Deck 3: Systems Design: Job-Order Costing

Question 1

Reference: 03-09
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. $$\begin{array} { | c | l | l | l | } \hline 1 . & \text { Work in Process } & \text { XXX } & \\\hline & \text { Manufacturing Overhead } & \text { XXX } & \\\hline & \text { Wages Payable } & & \text { XXX } \\\hline & & & \\\hline 2 . & \text { Salary Expense } & \text { XXX } & \\\hline & \text { Wages Payable } & & \text { XXX } \\\hline & & & \\\hline 3 . & \text { Manufacturing Overhead } & \text { XXX } & \\\hline & \text { Accumulated Depreciation } & & \text { XXX } \\\hline & & & \\\hline 4 . & \text { Work in Process } & \text { XXX } & \\\hline & \text { Raw Materials } & & \text { XXX } \\\hline & & & \\\hline 5 . & \text { Work in Process } & \text { XXX } & \\\hline & \text { Manufacturing Overhead } & & \text { XXX } \\\hline & & & \\\hline 6 . & \text { Manufacturing Overhead } & \text { XXX } & \\\hline & \text { Raw Materials } & & \text { XXX } \\\hline & & & \\\hline \text { 7. } & \text { Finished Goods } & \text { XXX } & \\\hline & \text { Work in Process } & & \text { XXX } \\\hline & & & \\\hline 8 . & \text { Raw Materials } & \text { XXX } & \\\hline & \text { Accounts Payable } & & \text { XXX } \\\hline\end{array}$$

-The entry to record the purchase of raw materials is:

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

Answer 1

8.

Question 2

Using the following information: $\begin{array}{ll}\text { Estimated manufacturing overhead } & \$ 840,000 \\\text { Actual manufacturing overhead } & \$ 800,000 \\\text { Estimated direct labour hours } & 56,000 \\\text { Actual direct labour hours worked } & 40,000\end{array}$ The predetermined overhead rate for applying manufacturing overhead would be:

A)$42.00.
B)$40.00.
C)$30.00.
D)$15.00.

Answer 2

$15.00.

Question 3

Reference: 03-04
The following T accounts are for Stanford Company:
$\begin{array}{}\text { Sales Salaries Expense }&\text { Work in Process }\\\begin{array} { l|llll } \hline\text { Beg. Bal. 7,000 }&24,000\quad(2)\\(1)\quad\quad19,000\end{array}&\begin{array} { l|llll } \hline ?\quad\quad(8)&\quad\quad\\?\quad\quad(9)\end{array}\end{array}$
$\begin{array}{lll}\text { Sales Salaries Expense }&\text { Work in Process }\\\begin{array} { l|llll } \hline (4)\quad\quad11,000&\\\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(4)}\quad\quad11,000&\quad\\(2)\quad\quad15,000\\(4)\quad\quad181,000\\(6)\quad\quad31,000\\\end{array}\end{array}$
$\begin{array}{lll}\text { Accounts Payable }&\text { Manufacturing Overhead }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&19,000\quad\quad(1)\\&5,000\quad\quad(5)\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(2)}\quad\quad9,000&31,000\quad\quad(6)\\(3)\quad\quad16,000&\quad\quad\quad\quad?(9)\\(4)\quad\quad8,000\\(5)\quad\quad5,000\\\end{array}\end{array}$
$\begin{array}{lll}\text { Wages \& Salaries Payable }&\text { Finished Goods }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&7,000 \text { Beg. Bal. }\\&37,000\quad\quad(4)\\\\\\\end{array}&\begin{array} { l|llll } \hline\text { Beg. Bal. 18,000 }&\quad\quad\quad\quad?(8)\\(7)\quad\quad62,000&\quad\quad\quad\quad?\\\text { End. Bal. 15,000 }\\\\\end{array}\end{array}$
$\begin{array}{lll}\text { Accumulated Depreciation-Factory }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&82,000 \quad \text { Beg. Bal. }\\&16,000\quad\quad(3)\\\\\\\end{array}\end{array}$


-The indirect labour cost is?

A)$8,000.
B)$15,000.
C)$37,000.
D)$18,000.

Answer 3

$8,000.

Question 4

Work in Process is a control account supported by detailed cost data contained in:

A)the Finished Goods inventory account.
B)purchase requisitions.
C)the Manufacturing Overhead account.
D)job cost sheets.

Question 5

Reference: 03-09
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. $\begin{array}{|l|l|l|l|}\hline 1 . & \text { Work in Process } & \mathrm{XXX} & \\\hline & \text { Manufacturing Overhead } & \mathrm{XXX} & \\\hline & \text { Wages Payable } & & \mathrm{XXX} \\\hline\\\hline 2 . & \text { Salary Expense } & \mathrm{XXX} & \\\hline & \text { Wages Payable } & & \mathrm{XXX} \\\hline\\\hline 3 . & \text { Manufacturing Overhead } & \mathrm{XXX} & \\\hline & \text { Accumulated Depreciation } & & \mathrm{XXX} \\\hline\\\hline 4 . & \text { Work in Process } & \mathrm{XXX} & \\\hline & \text { Raw Materials } & & \mathrm{XXX} \\\hline & & & \\\hline 5 . & \text { Work in Process } & \mathrm{XXX} & \\\hline & \text { Manufacturing Overhead } & & \mathrm{XXX} \\\hline\\\hline \text { 6. } & \text { Manufacturing Overhead } & \text { XXX } & \\\hline & \text { Raw Materials } & & \mathrm{XXX} \\\hline & & & \\\hline \text { 7. } & \text { Finished Goods } & \mathrm{XXX} & \\\hline & \text { Work in Process } & & \mathrm{XXX} \\\hline\\\hline 8 . & \text { Raw Materials } & \text { XXX } & \\\hline & \text { Accounts Payable } & & \mathrm{XXX} \\\hline\end{array}$

-The entry to record depreciation on manufacturing equipment is:

A)1.
B)5.
C)4.
D)3.

Question 6

Reference: 03-06
The Milo Company's records for May contained the following information: $$\begin{array} { | l | l | l | } \hline \text { Actual direct labour-hours } & 9,000 & \text { hours } \\\hline \text { Actual direct labour cost } & \$ 47,000 & \\\hline \text { Direct material purchased } & 16,000 & \\\hline \text { Direct material used } & 14,000 & \\\hline \text { Cost of goods sold } & 100,000 & \\\hline \text { Overapplied overhead } & 5,000 & \\\hline \text { Ending inventories: } & & \\\hline \text { Raw materials } & 30,000 & \\\hline \text { Work in process } & 50,000 & \\\hline \text { Finished goods } & 70,000 & \\\hline\end{array}$$ The company uses a predetermined overhead rate of $5.00 per direct labour hour to apply manufacturing overhead to jobs.

-Direct labour costs charged to production during the year amounted to:

A)$135,000.
B)$360,000.
C)$225,000.
D)$216,000.

Question 7

Sharp Company's records show that overhead was overapplied by $10,000 last year. overapplied overhead was closed out to the Cost of Goods Sold account at the end of the year. In trying to determine why overhead was overapplied by such a large amount, the company has discovered that $6,000 of depreciation on factory equipment was charged to administrative expense in error. Given the above information, which of the following statements is true?

A)Under the circumstances posed above, the error in recording depreciation would have no effect on net income for the year.
B)Manufacturing overhead was actually overapplied by $16,000 for the year.
C)The amount of $6,000 in depreciation should have been charged to Work in Process rather than to administrative expense.
D)The company's net income is understated by $6,000 for the year.

