Reference: 03-09 The following journal entries without dollar data were taken from the accounting records of Case Company. Case company has a job-order costing system and applies overhead to jobs using a predetermined overhead rate. \(\begin{array}{|l|l|l|l|} \hline 1 . & \text { Work in Process } & \mathrm{XXX} & \\ \hline & \text { Manufacturing Overhead } & \mathrm{XXX} & \\ \hline & \text { Wages Payable } & & \mathrm{XXX} \\\hline\\ \hline 2 . & \text { Salary Expense } & \mathrm{XXX} & \\ \hline & \text { Wages Payable } & & \mathrm{XXX} \\\hline\\\hline 3 . & \text { Manufacturing Overhead } & \mathrm{XXX} & \\ \hline & \text { Accumulated Depreciation } & & \mathrm{XXX} \\\hline\\\hline 4 . & \text { Work in Process } & \mathrm{XXX} & \\ \hline & \text { Raw Materials } & & \mathrm{XXX} \\ \hline & & & \\ \hline 5 . & \text { Work in Process } & \mathrm{XXX} & \\ \hline & \text { Manufacturing Overhead } & & \mathrm{XXX} \\\hline\\\hline \text { 6. } & \text { Manufacturing Overhead } & \text { XXX } & \\ \hline & \text { Raw Materials } & & \mathrm{XXX} \\ \hline & & & \\ \hline \text { 7. } & \text { Finished Goods } & \mathrm{XXX} & \\ \hline & \text { Work in Process } & & \mathrm{XXX} \\\hline\\\hline 8 . & \text { Raw Materials } & \text { XXX } & \\ \hline & \text { Accounts Payable } & & \mathrm{XXX} \\ \hline \end{array}\) -The entry to record depreciation on manufacturing equipment is:

A) 1. B) 5. C) 4. D) 3. A) 1. B) 5. C) 4. D) 3.

Reference: 03-06 The Milo Company's records for May contained the following information: \[\begin{array} { | l | l | l | } \hline \text { Actual direct labour-hours } & 9,000 & \text { hours } \\ \hline \text { Actual direct labour cost } & \$ 47,000 & \\ \hline \text { Direct material purchased } & 16,000 & \\ \hline \text { Direct material used } & 14,000 & \\ \hline \text { Cost of goods sold } & 100,000 & \\ \hline \text { Overapplied overhead } & 5,000 & \\ \hline \text { Ending inventories: } & & \\ \hline \text { Raw materials } & 30,000 & \\ \hline \text { Work in process } & 50,000 & \\ \hline \text { Finished goods } & 70,000 & \\ \hline \end{array}\] The company uses a predetermined overhead rate of $5.00 per direct labour hour to apply manufacturing overhead to jobs. -The total cost added to Work in Process during May was:

A) $111,000. B) $106,000. C) $101,000. D) $61,000. A) $111,000. B) $106,000. C) $101,000. D) $61,000.

