company:

Additional data:

1. Actual manufacturing overhead for January amounted to $65,500.

2. Total direct labor cost for January was $63,400.

3. The predetermined manufacturing overhead rate is based on direct labor cost.

The budget for the year called for $250,000 of direct labor cost and $350,000 of

manufacturing overhead costs.

4. The only job unfinished on January 31 was Job No. 151, for which total direct labor

charges were $5,500 (800 direct labor hours) and total direct material charges were $14,200.

5. Cost of direct materials placed in production during January totaled $123,100.

There were no indirect material requisitions during January.

6. January 31 balance in raw materials inventory was $35,800.

7. Finished goods inventory balance on January 31 was $34,800.

What is the cost of goods manufactured for January?

A) $275,260

B) $231,786

C) $247,860

D) $204,386

Diff: 3

LO: 3-5

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

48) The following account balances at the beginning of January were selected from the general ledger of Frozen Juice Manufacturing Company:

Additional data:

1. Actual manufacturing overhead for January amounted to $66,800.

2. Total direct labor cost for January was $63,400.

3. The predetermined manufacturing overhead rate is based on direct labor cost.

The budget for the year called for $248,000 of direct labor cost and $322,400 of

manufacturing overhead costs.

4. The only job unfinished on January 31 was Job No. 151, for which total direct

labor charges were $5,500 (1,600 direct labor hours) and total direct material charges

were $14,600.

5. Cost of direct materials placed in production during January totaled $123,500.

There were no indirect material requisitions during January.

6. January 31 balance in raw materials inventory was $35,300.

7. Finished goods inventory balance on January 31 was $35,200.

What is the work in process inventory balance on January 31?

A) $7,150

B) $68,869

C) $27,250

D) $97,169

Diff: 2

LO: 3-5

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

49) The following account balances at the beginning of January were selected from the general ledger of Frozen Juice Manufacturing Company:

Additional data:

1. Actual manufacturing overhead for January amounted to $67,200.

2. Total direct labor cost for January was $63,100.

3. The predetermined manufacturing overhead rate is based on direct labor cost.

The budget for the year called for $251,000 of direct labor cost and $301,200 of

manufacturing overhead costs.

4. The only job unfinished on January 31 was Job No. 151, for which total direct labor

charges were $6,000 (1,700 direct labor hours) and total direct material charges

were $14,600.

5. Cost of direct materials placed in production during January totaled $123,600.

There were no indirect material requisitions during January.

6. January 31 balance in raw materials inventory was $35,000.

7. Finished goods inventory balance on January 31 was $34,600.

What is the cost of goods sold for January?

A) $241,020

B) $316,300

C) $206,800

D) $232,400

Diff: 3

LO: 3-5

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

50) The following account balances at the beginning of January were selected from the general ledger of Frozen Juice Manufacturing Company:

Additional data:

1. Actual manufacturing overhead for January amounted to $64,400.

2. Total direct labor cost for January was $64,000.

3. The predetermined manufacturing overhead rate is based on direct labor cost.

The budget for the year called for $250,000 of direct labor cost and $350,000 of

manufacturing overhead costs.

4. The only job unfinished on January 31 was Job No. 151, for which total direct

labor charges were $6,100 (900 direct labor hours) and total direct material charges

were $14,900.

5. Cost of direct materials placed in production during January totaled $123,000.

There were no indirect material requisitions during January.

6. January 31 balance in raw materials inventory was $36,000.

7. Finished goods inventory balance on January 31 was $35,000.

Has manufacturing overhead been overallocated or underallocated and by what amount as of January 31?

A) $25,200 overallocated

B) $25,200 underallocated

C) $14,900 overallocated

D) $14,900 underallocated

Diff: 2

LO: 3-5

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

51) The following information was gathered for the Snipes Corporation for the most recent year. Manufacturing overhead is allocated using direct labor hours.

What is the company's predetermined manufacturing overhead rate? (Round your answer to the nearest cent.)

A) $16.49 per direct labor hour

B) $19.32 per direct labor hour

C) $24.57 per direct labor hour

D) $20.97 per direct labor hour

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

52) The following information was gathered for the Snipes Corporation for the most recent year. Manufacturing overhead is allocated using direct labor hours.

What amount of manufacturing overhead would be allocated for the year? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)

A) $1,254,090

B) $1,068,960

C) $985,900

D) $840,400

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

53) The following information was gathered for the Snipes Corporation for the most recent year. Manufacturing overhead is allocated using direct labor hours.

