Secrease Corporation uses machine-hours as the allocation base for applying its manufacturing overhead. $\begin{array}{|l|r|} \hline \begin{array}{l} \text { Estimated manufacturing overhead cost } \\ \text { for the year } \end{array} & \$ 594,000 \\ \hline \text { Capacity } & 110,000 \text { machine-hours } \\ \hline\text { Estimated amount of the allocation base } \\ \text { for the year }&108,000 \text { machine-hours }\\\hline \text { Amount of the allocation base for the } & 88,000 \text { machine-hours } \\ \text { actual output of the year } & \\\hline \begin{array}{l} \text { Actual manufacturing overhead cost for } \\ \text { the year } \end{array} & \$ 589,000 \\ \hline \end{array}$All of the company's manufacturing overhead is fixed. - If the predetermined overhead rate is based on capacity,by how much was manufacturing overhead for the year over applied or underapplied?

A) Manufacturing overhead underapplied $113,800 B) Manufacturing overhead overapplied $113,800 C) Manufacturing overhead overapplied $105,000 D) Manufacturing overhead underapplied $105,000 A) Manufacturing overhead underapplied $113,800 B) Manufacturing overhead overapplied $113,800 C) Manufacturing overhead overapplied $105,000 D) Manufacturing overhead underapplied $105,000

Sai Company uses a job order cost system and applies manufacturing overhead costs to jobs using a predetermined overhead rate based on direct labour-hours. The following data were extracted from the company's accounting records for Year 6 $\begin{array}{|l|r|r|} \hline & \text { Estimated } & \text { Actual } \\ \hline \begin{array}{l} \text { Manufacturing overhead } \\ \text { costs } \end{array} & \$ 50,000 & \$ 54,000 \\ \hline \text { Direct labour hours } & 20,000 \text { hours } & 24,000 \text { hours } \\ \hline \end{array}$ Job \#461 was completed during the year and the following costs had been incurred on that job: $\begin{array}{|l|r|} \hline \text { Direct materials: } & \$ 4,000 \\ \hline \text { Direct labour: } & \$ 1,500 \text { (at } \$ 5.00 \text { per direct labour hour) } \\ \hline \end{array}$ -Suppose Job #461 contained 100 units.What unit cost would appear on the job cost sheet for job #461?

A) $55.00 per unit. B) $61.00 per unit. C) $61.75 per unit. D) $62.50 per unit. A) $55.00 per unit. B) $61.00 per unit. C) $61.75 per unit. D) $62.50 per unit.

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. $\begin{array}{|l|l|l|} \hline \text { 1. Work in process } & \mathrm{XXX} & \\ \hline \text { Manufacturing overhead } & \mathrm{XXX} & \\\hline \text { Wages payable } & & \mathrm{XXX} \\ \hline \text { 2. Salary expense } & \mathrm{XXX} & \\\hline \text { Wages payable } & & \text { XXX } \\ \hline \text { 3. Manufacturing overhead } & \mathrm{XXX} & \\ \hline \text { Accumulated amortization } & & \mathrm{XXX} \\\hline \text { 4. Work in process } & \mathrm{XXX} & \\ \hline \text { Raw materials } & & \mathrm{XXX} \\ \hline \text { 5. Work in process } & \mathrm{XXX} & \\\hline \text { Manufacturing overhead } & & \mathrm{XXX} \\ \hline \text { 6. Manufacturing overhead } & \mathrm{XXX} & \\ \hline \text { Raw materials } & & \mathrm{XXX} \\\hline \text { 7. Finished goods } & \mathrm{XXX} & \\ \hline \text { Work in process } & & \mathrm{XXX} \\\hline \text { 8. Raw materials } & \mathrm{XXX} & \\ \hline \text { Accounts payable } & & \mathrm{XXX} \\ \hline \end{array}$ -Which entry records the purchase of raw materials?

A) 8. B) 4. C) 6. D) 1. A) 8. B) 4. C) 6. D) 1.

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year.Actual costs and activity during the year were: $\begin{array}{|l|l|} \hline \begin{array}{l} \text { Actual manufacturing overhead cost } \\ \text { incurred } \end{array} & \$ 47,000 \\ \hline \text { Actual direct labour hours worked } & 24,000 \\ \hline \end{array}$ What was the under- or overapplied overhead last year?