Reference: 03-04 The following T accounts are for Stanford Company: $\begin{array}{} \text { Sales Salaries Expense }&\text { Work in Process }\\ \begin{array} { l|llll } \hline\text { Beg. Bal. 7,000 }&24,000\quad(2)\\ (1)\quad\quad19,000\end{array}&\begin{array} { l|llll } \hline ?\quad\quad(8)&\quad\quad\\ ?\quad\quad(9)\end{array} \end{array}$ $\begin{array}{lll}\text { Sales Salaries Expense }&\text { Work in Process }\\ \begin{array} { l|llll } \hline (4)\quad\quad11,000&\\\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(4)}\quad\quad11,000&\quad\\ (2)\quad\quad15,000\\ (4)\quad\quad181,000\\ (6)\quad\quad31,000\\ \end{array} \end{array}$ $\begin{array}{lll}\text { Accounts Payable }&\text { Manufacturing Overhead }\\ \begin{array} { l|llll } \hline \quad\quad\quad\quad&19,000\quad\quad(1)\\&5,000\quad\quad(5)\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(2)}\quad\quad9,000&31,000\quad\quad(6)\\ (3)\quad\quad16,000&\quad\quad\quad\quad?(9)\\ (4)\quad\quad8,000\\ (5)\quad\quad5,000\\ \end{array} \end{array}$ $\begin{array}{lll}\text { Wages \& Salaries Payable }&\text { Finished Goods }\\ \begin{array} { l|llll } \hline \quad\quad\quad\quad&7,000 \text { Beg. Bal. }\\&37,000\quad\quad(4)\\\\\\\end{array}&\begin{array} { l|llll } \hline\text { Beg. Bal. 18,000 }&\quad\quad\quad\quad?(8)\\ (7)\quad\quad62,000&\quad\quad\quad\quad?\\ \text { End. Bal. 15,000 }\\ \\ \end{array} \end{array}$ $\begin{array}{lll}\text { Accumulated Depreciation-Factory }\\ \begin{array} { l|llll } \hline \quad\quad\quad\quad&82,000 \quad \text { Beg. Bal. }\\&16,000\quad\quad(3)\\\\\\\end{array}\end{array}$ -The indirect labour cost is?

A) $8,000. B) $15,000. C) $37,000. D) $18,000. A) $8,000. B) $15,000. C) $37,000. D) $18,000.

The Samuelson Company uses a job-order costing system. The following data were recorded for June: $\begin{array}{|l|l|l|l|} \hline & \text { June } 1 & \text { Added During June } \\ \hline \text { Job Number } & \begin{array}{l} \text { Work in Process } \\ \text { Inventory } \end{array} & \text { Direct Material } & \text {Direct Labour } \\ \hline 475 & \$ 1,000 & \$ 400 & \$ 200 \\ \hline 476 & \$ 900 & \$ 600 & \$ 800 \\ \hline 477 & \$ 800 & \$ 900 & \$ 1,400 \\ \hline 478 & \$ 600 & \$ 1,100 & \$ 1,900 \\ \hline \end{array}$ Overhead is charged to production at 70% of the direct materials cost. Jobs 475, 477, and 478 have been delivered to the customer. Samuelson's Work in Process inventory balance on June 30 was:

A) $2,300. B) $2,860. C) $2,720. D) $6,450. A) $2,300. B) $2,860. C) $2,720. D) $6,450.

Kelsh Company uses a predetermined overhead rate based on machine hours to appl? manufacturing overhead to jobs. The company has provided the following estimated costs for next year: \[\begin{array} { l c } \text { Direct materials } & \$ 10,000 \\ \text { Direct labour } & 30,000 \\ \text { Sales commissions } & 40,000 \\ \text { Salary of production supervis or } & 20,000 \\ \text { In direct materials } & 4,000 \\ \text { Advertising expense } & 8,000 \\ \text { Rent on factory equipment } & 10,000 \end{array}\] Kelsh estimates that 5,000 direct labour hours and 10,000 machine hours will be worked during the year. The predetermined overhead rate per hour will be:

A) $6.40. B) $8.20. C) $6.80. D) $3.40. A) $6.40. B) $8.20. C) $6.80. D) $3.40.

