Managerial Accounting 4th Edition Braun, Tietz Test Bank

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Managerial Accounting 4th Edition Braun, Tietz Test Bank

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Managerial Accounting, 4e (Braun/Tietz)
Chapter 3 Job 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: Discuss process costing systems and calculate product cost using process costing.

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: Discuss process costing systems and calculate product cost using process costing.

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: Discuss process costing systems and calculate product cost using process costing.

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

Diff: 1
LO: 3-1
EOC: S3-15
AACSB: Reflective thinking
Learning Outcome: Discuss process costing systems and calculate product cost using process costing.

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 a job order cost system and calculate the predetermined overhead rate and allocate indirect costs. Discuss process costing systems and calculate product cost using process costing.

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: 3-3
EOC: S3-1
AACSB: Reflective thinking
Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs. Discuss process costing systems and calculate product cost using process costing.

7) Job costing should only be used by manufacturers.

Diff: 1
LO: 3-1
EOC: S3-1
AACSB: Reflective thinking
Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

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 a job order cost system and calculate the predetermined overhead rate and allocate indirect costs. Discuss process costing systems and calculate product cost using process costing.

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 a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

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 a job order cost system and calculate the predetermined overhead rate and allocate indirect costs. Discuss process costing systems and calculate product cost using process costing.

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 a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

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: 3-2
EOC: S3-3
AACSB: Reflective thinking
Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

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 a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

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 a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

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 a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

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 a job order cost system and calculate the predetermined overhead rate and allocate indirect costs. Discuss process costing systems and calculate product cost using process costing.

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: 2
LO: 3-1
EOC: S3-1
AACSB: Reflective thinking
Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

18) Which of the following is an example of an industry that would use a process costingrather than a job costingsystem?
A) Coca-Cola
B) Boeing Jets
C) Centex Custom Homes
D) Snyder & Lewis, Attorneys at Law

Diff: 2
LO: 3-1
EOC: E3-16A
AACSB: Reflective thinking
Learning Outcome: Discuss process costing systems and calculate product cost using process costing.

19) Which of the following is an example of an industry that would use a process costingrather than a job costingsystem?
A) Brugman Custom Cabinetry
B) Computer Repair
C) Pepsi
D) Smith & Zu Certified Public Accountants

Diff: 2
LO: 3-1
EOC: E3-16A
AACSB: Reflective thinking
Learning Outcome: Discuss process costing systems and calculate product cost using process costing.

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: Discuss process costing systems and calculate product cost using process costing. Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

21) A manufacturer of plywood would use what type of product costing system?
A) Process costing
B) Job costing
C) Either job or process
D) Both job and process

Diff: 2
LO: 3-1
EOC: E3-16A
AACSB: Reflective thinking
Learning Outcome: Discuss process costing systems and calculate product cost using process costing.

22) A manufacturer of luxury yachts would use which type of costing system?
A) Process costing
B) Job costing
C) Either job or process
D) Both job and process

Diff: 1
LO: 3-1
EOC: E3-16A
AACSB: Reflective thinking
Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

23) An example of an industry that uses process costing might be a
A) custom printer.
B) homebuilder.
C) shipbuilder.
D) company that makes cement.

Diff: 1
LO: 3-1
EOC: E3-16A
AACSB: Reflective thinking
Learning Outcome: Discuss process costing systems and calculate product cost using process costing.

24) Job order costing might be used by a
A) candy manufacturer.
B) custom home builder.
C) crude oil refinery.
D) cereal maker.

Diff: 1
LO: 3-1
EOC: E3-16A
AACSB: Reflective thinking
Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

25) ________ 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 a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

26) 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: Discuss process costing systems and calculate product cost using process costing.

27) 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
LO: 3-1
EOC: E3-16A
AACSB: Reflective thinking
Learning Outcome: Discuss process costing systems and calculate product cost using process costing. Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

28) 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
LO: 3-1
EOC: E3-16A
AACSB: Reflective thinking
Learning Outcome: Discuss process costing systems and calculate product cost using process costing. Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

29) 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: Discuss process costing systems and calculate product cost using process costing. Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

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

Diff: 3
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.

