Deck 5: Systems Design: Job-Order Costing

Question 1

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?

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

Answer 1

D

Question 2

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

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

Answer 2

$3.40.

Question 3

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

A) Budgeted level of activity.
B) Actual level of activity.
C) Capacity (maximum) level of activity.
D) Normal level of activity.

Answer 3

C

Question 4

Carlo Company uses a predetermined overhead rate based on direct labour hours to apply 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 overapplied.
B) $2,250 underapplied.
C) $15,000 overapplied.
D) $15,000 underapplied.

Question 5

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?

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

Question 6

Which of the following statements is true if a company applies overhead to jobs on the basis of a predetermined overhead rate and reports a credit balance in the Manufacturing Overhead account at the end of any period?

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

Question 7

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.What would be the manufacturing overhead for the year?

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

Question 8

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?

A) $345,000.
B) $342,000.
C) $330,000.
D) $300,000.

Question 9

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

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

Question 10

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.

Question 11

Kelly 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 1052:
$$\begin{array} { | l | r | } \hline \text { Direct materials: } & \$ 13,700 \\\hline \text { Direct labour: } & \$ 4,800 \\\hline\end{array}$$
Manufacturing overhead was applied at the rate of $25 per machine hour,and Job 1052 required 800 machine hours.In addition,selling and shipping costs of $7,000 were incurred.Job 1052 consisted of 7,000 shirts and was completed on March 24.The total cost of job 1052 transferred from Work in Process to Finished Goods on March 24 is:

A) $33,700
B) $38,500
C) $18,500
D) $20,000

Question 12

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: $\begin{array}{|l|r|r|}\hline & \text { Department A } & \text { Department B } \\\hline \text { Direct labour cost } & \$ 56,000 & \$ 33,000 \\\hline \text { Manufacturing overhead } & \$ 67,200 & \$ 45,000 \\\hline \text { Direct labour hours } & 8,000 & 9,000 \\\hline \text { Machine hours } & 4,000 & 15,000 \\\hline\end{array}$ What predetermined overhead rate would be used in Departments A and B,respectively?

A) 83% and $5.00.
B) 83% and $3.00.
C) 120% and $3.00.
D) 120% and $5.00. Dept. A = $67,200/$56,000 = 120% Dept. B = $45,000/15,000m. hrs = $3/m. hr.

Question 13

Simplex Company has the following estimated costs for next year:
$\begin{array}{|l|r|}\hline \text { Direct materials } & \$ 15,000 \\\hline \text { Direct labour } & 55,000 \\\hline \text { Sales commissions } & 75,000 \\\hline \text { Salary of production supervisor } & 35,000 \\\hline \text { Indirect materials } & 5,000 \\\hline \text { Advertising expenses } & 11,000 \\\hline \text { Rent on factory equipment } & 16,000 \\\hline\end{array}$
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,what will be the overhead rate per hour?

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

Question 14

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

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

Question 15

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?

A) Overapplied overhead of $30,000.
B) Underapplied overhead of $30,000.
C) Underapplied overhead of $6,000.
D) Overapplied overhead of $6,000.

Question 16

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

Question 17

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

A) Job cost sheets.
B) The Manufacturing Overhead account.
C) The Finished Goods inventory account.
D) Purchase requisitions.

Question 18

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

A) Fast food restaurant
B) Shipbuilder
C) Crude oil refinery
D) Candy maker

Question 19

In a normal job-order costing system,the journal entry to record the application of overhead cost to jobs includes which of the following?

A) A credit to the Work in Process inventory account.
B) A credit to the Manufacturing Overhead account.
C) A debit to Cost of Goods Sold.
D) A debit to the Manufacturing Overhead account.

Question 20

In a normal job-order costing system,the salary of the factory supervisor would usually be recorded as a debit to which of the following accounts?

A) Manufacturing Overhead.
B) Salary Expense.
C) Work in Process.
D) Finished Goods.

