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 raw materials purchased during the year?

A) $411,000. B) $360,000. C) $316,000. D) $336,000. A) $411,000. B) $360,000. C) $316,000. D) $336,000.

Lucy Sportswear manufactures a specialty line of T-shirts.The company uses a job-order costing system.During March,the following costs were incurred on Job ICU2: $\begin{array}{|l|r|} \hline \text { Direct materials: } & \$ 13,700 \\ \hline \text { Direct labour: } & \$ 4,800 \\ \hline \end{array}$ In addition,selling and shipping costs of $7,000 were incurred on the job.Manufacturing overhead was applied at the rate of $25 per machine hour,and Job ICU2 required 800 machine hours.If Job ICU2 consisted of 7,000 shirts,what was the Cost of Goods Sold per shirt?

A) $5.50. B) $5.70. C) $6.00. D) $6.50. A) $5.50. B) $5.70. C) $6.00. D) $6.50.

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

A) 1. B) 5. C) 6. D) 3. A) 1. B) 5. C) 6. D) 3.

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 sold for the year (before disposition of any under- or overapplied overhead)?

A) $736,000. B) $716,000. C) $691,000. D) $801,000. A) $736,000. B) $716,000. C) $691,000. D) $801,000.

Exam 5: Systems Design: Job-Order Costing

The following cost data relate to the manufacturing activities of the Kamas Company during the most recent year: Manufacturing overhead costs incurred during the year: Property taxes \ 1,600 Utilities, factory 2,600 Indirect labour 5,100 Depreciation, factory 13,000 Insurance, factory 2,500 Total actual costs \ 24,800 Other costs incurred during the year: Purchases of raw materials \ 15,000 Direct labour cost 22,000 Inventories: Raw materials, beginning \ 5,000 Raw materials, ending 4,400 Work in process, beginning 3,500 Work in process, ending 4,500 The company uses a predetermined overhead rate to charge overhead cost to production.The rate for the year just completed was $4.00 per machine hour; a total of 6,000 machine hours were recorded for the year. Required: a.Compute the amount of under- or overapplied overhead cost for the year just ended. b.Prepare a schedule of cost of goods manufactured for the year.

(Essay)

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Question 101

Knowlton Company applies overhead to completed jobs on the basis of 70% of direct labour cost.If Job 501 shows $21,000 of manufacturing overhead applied,what was the direct labour cost on the job?

(Multiple Choice)

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Question 102

Freeman Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs.At the beginning of the year,the company estimated manufacturing overhead would be $150,000 and direct labour hours would be 10,000.The actual figures for the year were $186,000 for manufacturing overhead and 12,000 direct labour hours.The cost records for the year will show which of the following?

(Multiple Choice)

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Question 103

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 raw materials purchased during the year?

(Multiple Choice)

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Question 104

Lucy Sportswear manufactures a specialty line of T-shirts.The company uses a job-order costing system.During March,the following costs were incurred on Job ICU2: Direct materials: \ 13,700 Direct labour: \ 4,800 In addition,selling and shipping costs of $7,000 were incurred on the job.Manufacturing overhead was applied at the rate of $25 per machine hour,and Job ICU2 required 800 machine hours.If Job ICU2 consisted of 7,000 shirts,what was the Cost of Goods Sold per shirt?

(Multiple Choice)

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Question 105

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 cost of direct materials used?

(Multiple Choice)

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Question 106

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 application of overhead?

(Multiple Choice)

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Question 107

(Appendix 5A)Which level of activity,if used to set a predetermined overhead rate,may encourage managers to increase selling prices as demand falls?

(Multiple Choice)

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Question 108

Sawyer Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs.Last year,the company worked 57,000 actual direct labour hours and used 40,000 machine hours.The company had estimated that it would work 55,000 direct labour hours using 44,000 machine hours during the year and incur $330,000 of manufacturing overhead cost.What was the company's manufacturing overhead applied for the year?

(Multiple Choice)

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Question 109

In a normal job-order costing system,the use of indirect materials would usually be recorded as a debit to which account?

(Multiple Choice)

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Question 110

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 sold for the year (before disposition of any under- or overapplied overhead)?

(Multiple Choice)

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Question 111

Normally,a job cost sheet is NOT prepared for a job until after the job has been completed.

(True/False)

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Question 112

Which of the following contain(s)the detailed cost data that support the Work in Process control account?

(Multiple Choice)

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Question 113

Knowlton Company applies overhead to completed jobs on the basis of 70% of direct labour cost.If Job 501 shows $21,000 of manufacturing overhead applied,what was the direct labour cost on the job?

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 cost of direct materials used?

(Appendix 5A)Which level of activity,if used to set a predetermined overhead rate,may encourage managers to increase selling prices as demand falls?

In a normal job-order costing system,the use of indirect materials would usually be recorded as a debit to which account?

Normally,a job cost sheet is NOT prepared for a job until after the job has been completed.

Which of the following contain(s)the detailed cost data that support the Work in Process control account?

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

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