Question 8

The entry to transfer the cost of goods manufactured for the period is:

A)4.
B)7.
C)1.
D)5.

Question 9

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

A)Raw Materials.
B)Finished Goods.
C)Work in Process.
D)Manufacturing Overhead.

Question 10

Reference: 03-09
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. $$\begin{array} { | c | l | l | l | } \hline 1 . & \text { Work in Process } & \text { XXX } & \\\hline & \text { Manufacturing Overhead } & \text { XXX } & \\\hline & \text { Wages Payable } & & \text { XXX } \\\hline & & & \\\hline 2 . & \text { Salary Expense } & \text { XXX } & \\\hline & \text { Wages Payable } & & \text { XXX } \\\hline & & & \\\hline 3 . & \text { Manufacturing Overhead } & \text { XXX } & \\\hline & \text { Accumulated Depreciation } & & \text { XXX } \\\hline & & & \\\hline 4 . & \text { Work in Process } & \text { XXX } & \\\hline & \text { Raw Materials } & & \text { XXX } \\\hline & & & \\\hline 5 . & \text { Work in Process } & \text { XXX } & \\\hline & \text { Manufacturing Overhead } & & \text { XXX } \\\hline & & & \\\hline 6 . & \text { Manufacturing Overhead } & \text { XXX } & \\\hline & \text { Raw Materials } & & \text { XXX } \\\hline & & & \\\hline \text { 7. } & \text { Finished Goods } & \text { XXX } & \\\hline & \text { Work in Process } & & \text { XXX } \\\hline & & & \\\hline 8 . & \text { Raw Materials } & \text { XXX } & \\\hline & \text { Accounts Payable } & & \text { XXX } \\\hline\end{array}$$

-The entry to record the application of overhead is:

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

Question 11

Carlo Company uses a predetermined overhead rate based on direct labour hours to appl? manufacturing overhead to jobs. The company estimated manufacturing overhead at
$255,000 for the year and direct labour-hours at 100,000 hours. Actual manufacturing overhead costs incurred during the year totalled $270,000. Actual direct labour hours were 105,000. What was the overapplied or underapplied overhead for the year?

A)$2,250 underapplied.
B)$15,000 underapplied.
C)$2,250 overapplied.
D)$15,000 overapplied.

Question 12

In job-order costing, all of the following statements are correct with respect to labour time and cost except:

A)a machine operator performing routine annual maintenance work on a piece of equipment would charge the maintenance time to a specific job.
B)time tickets are kept by employees showing the amount of work on specific jobs.
C)labour cost that can be traced to a job only with a great deal of effort is treated as part of manufacturing overhead.
D)the job cost sheet for a job will contain all direct labour charges to that particular job.

Question 13

Reference: 03-03
Meyers Company had the following inventory balances at the beginning and end of November: $$\begin{array} { | l | l | l | } \hline & \text { November 1 } & \text { November 30 } \\\hline \text { Raw Materials } & \$ 17,000 & \$ 20,000 \\\hline \text { Finished Goods } & \$ 50,000 & \$ 44,000 \\\hline \text { Work in Process } & \$ 9,000 & \$ 11,000 \\\hline\end{array}$$ During November, $39,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $8 per direct labour-hour, and it paid its direct labour workers $10 per hour. A total of 300 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost.

-The actual direct labour hours worked during November totalled:

A)2,800.
B)3,500.
C)3,600.
D)3,300.

Question 14

Reference: 03-03
Meyers Company had the following inventory balances at the beginning and end of November: $$\begin{array} { | l | l | l | } \hline & \text { November 1 } & \text { November 30 } \\\hline \text { Raw Materials } & \$ 17,000 & \$ 20,000 \\\hline \text { Finished Goods } & \$ 50,000 & \$ 44,000 \\\hline \text { Work in Process } & \$ 9,000 & \$ 11,000 \\\hline\end{array}$$ During November, $39,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $8 per direct labour-hour, and it paid its direct labour workers $10 per hour. A total of 300 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost.

-The amount of direct labour cost in the November 30 Work in Process inventory was:

A)$3,300.
B)$2,800.
C)$6,300.
D)$3,500.

Question 15

Reference: 03-02
Hamilton Company uses job-order costing. Manufacturing overhead is applied using a predetermined rate of
150% of direct labour cost. Any overapplied or underapplied manufacturing overhead is closed to the Cost of
Goods Sold account at the end of each month. Additional information is available as follows:
Job 101 was the only job in process at January 31. The job cost sheet for this job contained the following costs at the beginning of the month: $$\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 4,000 \\\hline \text { Direct labour } & \$ 2,000 \\\hline \text { Applied manufacturing overhead } & \$ 3,000 \\\hline\end{array}$$ Jobs 102, 103, and 104 were started during February.
Direct materials requisitions for February totalled $26,000. Direct labour cost of $20,000 was incurred for February. Actual manufacturing overhead was $32,000 for February.
The only job still in process at February 28 was Job 104, with costs of $2,800 for direct materials and $1,800 for direct labour.

-For the month of February, the manufacturing overhead was:

A)$1,000 overapplied.
B)$2,000 underapplied.
C)$2,000 overapplied.
D)$700 overapplied.

Question 16

Kelsh Company uses a predetermined overhead rate based on machine hours to appl? manufacturing overhead to jobs. The company has provided the following estimated costs for next year: $$\begin{array} { l c } \text { Direct materials } & \$ 10,000 \\\text { Direct labour } & 30,000 \\\text { Sales commissions } & 40,000 \\\text { Salary of production supervis or } & 20,000 \\\text { In direct materials } & 4,000 \\\text { Advertising expense } & 8,000 \\\text { Rent on factory equipment } & 10,000\end{array}$$ Kelsh estimates that 5,000 direct labour hours and 10,000 machine hours will be worked during the year. The predetermined overhead rate per hour will be:

A)$6.40.
B)$8.20.
C)$6.80.
D)$3.40.

Question 17

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

A)110% and $15.00.
B)50% and $8.00.
C)50% and $5.00.
D)200% and $5.00.

Question 18

Reference: 03-04
The following T accounts are for Stanford Company:
$\begin{array}{}\text { Sales Salaries Expense }&\text { Work in Process }\\\begin{array} { l|llll } \hline\text { Beg. Bal. 7,000 }&24,000\quad(2)\\(1)\quad\quad19,000\end{array}&\begin{array} { l|llll } \hline ?\quad\quad(8)&\quad\quad\\?\quad\quad(9)\end{array}\end{array}$
$\begin{array}{lll}\text { Sales Salaries Expense }&\text { Work in Process }\\\begin{array} { l|llll } \hline (4)\quad\quad11,000&\\\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(4)}\quad\quad11,000&\quad\\(2)\quad\quad15,000\\(4)\quad\quad181,000\\(6)\quad\quad31,000\\\end{array}\end{array}$
$\begin{array}{lll}\text { Accounts Payable }&\text { Manufacturing Overhead }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&19,000\quad\quad(1)\\&5,000\quad\quad(5)\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(2)}\quad\quad9,000&31,000\quad\quad(6)\\(3)\quad\quad16,000&\quad\quad\quad\quad?(9)\\(4)\quad\quad8,000\\(5)\quad\quad5,000\\\end{array}\end{array}$
$\begin{array}{lll}\text { Wages \& Salaries Payable }&\text { Finished Goods }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&7,000 \text { Beg. Bal. }\\&37,000\quad\quad(4)\\\\\\\end{array}&\begin{array} { l|llll } \hline\text { Beg. Bal. 18,000 }&\quad\quad\quad\quad?(8)\\(7)\quad\quad62,000&\quad\quad\quad\quad?\\\text { End. Bal. 15,000 }\\\\\end{array}\end{array}$
$\begin{array}{lll}\text { Accumulated Depreciation-Factory }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&82,000 \quad \text { Beg. Bal. }\\&16,000\quad\quad(3)\\\\\\\end{array}\end{array}$


-The manufacturing overhead applied is?

