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. -The cost of goods manufactured for February was:

A) $85,000. B) $77,700. C) $79,700. D) $78,000. A) $85,000. B) $77,700. C) $79,700. D) $78,000.

Using the following information: $\begin{array}{ll} \text { Estimated manufacturing overhead } & \$ 840,000 \\ \text { Actual manufacturing overhead } & \$ 800,000 \\ \text { Estimated direct labour hours } & 56,000 \\ \text { Actual direct labour hours worked } & 40,000 \end{array}$ The predetermined overhead rate for applying manufacturing overhead would be:

A) $42.00. B) $40.00. C) $30.00. D) $15.00. A) $42.00. B) $40.00. C) $30.00. D) $15.00.

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 goods sold (after adjustment for underapplied or overapplied overhead)is:

A) $72,000. B) $58,000. C) $65,000. D) $69,000. A) $72,000. B) $58,000. C) $65,000. D) $69,000.

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. \[\begin{array} { | c | l | l | l | } \hline 1 . & \text { Work in Process } & \text { XXX } & \\ \hline & \text { Manufacturing Overhead } & \text { XXX } & \\ \hline & \text { Wages Payable } & & \text { XXX } \\ \hline & & & \\ \hline 2 . & \text { Salary Expense } & \text { XXX } & \\ \hline & \text { Wages Payable } & & \text { XXX } \\ \hline & & & \\ \hline 3 . & \text { Manufacturing Overhead } & \text { XXX } & \\ \hline & \text { Accumulated Depreciation } & & \text { XXX } \\ \hline & & & \\ \hline 4 . & \text { Work in Process } & \text { XXX } & \\ \hline & \text { Raw Materials } & & \text { XXX } \\ \hline & & & \\ \hline 5 . & \text { Work in Process } & \text { XXX } & \\ \hline & \text { Manufacturing Overhead } & & \text { XXX } \\ \hline & & & \\ \hline 6 . & \text { Manufacturing Overhead } & \text { XXX } & \\ \hline & \text { Raw Materials } & & \text { XXX } \\ \hline & & & \\ \hline \text { 7. } & \text { Finished Goods } & \text { XXX } & \\ \hline & \text { Work in Process } & & \text { XXX } \\ \hline & & & \\ \hline 8 . & \text { Raw Materials } & \text { XXX } & \\ \hline & \text { Accounts Payable } & & \text { XXX } \\ \hline \end{array}\] -The entry to record the application of overhead is:

A) 1. B) 5. C) 3. D) 6. A) 1. B) 5. C) 3. D) 6.

\[\begin{array} { | l | l | l | } \hline & \text { Balance } & \text { Balance } \\ \hline & \text { November I } & \text { November } 30 \\ \hline \text { Raw materials } & \$ 4,000 & \$ 3,000 \\ \hline \text { Work in process } & 12,000 & 15,000 \\ \hline \text { Finished goods } & 24,000 & 27,000 \\ \hline \end{array}\]

A) $21,000. B) $19,000. C) $15,000. D) $18,000. A) $21,000. B) $19,000. C) $15,000. D) $18,000.

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 . -What was the total amount of direct material purchases during January?

A) $195,000. B) $180,000. C) $190,000. D) $200,000. A) $195,000. B) $180,000. C) $190,000. D) $200,000.

Compton Company uses a predetermined overhead rate in applying overhead to production orders on a labour cost basis in Department A and on a machine hours basis in Department B. At the beginning of the most recently completed year, the company made the following estimates: \[\begin{array} { | l | l | l | } \hline & \text { Dept. A } & \text { Dept. B } \\ \hline \text { Direct labour cost } & \$ 56,000 & \$ 33,000 \\ \hline \text { Factory overhead } & \$ 67,200 & \$ 45,000 \\ \hline \text { Direct labour hours } & 8,000 & 9,000 \\ \hline \text { Machine hours } & 4,000 & 15,000 \\ \hline \end{array}\] What predetermined overhead rate would be used in Department A and Department B, respectively?

A) 83% and $3. B) 120% and $3. C) 81% and $3. D) 83% and $5. A) 83% and $3. B) 120% and $3. C) 81% and $3. D) 83% and $5.

Exam 3: Systems Design: Job-Order Costing

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. -The cost of goods manufactured for February was:

(Multiple Choice)

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Question 81

Using the following information: Estimated manufacturing overhead \ 840,000 Actual manufacturing overhead \ 800,000 Estimated direct labour hours 56,000 Actual direct labour hours worked 40,000 The predetermined overhead rate for applying manufacturing overhead would be:

(Multiple Choice)

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Question 82

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 goods sold (after adjustment for underapplied or overapplied overhead)is:

(Multiple Choice)

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Question 83

Indirect labour costs are initially recorded in the Work in Process account and on the job cost sheets of the individual jobs worked on during a period.