Question 21

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:
$\begin{array}{|l|r|}\hline \text { Direct materials issued to production } & \$ 90,000 \\\hline \text { Indirect materials issued to production } & 8,000 \\\hline \text { Manufacturing overhead cost incurred } & 125,000 \\\hline \text { Manufacturing overhead cost applied } & 113,000 \\\hline \text { Direct labour cost incurred } & 107,000 \\\hline\end{array}$
Lamprey Company had no beginning or ending inventories.What was the cost of goods manufactured for January?

A) $318,000.
B) $310,000.
C) $322,000.
D) $330,000.

Question 22

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 goods manufactured?

A) $50,000.
B) $55,000.
C) $56,000.
D) $61,000.

Question 23

Worrell Corporation has a job-order costing system.The following debits (credits)appeared in the Work in Process account for the month of March:
$\begin{array}{|l|r|}\hline \text { March 1, balance } & \$ 12,000 \\\hline \text { March 31, direct materials } & 40,000 \\\hline \text { March 31, direct labour } & 30,000 \\\hline \text { March 31, manufacturing overhead applied } & 27,000 \\\hline \text { March 31, to finished goods } & (100,000) \\\hline\end{array}$
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) $2,250.
B) $2,500.
C) $4,250.
D) $9,000.

Question 24

Manufacturing overhead is overapplied for the year by $3,000.The unadjusted cost of goods sold is $360,000.Closing manufacturing overhead into cost of goods sold will result in which of the following?

A) Adjusted cost of goods sold of $363,000.
B) A credit balance in manufacturing overhead of $6,000.
C) Adjusted cost of goods sold of $357,000.
D) Adjusted cost of goods sold of $360,000.

Question 25

Dowan Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs.During the 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) 24,000 hours.
B) 25,000 hours.
C) 26,000 hours.
D) 28,200 hours.

Question 26

What was the amount of direct materials used during November if $20,000 in raw materials were purchased during the month,all raw materials are direct,and if the inventories were as follows?
$\begin{array}{|l|r|r|}\hline & \text { Balance November 1 } & \text { Balance November 30 } \\\hline \text { Raw materials } & \$ 4,000 & \$ 3,000 \\\hline \text { Work in process } & \$ 12,000 & \$ 15,000 \\\hline \text { Finished goods } & \$ 24,000 & \$ 27,000 \\\hline\end{array}$

A) $15,000.
B) $20,000.
C) $21,000.
D) $24,000.

Question 27

During the year,Paul Company used a predetermined overhead rate 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:
$\begin{array}{|l|l|}\hline \begin{array}{l}\text { Actual manufacturing overhead cost } \\\text { incurred }\end{array} & \$ 90,000 \\\hline \text { Actual direct labour hours worked } & 25,000 \\\hline\end{array}$
What was the under- or overapplied overhead for the year?

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

Question 28

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 goods sold (after adjustment for under- or over applied overhead)?

A) $51,000.
B) $54,000.
C) $55,000.
D) $56,000.

Question 29

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.

Question 30

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.

Question 31

Bitter Company incurs a direct labour rate of $15 per hour applies overhead to jobs on the basis of $1.25 per direct labour hour.If Job 107 shows $86,000 of direct material and $10,000 of manufacturing overhead applied,what is the total cost of job 107?

A) $96,000.
B) $120,000.
C) $130,000.
D) $216,000.

Question 32

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?

A) Finished Goods was debited for $82,000 during the month.
B) Finished Goods was debited for $52,000 during the month.
C) Manufacturing Overhead was underapplied by $2,000 at the end of the month
D) Finished Goods was credited for $82,000 during the month

Question 33

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 indirect labour cost?

A) $5,000.
B) $12,000.
C) $15,000.
D) $35,000.