A)$42,000.
B)$38,000.
C)$31,000.
D)$24,000.

Question 19

Reference: 03-12
Jimbob Co. had the following inventory balances at the beginning and end of April: $$\begin{array} { | l | l | l | } \hline & \text { April 1 } & \text { April 30 } \\\hline \text { Raw Materials } & \$ 17,000 & \$ 20,000 \\\hline \text { Finished Goods } & \$ 50,000 & \$ 44,000 \\\hline \text { Work in Process } & \$ 9,000 & \$ 11,000 \\\hline\end{array}$$ During April, $36,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was 80 cents per each direct labour dollar, and it paid its direct labour workers $20 per hour. A total of 150 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost.

-The direct materials cost in the April 1 Work in Process inventory account totalled:

A)$3,000.
B)$6,000.
C)$6,600.
D)$3,600.

Question 20

The balance in White Company's Work in Process inventory account was $15,000 on August 1 and $18,000 on August 31.. If the sum of the debits to the Manufacturing Overhead account total $28,000 for the month, and if the sum of the credits totalled $30,000, then:

A)Manufacturing Overhead was underapplied by $2,000 at the end of the month.
B)Finished Goods was debited for $85,000 during the month.
C)Finished Goods was debited for $82,000 during the month.
D)Finished Goods was credited for $83,000 during the month.

Question 21

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 and 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, the Cost of Goods Sold per shirt was:

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

Question 22

Reference: 03-10
Summit Company has provided the following inventory balances and manufacturing cost data for the month of
January: $$\begin{array}{l}\begin{array} { | c | l | l | } \hline \text { Inventories: } & \text { January 1 } & \text { January } 31 \\\hline \text { Direct materials } & \$ 30,000 & \$ 40,000 \\\hline \text { Work in process } & \$ 15,000 & \$ 20,000 \\\hline \text { Finished goods } & \$ 65,000 & \$ 50,000 \\\hline\end{array}\\\\\begin{array} { | l | l | } \hline & \text { Month of January } \\\hline \text { Cost of goods manufactured } & \$ 515,000 \\\hline \text { Manufacturing overhead applied } & \$ 150,000 \\\hline \text { Direct materials used } & \$ 190,000 \\\hline \text { Actual manufacturing overhead } & \$ 144,000 \\\hline\end{array}\end{array}$$ Under Summit's job-order costing system, any overapplied or underapplied overhead is closed to the Cost of
Goods Sold account at the end of the calendar year .

-How much direct labour cost was incurred during January?

A)$170,000.
B)$186,000.
C)$180,000.
D)$175,000.

Question 23

Reference: 03-07
The following data are for Potras Company: $$\begin{array} { | l | l | l | } \hline & \text { Beginning } & \text { Ending } \\\hline \text { Finished goods inventory } & \$ 30,000 & \$ 40,000 \\\hline \text { Work in process inventory } & \$ 20,000 & \$ 13,000 \\\hline \text { Raw materials inventory } & \$ 21,000 & \$ 26,000 \\\hline \text { Purchases of raw materials } & \$ 71,000 & \\\hline \text { Factory depreciation } & \$ 5,000 & \\\hline \text { Other factory costs } & \$ 10,000 & \\\hline \text { Direct labour } & \$ 27,000 & \\\hline \text { Indirect labour } & \$ 6,000 & \\\hline \text { Selling expense } & \$ 12,000 & \\\hline \begin{array} { l } \text { Overapplied or underapplied } \\\text { overhead }\end{array} & - 0 - & \\\hline\end{array}$$

-The cost of goods manufactured was?

A)$114,000.
B)$133,000.
C)$138,000.
D)$121,000.

Question 24

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 incurred $345,000 of actual manufacturing overhead cost. The Company had estimated that it would work 55,000 direct labour hours during the year and incur $330,000 of manufacturing overhead cost. The company's manufacturing overhead cost for the year was:

A)overapplied by $3,000.
B)underapplied by $3,000.
C)overapplied by $15,000.
D)underapplied by $15,000.

Question 25

Which of the following statements is not true about the use of a normal costing system

A)Actual overhead costs are never directly assigned to products.
B)Actual overhead costs never flow directly through the inventory accounts.
C)Individual product costs are usually not adjusted for differences between actual and budgeted costs.
D)A normal costing system requires waiting until after a period end to complete the costing for all jobs completed during a period.

Question 26

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, the direct labour cost on the job was:

A)$21,000.
B)$27,300.
C)$30,000.
D)$14,700.

Question 27

Sweet Company applies overhead to jobs on the basis of 125% of direct labour cost. If Job 107 shows $10,000 of manufacturing overhead applied, how much was the direct labour cost on the job:

A)$11,250.
B)$10,000.
C)$12,500.
D)$8,000.

Question 28

Simplex Company has the following estimated costs for next year: $$\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 15,000 \\\hline \text { Direct labour } & 55,000 \\\hline \text { Sales commissions } & 75,000 \\\hline \text { Salary of production supervisor } & 35,000 \\\hline \text { Indirect materials } & 5,000 \\\hline \text { Advertising expense } & 11,000 \\\hline \text { Rent on factory equipment } & 16,000 \\\hline\end{array}$$ Simplex estimates that 10,000 direct labour and 16,000 machine hours will be worked during the year. If overhead is applied on the basis of machine hours, the overhead rate per hour will be:

A)$8.56.
B)$3.50.
C)$7.63.
D)$6.94.

Question 29

Reference: 03-12
Jimbob Co. had the following inventory balances at the beginning and end of April: $$\begin{array} { | l | l | l | } \hline & \text { April 1 } & \text { April 30 } \\\hline \text { Raw Materials } & \$ 17,000 & \$ 20,000 \\\hline \text { Finished Goods } & \$ 50,000 & \$ 44,000 \\\hline \text { Work in Process } & \$ 9,000 & \$ 11,000 \\\hline\end{array}$$ During April, $36,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was 80 cents per each direct labour dollar, and it paid its direct labour workers $20 per hour. A total of 150 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost.

-The actual direct labour hours worked during April totalled:

A)1,650.
B)1,800.
C)1,400.
D)1,750.

Question 30

Reference: 03-06
The Milo Company's records for May contained the following information: $$\begin{array} { | l | l | l | } \hline \text { Actual direct labour-hours } & 9,000 & \text { hours } \\\hline \text { Actual direct labour cost } & \$ 47,000 & \\\hline \text { Direct material purchased } & 16,000 & \\\hline \text { Direct material used } & 14,000 & \\\hline \text { Cost of goods sold } & 100,000 & \\\hline \text { Overapplied overhead } & 5,000 & \\\hline \text { Ending inventories: } & & \\\hline \text { Raw materials } & 30,000 & \\\hline \text { Work in process } & 50,000 & \\\hline \text { Finished goods } & 70,000 & \\\hline\end{array}$$ The company uses a predetermined overhead rate of $5.00 per direct labour hour to apply manufacturing overhead to jobs.