A) $1,000 underapplied. B) $1,000 overapplied. C) $2,000 underapplied. D) $3,000 overapplied. A) $1,000 underapplied. B) $1,000 overapplied. C) $2,000 underapplied. D) $3,000 overapplied.

The information below has been taken from the cost records of Tercel Company for the past year: $\begin{array} {| l | r | } \hline \begin{array} { l } \text { Raw materials used in production (all } \\ \text { direct) } \end{array} & \$ 326,000 \\ \hline \begin{array} { l } \text { Total manufacturing costs charged to jobs } \\ \text { during the year (includes raw materials, } \\ \text { direct labour, and manufacturing overhead } \\ \text { applied at the rate of } 60 \% \text { of direct labour } \\ \text { cost) } \end{array} & \$ 686,000 \\ \hline \begin{array} { l } \text { Cost of goods available for sales } \\ \end{array} & \$ 826,000 \\ \hline \begin{array} { l } \text { Selling and administrative expenses }\end{array} &\$25,000\\ \hline \end{array}$ $\begin{array}{|l|r|r|} \hline & \text { Inventories } & \\ \hline & \text { Beginning } & \text { Ending } \\ \hline \text { Raw materials (all direct) } & \$ 75,000 & \$ 85,000 \\ \hline \text { Work in process } & 80,000 & 30,000 \\ \hline \text { Finished goods } & 90,000 & 110,000 \\ \hline \end{array}$ -What was the cost of goods manufactured during the year?

A) $636,000. B) $766,000. C) $736,000. D) $716,000. A) $636,000. B) $766,000. C) $736,000. D) $716,000.

Sai Company uses a job order cost system and applies manufacturing overhead costs to jobs using a predetermined overhead rate based on direct labour-hours. The following data were extracted from the company's accounting records for Year 6 $\begin{array}{|l|r|r|} \hline & \text { Estimated } & \text { Actual } \\ \hline \begin{array}{l} \text { Manufacturing overhead } \\ \text { costs } \end{array} & \$ 50,000 & \$ 54,000 \\ \hline \text { Direct labour hours } & 20,000 \text { hours } & 24,000 \text { hours } \\ \hline \end{array}$ Job \#461 was completed during the year and the following costs had been incurred on that job: $\begin{array}{|l|r|} \hline \text { Direct materials: } & \$ 4,000 \\ \hline \text { Direct labour: } & \$ 1,500 \text { (at } \$ 5.00 \text { per direct labour hour) } \\ \hline \end{array}$ -What was the underapplied or over applied overhead for the year?

A) $6,000 overapplied. B) $4,000 underapplied. C) $10,000 underapplied. D) $10,000 overapplied. A) $6,000 overapplied. B) $4,000 underapplied. C) $10,000 underapplied. D) $10,000 overapplied.

The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs.The predetermined overhead rate is based on labour cost in Department A and on machine hours in Department B.At the beginning of the year,the company made the following estimates: $\begin{array}{|l|r|r|} \hline & \text { Department A } & \text { Department B } \\ \hline \text { Direct labour cost } & \$ 30,000 & \$ 40,000 \\ \hline \text { Manufacturing overhead } & \$ 60,000 & \$ 50,000 \\ \hline \text { Direct labour hours } & 6,000 & 8,000 \\ \hline \text { Machine hours } & 2,000 & 10,000 \\ \hline \end{array}$ What predetermined overhead rates would be used in Departments A and B,respectively?

A) 50% and $8.00. B) 50% and $5.00. C) 110% and $15.00. D) 200% and $5.00. Dept. A = $60,000/$30,000 = 200% Dept. B = $50,000/10,000m. hrs = $5/m. hr. A) 50% and $8.00. B) 50% and $5.00. C) 110% and $15.00. D) 200% and $5.00. Dept. A = $60,000/$30,000 = 200% Dept. B = $50,000/10,000m. hrs = $5/m. hr.

The following data are for Potras Company: $\begin{array}{|l|r|r|} \hline & \text { Beginning } & \text { Ending } \\ \hline \text { Finished goods inventory } & \$ 30,000 & \$ 40,000 \\ \hline \text { Work-in-process inventory } & 20,000 & 13,000 \\ \hline \text { Raw materials inventory } & 21,000 & 26,000 \\\hline \text { Purchases of raw materials } & 71,000 \\ \hline \text { Factory depreciation } & 5,000 \\ \hline \text { Other factory costs } & 10,000 \\ \hline \text { Direct labour } & 27,000 \\ \hline \text { Indirect labour } & 6,000 \\ \hline \text { Selling expense } & 12,000 \\\hline \begin{array}{l} \text { Over- or underapplied } \\ \text { overhead } \end{array} & -0 \\ \hline \end{array}$ -What is the cost of goods sold?