(True/False)

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Question 84

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 XXX Manufacturing Overhead XXX Wages Payable XXX 2. Salary Expense XXX Wages Payable XXX 3. Manufacturing Overhead XXX Accumulated Depreciation XXX 4. Work in Process XXX Raw Materials XXX 5. Work in Process XXX Manufacturing Overhead XXX 6. Manufacturing Overhead XXX Raw Materials XXX 7. Finished Goods XXX Work in Process XXX 8. Raw Materials XXX Accounts Payable XXX -The entry to record the application of overhead is:

(Multiple Choice)

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Question 85

In a job-order costing system, costs are traced to departments and then allocated to units of product using an average process.

(True/False)

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Question 86

In job-order costing, the Work in Process inventory account contains the actual costs of direct labour, direct materials, and manufacturing overhead incurred on partially completed jobs.

(True/False)

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Question 87

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 amount of direct labour cost in the November 30 Work in Process inventory was:

(Multiple Choice)

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Question 88

The cost of goods manufactured for March was:

(Multiple Choice)

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Question 89

In a job-order costing system, the journal entry to record the application of overhead cost to jobs would include:

(Multiple Choice)

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Question 90

In a job-order costing system, the amount of overhead cost that has been applied to a job that remains incomplete at the end of a period is:

(Multiple Choice)

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Question 91

Which of the following companies would be most likely to use a job-order costing system rather than a process costing system?

(Multiple Choice)

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Question 92

The ending balance of which of the following accounts can be calculated by summing the totals of the open job-order cost sheets:

(Multiple Choice)

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Question 93

A credit balance in the Manufacturing Overhead account at the end of the year means that overhead was underapplied.

(True/False)

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Question 94

Balance Balance November I November 30 Raw materials \ 4,000 \ 3,000 Work in process 12,000 15,000 Finished goods 24,000 27,000

(Multiple Choice)

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Question 95

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 . -What was the total amount of direct material purchases during January?

(Multiple Choice)

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Question 96

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 direct materials cost in the April 1 Work in Process inventory account totalled:

(Multiple Choice)

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Question 97

Harrell Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. At the beginning of the year, the company estimated its total manufacturing overhead cost at $400,000 and its direct labour-hours at 100,000 hours. The actual overhead cost incurred during the year was $350,000 and the actual direct labour hours incurred on jobs during the year was 90,000 hours. The manufacturing overhead for the year would be?

(Multiple Choice)

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Question 98

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 raw materials purchased during November totalled:

(Multiple Choice)

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Question 99

Compton Company uses a predetermined overhead rate in applying overhead to production orders on a labour cost basis in Department A and on a machine hours basis in Department B. At the beginning of the most recently completed year, the company made the following estimates: Dept. A Dept. B Direct labour cost \ 56,000 \ 33,000 Factory overhead \ 67,200 \ 45,000 Direct labour hours 8,000 9,000 Machine hours 4,000 15,000 What predetermined overhead rate would be used in Department A and Department B, respectively?

(Multiple Choice)

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Question 100

Using the following information: Estimated manufacturing overhead \ 840,000 Actual manufacturing overhead \ 800,000 Estimated direct labour hours 56,000 Actual direct labour hours worked 40,000 The predetermined overhead rate for applying manufacturing overhead would be:

Indirect labour costs are initially recorded in the Work in Process account and on the job cost sheets of the individual jobs worked on during a period.

In a job-order costing system, costs are traced to departments and then allocated to units of product using an average process.

In job-order costing, the Work in Process inventory account contains the actual costs of direct labour, direct materials, and manufacturing overhead incurred on partially completed jobs.

The cost of goods manufactured for March was:

In a job-order costing system, the journal entry to record the application of overhead cost to jobs would include:

In a job-order costing system, the amount of overhead cost that has been applied to a job that remains incomplete at the end of a period is:

Which of the following companies would be most likely to use a job-order costing system rather than a process costing system?

The ending balance of which of the following accounts can be calculated by summing the totals of the open job-order cost sheets:

A credit balance in the Manufacturing Overhead account at the end of the year means that overhead was underapplied.

Balance Balance November I November 30 Raw materials \ 4,000 \ 3,000 Work in process 12,000 15,000 Finished goods 24,000 27,000

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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