-The Cost of Goods Sold for the year (before disposition of any overhead underapplied or overapplied)was:

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

Question 31

For the current year, Paxman Company incurred $150,000 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was overapplied in the amount of $6,000 for the year. If the predetermined overhead rate was $8.00 per direct labour hour, how many hours were worked during the year?

A)19,500 hours.
B)18,000 hours.
C)17,750 hours.
D)18,750 hours.

Question 32

Harrell 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 its total manufacturing overhead cost at $400,000 and its direct labour-hours at 100,000 hours. The actual overhead cost incurred during the year was $350,000 and the actual direct labour hours incurred on jobs during the year was 90,000 hours. The manufacturing overhead for the year would be?

A)$50,000 overapplied.
B)$50,000 underapplied.
C)$10,000 overapplied.
D)$10,000 underapplied.

Question 33

Which of the following companies would be most likely to use a job-order costing system rather than a process costing system?

A)Crude oil refining.
B)Shipbuilding.
C)Candy making.
D)Fast food restaurant.

Question 34

Reference: 03-04
The following T accounts are for Stanford Company:
$\begin{array}{}\text { Sales Salaries Expense }&\text { Work in Process }\\\begin{array} { l|llll } \hline\text { Beg. Bal. 7,000 }&24,000\quad(2)\\(1)\quad\quad19,000\end{array}&\begin{array} { l|llll } \hline ?\quad\quad(8)&\quad\quad\\?\quad\quad(9)\end{array}\end{array}$
$\begin{array}{lll}\text { Sales Salaries Expense }&\text { Work in Process }\\\begin{array} { l|llll } \hline (4)\quad\quad11,000&\\\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(4)}\quad\quad11,000&\quad\\(2)\quad\quad15,000\\(4)\quad\quad181,000\\(6)\quad\quad31,000\\\end{array}\end{array}$
$\begin{array}{lll}\text { Accounts Payable }&\text { Manufacturing Overhead }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&19,000\quad\quad(1)\\&5,000\quad\quad(5)\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(2)}\quad\quad9,000&31,000\quad\quad(6)\\(3)\quad\quad16,000&\quad\quad\quad\quad?(9)\\(4)\quad\quad8,000\\(5)\quad\quad5,000\\\end{array}\end{array}$
$\begin{array}{lll}\text { Wages \& Salaries Payable }&\text { Finished Goods }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&7,000 \text { Beg. Bal. }\\&37,000\quad\quad(4)\\\\\\\end{array}&\begin{array} { l|llll } \hline\text { Beg. Bal. 18,000 }&\quad\quad\quad\quad?(8)\\(7)\quad\quad62,000&\quad\quad\quad\quad?\\\text { End. Bal. 15,000 }\\\\\end{array}\end{array}$
$\begin{array}{lll}\text { Accumulated Depreciation-Factory }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&82,000 \quad \text { Beg. Bal. }\\&16,000\quad\quad(3)\\\\\\\end{array}\end{array}$


-The ending Work in Process account balance is?

A)$20,000.
B)$13,000.
C)$64,000.
D)$75,000.

Question 35

Reference: 03-05
Mallet Company had only Job 844 in process on March 1 of the current year. The job had been charged with
$2,000 of direct material cost, $2,500 of direct labour cost, and $1,750 of manufacturing overhead cost. The company assigns overhead cost to jobs at a predetermined rate of 70% of direct labour cost. Any underapplied or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month.
During March, the following activity and amounts were recorded by the company: $$\begin{array} { | l | l | } \hline \text { Raw materials (all direct materials): } & \\\hline \text { Purchased during the month } & \$ 29,500 \\\hline \text { Used in production } & \$ 30,500 \\\hline & \\\hline \text { Labour: } & \\\hline \text { Direct labour hours worked during the month } & 2,500 \\\hline \text { Direct labour cost incurred } & \$ 26,500 \\\hline \text { Indirect labour costs incurred } & \$ 5,500 \\\hline & \\\hline \text { Manufacturing overhead costs incurred (total) } & \$ 18,500 \\\hline & \\\hline \text { Inventories: } & \\\hline \text { Raw materials (all direct) March 31 } & \$ 7,500 \\\hline \text { Work in process, March 31 } & \$ 14,500 \\\hline\end{array}$$ Work in process inventory contained $5,500 of direct labour cost.

-The balance in the March 1 Raw Materials inventory was:

A)$9,500.
B)$6,500.
C)$8,500.
D)$10,500.

Question 36

If a company applies overhead to jobs on the basis of a predetermined overhead rate, a credit balance in the Manufacturing Overhead account at the end of any period means that:

A)the amount of overhead cost charged to jobs is less than the estimated overhead cost for the period.
B)more overhead cost has been charged to jobs than has been incurred during the period.
C)the amount of overhead cost charged to jobs is greater than the estimated cost for the period.
D)more overhead cost has been incurred during the period than has been charged to jobs.

Question 37

Reference: 03-04
The following T accounts are for Stanford Company:
$\begin{array}{}\text { Sales Salaries Expense }&\text { Work in Process }\\\begin{array} { l|llll } \hline\text { Beg. Bal. 7,000 }&24,000\quad(2)\\(1)\quad\quad19,000\end{array}&\begin{array} { l|llll } \hline ?\quad\quad(8)&\quad\quad\\?\quad\quad(9)\end{array}\end{array}$
$\begin{array}{lll}\text { Sales Salaries Expense }&\text { Work in Process }\\\begin{array} { l|llll } \hline (4)\quad\quad11,000&\\\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(4)}\quad\quad11,000&\quad\\(2)\quad\quad15,000\\(4)\quad\quad181,000\\(6)\quad\quad31,000\\\end{array}\end{array}$
$\begin{array}{lll}\text { Accounts Payable }&\text { Manufacturing Overhead }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&19,000\quad\quad(1)\\&5,000\quad\quad(5)\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(2)}\quad\quad9,000&31,000\quad\quad(6)\\(3)\quad\quad16,000&\quad\quad\quad\quad?(9)\\(4)\quad\quad8,000\\(5)\quad\quad5,000\\\end{array}\end{array}$
$\begin{array}{lll}\text { Wages \& Salaries Payable }&\text { Finished Goods }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&7,000 \text { Beg. Bal. }\\&37,000\quad\quad(4)\\\\\\\end{array}&\begin{array} { l|llll } \hline\text { Beg. Bal. 18,000 }&\quad\quad\quad\quad?(8)\\(7)\quad\quad62,000&\quad\quad\quad\quad?\\\text { End. Bal. 15,000 }\\\\\end{array}\end{array}$
$\begin{array}{lll}\text { Accumulated Depreciation-Factory }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&82,000 \quad \text { Beg. Bal. }\\&16,000\quad\quad(3)\\\\\\\end{array}\end{array}$


-The cost of goods manufactured is?

A)$71,000.
B)$62,000.
C)$64,000.
D)$82,000.

Question 38

Hussain Shop uses a job-order costing system. Overhead is applied to jobs based on direct labour hours. The source document that would give the number of direct labour hours worked on Job 256 is the:

A)labour time sheet.
B)machine hours usage ticket.
C)material requisition form.
D)Job-order cost sheet.