A) $131,000. B) $91,000. C) $81,000. D) $111,000. A) $131,000. B) $91,000. C) $81,000. D) $111,000.

Exam 5: Systems Design: Job-Order Costing

The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period.The job cost sheets of two uncompleted jobs show charges of $400 and $200 for direct materials and charges of $300 and $500 for direct labour.From this information,what predetermined overhead rate,as a percentage of direct labour costs,does the company appear to be using?

(Multiple Choice)

4.9/5

(42)

Question 41

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

(True/False)

4.8/5

(31)

Question 42

Secrease Corporation uses machine-hours as the allocation base for applying its manufacturing overhead. Estimated manufacturing overhead cost for the year \ 594,000 Capacity 110,000 machine-hours Estimated amount of the allocation base for the year 108,000 machine-hours Amount of the allocation base for the 88,000 machine-hours actual output of the year Actual manufacturing overhead cost for the year \ 589,000 All of the company's manufacturing overhead is fixed. - If the predetermined overhead rate is based on capacity,by how much was manufacturing overhead for the year over applied or underapplied?

(Multiple Choice)

4.9/5

(36)

Question 43

Raw materials can be direct materials,but NOT all direct materials need to be raw materials.

(True/False)

4.9/5

(34)

Question 44

Non-manufacturing costs are expensed as incurred,rather than going into the Work in Process account.

(True/False)

4.8/5

(36)

Question 45

Sai Company uses a job order cost system and applies manufacturing overhead costs to jobs using a predetermined overhead rate based on direct labour-hours. The following data were extracted from the company's accounting records for Year 6 Estimated Actual Manufacturing overhead costs \ 50,000 \ 54,000 Direct labour hours 20,000 hours 24,000 hours Job \#461 was completed during the year and the following costs had been incurred on that job: Direct materials: \ 4,000 Direct labour: \ 1,500 (at \ 5.00 per direct labour hour) -Suppose Job #461 contained 100 units.What unit cost would appear on the job cost sheet for job #461?

(Multiple Choice)

4.7/5

(40)

Question 46

The following journal entry would be made to apply overhead cost to jobs in a job-order costing system: Work in process XXX Manufacturing overhead

(True/False)

4.9/5

(34)

Question 47

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 Manufacturing overhead Wages payable 2. Salary expense Wages payable XXX 3. Manufacturing overhead Accumulated amortization 4. Work in process Raw materials 5. Work in process Manufacturing overhead 6. Manufacturing overhead Raw materials 7. Finished goods Work in process 8. Raw materials Accounts payable -Which entry records the purchase of raw materials?

(Multiple Choice)

4.8/5

(32)

Question 48

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

(Multiple Choice)

4.9/5

(36)

Question 49

Beaver Company used a predetermined overhead rate last year of $2 per direct labour hour based on an estimate of 25,000 direct labour hours to be worked during the year.Actual costs and activity during the year were: Actual manufacturing overhead cost incurred \ 47,000 Actual direct labour hours worked 24,000 What was the under- or overapplied overhead last year?

(Multiple Choice)

4.9/5

(36)

Question 50

The information below has been taken from the cost records of Tercel Company for the past year: Raw materials used in production (all direct) \ 326,000 Total manufacturing costs charged to jobs during the year (includes raw materials, direct labour, and manufacturing overhead applied at the rate of 60\% of direct labour cost) \ 686,000 Cost of goods available for sales \ 826,000 Selling and administrative expenses \2 5,000 Inventories Beginning Ending Raw materials (all direct) \ 75,000 \ 85,000 Work in process 80,000 30,000 Finished goods 90,000 110,000 -What was the cost of goods manufactured during the year?

(Multiple Choice)

5.0/5

(42)

Question 51

Sai Company uses a job order cost system and applies manufacturing overhead costs to jobs using a predetermined overhead rate based on direct labour-hours. The following data were extracted from the company's accounting records for Year 6 Estimated Actual Manufacturing overhead costs \ 50,000 \ 54,000 Direct labour hours 20,000 hours 24,000 hours Job \#461 was completed during the year and the following costs had been incurred on that job: Direct materials: \ 4,000 Direct labour: \ 1,500 (at \ 5.00 per direct labour hour) -What was the underapplied or over applied overhead for the year?