What is the amount of overallocated or underallocated overhead for the year? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)

A) $144,500 overallocated

B) $144,500 underallocated

C) $86,067 underallocated

D) $86,067 overallocated

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

54) The following information was gathered for the Blazer Corporation for the most recent year. Manufacturing overhead is allocated using direct labor hours.

By how much is manufacturing overhead over- or underallocated?

A) $84,000 overallocated

B) $84,000 underallocated

C) $100,000 overallocated

D) $100,000 underallocated

Diff: 2

LO: 3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

55) The following information was gathered for the Blazer Corporation for the most recent year. Manufacturing overhead is allocated using direct labor hours.

By how much is manufacturing overhead over- or underallocated?

A) $21,000 overallocated

B) $21,000 underallocated

C) $32,750 overallocated

D) $53,750 underallocated

Diff: 2

LO: 3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

56) The following information was gathered for the Greensprings Corporation for the most recent year. Manufacturing overhead is allocated using machine hours.

By how much is manufacturing overhead over- or underallocated?

A) $10,000 overallocated

B) $10,000 underallocated

C) $90,000 overallocated

D) $90,000 underallocated

Diff: 2

LO: 3-5

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

57) For each of the following statements, determine if it would be handled:

A) Before the period

B) During the period

C) At the end of the period

Put the correct letter on the line in front of each statement.

________ Calculate the amount of overallocated or underallocated manufacturing overhead.

________ Compute the predetermined manufacturing overhead rate.

________ Adjust cost of goods sold for the amount of overallocated or underallocated

manufacturing overhead.

________ Allocate the manufacturing overhead costs.

Diff: 1

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

58) For each of the following statements, determine if manufacturing overhead was:

A) Underallocated

B) Overallocated

Put the correct letter on the line in front of each statement.

________ Cost of goods sold is increased

________ Actual manufacturing overhead is less than allocated manufacturing overhead

________ Cost of goods sold is decreased

________ Actual manufacturing overhead is more than allocated manufacturing overhead

Diff: 2

LO: 3-5

EOC: E3-24A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

59) The following account balances at the beginning of January were selected from the general ledger of River Rock Industries:

Work in process inventory $0

Raw materials inventory $30,900

Finished goods inventory $54,800

Additional data:

1. Actual manufacturing overhead for January amounted to $80,500.

2. Total direct labor cost for January was $70,000; actual direct labor hours for January were 4,200.

3. The predetermined manufacturing overhead rate is based on direct labor hours.

The budget for the year called for $350,000 of direct labor cost and $425,000 of

manufacturing overhead costs. Estimated direct labor hours for the year were

expected to be 20,000.

4. The only job unfinished on January 31 was Job No. 449, for which total direct labor

charges were $22,000 (1,200 direct labor hours) and total direct material charges

were $17,600.

5. Cost of direct materials placed in production during January totaled $129,500.

There were no indirect material requisitions during January.

6. January 31 balance in raw materials inventory was $30,000.

7. Finished goods inventory balance on January 31 was $44,700.

Required:

a) Determine the predetermined manufacturing overhead rate.

b) Determine the amount of materials purchased during January.

c) Determine cost of goods manufactured for January.

d) Determine the work in process inventory balance on January 31.

e) Determine cost of goods sold for January.

f) Determine whether manufacturing overhead is overallocated or underallocated

and by what amount at Jan. 31.

Diff: 3

LO: 3-5

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

60) The following information was gathered for the Staccato Corporation for the most recent year. Manufacturing overhead is allocated using direct labor hours.

Compute:

a) Predetermined manufacturing overhead rate

b) Manufacturing overhead allocated for the year

c) Amount of over/underallocated overhead at the end of the year

Diff: 2

LO: 3-5

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

3.6 Prepare journal entries for a manufacturer's job costing system

1) In job costing, the purchase of raw materials is recorded as a debit to the Raw Materials Inventory account and a credit to accounts payable.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

2) When an item is sold, Finished Goods Inventory account is credited and Cost of Goods Sold is debited.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

3) In job costing, when indirect materials are requisitioned for a job, the Raw Materials Inventory account is credited.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

4) In job costing, when raw materials are requisitioned for a job, the Raw Materials Inventory account is credited.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

5) The Work-in-Process account is debited for the cost of direct labor in a job cost system.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

6) Actual manufacturing overhead costs are accumulated as debits to a single general ledger account called Manufacturing Overhead.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

7) The entry to allocate manufacturing overhead costs to work-in-process requires a debit to Work-in Process account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

8) The Manufacturing Overhead account is credited for actual manufacturing overhead costs incurred during the period.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

9) The entry to transfer sold goods includes a debit to the Finished Goods Inventory account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

10) The Finished Goods Inventory account is debited when the product is sold.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Reflective thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

11) In job costing, the journal entry to record the use of direct materials on jobs is to debit Work-in-Process Inventory account and credit

A) Raw Materials Inventory account.