Question 39

$$\begin{array} { | l | l | l | } \hline & \text { Balance } & \text { Balance } \\\hline & \text { November I } & \text { November } 30 \\\hline \text { Raw materials } & \$ 4,000 & \$ 3,000 \\\hline \text { Work in process } & 12,000 & 15,000 \\\hline \text { Finished goods } & 24,000 & 27,000 \\\hline\end{array}$$

A)$21,000.
B)$19,000.
C)$15,000.
D)$18,000.

Question 40

In a job-order costing system, the use of direct materials previously purchased usually is recorded as a debit to:

A)Manufacturing Overhead.
B)Raw Materials inventory.
C)Work in Process inventory.
D)Finished Goods inventory.

Question 41

Using the following information: $$\begin{array} { | l | l | } \hline \text { Cost of Goods Sold for the year } & \$ 840,000 \\\hline \text { Ending Finished Goods } & \$ 100,000 \\\hline \text { Ending Work in Process } & \$ 60,000 \\\hline \text { Overapplied manufacturing overhead } & \$ 40,000 \\\hline\end{array}$$ Assuming overapplied overhead is considered material, using the preferred method, what would be the adjustment to Cost of Goods Sold to close the overapplied overhead?

A)A credit of $33,600.
B)A debit of $40,000.
C)A credit of $40,000.
D)A debit of $33,600.

Question 42

Reference: 03-05
Mallet Company had only Job 844 in process on March 1 of the current year. The job had been charged with
$2,000 of direct material cost, $2,500 of direct labour cost, and $1,750 of manufacturing overhead cost. The company assigns overhead cost to jobs at a predetermined rate of 70% of direct labour cost. Any underapplied or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month.
During March, the following activity and amounts were recorded by the company: $$\begin{array} { | l | l | } \hline \text { Raw materials (all direct materials): } & \\\hline \text { Purchased during the month } & \$ 29,500 \\\hline \text { Used in production } & \$ 30,500 \\\hline & \\\hline \text { Labour: } & \\\hline \text { Direct labour hours worked during the month } & 2,500 \\\hline \text { Direct labour cost incurred } & \$ 26,500 \\\hline \text { Indirect labour costs incurred } & \$ 5,500 \\\hline & \\\hline \text { Manufacturing overhead costs incurred (total) } & \$ 18,500 \\\hline & \\\hline \text { Inventories: } & \\\hline \text { Raw materials (all direct) March 31 } & \$ 7,500 \\\hline \text { Work in process, March 31 } & \$ 14,500 \\\hline\end{array}$$ Work in process inventory contained $5,500 of direct labour cost.

-The amount of direct materials cost in the March 31 work in process inventory account was:

A)$3,850.
B)$5,150.
C)$9,350.
D)$9,000.

Question 43

Reference: 03-04
The following T accounts are for Stanford Company:
$\begin{array}{}\text { Sales Salaries Expense }&\text { Work in Process }\\\begin{array} { l|llll } \hline\text { Beg. Bal. 7,000 }&24,000\quad(2)\\(1)\quad\quad19,000\end{array}&\begin{array} { l|llll } \hline ?\quad\quad(8)&\quad\quad\\?\quad\quad(9)\end{array}\end{array}$
$\begin{array}{lll}\text { Sales Salaries Expense }&\text { Work in Process }\\\begin{array} { l|llll } \hline (4)\quad\quad11,000&\\\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(4)}\quad\quad11,000&\quad\\(2)\quad\quad15,000\\(4)\quad\quad181,000\\(6)\quad\quad31,000\\\end{array}\end{array}$
$\begin{array}{lll}\text { Accounts Payable }&\text { Manufacturing Overhead }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&19,000\quad\quad(1)\\&5,000\quad\quad(5)\\\\\\\end{array}&\begin{array} { l|llll } \hline \text {(2)}\quad\quad9,000&31,000\quad\quad(6)\\(3)\quad\quad16,000&\quad\quad\quad\quad?(9)\\(4)\quad\quad8,000\\(5)\quad\quad5,000\\\end{array}\end{array}$
$\begin{array}{lll}\text { Wages \& Salaries Payable }&\text { Finished Goods }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&7,000 \text { Beg. Bal. }\\&37,000\quad\quad(4)\\\\\\\end{array}&\begin{array} { l|llll } \hline\text { Beg. Bal. 18,000 }&\quad\quad\quad\quad?(8)\\(7)\quad\quad62,000&\quad\quad\quad\quad?\\\text { End. Bal. 15,000 }\\\\\end{array}\end{array}$
$\begin{array}{lll}\text { Accumulated Depreciation-Factory }\\\begin{array} { l|llll } \hline \quad\quad\quad\quad&82,000 \quad \text { Beg. Bal. }\\&16,000\quad\quad(3)\\\\\\\end{array}\end{array}$


-The cost of goods sold (after adjustment for underapplied or overapplied overhead)is:

A)$72,000.
B)$58,000.
C)$65,000.
D)$69,000.

Question 44

Reference: 03-06
The Milo Company's records for May contained the following information: $$\begin{array} { | l | l | l | } \hline \text { Actual direct labour-hours } & 9,000 & \text { hours } \\\hline \text { Actual direct labour cost } & \$ 47,000 & \\\hline \text { Direct material purchased } & 16,000 & \\\hline \text { Direct material used } & 14,000 & \\\hline \text { Cost of goods sold } & 100,000 & \\\hline \text { Overapplied overhead } & 5,000 & \\\hline \text { Ending inventories: } & & \\\hline \text { Raw materials } & 30,000 & \\\hline \text { Work in process } & 50,000 & \\\hline \text { Finished goods } & 70,000 & \\\hline\end{array}$$ The company uses a predetermined overhead rate of $5.00 per direct labour hour to apply manufacturing overhead to jobs.

-The Cost of Goods Manufactured during the year was:

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

Question 45

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

A)transferred to Finished Goods at the end of the period.
B)closed to Cost of Goods Sold.
C)deducted on the Income Statement as overapplied overhead.
D)part of the ending balance of the Work in Process inventory account.

Question 46

Using the following information: $$\begin{array} { | l | l | } \hline \text { Cost of Goods Sold for the year } & \$ 840,000 \\\hline \text { Ending Finished Goods } & \$ 100,000 \\\hline \text { Ending Work in Process } & \$ 60,000 \\\hline \text { Underapplied manufacturing overhead } & \$ 40,000 \\\hline\end{array}$$ Assuming underapplied overhead is considered material, using the preferred method, what would be the adjustment to Cost of Goods Sold to close the underapplied overhead?

A)A credit of $33,600.
B)A debit of $40,000.
C)A credit of $40,000.
D)A debit of $33,600.

Question 47

Lucas Co. appeared in the Work in Process account: $$\begin{array} { | l | l | c | } \hline \text { April } & & \\\hline 1 & \text { Balance } & \$ 24,000 \\\hline 30 & \text { Direct materials } & 80,000 \\\hline 30 & \text { Direct labour } & 60,000 \\\hline 30 & \text { Manufacturing overhead } & 54,000 \\\hline 30 & \text { To finished goods } & ( 200,000 ) \\\hline\end{array}$$ Lucas applies overhead at a predetermined rate of 90% of direct labour cost. Job No. 100, the only job still in process at the end of April, has been charged with manufacturing overhead of $4,500. The amount of direct materials charged to Job No. 100 was:

A)$18,000.
B)$8,500.
C)$5,000.
D)$4,500.

