Question 1

At the end of the year underapplied overhead usually decreases Cost of Goods Sold.

Accepted Answer

A) True 
 B)False  False

Question 2

An important feature of a job order cost system is that each job

Accepted Answer

A) must be similar to previous jobs completed. 
B) has its own distinguishing characteristics. 
C) must be completed before a new job is accepted. 
D) consists of one unit of output. 
A) must be similar to previous jobs completed. 
B) has its own distinguishing characteristics. 
C) must be completed before a new job is accepted. 
D) consists of one unit of output. B

Question 3

Recording the acquisition of raw materials is a part of accumulating manufacturing costs.

Accepted Answer

A) True 
 B)False  True

Question 4

Usually under- or overapplied overhead is considered to be an adjustment to

Accepted Answer

A) work in process. 
B) finished goods. 
C) finished goods and cost of goods sold. 
D) cost of goods sold. 
A) work in process. 
B) finished goods. 
C) finished goods and cost of goods sold. 
D) cost of goods sold.

Question 5

A company estimated its annual overhead costs to be $1500000 and direct labor costs to be $1000000.Actual overhead was $1450000 and actual labor costs totaled $1100000.How much is the company's predetermined overhead rate to the nearest cent?

Accepted Answer

A) $1.45 
B) $1.31 
C) $1.50 
D) $1.37 
A) $1.45 
B) $1.31 
C) $1.50 
D) $1.37

Question 6

Gannon Company had the following information at December 31: $\begin{array}{l}
\text { Finished goods inventory, January } 1 & \$ 50,000\
\text { Finished goods inventory, December } 31&\$150,000
\end{array}$ If the cost of goods manufactured during the year amounted to $2200000 and annual sales were $2750000 the amount of gross profit for the year is

Accepted Answer

A) $550000. 
B) $2100000. 
C) $650000. 
D) $450000. 
A) $550000. 
B) $2100000. 
C) $650000. 
D) $450000.

Question 7

If actual overhead is less than applied manufacturing overhead then manufacturing overhead is:

Accepted Answer

A) underapplied. 
B) overapplied. 
C) a loss on the income statement under "Other Expenses and Losses." 
D) considered a miscellaneous expense. 
A) underapplied. 
B) overapplied. 
C) a loss on the income statement under "Other Expenses and Losses." 
D) considered a miscellaneous expense.

Question 8

The flow of costs in a job order cost system

Accepted Answer

A) involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done. 
B) cannot be measured until all jobs are complete. 
C) measures product costs for a set time period. 
D) generally follows a LIFO cost flow assumption. 
A) involves accumulating manufacturing costs incurred and assigning the accumulated costs to work done. 
B) cannot be measured until all jobs are complete. 
C) measures product costs for a set time period. 
D) generally follows a LIFO cost flow assumption.

Question 9

Cost of goods manufactured equals $85000 for 2022.Finished Goods Inventory is $2000 at the beginning of the year and $5500 at the end of the year.Beginning and ending Work in Process for 2022 are $4000 and $5000 respectively.How much is Cost of Goods Sold for the year?

Accepted Answer

A) $87500 
B) $83000 
C) $81500 
D) $88500 
A) $87500 
B) $83000 
C) $81500 
D) $88500

Question 10

The perpetual inventory method cannot be used in a job order cost system.

Accepted Answer

A) True 
 B)False

Question 11

A cost accounting system consists of manufacturing cost accounts that are fully integrated into the accounting rewards of a company.

Accepted Answer

A) True 
 B)False

Question 12

The existence of under- or overapplied overhead at the end of the year

Accepted Answer

A) requires an adjustment to Cost of Goods Sold. 
B) indicates that an error has been made. 
C) requires a retroactive adjustment to the cost of all jobs completed. 
D) is written off as a bad estimate expense. 
A) requires an adjustment to Cost of Goods Sold. 
B) indicates that an error has been made. 
C) requires a retroactive adjustment to the cost of all jobs completed. 
D) is written off as a bad estimate expense.

Question 13

A major purpose of cost accounting is to

Accepted Answer

A) classify all costs as operating or nonoperating. 
B) measure record and report period costs. 
C) provide information to stockholders for investment decisions. 
D) measure record and report product costs. 
A) classify all costs as operating or nonoperating. 
B) measure record and report period costs. 
C) provide information to stockholders for investment decisions. 
D) measure record and report product costs.

Question 14

Vektek Inc.thinks machine hours is the best activity base for its manufacturing overhead.The estimate of annual overhead costs for its jobs was $2050000.The company used 1000 hours of processing on Job No.B12 during the period and incurred overhead costs totaling $2100000.The estimated machine hours for the year totaled 20000.How much overhead should be applied to Job No.B12?

Accepted Answer

A) $2100 
B) $102500 
C) $105000 
D) $2050 
A) $2100 
B) $102500 
C) $105000 
D) $2050

Question 15

If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period overhead is said to be

Accepted Answer

A) underapplied. 
B) overapplied. 
C) in error. 
D) prepaid. 
A) underapplied. 
B) overapplied. 
C) in error. 
D) prepaid.

Question 16

During 2022 Tanner Manufacturing estimated Job No.26 to cost $300000 of overhead $500000 of materials and $200000 in labor.Tanner applied overhead based on direct labor cost.Actual production required an overhead cost of $290000 $550000 in materials used and $220000 in labor.All of the goods were completed.What amount was transferred to Finished Goods?