B) Finished Goods Inventory account.

C) Manufacturing Overhead account.

D) Wages Payable account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

12) Cost of Goods Sold account is debited and Finished Goods Inventory is credited for

A) purchase of goods on account.

B) transfer of goods to the Finished Goods Storeroom.

C) transfer of materials into Work-in-Process Inventory.

D) the sale of goods to a customer.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

13) Under which of the following situations is Finished Goods Inventory debited and Work-in- Process Inventory account credited?

A) Transfer of goods to the finished goods storeroom

B) Purchase of goods on account

C) Transfer goods out of the factory

D) Transfer of material to Work-in-Process Inventory account

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

14) Under which of the following situations is Raw Materials Inventory account credited and Work-in-Process Inventory account debited?

A) We ship goods to the customer.

B) Material is transferred to the factory.

C) We transfer goods to the storeroom.

D) We purchase goods on account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

15) The cost of direct materials used in production is debited to

A) either Manufacturing Overhead account or Work-in-Process Inventory account.

B) Finished Goods Inventory account.

C) Work-in-Process Inventory account.

D) Manufacturing Overhead account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

16) The cost of direct labor used in production is recorded as a

A) debit to Work-in-Process Inventory account.

B) debit to Manufacturing Overhead account.

C) debit to wages expense.

D) debit to wages payable.

Diff: 1

LO: 3-6

EOC: S3-12

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

17) The cost of direct labor used in production is recorded as a

A) credit to Manufacturing Overhead account.

B) credit to Work-in-Process Inventory account.

C) credit to wages expense.

D) credit to wages payable.

Diff: 1

LO: 3-6

EOC: S3-12

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

18) The cost of indirect labor used in the factory is recorded as a

A) credit to Work-in-Process Inventory account.

B) debit to Manufacturing Overhead account.

C) credit to wages payable.

D) debit to wages expense.

Diff: 1

LO: 3-6

EOC: S3-12

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

19) How is the cost of direct materials used in production recorded?

A) Debit to Manufacturing Overhead account

B) Debit to Raw Materials Inventory account

C) Debit to Work-in-Process Inventory account

D) Debit to Direct Materials Expense account

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

20) How is the cost of direct materials used in production recorded?

A) Credit to Manufacturing Overhead account

B) Credit to Work-in-Process Inventory account

C) Credit to Direct Materials Expense account

D) Credit to Raw Materials Inventory account

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

21) How is the cost of indirect materials used in the factory recorded?

A) Debit to Work-in-Process Inventory account

B) Debit to Manufacturing Overhead account

C) Debit to Raw Materials Inventory account

D) Debit to Direct Materials Expense

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

22) The journal entry to record the requisition of indirect materials for use in production includes the following:

A) Credit to Manufacturing Overhead account

B) Credit to Raw Materials Inventory account

C) Credit to Work-in-Process Inventory account

D) Credit to Direct Materials Expense account

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

23) The journal entry needed to record the transfer of raw materials, including both direct and indirect materials, into the factory is:

A) Work -in-Process Inventory XXX

Manufacturing Overhead XXX

Raw Materials Inventory XXX

B) Work-in-Process Inventory XXX

Raw Materials Inventory XXX

C) Manufacturing Overhead XXX

Raw Materials Inventory XXX

D) Raw Materials Inventory XXX

Work-in-Process Inventory XXX

Diff: 1

LO: 3-6

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

24) The journal entry needed to record the receipt of a factory utility bill would include a

A) debit to Manufacturing Overhead account.

B) credit to Manufacturing Overhead account.

C) debit to Accounts Payable account.

D) debit to Utilities Payable account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

25) To record depreciation on factory equipment, the needed journal entry would include a

A) credit to Manufacturing Overhead account.

B) debit to Work-in-Process Inventory account.

C) credit to Accumulated Depreciation account.

D) debit to Factory Equipment account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

26) To record depreciation on the factory equipment, the journal entry would include a

A) debit to Work-in-Process Inventory account.

B) debit to Manufacturing Overhead account.

C) credit to Manufacturing Overhead account.