Question 48

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 the two uncompleted jobs show charges of $400 and $200 for direct materials, and charges of $300 and $500 for direct labour. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labour costs, of:

A)80%.
B)125%.
C)300%.
D)240%.

Question 49

The Samuelson Company uses a job-order costing system. The following data were recorded for June: $\begin{array}{|l|l|l|l|}\hline & \text { June } 1 & \text { Added During June } \\\hline \text { Job Number } & \begin{array}{l}\text { Work in Process } \\\text { Inventory }\end{array} & \text { Direct Material } & \text {Direct Labour } \\\hline 475 & \$ 1,000 & \$ 400 & \$ 200 \\\hline 476 & \$ 900 & \$ 600 & \$ 800 \\\hline 477 & \$ 800 & \$ 900 & \$ 1,400 \\\hline 478 & \$ 600 & \$ 1,100 & \$ 1,900 \\\hline\end{array}$ Overhead is charged to production at 70% of the direct materials cost. Jobs 475, 477, and 478 have been delivered to the customer.
Samuelson's Work in Process inventory balance on June 30 was:

A)$2,300.
B)$2,860.
C)$2,720.
D)$6,450.

Question 50

Of the following accounts used in a job-order costing system, which is an expense account?

A)Cost of Goods Sold.
B)Work in Process.
C)Raw Material Inventory.
D)Finished Goods.

Question 51

Reference: 03-02
Hamilton Company uses job-order costing. Manufacturing overhead is applied using a predetermined rate of
150% of direct labour cost. Any overapplied or underapplied manufacturing overhead is closed to the Cost of
Goods Sold account at the end of each month. Additional information is available as follows:
Job 101 was the only job in process at January 31. The job cost sheet for this job contained the following costs at the beginning of the month: $$\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 4,000 \\\hline \text { Direct labour } & \$ 2,000 \\\hline \text { Applied manufacturing overhead } & \$ 3,000 \\\hline\end{array}$$ Jobs 102, 103, and 104 were started during February.
Direct materials requisitions for February totalled $26,000. Direct labour cost of $20,000 was incurred for February. Actual manufacturing overhead was $32,000 for February.
The only job still in process at February 28 was Job 104, with costs of $2,800 for direct materials and $1,800 for direct labour.

-The cost of goods manufactured for February was:

A)$85,000.
B)$77,700.
C)$79,700.
D)$78,000.

Question 52

Compton Company uses a predetermined overhead rate in applying overhead to production orders on a labour cost basis in Department A and on a machine hours basis in Department B. At the beginning of the most recently completed year, the company made the following estimates: $$\begin{array} { | l | l | l | } \hline & \text { Dept. A } & \text { Dept. B } \\\hline \text { Direct labour cost } & \$ 56,000 & \$ 33,000 \\\hline \text { Factory overhead } & \$ 67,200 & \$ 45,000 \\\hline \text { Direct labour hours } & 8,000 & 9,000 \\\hline \text { Machine hours } & 4,000 & 15,000 \\\hline\end{array}$$ What predetermined overhead rate would be used in Department A and Department B, respectively?

A)83% and $3.
B)120% and $3.
C)81% and $3.
D)83% and $5.

Question 53

Dowan Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. Last year Dowan Company incurred $156,600 in actual manufacturing overhead cost. The Manufacturing Overhead account showed that overhead was underapplied by $12,600 for the year. If the predetermined overhead rate is $6.00 per direct labour hour, how many hours did the company work during the year?

A)28,200 hours.
B)25,000 hours.
C)26,000 hours.
D)24,000 hours.

Question 54

Reference: 03-11
The Tse Manufacturing Company uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. The company closes 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, the actual manufacturing overhead cost for the year was:

A)$28,500.
B)$31,000.
C)$19,500.
D)$22,000.

Question 55

Reference: 03-08
The Bus Company uses a job-order costing system. The following information was recorded for September:
The direct labour wage rate is $10 per hour. Overhead is applied at the rate of $5 per direct labour-hour. Jobs 1, 2, and 3 have been completed and transferred to finished goods. Job 2 has been delivered to the customer. $$\begin{array} { | l | l | l | l | } \hline & & { \text { Added During September } } \\\hline \text { Job Number } & \begin{array} { l } \text { September 1 } \\\text { Inventory }\end{array} & \begin{array} { l } \text { Direct } \\\text { Materials }\end{array} & \text { Direct Labour } \\\hline 1 & \$ 1,000 & \$ 300 & \$ 200 \\\hline 2 & 1,400 & 250 & 300 \\\hline 3 & 500 & 1,500 & 150 \\\hline 4 & 750 & 4,000 & 400 \\\hline\end{array}$$

-The Cost of Goods Manufactured for September is:

A)$10,750.
B)$7,625.
C)$11,275.
D)$5,925.

Question 56

CR Company has the following estimated costs for the next year: $$\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 4,000 \\\hline \text { Direct labour } & 20,000 \\\hline \text { Rent on factory building } & 15,000 \\\hline \text { Sales salaries } & 25,000 \\\hline \text { Depreciation on factory equipment } & 8,000 \\\hline \text { Indirect labour } & 10,000 \\\hline \text { Production supervisor's salary } & 12,000 \\\hline\end{array}$$ CR Company estimates that 20,000 labour hours will be worked during the year. If overhead is applied on the basis of direct labour hours, the overhead rate per hour will be?

A)$4.70.
B)$3.25.
C)$2.25.
D)$3.45.

Question 57

Reference: 03-10
Summit Company has provided the following inventory balances and manufacturing cost data for the month of
January: $$\begin{array}{l}\begin{array} { | c | l | l | } \hline \text { Inventories: } & \text { January 1 } & \text { January 31 } \\\hline \text { Direct materials } & \$ 30,000 & \$ 40,000 \\\hline \text { Work in process } & \$ 15,000 & \$ 20,000 \\\hline \text { Finished goods } & \$ 65,000 & \$ 50,000 \\\hline\end{array}\\\\\begin{array} { | l | l | } \hline & \text { Month of January } \\\hline \text { Cost of goods manufactured } & \$ 515,000 \\\hline \text { Manufacturing overhead applied } & \$ 150,000 \\\hline \text { Direct materials used } & \$ 190,000 \\\hline \text { Actual manufacturing overhead } & \$ 144,000 \\\hline\end{array}\end{array}$$ Under Summit's job-order costing system, any overapplied or underapplied overhead is closed to the Cost of
Goods Sold account at the end of the calendar year .

-What was the total amount of direct material purchases during January?

A)$195,000.
B)$180,000.
C)$190,000.
D)$200,000.

Question 58

The cost of goods manufactured for March was:

A)$81,800.
B)$75,550.
C)$67,300.
D)$67,250.

Question 59

Reference: 03-03
Meyers Company had the following inventory balances at the beginning and end of November: $$\begin{array} { | l | l | l | } \hline & \text { November 1 } & \text { November } 30 \\\hline \text { Raw Materials } & \$ 17,000 & \$ 20,000 \\\hline \text { Finished Goods } & \$ 50,000 & \$ 44,000 \\\hline \text { Work in Process } & \$ 9,000 & \$ 11,000 \\\hline\end{array}$$ During November, $39,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $8 per direct labour-hour, and it paid its direct labour workers $10 per hour. A total of 300 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost.