Question 34

At the beginning of the current year CR Company estimated the following costs:
$\begin{array}{|l|r|}\hline \text { Direct materials } & \$ 4,000 \\\hline \text { Direct labour } & 20,000 \\\hline \text { Rent on factory building } & 15,000 \\\hline \text { Sales salaries } & 25,000 \\\hline \text { Depreciation on factory equipment } & 8,000 \\\hline \text { Indirect labour } & 10,000 \\\hline \text { Production supervisor's salary } & 12,000 \\\hline\end{array}$
CR Company estimated 20,000 labour hours to be worked during the year.Actual labour hours worked were 22,000 hours.If overhead is applied on the basis of direct labour hours,what will be the overhead applied for the year?

A) $55,000.
B) $49,500.
C) $103,400.
D) $75,900.

Question 35

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

Question 36

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 manufacturing overhead applied?

A) $27,000.
B) $28,000.
C) $29,000.
D) $36,000.

Question 37

Sharp Company's records show that overhead was overapplied by $10,000 last year.This 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) Manufacturing overhead was actually overapplied by $16,000 for the year.
B) The company's net income is understated by $6,000 for the year.
C) Under the circumstances described above, the error in recording depreciation would have no effect on net income for the year.
D) The $6,000 in depreciation should have been charged to Work in Process rather than to administrative expense.

Question 38

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?

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

Question 39

Kanuck Company applies overhead to completed jobs on the basis of $0.70 per machine hour.If Job 501 shows $28,000 of manufacturing overhead applied,how many machine hours were used for the job?

A) 19,600.
B) 28,000.
C) 30,000.
D) 40,000.

Question 40

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

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

Question 41

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.

Question 42

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?

A) $27,000
B) $50,000
C) $55,000
D) $63,000

Question 43

Mallet Company has only Job 844 in process on March 1 of the current year. The job has 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 under- or overapplied overhead cost is closed out to Cost of Goods Sold at the end of the month.

During March, the following activity and amounts were recorded by the company:

Raw materials (all direct materials):
$\begin{array}{|l|r|}\hline \text { Purchased during the month } & \$ 29,500 \\\hline \text { Used in production } & \$ 30,500 \\\hline\end{array}$
Labour:
$\begin{array}{|l|r|}\hline \begin{array}{l}\text { Direct labour hours worked during the } \\\text { month }\end{array} & 2,500 \\\hline \text { Direct labour cost incurred } & \$ 26,500 \\\hline \text { Indirect labour costs incurred } & \$ 5,500 \\\hline \begin{array}{l}\text { Manufacturing overhead costs incurred } \\\text { (total) }\end{array} & \$ 18,500 \\\hline\end{array}$
Inventories:
$\begin{array}{|l|r|}\hline \text { Raw materials (all direct) March 31 } & \$ 7,500 \\\hline \text { Work in process, March 31 } & \$ 14,500 \\\hline\end{array}$
Work in Process inventory contains $\$ 5,500$ of direct labour cost.



-What is the amount of direct materials cost in the March 31 work in process inventory account?

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

Question 44

The Bus Company uses a job-order costing system. The following information was recorded for September: $\begin{array}{l}\text { Added During September }\\\begin{array} { | l | r | r | r | } \hline \text { Job Number } & \begin{array} { r } \text { September 1 } \\\text { Inventory }\end{array} & \text { Direct Materials } & \text { Direct Labour } \\\hline 1 & \$ 1,000 & \$ 300 & \$ 200 \\\hline 2 & 1,400 & 250 & 300 \\\hline 3 & 500 & 1,500 & 150 \\\hline 4 & 750 & 4,000 & 400 \\\hline\end{array}\end{array}$ 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.

-What is the cost of goods sold for September (before disposition of any under- or overapplied overhead)?

A) $2,100.
B) $5,925.
C) $3,700.
D) $1,950.

Question 45

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 raw materials used in production?

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

Question 46

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 would be the ending Work in Process account balance?

A) $2,000.
B) $13,000.
C) $50,000.
D) $55,000.

Question 47

Mallet Company has only Job 844 in process on March 1 of the current year. The job has 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 under- or overapplied overhead cost is closed out to Cost of Goods Sold at the end of the month.