31) 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: 3
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.

32) 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.

33) 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.

34) When the products are shipped to customers, the cost of manufacturing those products becomes Cost of Goods Sold (COGS) shown on the companys 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.

35) 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.

36) 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.

37) 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.

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

Diff: 2
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.

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

Diff: 2
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.

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

Diff: 2
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.

41) 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.

42) 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.

43) The ________ substantiates the total of the raw materials inventory account shown on the companys 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.

44) 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.

45) 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.

46) 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.

47) 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.

48) 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.

49) 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.

50) 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.

51) 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.

52) 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.

53) 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.

54) 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.

55) When used, raw materials
A) would be classified as direct materials.
B) would be classified as direct labor.
C) would be classified as indirect materials.
D) cannot be determined with the information provided.

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.

56) 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.

57) 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 of materials F. job cost record
B. cost driver G. process costing
C. materials requisition H. labor time record
D. invoice I. receiving report
E. purchase order J. job costing

________ 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. Discuss process costing systems and calculate product cost using process costing.

58) 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.

59) 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: 3-3
EOC: S3-5
AACSB: Analytical thinking
Learning Outcome: Describe a job order cost system and calculate the predetermined overhead rate and allocate indirect costs.

60) Briefly explain the flow of inventory through a manufacturing system into a companys 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.

61) 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.

62) Generally accepted accounting principles (GAAP) mandate that manufacturing overhead must be treated as an inventoriable 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.

63) 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.

64) 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.

65) 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.

66) 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.

67) 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.

68) 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.

69) 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.

70) 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.

71) 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.

72) 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.

73) 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.

74) 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 some 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.

75) What is the primary factor that causes a cost 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.

76) A(n) ________ is an estimated manufacturing overhead rate computed during 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.

77) 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.

78) 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.

79) 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.

80) 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.

81) Manufacturing overhead is allocated on the basis of
A) machine hours.
B) direct labor hours.
C) direct labor costs.
D) all of the above.

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.

82) 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: 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.

83) 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.

84) 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.

85) 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.

86) 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.

87) 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.

88) Here are selected data for Campbell Company:

Cost of goods manufactured $320,000
Work in process inventory, beginning 109,000
Work in process inventory, ending 104,000
Direct materials used 73,000

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

What was the amount of direct labor costs?
A) $78,000
B) $162,581
C) $151,250
D) $242,000

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.

89) Here are selected data for Bailey Company:

Cost of goods manufactured $320,000
Work in process inventory, beginning 109,000
Work in process inventory, ending 104,000
Direct materials used 73,000

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

What was the amount of direct labor costs?
A) $78,000
B) $161,333
C) $168,000
D) $242,000

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.

90) Greatwater Manufacturing uses job costing. In May, material requisitions were $44,000 ($39,000 of these were direct materials), and raw material purchases were $57,700. The end of month balance in raw materials inventory was $24,300. What was the beginning raw materials inventory balance?
A) $10,600
B) $43,000
C) $72,400
D) $25,300

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.

91) Nemec Manufacturing uses job costing. In May, material requisitions were $44,000 ($39,000 of these were direct materials), and raw material purchases were $60,000. The end of month balance in raw materials inventory was $24,300. What was the beginning raw materials inventory balance?
A) $74,700
B) $45,300
C) $8,300
D) $23,000

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.

92) Ryans Paints allocates overhead based on machine hours. Selected data for the most recent year follow.

Estimated manufacturing overhead cost $235,000
Actual manufacturing overhead cost $244,000
Estimated machine hours 20,000
Actual machine hours 22,500

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) $10.44.
B) $11.75.
C) $10.84.
D) $12.20.

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.

93) Ryans Paints allocates overhead based on machine hours. Selected data for the most recent year follow.