-The raw materials purchased during November totalled:

A)$42,000.
B)$45,000.
C)$36,000.
D)$39,000.

Question 60

Under Lamprey Company's job-order costing system, manufacturing overhead is applied to Work in Process inventory using a predetermined overhead rate. During January, Lamprey's transactions included the following: $$\begin{array} { | l | l | } \hline \text { Direct materials issued to production } & \$ 90,000 \\\hline \text { Indirect materials issued to production } & 8,000 \\\hline \text { Manufacturing overhead cost incurred } & 125,000 \\\hline \text { Manufacturing overhead cost applied } & 113,000 \\\hline \text { Direct labour cost incurred } & 107,000 \\\hline\end{array}$$ Lamprey Company had no beginning or ending inventories. What was the cost of goods manufactured for January?

A)$330,000.
B)$310,000.
C)$322,000.
D)$302,000.

Question 61

Reference: 03-08
The Bus Company uses a job-order costing system. The following information was recorded for September: $$\begin{array} { | l | l | l | l | } \hline & &{ \text { Added During September } } \\\hline \text { Job Number } & \begin{array} { l } \text { September 1 } \\\text { Inventory }\end{array} & \begin{array} { l } \text { Direct } \\\text { Materials }\end{array} & \text { Direct Labour } \\\hline 1 & \$ 1,000 & \$ 300 & \$ 200 \\\hline 2 & 1,400 & 250 & 300 \\\hline 3 & 500 & 1,500 & 150 \\\hline 4 & 750 & 4,000 & 400 \\\hline\end{array}$$ The direct labour wage rate is $10 per hour. Overhead is applied at the rate of $5 per direct labour-hour. Jobs 1, 2, and 3 have been completed and transferred to finished goods. Job 2 has been delivered to the customer.

-The ending Work in Process inventory is?

A)$7,575.
B)$5,150.
C)$5,350.
D)$4,325.

Question 62

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: $$\begin{array} { | l | l | } \hline \text { Actual manufacturing overhead cost incurred } & \$ 47,000 \\\hline \text { Actual direct labour hours worked } & 24,000 \\\hline\end{array}$$ The underapplied or overapplied overhead last year was:

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

Question 63

The ending balance of which of the following accounts can be calculated by summing the totals of the open job-order cost sheets:

A)Work in Process.
B)Materials.
C)Finish Goods.
D)Cost of Goods Sold.

Question 64

In a job-order costing system, direct labour costs are usually recorded initially with a debit to:

A)Finished Goods inventory.
B)Manufacturing Overhead.
C)Direct Labour Expense.
D)Work in Process.

Question 65

Reference: 03-12
Jimbob Co. had the following inventory balances at the beginning and end of April: $$\begin{array} { | l | l | l | } \hline & \text { April 1 } & \text { April } 30 \\\hline \text { Raw Materials } & \$ 17,000 & \$ 20,000 \\\hline \text { Finished Goods } & \$ 50,000 & \$ 44,000 \\\hline \text { Work in Process } & \$ 9,000 & \$ 11,000 \\\hline\end{array}$$ During April, $36,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was 80 cents per each direct labour dollar, and it paid its direct labour workers $20 per hour. A total of 150 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost.

-The raw materials purchased during April totalled:

A)$42,000.
B)$36,000.
C)$45,000.
D)$39,000.

Question 66

Reference: 03-07
The following data are for Potras Company: $$\begin{array} { | l | l | l | } \hline & \text { Beginning } & \text { Ending } \\\hline \text { Finished goods inventory } & \$ 30,000 & \$ 40,000 \\\hline \text { Work in process inventory } & \$ 20,000 & \$ 13,000 \\\hline \text { Raw materials inventory } & \$ 21,000 & \$ 26,000 \\\hline \text { Purchases of raw materials } & \$ 71,000 & \\\hline \text { Factory depreciation } & \$ 5,000 & \\\hline \text { Other factory costs } & \$ 10,000 & \\\hline \text { Direct labour } & \$ 27,000 & \\\hline \text { Indirect labour } & \$ 6,000 & \\\hline \text { Selling expense } & \$ 12,000 & \\\hline \begin{array} { l } \text { Overapplied or underapplied } \\\text { overhead }\end{array} & - 0 - & \\\hline\end{array}$$

-The cost of raw materials used in production was:

A)$66,000.
B)$76,000.
C)$71,000.
D)$26,000.

Question 67

Paul Company used a predetermined overhead rate during the year just completed of $3.50 per direct labour hour, based on an estimate of 22,000 direct labour hours to be worked during the year. Actual overhead cost and activity during the year were: $$\begin{array} { | l | l | } \hline \text { Actual manulacturing overhead cost incurred } & \$ 90,000 \\\hline \text { Actual direct labour hours worked } & 25,000 \\\hline\end{array}$$ The underapplied or overapplied overhead for the year was:

A)$2,500 underapplied.
B)$13,000 underapplied.
C)$2,500 overapplied.
D)$10,500 overapplied.

Question 68

Jimbob Co. has the following estimated costs for the next year: $$\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 4,000 \\\hline \text { Direct labour } & 20,000 \\\hline \text { Rent on factory building } & 15,000 \\\hline \text { Sales salaries } & 25,000 \\\hline \text { Depreciation on factory equipment } & 8,000 \\\hline \text { Indirect labour } & 10,000 \\\hline \text { Production supervisor's salary } & 12,000 \\\hline\end{array}$$ The company estimates that 20,000 labour hours will be worked and 1,000 machine hours incurred during the year. If overhead is applied on the basis of direct labour costs, the overhead rate will be:

A)100%.
B)400%.
C)225%.
D)200%.

Question 69

Reference: 03-01
Wayne Company uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate based on direct labour-hours. The company had the following inventories at the beginning and end of March: $$\begin{array}{l}\begin{array} { | l | l | l | } \hline & \text { March 1 } & \text { March 31 } \\\hline \text { Direct Materials } & \$ 36,000 & \$ 30,000 \\\hline \text { Work in Process } & 18,000 & 12,000 \\\hline \text { Finished Goods } & 54,000 & 72,000 \\\hline\end{array}\\\text { The following additional data pertain to operations during March: }\\\begin{array} { | l | l | l | } \hline \text { Direct materials purchased } & \$ 84,000 & \\\hline \text { Direct labour cost } & \$ 60,000 & \\\hline \text { Direct labour rate } & \$ 7.50 & \text { per direct labour-hour } \\\hline \text { Overhead rate } & \$ 10.00 & \text { per direct labour-hour } \\\hline\end{array}\end{array}$$

-The Cost of Goods Manufactured for March was:

A)$218,000.
B)$230,000.
C)$236,000.
D)$212,000.

Question 70

Reference: 03-07
The following data are for Potras Company:
$$\begin{array} { | l | l | l | } \hline & \text { Beginning } & \text { Ending } \\\hline \text { Finished goods inventory } & \$ 30,000 & \$ 40,000 \\\hline \text { Work in process inventory } & \$ 20,000 & \$ 13,000 \\\hline \text { Raw materials inventory } & \$ 21,000 & \$ 26,000 \\\hline \text { Purchases of raw materials } & \$ 71,000 & \\\hline \text { Factory depreciation } & \$ 5,000 & \\\hline \text { Other factory costs } & \$ 10,000 & \\\hline \text { Direct labour } & \$ 27,000 & \\\hline \text { Indirect labour } & \$ 6,000 & \\\hline \text { Selling expense } & \$ 12,000 & \\\hline \begin{array} { l } \text { Overapplied or underapplied } \\\text { overhead }\end{array} & - 0 - & \\\hline\end{array}$$

-The cost of goods sold was?