D) debit to Accumulated Depreciation account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

27) To allocate manufacturing overhead to specific jobs, the needed journal entry would include a

A) credit to Work-in-Process Inventory account.

B) debit to Manufacturing Overhead account.

C) debit to Cost of Goods Sold account.

D) credit to Manufacturing Overhead account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

28) The journal entry needed to record the completion of a job includes a

A) credit to Work-in-Process Inventory account.

B) credit to Finished Goods Inventory account.

C) debit to Work-in-Process Inventory account.

D) debit to Cost of Goods Sold account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

29) The journal entry needed to record the completion of a job includes a

A) debit to Cost of Goods Sold account.

B) debit to Work-in-Process Inventory account.

C) debit to Finished Goods Inventory account.

D) debit to Raw Materials Inventory account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

30) Under a perpetual inventory system, the journal entry needed to record the sale of a job includes a

A) debit to Finished Foods Inventory account and credit to Cost of Goods Sold.

B) debit to Cost of Goods Sold account and credit to Finished Goods Inventory account.

C) debit to Sales Revenue account and credit to Accounts Receivable account.

D) debit to Cost of Goods Sold and credit to Sales Revenue account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

31) Under a perpetual inventory system, the journal entry needed to record the sale of a job includes a

A) debit to Cost of Goods Sold account and credit to Sales Revenue account.

B) debit to Finished Goods Inventory account and credit to Cost of Goods Sold account.

C) debit to Sales Revenue account and credit to Accounts Receivable account.

D) debit to Accounts Receivable account and credit to Sales Revenue account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

32) Wood Carver Company had the following labor-related transactions at their plant last month:

What is the journal entry to record the incurrence of direct labor?

A)

B)

C)

D)

Diff: 1

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

33) Which of the following entries would be made to record the purchase of $35,000 of raw materials on account?

A)

B)

C)

D)

Diff: 1

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

34) Here is some basic data for Superfly Company:

The journal entry to record the cost of raw materials placed into production involves a

A) debit to Overhead account for $50,800.

B) debit to Work-in-Process Inventory account for $53,600.

C) debit to Work-in-Process Inventory account for $50,800.

D) credit to Manufacturing Overhead account for $2,800.

Diff: 2

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

35) The cost of indirect materials used in production is credited to

A) the Finished Goods Inventory account.

B) the Manufacturing Overhead account.

C) the Work-in-Process Inventory account.

D) the Raw Materials Inventory account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

36) The journal entry to issue $680 of direct materials and $90 of indirect materials involves a debit to

A) the Manufacturing Overhead account for $770.

B) the Work-in-Process Inventory account for $770.

C) the Work-in-Process Inventory account for $680 and a credit to the Manufacturing Overhead account for $90.

D) the Work-in-Process Inventory account for $680 and a debit to the Manufacturing Overhead account for $90.

Diff: 2

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

37) The journal entry to assign $2,400 of direct labor and $340 of indirect labor involves a debit to

A) the Manufacturing Overhead account for $2,740.

B) the Work-in-Process Inventory account for $2,740.

C) the Work-in-Process Inventory account for $2,400 and a credit to Manufacturing Overhead account for $340.

D) the Work-in-Process Inventory account for $2,400 and a debit to the Manufacturing Overhead account for $340; and a credit to the Wages Payable account for $2,740.

Diff: 2

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

38) Which of the following entries would be made to record the requisition of $11,400 of direct materials and $6,300 of indirect materials?

A)

B)

C)

D)

Diff: 2

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

39) To record the costs of indirect labor, which of the following accounts would be debited?

A) Work-in-Process Inventory account

B) Manufacturing Overhead account

C) Finished Goods Inventory account

D) Wages Payable account

Diff: 1

LO: 3-6

EOC: S3-12

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

40) To record direct labor costs incurred, which of the following accounts would be debited?

A) Finished Goods Inventory account

B) Manufacturing Overhead account

C) Work-in-Process Inventory account

D) Wages Payable account

Diff: 1

LO: 3-6

EOC: S3-12

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

41) To record the requisition of direct materials, which of the following accounts would be debited?

A) Finished Goods Inventory account

B) Work-in-Process Inventory account

C) Raw Materials Inventory account

D) Cost of Goods Manufactured account

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

42) The entry to record the purchase of raw materials on account using a job costing system would include a

A) credit to Work-in-Process Inventory account.

B) debit to Accounts Payable account.

C) debit to Work-in-Process Inventory account.

D) debit to Raw Materials Inventory account.