Estimated manufacturing overhead cost $235,000
Actual manufacturing overhead cost $244,000
Estimated machine hours 20,000
Actual machine hours 22,500

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
A) $239,500.
B) $264,375.
C) $235,000.
D) $244,000.

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.

94) Polands Paints allocates overhead based on machine hours. Selected data for the most recent year follow.

Estimated manufacturing overhead cost $238,000
Actual manufacturing overhead cost $244,000
Estimated machine hours 20,000
Actual machine hours 22,500

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) $10.58.
B) $12.20.
C) $10.84.
D) $11.90.

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.

95) Polands Paints allocates overhead based on machine hours. Selected data for the most recent year follow.

Estimated manufacturing overhead cost $238,000
Actual manufacturing overhead cost $244,000
Estimated machine hours 20,000
Actual machine hours 22,500

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
A) $244,000.
B) $238,000.
C) $267,750.
D) $241,000.

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.

96) Here are selected data for Tyler Corporation:

Cost of materials purchases on account $68,000
Cost of materials requisitioned (includes $4,500 of indirect) 51,000
Direct labor costs incurred 77,000
Manufacturing overhead costs incurred, including indirect materials 97,500
Cost of goods manufactured 223,000
Cost of goods sold 151,000
Beginning raw materials inventory 14,500
Beginning work in process inventory 29,700
Beginning finished goods inventory 32,800
Predetermined manufacturing overhead rate (as % of direct labor cost) 130%

What is the balance in work in process inventory at the end of the year?
A) $30,300
B) $27,700
C) $49,200
D) $23,800

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.

97) Davy Company had a beginning work in process inventory balance of $32,000. During the year, $54,500 of direct materials was placed into production. Direct labor was $63,400, and indirect labor was $19,500. Manufacturing overhead is allocated at 125% of direct labor costs. Actual manufacturing overhead was $86,500, and jobs costing $225,000 were completed during the year. What is the ending work in process inventory balance?
A) $172,400
B) $11,400
C) $4,150
D) $79,250

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.

98) Before the year began, Murphy Manufacturing estimated that manufacturing overhead for the year would be $175,500 and that 13,000 direct labor hours would be worked. Actual results for the year included the following:

Actual manufacturing overhead cost $184,000
Actual direct labor hours 14,500

The predetermined manufacturing overhead rate per direct labor hour is closest to
A) $12.10.
B) $12.69.
C) $13.50.
D) $14.15.

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.

99) Before the year began, Murphy Manufacturing estimated that manufacturing overhead for the year would be $175,500 and that 13,000 direct labor hours would be worked. Actual results for the year included the following:

Actual manufacturing overhead cost $184,000
Actual direct labor hours 14,500

The amount of manufacturing overhead allocated for the year based on direct labor hours would have been
A) $179,750.
B) $195,750.
C) $175,500.
D) $184,000.

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.

100) Here are selected basic data for Wilson Company:

Estimated manufacturing overhead $243,750 Factory utilities $30,200
Estimated labor hours 35,000 Indirect labor $22,400
Actual direct labor hours 36,000 Sales commissions $53,700
Estimated direct labor cost $325,000 Factory rent $47,700
Actual direct labor cost $320,000 Factory property taxes $28,100
Factory depreciation $65,400 Indirect materials $33,000

If the company allocates overhead based on direct labor cost, what are the total actual manufacturing overhead costs?
A) $280,500
B) $171,400
C) $258,100
D) $226,800

Diff: 2
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.
101) Here are selected data for Wilson Company:

Estimated manufacturing overhead $243,750 Factory utilities $30,200
Estimated labor hours 35,000 Indirect labor $22,400
Actual direct labor hours 36,000 Sales commissions $53,700
Estimated direct labor cost $325,000 Factory rent $47,700
Actual direct labor cost $320,000 Factory property taxes $28,100
Factory depreciation $65,400 Indirect materials $33,000

If the company allocates overhead based on direct labor cost, what is the predetermined manufacturing overhead rate?
A) 76% of direct labor cost
B) 133% of direct labor cost
C) 75% of direct labor cost
D) 102% of direct labor cost

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.