Accepted Answer

A) $1000000 
B) $1060000 
C) $1070000 
D) $1100000 
A) $1000000 
B) $1060000 
C) $1070000 
D) $1100000

Question 17

Under an effective system of internal control the authorization for issuing materials is made

Accepted Answer

A) orally. 
B) on a prenumbered materials requisition slip. 
C) by the accounting department. 
D) by anyone on the production line. 
A) orally. 
B) on a prenumbered materials requisition slip. 
C) by the accounting department. 
D) by anyone on the production line.

Question 18

Time tickets should be approved by

Accepted Answer

A) the audit committee. 
B) co-workers. 
C) the employee's supervisor. 
D) the payroll department. 
A) the audit committee. 
B) co-workers. 
C) the employee's supervisor. 
D) the payroll department.

Question 19

If manufacturing overhead has been overapplied during the year the adjustment at the end of the year will show a(n)

Accepted Answer

A) increase to Manufacturing Overhead. 
B) decrease to Finished Goods Inventory 
C) increase to Cost of Goods Sold. 
D) decrease to Work in Process Inventory. 
A) increase to Manufacturing Overhead. 
B) decrease to Finished Goods Inventory 
C) increase to Cost of Goods Sold. 
D) decrease to Work in Process Inventory.

Question 20

During 2022 Durham Manufacturing estimated Job No.51 to cost $300000 of overhead $500000 of materials and $200000 in labor.Durham applied overhead based on direct labor cost.Actual production required an overhead cost of $295000 $570000 in materials used and $220000 in labor.All of the goods were completed.What amount was transferred to Finished Goods?

Accepted Answer

A) $1090000 
B) $1120000 
C) $1000000 
D) $1085000 
A) $1090000 
B) $1120000 
C) $1000000 
D) $1085000

At the end of the year underapplied overhead usually decreases Cost of Goods Sold.

An important feature of a job order cost system is that each job

Recording the acquisition of raw materials is a part of accumulating manufacturing costs.

Usually under- or overapplied overhead is considered to be an adjustment to

A company estimated its annual overhead costs to be $1500000 and direct labor costs to be $1000000.Actual overhead was $1450000 and actual labor costs totaled $1100000.How much is the company's predetermined overhead rate to the nearest cent?

Gannon Company had the following information at December 31: Finished goods inventory, January 1 \ 50,000 Finished goods inventory, December 31 \1 50,000 If the cost of goods manufactured during the year amounted to $2200000 and annual sales were $2750000 the amount of gross profit for the year is

If actual overhead is less than applied manufacturing overhead then manufacturing overhead is:

The flow of costs in a job order cost system

Cost of goods manufactured equals $85000 for 2022.Finished Goods Inventory is $2000 at the beginning of the year and $5500 at the end of the year.Beginning and ending Work in Process for 2022 are $4000 and $5000 respectively.How much is Cost of Goods Sold for the year?

The perpetual inventory method cannot be used in a job order cost system.

A cost accounting system consists of manufacturing cost accounts that are fully integrated into the accounting rewards of a company.

The existence of under- or overapplied overhead at the end of the year

A major purpose of cost accounting is to

If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period overhead is said to be

Under an effective system of internal control the authorization for issuing materials is made

Time tickets should be approved by

If manufacturing overhead has been overapplied during the year the adjustment at the end of the year will show a(n)

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters

Exam 11: Incremental Analysis

At the end of the year underapplied overhead usually decreases Cost of Goods Sold.

An important feature of a job order cost system is that each job

Recording the acquisition of raw materials is a part of accumulating manufacturing costs.

Usually under- or overapplied overhead is considered to be an adjustment to

A company estimated its annual overhead costs to be $1500000 and direct labor costs to be $1000000.Actual overhead was $1450000 and actual labor costs totaled $1100000.How much is the company's predetermined overhead rate to the nearest cent?

Gannon Company had the following information at December 31: Finished goods inventory, January 1 \ 50,000 Finished goods inventory, December 31 \1 50,000 If the cost of goods manufactured during the year amounted to $2200000 and annual sales were $2750000 the amount of gross profit for the year is

If actual overhead is less than applied manufacturing overhead then manufacturing overhead is:

The flow of costs in a job order cost system

Cost of goods manufactured equals $85000 for 2022.Finished Goods Inventory is $2000 at the beginning of the year and $5500 at the end of the year.Beginning and ending Work in Process for 2022 are $4000 and $5000 respectively.How much is Cost of Goods Sold for the year?

The perpetual inventory method cannot be used in a job order cost system.

A cost accounting system consists of manufacturing cost accounts that are fully integrated into the accounting rewards of a company.

The existence of under- or overapplied overhead at the end of the year

A major purpose of cost accounting is to

If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period overhead is said to be

Under an effective system of internal control the authorization for issuing materials is made

Time tickets should be approved by

If manufacturing overhead has been overapplied during the year the adjustment at the end of the year will show a(n)

Introduction to Financial Statements

A Further Look at Financial Statements

The Accounting Information System

Accrual Accounting Concepts

Fraud, Internal Control, and Cash

Reporting and Analyzing Long-Lived Assets

Reporting and Analyzing Liabilities and Stockholders Equity

Financial Analysis: the Big Picture

Managerial Accounting

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Planning for Capital Investments

Activity Based Costing

Cost-Volume Profit Analysis: Additional Issues

Filters