Diff: 1

LO: 3-6

EOC: S3-11

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

43) Which of the following entries would be made to record $20,600 of labor—80% of which is direct, and 20% of which is indirect—to jobs?

A)

B)

C)

D)

Diff: 2

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

44) The journal entry to record $300 of depreciation expense on factory equipment involves a

A) debit to Accumulated Depreciation account for $300.

B) debit to Manufacturing Overhead account for $300.

C) debit to Factory Equipment account for $300.

D) credit to Manufacturing Overhead account for $300.

Diff: 2

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

45) Here is some basic data for Mandoe Manufacturing:

The journal entry to record actual manufacturing overhead costs includes a

A) debit to Manufacturing Overhead account for $98,400.

B) debit to Work-in-Process Inventory account for $96,300.

C) credit to Work-in-Process Inventory account for $98,400.

D) credit to Manufacturing Overhead account for $96,300.

Diff: 1

LO: 3-6

EOC: P3-49A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

46) Here is some basic data for Fletcher Company:

The journal entry to record the allocation of manufacturing overhead involves a debit to work in process inventory of

A) $124,670.

B) $93,700.

C) $71,890.

D) $76,700.

Diff: 2

LO: 3-6

EOC: P3-49A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

47) Actual manufacturing overhead is always recorded

A) with a debit to work-in-process inventory.

B) with a credit to raw materials inventory.

C) with a credit to manufacturing overhead.

D) with a debit to manufacturing overhead.

Diff: 2

LO: 3-6

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

48) Allocated manufacturing overhead is always recorded

A) with a debit to work-in-process inventory.

B) with a credit to manufacturing overhead.

C) with a debit to raw materials inventory.

D) Both A & B are correct.

Diff: 2

LO: 3-6

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

49) Here is some basic data for Honey Dukes Corporation:

The entry to record the cost of goods completed would be a

A) debit to Finished Goods Inventory account for $287,000.

B) credit to Work-in-Process Inventory account for $255,000.

C) debit to Work-in-Process Inventory account for $255,000.

D) credit to Finished Goods Inventory account for $287,000.

Diff: 2

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

50) Here is some basic data for Honey Dukes Corporation:

The journal entry to record the cost of jobs sold would include a

A) debit to Finished Goods Inventory account for $255,000.

B) credit to Finished Goods Inventory account for $287,000.

C) debit to Cost of Goods Sold account for $287,000.

D) credit to Finished Goods Inventory account for $255,000.

Diff: 1

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

51) Job 222 started on June 1 and finished on July 15. Total cost on July 1 was $13,000, and the costs added in July were $188,800. The entry for the sale at a price of $310,600 would be:

A)

B)

C)

D)

Diff: 1

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

52) When a job is completed, the journal entry involves a

A) debit to Work-in-Process Inventory account and a credit to the Finished Goods Inventory account.

B) debit to Cost of Goods Sold and a credit to the Finished Goods Inventory account.

C) debit to Finished Goods Inventory account and a credit to Work-in-Process Inventory account.

D) debit to Finished Goods and a credit to Cost of Goods Sold.

Diff: 1

LO: 3-6

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

53) Here is selected data for Bluestreak Corporation:

The journal entry to transfer completed goods to the finished goods inventory account would include a

A) debit to Work-in-Process Inventory account for $234,000.

B) debit to Finished Goods Inventory account for $238,300.

C) credit to Work-in-Process Inventory account for $238,300.

D) debit to Finished Goods Inventory account for $234,000.

Diff: 1

LO: 3-6

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

54) Here is selected data for Bluestreak Corporation:

The journal entry to close manufacturing overhead would include a

A) credit to Manufacturing Overhead account for $7,450.

B) debit to Work-in-Process Inventory account for $7,450.

C) debit to Manufacturing Overhead account for $7,450.

D) debit to Cost of Goods Sold for $7,450.

Diff: 2

LO: 3-6

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

55) Here is selected data for Bluestreak Corporation:

The journal entry to close manufacturing overhead would include a

A) credit to Manufacturing Overhead account for $17,800.

B) debit to Work-in-Process Inventory account for $17,800.

C) credit to Work-in-Process Inventory account for $17,800.

D) credit to Cost of Goods Sold account for $17,800.

Diff: 2

LO: 3-6

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

56) Perry Company uses a job cost system. The overhead account shows a $5,600 overallocated balance at the end of the year. Actual overhead incurred was $100,200. Other balances are:

The entry to close manufacturing overhead would include a

A) debit to Manufacturing Overhead account for $5,600.

