Question 1

If actual overhead is greater than applied overhead, then the variance is called ___________________.

Accepted Answer

underappli

Question 2

Which of the following statements is false?

Accepted Answer

A)  Actual overhead costs always enter the Work-in-Process account. 
B)  The cost of a job includes direct materials, direct labor, and applied overhead. 
C)  The use of normal costing means that overhead is applied to each job using a predetermined rate. 
D)  Indirect labor is assigned as a part of overhead. 
E)  None of these are correct. 
A)  Actual overhead costs always enter the Work-in-Process account. 
B)  The cost of a job includes direct materials, direct labor, and applied overhead. 
C)  The use of normal costing means that overhead is applied to each job using a predetermined rate. 
D)  Indirect labor is assigned as a part of overhead. 
E)  None of these are correct.

Question 3

The predetermined overhead rate is usually calculated

Accepted Answer

A)  at the end of each month. 
B)  at the beginning of each month. 
C)  at the beginning of the year. 
D)  at the end of the year. 
A)  at the end of each month. 
B)  at the beginning of each month. 
C)  at the beginning of the year. 
D)  at the end of the year.

Question 4

There are other source documents besides the time ticket and the material requisition form used to fill out the job-order cost sheet.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is true about the job-order cost sheet?

Accepted Answer

A)  It is prepared for every job. 
B)  It is subsidiary to the work-in-process account. 
C)  It is the primary document for accumulating all costs related to a particular job. 
D)  It contains all information pertinent to a job. 
E)  All of these are correct. 
A)  It is prepared for every job. 
B)  It is subsidiary to the work-in-process account. 
C)  It is the primary document for accumulating all costs related to a particular job. 
D)  It contains all information pertinent to a job. 
E)  All of these are correct.

Question 6

Brillant Design Company makes custom chairs for individual customers.On October 1, there was one job in process, Job 243, with a cost of $1,300.Jobs 244, 245, and 246 were started during the month of October.Data on costs added during the month are as follows: ​
​
  Overhead is applied to production at the rate of 70% of direct labor cost.Job 245 was completed on October 14 and the client was billed at cost plus 55%.All other jobs remained in process.
​
What is the price of Job 245?

Accepted Answer

A)  $20,204.20 
B)  $10,627.70 
C)  $22,310.50 
D)  $18,761.20 
E)  $14,399.50 
A)  $20,204.20 
B)  $10,627.70 
C)  $22,310.50 
D)  $18,761.20 
E)  $14,399.50

Question 7

Ending Work-in-Process for Lee's Carpentry was $64,000 for January.Direct labor and direct materials together for the month were $39,000.Direct labor was twice as much as direct materials.The overhead rate is 70% of direct labor.No jobs were finished during the month.What was beginning Work-in-Process?

Accepted Answer

A)  $6,800 
B)  $25,000 
C)  $4,250 
D)  $15,250 
E)  $0 
A)  $6,800 
B)  $25,000 
C)  $4,250 
D)  $15,250 
E)  $0

Question 8

Costs reported on the financial statements must be estimated costs.

Accepted Answer

A) True 
 B)False

Question 9

Carlson Company uses a predetermined rate to apply overhead.At the beginning of the year, Carlson estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000.Actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual machine hours were 11,000. If the predetermined overhead rate is based on machine hours, what is the total amount credited to the plantwide overhead account for the year for Carlson?

Accepted Answer

A)  $249,280 
B)  $246,000 
C)  $240,000 
D)  $264,000 
A)  $249,280 
B)  $246,000 
C)  $240,000 
D)  $264,000

Question 10

Mitchell's Softball Gloves Company estimated the following at the beginning of the year:  
  Mitchell uses departmental overhead rates.In the assembly department, direct labor hours are used to apply overhead.Machine hours are used to apply overhead in the testing department.
Actual data for August is as follows:

Mitchell decides to continue using departmental overhead rates.If a job spends 4 hours in assembly and 3 hours in testing, what is the amount of overhead charged to the job?

Accepted Answer

A)  $22 
B)  $20 
C)  $28 
D)  $50.54 
E)  None of these. 
A)  $22 
B)  $20 
C)  $28 
D)  $50.54 
E)  None of these.

Question 11

Which of the following is reflected in the labor cost flows of a company?

Accepted Answer

A)  Direct labor cost 
B)  Overtime labor cost 
C)  Administration cost 
D)  Both indirect and direct labor cost 
E)  Administration cost and indirect cost 
A)  Direct labor cost 
B)  Overtime labor cost 
C)  Administration cost 
D)  Both indirect and direct labor cost 
E)  Administration cost and indirect cost

Question 12

Manufacturing and service firms producing unique products or services require job-order accounting systems.

Accepted Answer

A) True 
 B)False

Question 13

At the beginning of the year, Zinc Inc.estimated that overhead would be $115,000 and direct labor hours would be 23,000.At the end of the year, actual overhead was $175,900 and there were actually 35,000 direct labor hours. What is the overhead variance?

Accepted Answer

A)  $600 overapplied 
B)  $900 underapplied 
C)  $300 underapplied 
D)  $700 overapplied 
E)  $800 underapplied 
A)  $600 overapplied 
B)  $900 underapplied 
C)  $300 underapplied 
D)  $700 overapplied 
E)  $800 underapplied

Question 14

Which of the following is not a manufacturing cost element?

Accepted Answer

A)  direct materials 
B)  direct labor 
C)  advertising expense 
D)  overhead 
E)  All of these are correct. 
A)  direct materials 
B)  direct labor 
C)  advertising expense 
D)  overhead 
E)  All of these are correct.

