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

The final step in recognizing the completion of production requires a company to debit Finished-Goods Inventory and credit Work-in-Process Inventory.

The selected data that follow relate to the Bargeron Furniture Company.

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

Mahler,Inc. ,applies manufacturing overhead at the rate of $40 per machine hour.Budgeted machine hours for the current period were anticipated to be 120,000;however,a lengthy strike resulted in actual machine hours being worked of only 90,000.Budgeted and actual manufacturing overhead figures for the year were $4,800,000 and $4,180,000,respectively.On the basis of this information,the company's year-end overhead was:

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.

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?

Strong Company applies overhead based on machine hours.At the beginning of 20x1,the company estimated that manufacturing overhead would be $500,000,and machine hours would total 20,000.By 20x1 year-end,actual overhead totaled $525,000,and actual machine hours were 25,000.On the basis of this information,the 20x1 predetermined overhead rate was:

Blarney Company applies manufacturing overhead by using a predetermined rate of 50% of direct labor cost.The data that follow pertain to job no.764: If Blarney adds a 40% markup on total cost to generate a profit,which of the following choices depicts a portion of the accounting needed to record the sale of job no.764?

The process of assigning overhead costs to the jobs that are worked on is commonly called:

Which of the following statements is true?

As production takes place,all manufacturing costs are added to the:

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

Tiffany charges manufacturing overhead to products by using a predetermined application rate,computed on the basis of labor hours.The following data pertain to the current year: Which of the following choices is the correct status of manufacturing overhead at year-end?

Armada Company applies manufacturing overhead by using a predetermined rate of 150% of direct labor cost.The data that follow pertain to job no.831: If Armada adds a 30% markup on total cost to generate a profit,which of the following choices depicts a portion of the accounting needed to record the credit sale of job no.831?

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

Kei Products uses a predetermined overhead application rate of $18 per labor hour.A review of the company's accounting records revealed budgeted manufacturing overhead for the period of $621,000,applied manufacturing overhead of $590,400,and overapplied overhead of $11,900. Required: A.Actual labor hours: $590,400 / $18 per hour = 32,800 hours Budgeted labor hours: $621,000 / $18 per hour = 34,500 hours Actual manufacturing overhead: $590,400 - $11,900 = $578,500 A.Determine Kei's actual labor hours,budgeted labor hours,and actual manufacturing overhead. B. B.Present the necessary year-end journal entry to handle the overapplied overhead,assuming that the firm allocates over- or underapplied overhead to Cost of Goods SolD.

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

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

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

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