Exam 3: Product Costing and Cost Accumulation in a Batch Production Environment

Bowers Industries' beginning and ending inventories for the month of September are: Production data for the month of September are: Bowers uses one overhead control account and charges overhead to production at 70% of direct labor cost.The company does not formally recognize over/underapplied overhead until year-end. Required: (a) What are the company's prime costs for September? (b) What are the company's total manufacturing costs for September? (c) What is the amount of costs of goods transferred to finished goods inventory for September? (d) What is the amount of cost of goods sold for September?

An accountant recently debited Work-in-Process Inventory and credited Manufacturing Overhead at a company that uses normal costing.The accountant was:

Rogers Manufacturing's overhead at year-end was underapplied by $5,800, a small amount given the firm's size.The year-end journal entry to record this amount would include:

Under- or overapplied manufacturing overhead at year-end is most commonly:

Flores Company, which uses labor hours to apply overhead to manufacturing, may have increased amounts of underapplied overhead at month-end if:

Which of the following types of companies would most likely use process costing?

When a single, volume-based cost driver (or activity base) is used to apply manufacturing overhead, what is the managerial accountant's primary objective in selecting the cost driver?

Blakely charges manufacturing overhead to products by using a predetermined application rate, computed on the basis of machine hours.The following data pertain to the current year: Budgeted manufacturing overhead: $480,000 Actual manufacturing overhead: $440,000 Budgeted machine hours: 20,000 Actual machine hours: 16,000 Overhead applied to production totaled:

The assignment of direct labor cost to individual jobs is based on:

Layman, Inc., has just completed job nos.78 and 79, which were similar in terms of complexity, production processes, and units manufactured.Job no.78 was manufactured by Joe Bingham, who earns $14 per hour, whereas job no.79 was completed by Susan Fortner, who earns $20 per hour.If Joe and Susan are equally efficient, would the company be better off using direct labor cost or direct labor hours as the cost driver in its predetermined overhead rate? Briefly explain.

Use the following labor budget data for Roy & Miller Accounting, LLP. The budgeted overhead cost for the year is $1,260,000.The company has estimated that one-third of the budgeted overhead cost is incurred to support the firm's two partners, and two-thirds goes to support the staff accountants.The current audit bid for Monoco Industries requires $18,000 in direct partner professional labor, $30,000 in direct staff accountant professional labor, $5,000 in direct material. What is the total budgeted compensation for both partners and staff accountants?

Manufacturing overhead is a pool of indirect production costs that must somehow be attached to each unit manufactured.

Which of the following would not likely be used by service providers to accumulate job costs?

Which of the following statements about the use of direct labor as a cost driver is false?

Use the following labor budget data for Roy & Miller Accounting, LLP. The budgeted overhead cost for the year is $1,260,000.The company has estimated that one-third of the budgeted overhead cost is incurred to support the firm's two partners, and two-thirds goes to support the staff accountants.The current audit bid for Monoco Industries requires $18,000 in direct partner professional labor, $30,000 in direct staff accountant professional labor, $5,000 in direct material. If overhead is applied on the Monoco engagement based on a single-cost driver basis, what is the total cost of the engagement?

Use the following labor budget data for Roy & Miller Accounting, LLP. The budgeted overhead cost for the year is $1,260,000.The company has estimated that one-third of the budgeted overhead cost is incurred to support the firm's two partners, and two-thirds goes to support the staff accountants.The current audit bid for Monoco Industries requires $18,000 in direct partner professional labor, $30,000 in direct staff accountant professional labor, $5,000 in direct material. What is the overhead rate for partners, if separate rates are used for partners and staff accountants?

Nonmanufacturing firms typically refer to their service production processes as jobs.

Hsu Company incurred $90,000 of depreciation for the year.Eighty percent relates to the firm's production facilities, and 20% relates to sales and administrative offices.If all items are handled in the proper manner, a review of the company's accounting records should reveal a:

Job-order costs are most useful for:

Which of the following is the correct method to calculate a predetermined overhead rate?