During March, the following activity and amounts were recorded by the company:

Raw materials (all direct materials):
$\begin{array}{|l|r|}\hline \text { Purchased during the month } & \$ 29,500 \\\hline \text { Used in production } & \$ 30,500 \\\hline\end{array}$
Labour:
$\begin{array}{|l|r|}\hline \begin{array}{l}\text { Direct labour hours worked during the } \\\text { month }\end{array} & 2,500 \\\hline \text { Direct labour cost incurred } & \$ 26,500 \\\hline \text { Indirect labour costs incurred } & \$ 5,500 \\\hline \begin{array}{l}\text { Manufacturing overhead costs incurred } \\\text { (total) }\end{array} & \$ 18,500 \\\hline\end{array}$
Inventories:
$\begin{array}{|l|r|}\hline \text { Raw materials (all direct) March 31 } & \$ 7,500 \\\hline \text { Work in process, March 31 } & \$ 14,500 \\\hline\end{array}$
Work in Process inventory contains $\$ 5,500$ of direct labour cost.



-What was the March 1 balance in the Raw Materials inventory?

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

Question 48

The Bus Company uses a job-order costing system. The following information was recorded for September: $\begin{array}{l}\text { Added During September }\\\begin{array} { | l | r | r | r | } \hline \text { Job Number } & \begin{array} { r } \text { September 1 } \\\text { Inventory }\end{array} & \text { Direct Materials } & \text { Direct Labour } \\\hline 1 & \$ 1,000 & \$ 300 & \$ 200 \\\hline 2 & 1,400 & 250 & 300 \\\hline 3 & 500 & 1,500 & 150 \\\hline 4 & 750 & 4,000 & 400 \\\hline\end{array}\end{array}$ 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.

-What is the cost of goods manufactured for September?

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

Question 49

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

-What was the actual overhead cost incurred during the month?

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

Question 50

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.

Question 51

Mallet Company has only Job 844 in process on March 1 of the current year. The job has 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 under- or overapplied overhead cost is closed out to Cost of Goods Sold at the end of the month.

During March, the following activity and amounts were recorded by the company:

Raw materials (all direct materials):
$\begin{array}{|l|r|}\hline \text { Purchased during the month } & \$ 29,500 \\\hline \text { Used in production } & \$ 30,500 \\\hline\end{array}$
Labour:
$\begin{array}{|l|r|}\hline \begin{array}{l}\text { Direct labour hours worked during the } \\\text { month }\end{array} & 2,500 \\\hline \text { Direct labour cost incurred } & \$ 26,500 \\\hline \text { Indirect labour costs incurred } & \$ 5,500 \\\hline \begin{array}{l}\text { Manufacturing overhead costs incurred } \\\text { (total) }\end{array} & \$ 18,500 \\\hline\end{array}$
Inventories:
$\begin{array}{|l|r|}\hline \text { Raw materials (all direct) March 31 } & \$ 7,500 \\\hline \text { Work in process, March 31 } & \$ 14,500 \\\hline\end{array}$
Work in Process inventory contains $\$ 5,500$ of direct labour cost.



-Which of the following would be included in the entry to dispose of the under- or over applied overhead cost for the month?

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

Question 52

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

-What was the total cost added to Work in Process during May?

A) $101,000.
B) $106,000.
C) $61,000.
D) $111,000.

Question 53

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 manufactured?

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

Question 54

The Bus Company uses a job-order costing system. The following information was recorded for September: $\begin{array}{l}\text { Added During September }\\\begin{array} { | l | r | r | r | } \hline \text { Job Number } & \begin{array} { r } \text { September 1 } \\\text { Inventory }\end{array} & \text { Direct Materials } & \text { Direct Labour } \\\hline 1 & \$ 1,000 & \$ 300 & \$ 200 \\\hline 2 & 1,400 & 250 & 300 \\\hline 3 & 500 & 1,500 & 150 \\\hline 4 & 750 & 4,000 & 400 \\\hline\end{array}\end{array}$ 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.

