Nautical Creations manufactures high-end boat accessories for large custom yachts.Nautical has always applied manufacturing overhead using a traditional predetermined overhead rate based on direct labor hours, this year it is $45 per DLH.Nautical is currently evaluating the use of activity-based driver rates to apply manufacturing overhead cost and has assembled the following budgeted amounts and actual activity required to produce Job #258. $\begin{array}{llrl} &&\text { Budgeted} & \text { Activity used }\\ \text { Activity Driver } & \text { Budgeted Cost } & \text { Activity } & \text { on Job } \# 258\\ \text { Machining time } & \$ 200,000 & 5,000 \text { hours } & 600\text { hours } \\ \text { Direct labor time } & \$ 220,000 & 10,00 0 \text { hours } & 800 \text { hours } \\ \text { Quality inspection time } & \$ 30,000 & 2,000 \text { hours } & 200 \text { hours } \end{array}$ Using the activity-based costing method of applying manufacturing overhead, the amount of overhead applied to Job #258 would be:

A) $36,000. B) $44,600. C) $63,000. D) $72,000. A) $36,000. B) $44,600. C) $63,000. D) $72,000.

Lakeside Machining, Inc., has the following inventory account balances and related manufacturing cost information for the month of August: $\begin{array}{lll} \text { Work in Process, August 1 } & \$ 156,000 \\ \text { Work in Process, August 31 } & \$ 148,00 \\ \text { Raw materials used } & \$ 315,000 \\ \text { Direct labor incurred } & \$ 226,000 \\ \text { Manufacturing overhead applied } & \$ 184,00 \\ \text { Manufacturing overhead incurred } & \$ 190,000 \end{array}$ In Lakeside's Statement of Cost of Goods Manufactured for August, cost of goods manufactured will be reported as:

A) 725,000. B) 733,000. C) 739,000. D) 747,000. A) 725,000. B) 733,000. C) 739,000. D) 747,000.

SurfsUp Specialty Products has the following inventory account balances and related manufacturing cost flow information for the month of October: $\begin{array}{lll} \text { Raw Materials, October } 1 & \$ 20,000 \\ \text { Raw Materials, October } 31 & \$ 25,000 \\ \text { Work in Process, October } 1 & \$ 45,000 \\ \text { Work in Process, October } 31 & \$40,000 \\ \text { Finished Goods, October } 1 & \$ 68,000 \\ \text { Finished Goods, October } 31 & \$ 62,000\\ \text {Raw materials purchased}&?\\ \text {Raw materials used}&\$75,000\\ \text {Direct labor incurred}&?\\ \text {Manufacturing overhead incurred}&\$120,000\\ \text {Cost of goods manufactured}&\$300,000\\ \text {Cost of goods sold}&? \end{array}$ Cost of goods sold for October is:

A) $300,000. B) $306,000. C) $362,000. D) $368,000. A) $300,000. B) $306,000. C) $362,000. D) $368,000.

Riverside Boats estimates the following for 2019: $\begin{array}{lr} \text { Manufacturing overhead } & \$ 80,000 \\ \text { Direct labor hours } & 48,000 \\ \text { Machine hours } & 100,000 \end{array}$ During 2019 Riverside incurs the following costs and activity: $\begin{array}{lr} \text { Manufacturing overhead } & \$ 508,000 \\ \text { Direct labor hours } & 52,000 \\ \text { Machine hours } & 108,000 \end{array}$ Riverside uses direct labor hours to calculate the predetermined overhead rate for the year. (a.)Calculate the predetermined overhead rate for 2019. (b.)Calculate the applied overhead for 2019. (c.)Calculate the amount of overapplied or underapplied overhead for 2019.

(a.) $480,000/48,000 DLHs = $10/DLH. (b

Exam 13: Cost Accounting and Reporting

The following are beginning and ending inventories of ABC Company for the month of May: April 30 May 31 Raw materials \ 50,300 \ 41,400 Work-in-process 106,900 97,200 Finished goods 70,800 62,800 Raw materials purchased during the month of May totaled $185,900.Direct labor costs incurred totaled $468,300 for the month.Actual and applied manufacturing overhead costs for May totaled $282,600 and $288,400, respectively.Over/underapplied overhead is written off to cost of goods sold at the end of the year in December. (a)Calculate the cost of goods manufactured for May. (b)Calculate the cost of goods sold for May.

(Essay)

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Question 61

Which of the following is not an account that over/under applied overhead is transferred to at the end of an accounting period?