102) Here are selected data for Wilson Company:

Estimated manufacturing overhead $243,750 Factory utilities $30,200
Estimated labor hours 35,000 Indirect labor $22,400
Actual direct labor hours 36,000 Sales commissions $53,700
Estimated direct labor cost $325,000 Factory rent $47,700
Actual direct labor cost $320,000 Factory property taxes $28,100
Factory depreciation $65,400 Indirect materials $33,000

If the company allocates manufacturing overhead based on direct labor cost, what are the allocated manufacturing overhead costs?
A) $243,750
B) $226,800
C) $426,667
D) $240,000

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.
103) Here are selected data for Sally Day Corporation:

Beginning raw materials inventory $37,000 Beginning work in process inventory 61,500
Beginning finished goods inventory 56,300 Cost of materials purchased 151,000
Cost of direct materials requisitioned 91,300 Direct labor incurred 125,000
Actual manufacturing overhead 160,000 Cost of goods manufactured 287,000
Cost of goods sold
265,000
Manufacturing overhead rate (% of direct labor) 125%

What is the ending work in process inventory balance?
A) $147,050
B) $151,500
C) $211,200
D) $207,450

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.

104) Here are selected data for Sally Day Corporation:

Beginning raw materials inventory $37,000 Beginning work in process inventory 61,500
Beginning finished goods inventory 56,300 Cost of materials purchased 151,000
Cost of direct materials requisitioned 91,300 Direct labor incurred 125,000
Actual manufacturing overhead 160,000 Cost of goods manufactured 287,000
Cost of goods sold
265,000
Manufacturing overhead rate (% of direct labor) 125%

What is the finished goods ending inventory?
A) $67,300
B) $287,000
C) $78,300
D) $495,700

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.

105) Here are selected basic data for Stehli Company:

Estimated manufacturing overhead $253,500 Factory utilities $30,200
Estimated labor hours 35,000 Indirect labor $22,400
Actual direct labor hours 36,000 Sales commissions $53,700
Estimated direct labor cost $325,000 Factory rent $47,700
Actual direct labor cost $320,000 Factory property taxes $28,100
Factory depreciation $66,000 Indirect materials $33,000

If the company allocates overhead based on direct labor cost, what are the total actual manufacturing overhead costs?
A) $227,400
B) $281,100
C) $258,700
D) $172,000

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.

106) Here are selected data for Stehli Company:

Estimated manufacturing overhead $253,500 Factory utilities $30,200
Estimated labor hours 35,000 Indirect labor $22,400
Actual direct labor hours 36,000 Sales commissions $53,700
Estimated direct labor cost $325,000 Factory rent $47,700
Actual direct labor cost $320,000 Factory property taxes $28,100
Factory depreciation $66,000 Indirect materials $33,000

If the company allocates overhead based on direct labor cost, what is the predetermined manufacturing overhead rate?
A) 78% of direct labor cost
B) 128% of direct labor cost
C) 79% of direct labor cost
D) 102% of direct labor cost

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.

107) Here are selected data for Stehli Company:

Estimated manufacturing overhead $253,500 Factory utilities $30,200
Estimated labor hours 35,000 Indirect labor $22,400
Actual direct labor hours 36,000 Sales commissions $53,700
Estimated direct labor cost $325,000 Factory rent $47,700
Actual direct labor cost $320,000 Factory property taxes $28,100
Factory depreciation $66,000 Indirect materials $33,000

If the company allocates manufacturing overhead based on direct labor cost, what are the allocated manufacturing overhead costs?
A) $410,256
B) $249,600
C) $227,400
D) $253,500

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.

108) Here are selected data for Sunny Sky Corporation:

Beginning raw materials inventory $37,000 Beginning work in process inventory 62,200
Beginning finished goods inventory 58,300 Cost of materials purchased 151,000
Cost of direct materials requisitioned 91,300 Direct labor incurred 135,000
Actual manufacturing overhead 160,000 Cost of goods manufactured 287,000
Cost of goods sold 265,000 Manufacturing overhead rate (% of direct labor) 125%

What is the ending work in process inventory balance?
A) $161,500
B) $170,250
C) $211,200
D) $229,950

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.

109) Here are selected data for Sunny Sky Corporation:

Beginning raw materials inventory $37,000 Beginning work in process inventory 62,200
Beginning finished goods inventory 58,300 Cost of materials purchased 151,000
Cost of direct materials requisitioned 91,300 Direct labor incurred 135,000
Actual manufacturing overhead 160,000 Cost of goods manufactured 287,000
Cost of goods sold 265,000 Manufacturing overhead rate (% of direct labor) 125%

What is the finished goods ending inventory?
A) $80,300
B) $493,700
C) $79,300
D) $287,000

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.

110) Job 140 requires $12,000 of direct materials, $6,700 of direct labor, 550 direct labor hours, and 270 machine hours. It also requires 9 hours of inspection at $40 per hour. Manufacturing overhead is computed at $28 per direct labor hour used and $42 per machine hour used.

The total amount of overhead allocated is
A) $34,100.
B) $26,740.
C) $45,440.
D) $15,400.

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.

111) Missy & Daughters allocates manufacturing overhead to jobs based on machine hours. The company has the following estimated costs for the upcoming year:

Direct materials used $50,000
Direct labor costs $70,000
Wages of factory janitors $39,000
Sales supervisor salary $51,000
Utilities for factory $16,000
Rent on factory building $13,000
Advertising expense $ 5,000

The company estimates that 1,360 direct labor hours will be worked in the upcoming year, while 1,000 machine hours will be used during the year. The predetermined manufacturing overhead rate per machine hour will be
A) $29.
B) $124.
C) $244.
D) $68.

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.

112) Missy & Daughters allocates manufacturing overhead to jobs based on direct labor hours. The company has the following estimated costs for the upcoming year:

Direct materials used $50,000
Direct labor costs $70,000
Wages of factory janitors $39,000
Sales supervisor salary $51,000
Utilities for factory $16,000
Rent on factory building $13,000
Advertising expense $ 5,000

The company estimates that 1,360 direct labor hours will be worked in the upcoming year, while 1,000 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour will be
A) $50.
B) $91.
C) $179.
D) $59.

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.

113) Job 123 requires $12,000 of direct materials, $5,500 of direct labor, 500 direct labor hours, and 300 machine hours. It also requires 6 hours of inspection at $40 per hour. Manufacturing overhead is computed at $30 per direct labor hour used and $40 per machine hour used.

The total amount charged for inspection
A) is $40.
B) is $40 budgeted hours.
C) is $240.
D) does not figure into the total cost of the job.

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.

114) Job 140 requires $12,000 of direct materials, $6,700 of direct labor, 550 direct labor hours, and 270 machine hours. It also requires 9 hours of inspection at $40 per hour. Manufacturing overhead is computed at $28 per direct labor hour used and $42 per machine hour used.

The total dollars of conversion costs are
A) $15,400.
B) $26,740.
C) $33,440.
D) $45,440.

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.

115) Jason 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 890 are as follows:

Direct materials used $5,500
Direct labor hours worked 350
Machine hours used 440
Direct labor rate per hour $18
Predetermined overhead rate based on machine hours $15

What amount of manufacturing overhead would be allocated to Job 612?
A) $5,500
B) $6,300
C) $6,600
D) $5,250

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.

116) Peterson Company gathered the following information for the year ended December 31:

Direct labor cost incurred for the year $180,000
Estimated manufacturing overhead costs $260,000
Estimated direct labor cost $200,000
Work in process inventory, Dec, 31 $51,000
Finished goods inventory, Dec. 31 $68,800
Cost of goods sold $141,000
Estimated direct labor hours 260,000

What would the predetermined manufacturing overhead rate for the year be using direct labor cost as the allocation base?
A) 130% of direct labor cost
B) 90% of direct labor cost
C) 111% of direct labor cost
D) 100% 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.

117) Peterson Company gathered the following information for the year ended December 31:

Direct labor cost incurred for the year $180,000
Estimated manufacturing overhead costs $260,000
Estimated direct labor cost $200,000
Work in process inventory, Dec, 31 $51,000
Finished goods inventory, Dec. 31 $68,800
Cost of goods sold $141,000
Estimated direct labor hours 260,000

Peterson 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?
A) $1.11 per direct labor hour
B) $1.00 per direct labor hour
C) $1.30 per direct labor hour
D) $.90 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.

118) Zanny Moldings has the following estimated costs for the upcoming year:

Direct materials used $25,000
Direct labor costs $62,000
Salary of factory supervisor $37,000
Advertising expense $33,000
Heating and lighting costs for factory $22,000
Depreciation on factory equipment $5,000
Sales commissions $8,000

The company estimates that 1,600 direct labor hours will be worked in the upcoming year, while 2,000 machine hours will be used during the year. The predetermined manufacturing overhead rate per machine hour is closest to
A) $32.
B) $96.
C) $14.
D) $53.

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.

119) Zanny Moldings has the following estimated costs for the upcoming year:

Direct materials used $25,000
Direct labor costs $62,000
Salary of factory supervisor $37,000
Advertising expense $33,000
Heating and lighting costs for factory $22,000
Depreciation on factory equipment $5,000
Sales commissions $8,000

The company estimates that 1,600 direct labor hours will be worked in the upcoming year, while 2,000 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour is closest to
A) $120.
B) $66.
C) $38.
D) $40.

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.

120) Perry Moldings has the following estimated costs for the upcoming year:

Direct labor costs $62,000
Direct materials used $25,000
Salary of factory supervisor $39,000
Sales commissions $8,000
Heating and lighting costs for factory $22,000
Depreciation on factory equipment $5,000
Advertising expense $33,000

The company estimates that 1,200 direct labor hours will be worked in the upcoming year, while 2,000 machine hours will be used during the year. The predetermined manufacturing overhead rate per machine hour is closest to
A) $52.
B) $97.
C) $14.
D) $33.

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.

121) Perry Moldings has the following estimated costs for the upcoming year:

Direct labor costs $62,000
Direct materials used $25,000
Salary of factory supervisor $39,000
Sales commissions $8,000
Heating and lighting costs for factory $22,000
Depreciation on factory equipment $5,000
Advertising expense $33,000

The company estimates that 1,200 direct labor hours will be worked in the upcoming year, while 2,000 machine hours will be used during the year. The predetermined manufacturing overhead rate per direct labor hour is closest to
A) $162.
B) $55.
C) $50.
D) $89.

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.

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

Ending raw materials inventory $21,000
Ending work in process inventory $44,200
Ending finished goods inventory $53,200
Amount of underallocated manufacturing overhead $5,100
Cost of goods sold for year $85,000
Cost of raw materials purchased during year $45,300
Cost of direct materials requisitioned during year $43,800
Cost of indirect materials requisitioned during year $7,200
Cost of goods completed during year $120,000
Manufacturing overhead allocated $60,000
Manufacturing overhead % of direct labor cost 120%

What is the beginning raw materials inventory?
A) $19,500
B) $5,700
C) $26,700
D) $72,000

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.

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

Ending raw materials inventory $21,000
Ending work in process inventory $44,200
Ending finished goods inventory $53,200
Amount of underallocated manufacturing overhead $5,100
Cost of goods sold for year $85,000
Cost of raw materials purchased during year $45,300
Cost of direct materials requisitioned during year $43,800
Cost of indirect materials requisitioned during year $7,200
Cost of goods completed during year $120,000
Manufacturing overhead allocated $60,000
Manufacturing overhead % of direct labor cost 120%

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