Question 1

The journal entry needed to record $5,000 of advertising for Oxner Manufacturing would include:

Accepted Answer

A) a debit to Advertising Expense. 
B) a credit to Advertising Expense. 
C) a debit to Manufacturing Overhead. 
D) a credit to Manufacturing Overhead. 
E) a debit to Projects-in-Process.

Question 2

A review of a company's Work-in-Process Inventory account found a debit for materials of $67,000. If all procedures were performed in the correct manner, this means that the ﬁrm:

Accepted Answer

A) also recorded a credit to Raw-Material Inventory. 
B) also recorded a credit to Manufacturing Supplies Inventory. 
C) was accounting for the usage of direct materials. 
D) was accounting for the usage of indirect materials. 
E) also recorded a credit to Raw-Material Inventory and was accounting for the usage of

Question 3

Metalica Company applies overhead based on machine hours.At the beginning of 20x1, the company estimated that manufacturing overhead would be $500,000, and machine hours would total 20,000.By 20x1 year-end, actual overhead totaled $525,000, and actual machine hours were 25,000.On the basis of this information, the 20x1 predetermined overhead rate was:

Accepted Answer

A) $0.04 per machine hour. 
B) $0.05 per machine hour. 
C) $20 per machine hour. 
D) $21 per machine hour. 
E) $25 per machine hour.

Question 4

Which of the following manufacturers would most likely use job-order costing?

Accepted Answer

A) Chemical manufacturers. 
B) Microchip processors. 
C) Custom-furniture manufacturers. 
D) Gasoline reﬁners. 
E) Fertilizer manufacturers.

Question 5

Product or service cost is a very objective number that anyone could agree on.

Accepted Answer

A) True 
 B)False

Question 6

Norwood Corporation uses a predetermined overhead rate of $20 per machine hour.In deriving this ﬁgure, the company's accountant used:

Accepted Answer

A) a denominator of budgeted machine hours for the current accounting period. 
B) a denominator of actual machine hours for the current accounting period. 
C) a denominator of actual machine hours for the previous accounting period. 
D) a numerator of budgeted machine hours for the current accounting period. 
E) a numerator of actual machine hours for the current accounting period.

Question 7

Use the following labor budget data for Roy & Miller Accounting, LLP.  The budgeted overhead cost for the year is $1,260,000.The company has estimated that one-third of the budgeted overhead cost is incurred to support the ﬁrm's two partners, and two-thirds goes to support the staff accountants.The current audit bid for Monoco Industries requires $18,000 in direct partner professional labor, $30,000 in direct staff accountant professional labor, $5,000 in direct material. What is the overhead rate for staff accountants, if separate rates are used for partners and staff accountants?

Accepted Answer

A) 50% 
B) 75% 
C) 66.7% 
D) 100% 
E) 150%

Exam 3: Product Costing and Cost Accumulation in a Batch Production Environment

The journal entry needed to record $5,000 of advertising for Oxner Manufacturing would include:

A review of a company's Work-in-Process Inventory account found a debit for materials of $67,000. If all procedures were performed in the correct manner, this means that the ﬁrm:

Which of the following manufacturers would most likely use job-order costing?

Product or service cost is a very objective number that anyone could agree on.

Norwood Corporation uses a predetermined overhead rate of $20 per machine hour.In deriving this ﬁgure, the company's accountant used: