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 cost of direct materials used is?

A) $18,000. B) $24,000. C) $14,000. D) $15,000. A) $18,000. B) $24,000. C) $14,000. D) $15,000.

Reference: 03-10 Summit Company has provided the following inventory balances and manufacturing cost data for the month of January: \[\begin{array}{l} \begin{array} { | c | l | l | } \hline \text { Inventories: } & \text { January 1 } & \text { January } 31 \\ \hline \text { Direct materials } & \$ 30,000 & \$ 40,000 \\ \hline \text { Work in process } & \$ 15,000 & \$ 20,000 \\ \hline \text { Finished goods } & \$ 65,000 & \$ 50,000 \\ \hline \end{array}\\\\ \begin{array} { | l | l | } \hline & \text { Month of January } \\ \hline \text { Cost of goods manufactured } & \$ 515,000 \\ \hline \text { Manufacturing overhead applied } & \$ 150,000 \\ \hline \text { Direct materials used } & \$ 190,000 \\ \hline \text { Actual manufacturing overhead } & \$ 144,000 \\ \hline \end{array} \end{array}\] Under Summit's job-order costing system, any overapplied or underapplied overhead is closed to the Cost of Goods Sold account at the end of the calendar year . -How much direct labour cost was incurred during January?

A) $170,000. B) $186,000. C) $180,000. D) $175,000. A) $170,000. B) $186,000. C) $180,000. D) $175,000.

Lucas Co. appeared in the Work in Process account: \[\begin{array} { | l | l | c | } \hline \text { April } & & \\ \hline 1 & \text { Balance } & \$ 24,000 \\ \hline 30 & \text { Direct materials } & 80,000 \\ \hline 30 & \text { Direct labour } & 60,000 \\ \hline 30 & \text { Manufacturing overhead } & 54,000 \\ \hline 30 & \text { To finished goods } & ( 200,000 ) \\ \hline \end{array}\] Lucas applies overhead at a predetermined rate of 90% of direct labour cost. Job No. 100, the only job still in process at the end of April, has been charged with manufacturing overhead of $4,500. The amount of direct materials charged to Job No. 100 was:

A) $18,000. B) $8,500. C) $5,000. D) $4,500. A) $18,000. B) $8,500. C) $5,000. D) $4,500.

Reference: 03-02 Hamilton Company uses job-order costing. Manufacturing overhead is applied using a predetermined rate of 150% of direct labour cost. Any overapplied or underapplied manufacturing overhead is closed to the Cost of Goods Sold account at the end of each month. Additional information is available as follows: Job 101 was the only job in process at January 31. The job cost sheet for this job contained the following costs at the beginning of the month: \[\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 4,000 \\ \hline \text { Direct labour } & \$ 2,000 \\ \hline \text { Applied manufacturing overhead } & \$ 3,000 \\ \hline \end{array}\] Jobs 102, 103, and 104 were started during February. Direct materials requisitions for February totalled $26,000. Direct labour cost of $20,000 was incurred for February. Actual manufacturing overhead was $32,000 for February. The only job still in process at February 28 was Job 104, with costs of $2,800 for direct materials and $1,800 for direct labour. -For the month of February, the manufacturing overhead was:

A) $1,000 overapplied. B) $2,000 underapplied. C) $2,000 overapplied. D) $700 overapplied. A) $1,000 overapplied. B) $2,000 underapplied. C) $2,000 overapplied. D) $700 overapplied.

Reference: 03-07 The following data are for Potras Company: \[\begin{array} { | l | l | l | } \hline & \text { Beginning } & \text { Ending } \\ \hline \text { Finished goods inventory } & \$ 30,000 & \$ 40,000 \\ \hline \text { Work in process inventory } & \$ 20,000 & \$ 13,000 \\ \hline \text { Raw materials inventory } & \$ 21,000 & \$ 26,000 \\ \hline \text { Purchases of raw materials } & \$ 71,000 & \\ \hline \text { Factory depreciation } & \$ 5,000 & \\ \hline \text { Other factory costs } & \$ 10,000 & \\ \hline \text { Direct labour } & \$ 27,000 & \\ \hline \text { Indirect labour } & \$ 6,000 & \\ \hline \text { Selling expense } & \$ 12,000 & \\ \hline \begin{array} { l } \text { Overapplied or underapplied } \\ \text { overhead } \end{array} & - 0 - & \\ \hline \end{array}\] -The cost of raw materials used in production was:

A) $66,000. B) $76,000. C) $71,000. D) $26,000. A) $66,000. B) $76,000. C) $71,000. D) $26,000.

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 ending Work in Process account balance is?

A) $20,000. B) $13,000. C) $64,000. D) $75,000. A) $20,000. B) $13,000. C) $64,000. D) $75,000.

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour, based on an estimate of 25,000 direct labour hours to be worked during the year. Actual costs and activity during the year were: \[\begin{array} { | l | l | } \hline \text { Actual manufacturing overhead cost incurred } & \$ 47,000 \\ \hline \text { Actual direct labour hours worked } & 24,000 \\ \hline \end{array}\] The underapplied or overapplied overhead last year was:

A) $2,000 underapplied. B) $3,000 overapplied. C) $1,000 underapplied. D) $1,000 overapplied. A) $2,000 underapplied. B) $3,000 overapplied. C) $1,000 underapplied. D) $1,000 overapplied.

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 cost of raw materials purchased during the year amounted to:

A) $316,000. B) $360,000. C) $336,000. D) $411,000. A) $316,000. B) $360,000. C) $336,000. D) $411,000.

Reference: 03-05 Mallet Company had only Job 844 in process on March 1 of the current year. The job had been charged with $2,000 of direct material cost, $2,500 of direct labour cost, and $1,750 of manufacturing overhead cost. The company assigns overhead cost to jobs at a predetermined rate of 70% of direct labour cost. Any underapplied or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During March, the following activity and amounts were recorded by the company: \[\begin{array} { | l | l | } \hline \text { Raw materials (all direct materials): } & \\ \hline \text { Purchased during the month } & \$ 29,500 \\ \hline \text { Used in production } & \$ 30,500 \\ \hline & \\ \hline \text { Labour: } & \\ \hline \text { Direct labour hours worked during the month } & 2,500 \\ \hline \text { Direct labour cost incurred } & \$ 26,500 \\ \hline \text { Indirect labour costs incurred } & \$ 5,500 \\ \hline & \\ \hline \text { Manufacturing overhead costs incurred (total) } & \$ 18,500 \\ \hline & \\ \hline \text { Inventories: } & \\ \hline \text { Raw materials (all direct) March 31 } & \$ 7,500 \\ \hline \text { Work in process, March 31 } & \$ 14,500 \\ \hline \end{array}\] Work in process inventory contained $5,500 of direct labour cost. -The amount of direct materials cost in the March 31 work in process inventory account was:

A) $3,850. B) $5,150. C) $9,350. D) $9,000. A) $3,850. B) $5,150. C) $9,350. D) $9,000.

Exam 3: Systems Design: Job-Order Costing

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 cost of direct materials used is?

(Multiple Choice)

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Question 41

Reference: 03-10 Summit Company has provided the following inventory balances and manufacturing cost data for the month of January: Inventories: January 1 January 31 Direct materials \ 30,000 \ 40,000 Work in process \ 15,000 \ 20,000 Finished goods \ 65,000 \ 50,000 Month of January Cost of goods manufactured \ 515,000 Manufacturing overhead applied \ 150,000 Direct materials used \ 190,000 Actual manufacturing overhead \ 144,000 Under Summit's job-order costing system, any overapplied or underapplied overhead is closed to the Cost of Goods Sold account at the end of the calendar year . -How much direct labour cost was incurred during January?

(Multiple Choice)

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Question 42

Lucas Co. appeared in the Work in Process account: April 1 Balance \ 24,000 30 Direct materials 80,000 30 Direct labour 60,000 30 Manufacturing overhead 54,000 30 To finished goods (200,000) Lucas applies overhead at a predetermined rate of 90% of direct labour cost. Job No. 100, the only job still in process at the end of April, has been charged with manufacturing overhead of $4,500. The amount of direct materials charged to Job No. 100 was:

(Multiple Choice)

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Question 43

The costing approach that meets the requirements of financial accounting and tax reporting requirements is:

(Multiple Choice)

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Question 44

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 actual direct labour hours worked during April totalled:

(Multiple Choice)

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Question 45

Reference: 03-02 Hamilton Company uses job-order costing. Manufacturing overhead is applied using a predetermined rate of 150% of direct labour cost. Any overapplied or underapplied manufacturing overhead is closed to the Cost of Goods Sold account at the end of each month. Additional information is available as follows: Job 101 was the only job in process at January 31. The job cost sheet for this job contained the following costs at the beginning of the month: Direct materials \ 4,000 Direct labour \ 2,000 Applied manufacturing overhead \ 3,000 Jobs 102, 103, and 104 were started during February. Direct materials requisitions for February totalled $26,000. Direct labour cost of $20,000 was incurred for February. Actual manufacturing overhead was $32,000 for February. The only job still in process at February 28 was Job 104, with costs of $2,800 for direct materials and $1,800 for direct labour. -For the month of February, the manufacturing overhead was:

(Multiple Choice)

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Question 46

Hussain Shop uses a job-order costing system. Overhead is applied to jobs based on direct labour hours. The source document that would give the number of direct labour hours worked on Job 256 is the:

(Multiple Choice)

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Question 47

Job cost sheets always contain entries for actual direct material, actual direct labour, and actual manufacturing overhead cost incurred in completing a job.

(True/False)

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Question 48

Lucy Sportswear manufactures a specialty line of T-shirts. The company uses a job-order costing system. During March, the following costs were incurred on Job ICU2: direct materials $13,700 and direct labour $4,800. In addition, selling and shipping costs of $7,000 were incurred on the job. Manufacturing overhead was applied at the rate of $25 per machine-hour and Job ICU2 required 800 machine-hours. If Job ICU2 consisted of 7,000 shirts, the Cost of Goods Sold per shirt was:

(Multiple Choice)

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Question 49

If the amount of underapplied or overapplied overhead is considered material at the end of a period, the preferred approach to dispose of such balances is to allocate the amounts proportionally to Cost of Goods Sold for the period and ending Work in Process and Finished Goods inventories.

(True/False)

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Question 50

Reference: 03-07 The following data are for Potras Company: Beginning Ending Finished goods inventory \ 30,000 \ 40,000 Work in process inventory \ 20,000 \ 13,000 Raw materials inventory \ 21,000 \ 26,000 Purchases of raw materials \ 71,000 Factory depreciation \ 5,000 Other factory costs \ 10,000 Direct labour \ 27,000 Indirect labour \ 6,000 Selling expense \ 12,000 Overapplied or underapplied overhead -0- -The cost of raw materials used in production was:

(Multiple Choice)

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Question 51

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 ending Work in Process account balance is?

(Multiple Choice)

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Question 52

Reference: 03-03 Meyers Company had the following inventory balances at the beginning and end of November: November 1 November 30 Raw Materials \ 17,000 \ 20,000 Finished Goods \ 50,000 \ 44,000 Work in Process \ 9,000 \ 11,000 During November, $39,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $8 per direct labour-hour, and it paid its direct labour workers $10 per hour. A total of 300 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 actual direct labour hours worked during November totalled:

(Multiple Choice)

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Question 53

In a job-order costing system, the use of indirect materials would usually be recorded as a debit to:

(Multiple Choice)

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Question 54

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour, based on an estimate of 25,000 direct labour hours to be worked during the year. Actual costs and activity during the year were: Actual manufacturing overhead cost incurred \ 47,000 Actual direct labour hours worked 24,000 The underapplied or overapplied overhead last year was:

(Multiple Choice)

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Question 55

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 cost of raw materials purchased during the year amounted to:

(Multiple Choice)

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Question 56

Reference: 03-05 Mallet Company had only Job 844 in process on March 1 of the current year. The job had been charged with $2,000 of direct material cost, $2,500 of direct labour cost, and $1,750 of manufacturing overhead cost. The company assigns overhead cost to jobs at a predetermined rate of 70% of direct labour cost. Any underapplied or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month. During March, the following activity and amounts were recorded by the company: Raw materials (all direct materials): Purchased during the month \ 29,500 Used in production \ 30,500 Labour: Direct labour hours worked during the month 2,500 Direct labour cost incurred \ 26,500 Indirect labour costs incurred \ 5,500 Manufacturing overhead costs incurred (total) \ 18,500 Inventories: Raw materials (all direct) March 31 \ 7,500 Work in process, March 31 \ 14,500 Work in process inventory contained $5,500 of direct labour cost. -The amount of direct materials cost in the March 31 work in process inventory account was:

(Multiple Choice)

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Question 57

Knowlton Company applies overhead to completed jobs on the basis of 70% of direct labour cost. If Job 501 shows $21,000 of manufacturing overhead applied, the direct labour cost on the job was:

(Multiple Choice)

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Question 58

Of the following accounts used in a job-order costing system, which is an expense account?

(Multiple Choice)

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Question 59

Absorption costing includes both fixed and variable costs when computing the cost of a product.

(True/False)

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Question 60

The costing approach that meets the requirements of financial accounting and tax reporting requirements is:

Hussain Shop uses a job-order costing system. Overhead is applied to jobs based on direct labour hours. The source document that would give the number of direct labour hours worked on Job 256 is the:

Job cost sheets always contain entries for actual direct material, actual direct labour, and actual manufacturing overhead cost incurred in completing a job.

If the amount of underapplied or overapplied overhead is considered material at the end of a period, the preferred approach to dispose of such balances is to allocate the amounts proportionally to Cost of Goods Sold for the period and ending Work in Process and Finished Goods inventories.

In a job-order costing system, the use of indirect materials would usually be recorded as a debit to:

Knowlton Company applies overhead to completed jobs on the basis of 70% of direct labour cost. If Job 501 shows $21,000 of manufacturing overhead applied, the direct labour cost on the job was:

Of the following accounts used in a job-order costing system, which is an expense account?

Absorption costing includes both fixed and variable costs when computing the cost of a product.

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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