Reference: 03-04 The following T accounts are for Stanford Company: $\begin{array}{} \text { Sales Salaries Expense }&\text { Work in Process }\\ \begin{array} { l|llll } \hline\text { Beg. Bal. 7,000 }&24,000\quad(2)\\ (1)\quad\quad19,000\end{array}&\begin{array} { l|llll } \hline ?\quad\quad(8)&\quad\quad\\ ?\quad\quad(9)\end{array} \end{array}$ $\begin{array}{lll}\text { Sales Salaries Expense }&\text { Work in Process }\\ \begin{array} { l|llll } \hline (4)\quad\quad11,000&\\\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(4)}\quad\quad11,000&\quad\\ (2)\quad\quad15,000\\ (4)\quad\quad181,000\\ (6)\quad\quad31,000\\ \end{array} \end{array}$ $\begin{array}{lll}\text { Accounts Payable }&\text { Manufacturing Overhead }\\ \begin{array} { l|llll } \hline \quad\quad\quad\quad&19,000\quad\quad(1)\\&5,000\quad\quad(5)\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(2)}\quad\quad9,000&31,000\quad\quad(6)\\ (3)\quad\quad16,000&\quad\quad\quad\quad?(9)\\ (4)\quad\quad8,000\\ (5)\quad\quad5,000\\ \end{array} \end{array}$ $\begin{array}{lll}\text { Wages \& Salaries Payable }&\text { Finished Goods }\\ \begin{array} { l|llll } \hline \quad\quad\quad\quad&7,000 \text { Beg. Bal. }\\&37,000\quad\quad(4)\\\\\\\end{array}&\begin{array} { l|llll } \hline\text { Beg. Bal. 18,000 }&\quad\quad\quad\quad?(8)\\ (7)\quad\quad62,000&\quad\quad\quad\quad?\\ \text { End. Bal. 15,000 }\\ \\ \end{array} \end{array}$ $\begin{array}{lll}\text { Accumulated Depreciation-Factory }\\ \begin{array} { l|llll } \hline \quad\quad\quad\quad&82,000 \quad \text { Beg. Bal. }\\&16,000\quad\quad(3)\\\\\\\end{array}\end{array}$ -The manufacturing overhead applied is?

A) $42,000. B) $38,000. C) $31,000. D) $24,000. A) $42,000. B) $38,000. C) $31,000. D) $24,000.

Reference: 03-08 The Bus Company uses a job-order costing system. The following information was recorded for September: The direct labour wage rate is $10 per hour. Overhead is applied at the rate of $5 per direct labour-hour. Jobs 1, 2, and 3 have been completed and transferred to finished goods. Job 2 has been delivered to the customer. \[\begin{array} { | l | l | l | l | } \hline & & { \text { Added During September } } \\ \hline \text { Job Number } & \begin{array} { l } \text { September 1 } \\ \text { Inventory } \end{array} & \begin{array} { l } \text { Direct } \\ \text { Materials } \end{array} & \text { Direct Labour } \\ \hline 1 & \$ 1,000 & \$ 300 & \$ 200 \\ \hline 2 & 1,400 & 250 & 300 \\ \hline 3 & 500 & 1,500 & 150 \\ \hline 4 & 750 & 4,000 & 400 \\ \hline \end{array}\] -The Cost of Goods Manufactured for September is:

A) $10,750. B) $7,625. C) $11,275. D) $5,925. A) $10,750. B) $7,625. C) $11,275. D) $5,925.

Exam 3: Systems Design: Job-Order Costing

The balance in White Company's Work in Process inventory account was $15,000 on August 1 and $18,000 on August 31.. If the sum of the debits to the Manufacturing Overhead account total $28,000 for the month, and if the sum of the credits totalled $30,000, then:

(Multiple Choice)

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Question 21

Reference: 03-09 The following journal entries without dollar data were taken from the accounting records of Case Company. Case company has a job-order costing system and applies overhead to jobs using a predetermined overhead rate. 1. Work in Process Manufacturing Overhead Wages Payable 2. Salary Expense Wages Payable 3. Manufacturing Overhead Accumulated Depreciation 4. Work in Process Raw Materials 5. Work in Process Manufacturing Overhead 6. Manufacturing Overhead XXX Raw Materials 7. Finished Goods Work in Process 8. Raw Materials XXX Accounts Payable -The entry to record depreciation on manufacturing equipment is:

(Multiple Choice)

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Question 22

Which of the following statements is not always true

(Multiple Choice)

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Question 23

Reference: 03-06 The Milo Company's records for May contained the following information: Actual direct labour-hours 9,000 hours Actual direct labour cost \ 47,000 Direct material purchased 16,000 Direct material used 14,000 Cost of goods sold 100,000 Overapplied overhead 5,000 Ending inventories: Raw materials 30,000 Work in process 50,000 Finished goods 70,000 The company uses a predetermined overhead rate of $5.00 per direct labour hour to apply manufacturing overhead to jobs. -The total cost added to Work in Process during May was:

(Multiple Choice)

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Question 24

The Cost of Goods Sold for September (before disposition of any underapplied or overapplied overhead)is?

(Multiple Choice)

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Question 25

The labour time sheet contains a detailed summary of the direct and the indirect labour hours of an employee.

(True/False)

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Question 26

Carlo Company uses a predetermined overhead rate based on direct labour hours to appl? manufacturing overhead to jobs. The company estimated manufacturing overhead at $255,000 for the year and direct labour-hours at 100,000 hours. Actual manufacturing overhead costs incurred during the year totalled $270,000. Actual direct labour hours were 105,000. What was the overapplied or underapplied overhead for the year?

(Multiple Choice)

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Question 27

All costs that cannot be traced directly to a product or an activity are ignored for the purpose of costing.

(True/False)

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Question 28

Reference: 03-04 The following T accounts are for Stanford Company: Sales Salaries Expense Work in Process Beg. Bal. 7,000 24,000(2) (1)19,000 ?(8) ?(9) Sales Salaries Expense Work in Process (4)11,000 (4) 11,000 (2)15,000 (4)181,000 (6)31,000 Accounts Payable Manufacturing Overhead 19,000(1) 5,000(5) (2) 9,000 31,000(6) (3)16,000 ?(9) (4)8,000 (5)5,000 Wages \& Salaries Payable Finished Goods 7,000 Beg. Bal. 37,000(4) Beg. Bal. 18,000 ?(8) (7)62,000 ? End. Bal. 15,000 Accumulated Depreciation-Factory 82,000 Beg. Bal. 16,000(3) -The indirect labour cost is?

(Multiple Choice)

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Question 29

Reference: 03-12 Jimbob Co. had the following inventory balances at the beginning and end of April: April 1 April 30 Raw Materials \ 17,000 \ 20,000 Finished Goods \ 50,000 \ 44,000 Work in Process \ 9,000 \ 11,000 During April, $36,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was 80 cents per each direct labour dollar, and it paid its direct labour workers $20 per hour. A total of 150 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost. -The amount of direct labour cost in the April 30 Work in Process inventory was:

(Multiple Choice)

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Question 30

The Samuelson Company uses a job-order costing system. The following data were recorded for June: June 1 Added During June Job Number Work in Process Inventory Direct Material Direct Labour 475 \ 1,000 \ 400 \ 200 476 \ 900 \ 600 \ 800 477 \ 800 \ 900 \ 1,400 478 \ 600 \ 1,100 \ 1,900 Overhead is charged to production at 70% of the direct materials cost. Jobs 475, 477, and 478 have been delivered to the customer. Samuelson's Work in Process inventory balance on June 30 was:

(Multiple Choice)

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Question 31

Which of the following statements is not true about the use of a normal costing system

(Multiple Choice)

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Question 32

Kelsh Company uses a predetermined overhead rate based on machine hours to appl? manufacturing overhead to jobs. The company has provided the following estimated costs for next year: Direct materials \ 10,000 Direct labour 30,000 Sales commissions 40,000 Salary of production supervis or 20,000 In direct materials 4,000 Advertising expense 8,000 Rent on factory equipment 10,000 Kelsh estimates that 5,000 direct labour hours and 10,000 machine hours will be worked during the year. The predetermined overhead rate per hour will be:

(Multiple Choice)

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Question 33

In a normal costing system actual overhead costs are allocated to jobs.

(True/False)

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Question 34

Reference: 03-04 The following T accounts are for Stanford Company: Sales Salaries Expense Work in Process Beg. Bal. 7,000 24,000(2) (1)19,000 ?(8) ?(9) Sales Salaries Expense Work in Process (4)11,000 (4) 11,000 (2)15,000 (4)181,000 (6)31,000 Accounts Payable Manufacturing Overhead 19,000(1) 5,000(5) (2) 9,000 31,000(6) (3)16,000 ?(9) (4)8,000 (5)5,000 Wages \& Salaries Payable Finished Goods 7,000 Beg. Bal. 37,000(4) Beg. Bal. 18,000 ?(8) (7)62,000 ? End. Bal. 15,000 Accumulated Depreciation-Factory 82,000 Beg. Bal. 16,000(3) -The manufacturing overhead applied is?

(Multiple Choice)

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Question 35

Sharp Company's records show that overhead was overapplied by $10,000 last year. overapplied overhead was closed out to the Cost of Goods Sold account at the end of the year. In trying to determine why overhead was overapplied by such a large amount, the company has discovered that $6,000 of depreciation on factory equipment was charged to administrative expense in error. Given the above information, which of the following statements is true?

(Multiple Choice)

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Question 36

Reference: 03-11 The Tse Manufacturing Company uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. The company closes any balance in the Manufacturing Overhead account to Cost of Goods Sold. During the year the company's Finished Goods inventory account was debited for $125,000 and credited for $110,000. The ending balance in the Finished Goods inventory account was $28,000. At the end of the year, manufacturing overhead was overapplied by $4,500. -The balance in the Finished Goods inventory account at the beginning of the year was:

(Multiple Choice)

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Question 37

When the predetermined overhead rate is based on direct labour-hours, the amount of overhead applied to a job is proportional to the amount of actual direct labour-hours incurred on the job.

(True/False)

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Question 38

Reference: 03-12 Jimbob Co. had the following inventory balances at the beginning and end of April: April 1 April 30 Raw Materials \ 17,000 \ 20,000 Finished Goods \ 50,000 \ 44,000 Work in Process \ 9,000 \ 11,000 During April, $36,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was 80 cents per each direct labour dollar, and it paid its direct labour workers $20 per hour. A total of 150 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost. -The raw materials purchased during April totalled:

(Multiple Choice)

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Question 39

Reference: 03-08 The Bus Company uses a job-order costing system. The following information was recorded for September: The direct labour wage rate is $10 per hour. Overhead is applied at the rate of $5 per direct labour-hour. Jobs 1, 2, and 3 have been completed and transferred to finished goods. Job 2 has been delivered to the customer. Added During September Job Number September 1 Inventory Direct Materials Direct Labour 1 \ 1,000 \ 300 \ 200 2 1,400 250 300 3 500 1,500 150 4 750 4,000 400 -The Cost of Goods Manufactured for September is:

(Multiple Choice)

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Question 40

The balance in White Company's Work in Process inventory account was $15,000 on August 1 and $18,000 on August 31.. If the sum of the debits to the Manufacturing Overhead account total $28,000 for the month, and if the sum of the credits totalled $30,000, then:

Which of the following statements is not always true

The Cost of Goods Sold for September (before disposition of any underapplied or overapplied overhead)is?

The labour time sheet contains a detailed summary of the direct and the indirect labour hours of an employee.

All costs that cannot be traced directly to a product or an activity are ignored for the purpose of costing.

Which of the following statements is not true about the use of a normal costing system

In a normal costing system actual overhead costs are allocated to jobs.

When the predetermined overhead rate is based on direct labour-hours, the amount of overhead applied to a job is proportional to the amount of actual direct labour-hours incurred on the job.

An Introduction to Managerial Accounting

Cost Concepts

Process Costing

Activity-Based Costing

Cost Behaviour: Analysis and Use

Budgeting

Cost-Volume-Profit Relationships

Relevant Costs: the Key to Decision Making

Capital Budgeting Decisions

Standard Costs and Variance Analysis

Organizational Structure and Performance Measurement

How Well Am I Doing Financial Statement Analysis Online

How Well Am I Doing Cash Flow Statement Online

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