(Multiple Choice)

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Question 62

An example of a cost that is likely to have a direct relationship with products being manufactured is:

(Multiple Choice)

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Question 63

Nautical Creations manufactures high-end boat accessories for large custom yachts.Nautical has always applied manufacturing overhead using a traditional predetermined overhead rate based on direct labor hours, this year it is $45 per DLH.Nautical is currently evaluating the use of activity-based driver rates to apply manufacturing overhead cost and has assembled the following budgeted amounts and actual activity required to produce Job #258. Budgeted Activity used Activity Driver Budgeted Cost Activity on Job \#258 Machining time \ 200,000 5,000 hours 600 hours Direct labor time \ 220,000 10,000 hours 800 hours Quality inspection time \ 30,000 2,000 hours 200 hours Using the activity-based costing method of applying manufacturing overhead, the amount of overhead applied to Job #258 would be:

(Multiple Choice)

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Question 64

O'Fallon Products estimates manufacturing overhead of $400,000 for 2019 and applies overhead to units produced based on 200,000 machine hours.During 2019, O'Fallon generated 195,120 machine hours and incurred $409,752 of manufacturing overhead.For 2019, O'Fallon will apply manufacturing overhead at the rate of ________ per machine hour.

(Multiple Choice)

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Question 65

Which of the following will cause income determined with absorption costing to be higher than income determined with direct costing?

(Multiple Choice)

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Question 66

Lakeside Machining, Inc., has the following inventory account balances and related manufacturing cost information for the month of August: Work in Process, August 1 \ 156,000 Work in Process, August 31 \ 148,00 Raw materials used \ 315,000 Direct labor incurred \ 226,000 Manufacturing overhead applied \ 184,00 Manufacturing overhead incurred \ 190,000 In Lakeside's Statement of Cost of Goods Manufactured for August, cost of goods manufactured will be reported as:

(Multiple Choice)

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Question 67

The predetermined overhead application rate based on direct labor hours is computed as:

(Multiple Choice)

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Question 68

For the partial value chain functions given below, which sequence is correct?

(Multiple Choice)

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Question 69

Which of the following is a true statement regarding absorption and/or direct costing?

(Multiple Choice)

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Question 70

Which of the following describes the correct sequence of flow of costs for a manufacturing firm?

(Multiple Choice)

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Question 71

SurfsUp Specialty Products has the following inventory account balances and related manufacturing cost flow information for the month of October: Raw Materials, October 1 \ 20,000 Raw Materials, October 31 \ 25,000 Work in Process, October 1 \ 45,000 Work in Process, October 31 \4 0,000 Finished Goods, October 1 \ 68,000 Finished Goods, October 31 \ 62,000 Raw materials purchased ? Raw materials used \7 5,000 Direct labor incurred ? Manufacturing overhead incurred \1 20,000 Cost of goods manufactured \3 00,000 Cost of goods sold ? Cost of goods sold for October is:

(Multiple Choice)

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Question 72

Riverside Boats estimates the following for 2019: Manufacturing overhead \ 80,000 Direct labor hours 48,000 Machine hours 100,000 During 2019 Riverside incurs the following costs and activity: Manufacturing overhead \ 508,000 Direct labor hours 52,000 Machine hours 108,000 Riverside uses direct labor hours to calculate the predetermined overhead rate for the year. (a.)Calculate the predetermined overhead rate for 2019. (b.)Calculate the applied overhead for 2019. (c.)Calculate the amount of overapplied or underapplied overhead for 2019.

(Essay)

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Question 73

The sequence of functions and related activities that, over the life of a product or service, can ultimately make a difference to the customer are:

(Multiple Choice)

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Question 74

Which of the following is not an account that over/under applied overhead is transferred to at the end of an accounting period?

An example of a cost that is likely to have a direct relationship with products being manufactured is:

Which of the following will cause income determined with absorption costing to be higher than income determined with direct costing?

The predetermined overhead application rate based on direct labor hours is computed as:

For the partial value chain functions given below, which sequence is correct?

Which of the following is a true statement regarding absorption and/or direct costing?

Which of the following describes the correct sequence of flow of costs for a manufacturing firm?

The sequence of functions and related activities that, over the life of a product or service, can ultimately make a difference to the customer are:

Accountingpresent and Past

Financial Statements and Accounting Conceptsprinciples

Fundamental Interpretations Made From Financial Statement Data

The Bookkeeping Process and Transaction Analysis

Accounting for and Presentation of Current Assets

Accounting for and Presentation of Property, Plant, and Equipment,

Accounting for and Presentation of Liabilities

Accounting for and Presentation of Stockholders Equity

The Income Statement and the Statement of Cash Flows

Corporate Governance, Notes to the Financial Statements,

Financial Statement Analysis

Managerial Accounting and Cost-Volume-Profit Relationships

Cost Planning

Cost Control

Cost for Decision Making

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