B) debit to Work-in-Process Inventory account for $5,600.

C) debit to Cost of Goods Sold account for $5,600.

D) credit to Work-in-Process Inventory account for $5,600.

Diff: 2

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

57) XYZ uses job costing. Actual manufacturing overhead for the period is $20,200 while allocated manufacturing overhead is $18,400. What entry will close the manufacturing overhead balance?

A) Debit the Manufacturing Overhead account and credit the Work-in-Process account for $1,800.

B) Debit the Manufacturing Overhead account and credit the Cost of Goods Sold account for $1,800.

C) Debit the Cost of Goods Sold account and credit the Finished Goods Inventory account for $1,800.

D) Debit the Cost of Goods Sold account and credit the Manufacturing Overhead account for $1,800.

Diff: 2

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

58) A company has overallocated manufacturing overhead by $1,900. The entry to close manufacturing overhead account would be to

A) debit Manufacturing Overhead account and credit Cost of Goods Sold account for $1,900.

B) debit Manufacturing Overhead account and credit Work-in-Process account for $1,900.

C) debit Cost of Goods Sold account and credit Manufacturing Overhead account for $1,900.

D) debit Cost of Goods Sold account and credit Finished Goods Inventory account for $1,900.

Diff: 2

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

59) Manufacturing overhead has an underallocated balance of $6,200; raw materials inventory balance is $50,000; work in process inventory is $30,000; finished goods inventory is $20,000; and cost of goods sold is $100,000. Which of these accounts would have an ending credit balance?

A) Raw Materials Inventory account

B) Finished Goods Inventory account

C) Work-in-Process Inventory account

D) None of the above

Diff: 2

LO: 3-6

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

60) Manufacturing overhead has an underallocated balance of $6,200; raw materials inventory balance is $50,000; work in process inventory is $30,000; finished goods inventory is $20,000; and cost of goods sold is $100,000.

Using this information, which account would have an opening credit balance?

A) Raw Materials Inventory account

B) Finished Goods Inventory account

C) Work-in-Process Inventory account

D) None of the above

Diff: 1

LO: 3-6

EOC: E3-27A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

61) On the line in front of each statement, enter either a D for debit or a C for credit to indicate the normal entry that would be needed for each account named.

________ added purchases to Raw Materials Inventory account

________ added indirect materials to Manufacturing Overhead account

________ requisitioned raw materials from Raw Materials Inventory account

________ added direct raw materials to Work-in-Process Inventory account

Diff: 1

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

62) On the line in front of each statement, enter either a D for debit or a C for credit to indicate the normal entry that would be needed for each account named.

________ direct labor was incurred on a job: Work-in-Process Inventory account

________ indirect labor was incurred: Wages Payable account

________ indirect labor was added to a job: Manufacturing Overhead account

________ direct labor was incurred: Wages Payable account

Diff: 2

LO: 3-6

EOC: E3-39B

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

63) Renew Enterprises uses a job costing system. Record the following transactions in Renew Enterprises' general journal for the current month:

a) Purchased raw materials on account, $82,000.

b) Requisitioned $41,300 of direct materials and $9,000 of indirect materials for use in production.

c) Factory payroll incurred, $110,000; 75% direct labor, 25% indirect labor.

d) Recorded depreciation expense factory equipment $15,000, and other manufacturing

overhead of $56,200 (credit accounts payable).

e) Allocated manufacturing overhead costs based on 125% of direct labor cost.

f) Cost of completed production for the current month, $133,000.

g) Cost of finished goods sold, $112,000; selling price, $162,000 (all sales on account).

Diff: 2

LO: 3-6

EOC: P3-49A

AACSB: Analytical thinking

Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

64) At Corral, Inc., the beginning balance of the work in process inventory account in April of the most recent year was $19,000. Direct materials used during April totaled $130,000. Total manufacturing labor incurred in April was $180,000, 75% of this amount represented direct labor. The predetermined manufacturing overhead rate is 130% of direct labor cost. Actual manufacturing overhead costs for April amounted to $160,000.

In April, two jobs were completed with total costs of $110,000 and $95,000, respectively. In April, the two jobs were sold on account for $187,000 and $124,000, respectively.

a. Compute the balance in work in process inventory on April 30.

b. Record the journal entry for direct materials used in April.

c. Record the journal entry to record labor costs for April.

d. Record the journal entry for allocated manufacturing overhead for April.

e. Record the entry to move the completed jobs into finished goods inventory in April.

f. Record the entry to sell the two completed jobs on account in April.