(Multiple Choice)

4.8/5

(39)

Question 52

In a normal job-order costing system,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)

4.8/5

(32)

Question 53

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company:At the end of the year, the company closes out the balance in the Manufacturing Overhead account to Cost of Goods Sold. -What is the total manufacturing cost for the year?

(Multiple Choice)

4.8/5

(39)

Question 54

The balances in White Company's Work in Process inventory account were $15,000 on August 1 and $18,000 on August 31.The company incurred $30,000 in direct labour cost during August and requisitioned $25,000 in raw materials (all direct material).The sum of the debits to the Manufacturing Overhead account totalled $28,000 for the month while the sum of the credits totalled $30,000.Which of the following statements is correct?

(Multiple Choice)

4.9/5

(42)

Question 55

The Tse Manufacturing Company uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. The company closes out any balance in the Manufacturing Overhead account to Cost of Goods Sold. During the year the company's Finished Goods inventory account was debited for $125,000 and credited for $110,000. The ending balance in the Finished Goods inventory account was $28,000. At the end of the year, manufacturing overhead was overapplied by $4,500. -If the estimated manufacturing overhead for the year was $24,000,and the applied overhead was $26,500,what was the actual manufacturing overhead cost for the year?

(Multiple Choice)

4.8/5

(34)

Question 56

Daffe Corporation uses direct labor-hours in setting its predetermined overhead rate.At the beginning of the year,the total estimated manufacturing overhead was $165,600.At the end of the year,actual direct labor-hours for the year were 11,900 hours,manufacturing overhead for the year was overapplied by $10,760,and the actual manufacturing overhead was $160,600. Required: What must have been the predetermined overhead rate for the year? Actual manufacturing Overapplied manufacturing overhead Answer: overhead = Applied manufacturing overhead -

(Essay)

4.7/5

(34)

Question 57

The Watts Company uses predetermined overhead rates to apply manufacturing overhead to jobs.The predetermined overhead rate is based on labour cost in Department A and on machine hours in Department B.At the beginning of the year,the company made the following estimates: Department A Department B Direct labour cost \ 30,000 \ 40,000 Manufacturing overhead \ 60,000 \ 50,000 Direct labour hours 6,000 8,000 Machine hours 2,000 10,000 What predetermined overhead rates would be used in Departments A and B,respectively?

(Multiple Choice)

4.7/5

(40)

Question 58

The following data are for Potras Company: Beginning Ending Finished goods inventory \ 30,000 \ 40,000 Work-in-process inventory 20,000 13,000 Raw materials inventory 21,000 26,000 Purchases of raw materials 71,000 Factory depreciation 5,000 Other factory costs 10,000 Direct labour 27,000 Indirect labour 6,000 Selling expense 12,000 Over- or underapplied overhead -0 -What is the cost of goods sold?

(Multiple Choice)

4.7/5

(40)

Question 59

In a job-order costing system,direct labour costs usually are recorded initially with a debit to which of the following accounts?

(Multiple Choice)

4.9/5

(35)

Question 60

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

Raw materials can be direct materials,but NOT all direct materials need to be raw materials.

Non-manufacturing costs are expensed as incurred,rather than going into the Work in Process account.

The following journal entry would be made to apply overhead cost to jobs in a job-order costing system: Work in process XXX Manufacturing overhead

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

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

The following partially completed T-accounts summarize last year's transactions for Kelshaw Company:At the end of the year, the company closes out the balance in the Manufacturing Overhead account to Cost of Goods Sold. -What is the total manufacturing cost for the year?

In a job-order costing system,direct labour costs usually are recorded initially with a debit to which of the following accounts?

Managerial Accounting and the Business Environment

Cost Terms,concepts,and Classifications

Cost Behaviour: Analysis and Use

Cost-Volume-Profit Relationships

Systems Design: Process Costing

Activity-Based Costing: A Tool to Aid Decision Making

Variable Costing: A Tool for Management

Budgeting

Standard Costs and Overhead Analysis

Reporting for Control

Relevant Costs for Decision Making

Capital Budgeting Decisions

Financial Statement Analysis

Filters