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

Describe the types of manufacturing environments that would best be suited for (1) job-order costing and (2) process costing.Include two examples of manufacturers that would likely use job-cost systems.

Mountain Man Corporation debited Cost of Goods Sold and credited Manufacturing Overhead at year-end.On the basis of this information, one can conclude that:

Morgan Manufacturing recently sold goods that cost $35,000 for $45,000 cash.The journal entries to record this transaction would include:

Holdren Industries started and finished job no.D45 during April.The job required $6,400 of direct material and 50 hours of direct labor at $18 per hour.The predetermined overhead rate is $6 per direct labor hour. Required: Prepare journal entries to record the incurrence of production costs and the completion of job D45.

Product costs provide crucial data for a variety of managerial purposes.

When selecting a volume-based cost driver, the goal is to:

Product costing in a manufacturing firm is the process of:

In the two-stage cost allocation process, costs are assigned:

Describe how job-order costing concepts are used in professional service firms, such as law practices, hospitals, and governmental agencies.

A predetermined overhead rate is calculated by dividing actual overhead cost by the actual amount of a cost driver used in the process.

Armour, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional labor hours.Overhead was estimated to be $150,000, direct professional labor hours were estimated to be 15,000, and direct professional labor cost was projected to be $225,000.During the year, Armour incurred actual overhead costs of $146,000, actual direct professional labor hours of 14,500, and actual direct labor cost of $222,000.By year-end, the firm's overhead was:

Which of the following is not a drawback of actual costing?

The estimates used to calculate the predetermined overhead rate will virtually always:

The term "normal costing" refers to the use of job-costing systems.

Which of the following statements about materials is false?

Douglas, Inc., employs a normal costing system.The following information pertains to the year just ended. Total manufacturing costs were $2,500,000. Cost of goods manufactured was $2,425,000. Applied manufacturing overhead was 30 percent of total manufacturing costs. Manufacturing overhead was applied to production at a rate of 80 percent of direct-labor cost. Work-in-process inventory on January 1 was 75 percent of work-in-process inventory on December 31. Based on this information, what amount is the total cost of direct material used during the year?

The primary difference between normalized and actual costing methods lies in the determination of a job's:

At the Bayshore Advertising Agency, partner and staff compensation cost is a key driver of agency overhead.In light of this fact, which of the following is the correct expression to determine the amount of overhead applied to a particular client job?

A computer manufacturer recently shipped several laptops to a customer (cost: $25,000) and billed the customer $30,000.Which of the following options correctly expresses the accounts that are debited and credited to record this transaction?

The selected data that follow relate to the Underwood Furniture Company. During the year, products costing $310,000 were completed, and products costing $316,000 were sold on account for $455,000. Required: Prepare journal entries to record the preceding transactions and events.