Question 15

Which of the following is false about actual overhead while using normal costing?

Accepted Answer

A)  Actual overhead is recorded to the overhead control account during the period. 
B)  If the actual overhead is greater than the applied overhead then the overhead is underapplied 
C)  Overhead variance is the difference between actual overhead and applied overhead. 
D)  It is divided into many smaller accounts such as indirect labor, supplies, etc. 
E)  None of these. 
A)  Actual overhead is recorded to the overhead control account during the period. 
B)  If the actual overhead is greater than the applied overhead then the overhead is underapplied 
C)  Overhead variance is the difference between actual overhead and applied overhead. 
D)  It is divided into many smaller accounts such as indirect labor, supplies, etc. 
E)  None of these.

Question 16

The unit cost of a job consists of the total costs of

Accepted Answer

A)  materials used on the job. 
B)  labor worked on the job. 
C)  applied overhead. 
D)  All of these are correct. 
E)  None of these are correct. 
A)  materials used on the job. 
B)  labor worked on the job. 
C)  applied overhead. 
D)  All of these are correct. 
E)  None of these are correct.

Question 17

What type of event would cause two separate journal entries to be made?

Accepted Answer

A)  Transferring the good to Finished Goods 
B)  Applied overhead to production based on direct labor hours 
C)  Transferring the goods from Raw Materials to Work-in-Process 
D)  Closing overapplied overhead to Cost of Goods Sold 
E)  Selling the good 
A)  Transferring the good to Finished Goods 
B)  Applied overhead to production based on direct labor hours 
C)  Transferring the goods from Raw Materials to Work-in-Process 
D)  Closing overapplied overhead to Cost of Goods Sold 
E)  Selling the good

Question 18

Warwick Company has the following transactions for the month of September:  
 
  Balances at the beginning of the month were:

-What is the ending balance in Work-in-Process?

Accepted Answer

A)  $162,912 
B)  $113,083 
C)  $166,414 
D)  $123,870 
E)  $0 
A)  $162,912 
B)  $113,083 
C)  $166,414 
D)  $123,870 
E)  $0

Question 19

At the beginning of the year, Forest Corporation estimates overhead will be $175,000.If the actual overhead for the year is $165,000 and the applied overhead for the year is $120,000, what is the journal entry needed to reconcile the overhead variance? Assume that the overhead variance is immaterial.

Accepted Answer

A)   
  
B)  
  
C)    
  
D)   
  
E)  None of these 
A)   
  
B)  
  
C)    
  
D)   
  
E)  None of these

Question 20

What account is credited when goods are sold?

Accepted Answer

A)  Accounts receivable 
B)  Cost of Goods Sold 
C)  Finished Goods 
D)  Raw materials 
E)  Work-in-process 
A)  Accounts receivable 
B)  Cost of Goods Sold 
C)  Finished Goods 
D)  Raw materials 
E)  Work-in-process

If actual overhead is greater than applied overhead, then the variance is called ___________________.

Which of the following statements is false?

The predetermined overhead rate is usually calculated

There are other source documents besides the time ticket and the material requisition form used to fill out the job-order cost sheet.

Which of the following is true about the job-order cost sheet?

Costs reported on the financial statements must be estimated costs.

Which of the following is reflected in the labor cost flows of a company?

Manufacturing and service firms producing unique products or services require job-order accounting systems.

At the beginning of the year, Zinc Inc.estimated that overhead would be $115,000 and direct labor hours would be 23,000.At the end of the year, actual overhead was $175,900 and there were actually 35,000 direct labor hours. What is the overhead variance?

Which of the following is not a manufacturing cost element?

Which of the following is false about actual overhead while using normal costing?

The unit cost of a job consists of the total costs of

What type of event would cause two separate journal entries to be made?

Warwick Company has the following transactions for the month of September: Balances at the beginning of the month were: -What is the ending balance in Work-in-Process?

What account is credited when goods are sold?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 4: Job-Order Costing and Normal Cost Overhead Application

If actual overhead is greater than applied overhead, then the variance is called ___________________.

Which of the following statements is false?

The predetermined overhead rate is usually calculated

There are other source documents besides the time ticket and the material requisition form used to fill out the job-order cost sheet.

Which of the following is true about the job-order cost sheet?

Costs reported on the financial statements must be estimated costs.

Which of the following is reflected in the labor cost flows of a company?

Manufacturing and service firms producing unique products or services require job-order accounting systems.

At the beginning of the year, Zinc Inc.estimated that overhead would be $115,000 and direct labor hours would be 23,000.At the end of the year, actual overhead was $175,900 and there were actually 35,000 direct labor hours. What is the overhead variance?

Which of the following is not a manufacturing cost element?

Which of the following is false about actual overhead while using normal costing?

The unit cost of a job consists of the total costs of

What type of event would cause two separate journal entries to be made?

Warwick Company has the following transactions for the month of September: Balances at the beginning of the month were: -What is the ending balance in Work-in-Process?

What account is credited when goods are sold?

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behavior, Cost Forecasting, and Segmented Income Statements

Activity-Based Costing and Management

Process Costing

Cost-Volume-Profit Analysis

Tactical Decision-Making and Relevant Costing

Profit Planning and Flexible Budgets

Standard Costing and Variance Analysis

Performance Evaluation and Decentralization

Capital Investment Decisions

Emerging Topics in Managerial Accounting: Sustainability, Quality Cost, Lean Accounting, International Issues, Enterprise Risk Management, the Managerial Accountant in Forensicfraud Accounting

Statement of Cash Flows

Financial Statement Analysis

Filters