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

Question 71

Reference: 03-05
Mallet Company had only Job 844 in process on March 1 of the current year. The job had been charged with
$2,000 of direct material cost, $2,500 of direct labour cost, and $1,750 of manufacturing overhead cost. The company assigns overhead cost to jobs at a predetermined rate of 70% of direct labour cost. Any underapplied or overapplied overhead cost is closed to Cost of Goods Sold at the end of the month.
During March, the following activity and amounts were recorded by the company: $$\begin{array} { | l | l | } \hline \text { Raw materials (all direct materials): } & \\\hline \text { Purchased during the month } & \$ 29,500 \\\hline \text { Used in production } & \$ 30,500 \\\hline & \\\hline \text { Labour: } & \\\hline \text { Direct labour hours worked during the month } & 2,500 \\\hline \text { Direct labour cost incurred } & \$ 26,500 \\\hline \text { Indirect labour costs incurred } & \$ 5,500 \\\hline & \\\hline \text { Manufacturing overhead costs incurred (total) } & \$ 18,500 \\\hline & \\\hline \text { Inventories: } & \\\hline \text { Raw materials (all direct) March 31 } & \$ 7,500 \\\hline \text { Work in process, March 31 } & \$ 14,500 \\\hline\end{array}$$ Work in process inventory contained $5,500 of direct labour cost.

-The entry to dispose of the underapplied or overapplied overhead cost for the month would include:

A)a debit of $50 to Cost of Goods Sold.
B)a debit of $5,500 to Manufacturing Overhead.
C)a credit of $5,500 to Cost of Goods Sold.
D)a debit of $50 to Manufacturing Overhead.

Question 72

Reference: 03-06
The Milo Company's records for May contained the following information: $$\begin{array} { | l | l | l | } \hline \text { Actual direct labour-hours } & 9,000 & \text { hours } \\\hline \text { Actual direct labour cost } & \$ 47,000 & \\\hline \text { Direct material purchased } & 16,000 & \\\hline \text { Direct material used } & 14,000 & \\\hline \text { Cost of goods sold } & 100,000 & \\\hline \text { Overapplied overhead } & 5,000 & \\\hline \text { Ending inventories: } & & \\\hline \text { Raw materials } & 30,000 & \\\hline \text { Work in process } & 50,000 & \\\hline \text { Finished goods } & 70,000 & \\\hline\end{array}$$ The company uses a predetermined overhead rate of $5.00 per direct labour hour to apply manufacturing overhead to jobs.

-The cost of raw materials purchased during the year amounted to:

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

Question 73

Reference: 03-06
The Milo Company's records for May contained the following information: $$\begin{array} { | l | l | l | } \hline \text { Actual direct labour-hours } & 9,000 & \text { hours } \\\hline \text { Actual direct labour cost } & \$ 47,000 & \\\hline \text { Direct material purchased } & 16,000 & \\\hline \text { Direct material used } & 14,000 & \\\hline \text { Cost of goods sold } & 100,000 & \\\hline \text { Overapplied overhead } & 5,000 & \\\hline \text { Ending inventories: } & & \\\hline \text { Raw materials } & 30,000 & \\\hline \text { Work in process } & 50,000 & \\\hline \text { Finished goods } & 70,000 & \\\hline\end{array}$$ The company uses a predetermined overhead rate of $5.00 per direct labour hour to apply manufacturing overhead to jobs.

-The actual overhead cost incurred during the month was:

A)$40,000.
B)$50,000.
C)$55,000.
D)$45,000.

Question 74

Reference: 03-11
The Tse Manufacturing Company uses a job-order costing system and applies overhead to jobs using a predetermined overhead rate. The company closes 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.
The balance in the Finished Goods inventory account at the beginning of the year was:

A)$8,500.
B)$28,000.
C)$17,500.
D)$13,000.

Question 75

The costing approach that meets the requirements of financial accounting and tax reporting requirements is:

A)absorption costing.
B)throughput costing.
C)standard costing
D)variable costing.

Question 76

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:

A)underapplied overhead of $6,000.
B)overapplied overhead of $6,000.
C)underapplied overhead of $30,000.
D)overapplied overhead of $30,000.

Question 77

Reference: 03-12
Jimbob Co. had the following inventory balances at the beginning and end of April: $$\begin{array} { | l | l | l | } \hline & \text { April 1 } & \text { April } 30 \\\hline \text { Raw Materials } & \$ 17,000 & \$ 20,000 \\\hline \text { Finished Goods } & \$ 50,000 & \$ 44,000 \\\hline \text { Work in Process } & \$ 9,000 & \$ 11,000 \\\hline\end{array}$$ During April, $36,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was 80 cents per each direct labour dollar, and it paid its direct labour workers $20 per hour. A total of 150 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost.

-The amount of direct labour cost in the April 30 Work in Process inventory was:

A)$3,300.
B)$2,800.
C)$6,300.
D)$3,500.

Question 78

Reference: 03-03
Meyers Company had the following inventory balances at the beginning and end of November: $$\begin{array} { | l | l | l | } \hline & \text { November 1 } & \text { November 30 } \\\hline \text { Raw Materials } & \$ 17,000 & \$ 20,000 \\\hline \text { Finished Goods } & \$ 50,000 & \$ 44,000 \\\hline \text { Work in Process } & \$ 9,000 & \$ 11,000 \\\hline\end{array}$$ During November, $39,000 in raw materials (all direct materials) were drawn from inventory and used in production. The company's predetermined overhead rate was $8 per direct labour-hour, and it paid its direct labour workers $10 per hour. A total of 300 hours of direct labour time had been expended on the jobs in the beginning Work in Process inventory account. The ending Work in Process inventory account contained $4,700 of direct materials cost. The Company incurred $28,000 of actual manufacturing overhead cost during the month and applied $26,400 in manufacturing overhead cost.

-The direct materials cost in the November 1 Work in Process inventory account totalled:

A)$6,000.
B)$3,000.
C)$3,600.
D)$6,600.

Question 79

Which of the following statements is not always true

A)The job-order costing system is simpler to use than process costing because the record keeping requirements are less.
B)The job-order costing system is used by manufacturing companies.
C)The job-order cost sheet is subsidiary to the work-in-process account.
D)All costs used in job-ordering costing are actual costs.

Question 80

Worrell Corporation has a job-order costing system. appeared in the Work in Process account for the month of March: $$\begin{array} { | l | c | } \hline \text { March 1, balance } & \$ 12,000 \\\hline \text { March 31, direct materials } & 40,000 \\\hline \text { March 31, direct labour } & 30,000 \\\hline \text { March 31, manufacturing overhead applied } & 27,000 \\\hline \text { March 31, to finished goods } & ( 100,000 ) \\\hline\end{array}$$ Worrell applies overhead at a predetermined rate of 90% of direct labour cost. Job No.
232, the only job still in process at the end of March, has been charged with manufacturing overhead of $2,250. What was the amount of direct materials charged to Job No. 232?

A)$9,000.
B)$4,250.
C)$2,250.
D)$2,500.