-What is the ending Work in Process inventory?

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

Question 55

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.

Question 56

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?

A) $11,000.
B) $12,000.
C) $15,000.
D) $20,000.

Question 57

Mallet Company has only Job 844 in process on March 1 of the current year. The job has 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 under- or overapplied overhead cost is closed out to Cost of Goods Sold at the end of the month.

During March, the following activity and amounts were recorded by the company:

Raw materials (all direct materials):
$\begin{array}{|l|r|}\hline \text { Purchased during the month } & \$ 29,500 \\\hline \text { Used in production } & \$ 30,500 \\\hline\end{array}$
Labour:
$\begin{array}{|l|r|}\hline \begin{array}{l}\text { Direct labour hours worked during the } \\\text { month }\end{array} & 2,500 \\\hline \text { Direct labour cost incurred } & \$ 26,500 \\\hline \text { Indirect labour costs incurred } & \$ 5,500 \\\hline \begin{array}{l}\text { Manufacturing overhead costs incurred } \\\text { (total) }\end{array} & \$ 18,500 \\\hline\end{array}$
Inventories:
$\begin{array}{|l|r|}\hline \text { Raw materials (all direct) March 31 } & \$ 7,500 \\\hline \text { Work in process, March 31 } & \$ 14,500 \\\hline\end{array}$
Work in Process inventory contains $\$ 5,500$ of direct labour cost.



-What is the cost of goods manufactured for March?

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

Question 58

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.

Question 59

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.

Question 60

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 amount of direct labour cost was charged to production during the year?

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

Question 61

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

-Which entry records amortization on manufacturing equipment?

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

Question 62

Job cost sheets supporting a normal job-order costing system contain entries for actual direct material,actual direct labour,and actual manufacturing overhead cost incurred in completing a job.

Question 63

The materials requisition form is a document that specifies the type and quantity of materials to be drawn from the storeroom and identifies the job to which the costs of the materials are to be charged

Question 64

Job-order costing is used in manufacturing companies and process costing is used in service firms.

Question 65

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


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

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

Question 66

In a job-order costing system,costs are traced to departments and then allocated to units of product using an averaging process.

Question 67

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


-How much direct labour cost was incurred during January?

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

Question 68

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.

Question 69

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.

-What was the balance in the Finished Goods inventory account at the beginning of the year?

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

Question 70

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.

Question 71

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

Question 72

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:
$\begin{array}{|l|r|}\hline \text { Direct materials: } & \$ 4,000 \\\hline \text { Direct labour: } & \$ 1,500 \text { (at } \$ 5.00 \text { per direct labour hour) } \\\hline\end{array}$


-How much of any underapplied or overapplied overhead would have been due to the fact that the estimated overhead allocation base was different from the actual?

A) $4,000.
B) $6,000.
C) $10,000.
D) $14,000.

Question 73

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?

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

Question 74

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

-Which entry records the application of overhead?

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

Question 75

Job-order costing is more likely to be used than process costing in situations where many different products or services are produced each period to customer specifications.

Question 76

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:
$\begin{array}{|l|r|}\hline \text { Direct materials: } & \$ 4,000 \\\hline \text { Direct labour: } & \$ 1,500 \text { (at } \$ 5.00 \text { per direct labour hour) } \\\hline\end{array}$


-How much of any underapplied or overapplied overhead would have been due to the fact that the estimated overhead costs were different from the actual?

A) $4,000.
B) $6,000.
C) $10,000.
D) $14,000.

Question 77

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

Question 78

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

-Which entry transfers the cost of goods manufactured for the period?

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

Question 79

A job cost sheet is a form prepared for each separate job that records the materials,labour,and overhead costs charged to the job.

Question 80

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.


- What is the predetermined overhead rate based on capacity to 2 decimal places?

A) $5.35
B) $6.69
C) $5.50
D) $5.40