Deck 3: Systems Design: Job-Order Costing

Question 1

Job-order costing is used in those situations where units of a product are homogeneous, such as in the manufacture of sugar.

Answer 1

False

Question 2

The following journal entry would be made to apply overhead cost to jobs in a job-order costing system:

Answer 2

True

Question 3

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

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

Answer 3

D

Question 4

For which situation(s) below would an organization be more likely to use a job-order costing system of accumulating product costs rather than a process costing system?

A) a steel factory that processes iron ore into steel bars
B) a factory that processes sugar and other ingredients into black licorice
C) a costume maker that makes specialty costumes for figure skaters
D) all of these

Question 5

Job-order costing is usually not used in service organizations such as hospitals and law firms.

Question 6

When completed goods are sold, the transaction is recorded as a debit to Cost of Goods Sold and a credit to Work in Process.

Question 7

Computing unit product costs involves averaging in:

A) Choice A
B) Choice B
C) Choice C
D) Choice D

Question 8

Use of a single, plantwide overhead rate is generally appropriate only for very large manufacturing companies.

Question 9

A credit balance in the Manufacturing Overhead account at the end of the year means that overhead was underapplied.

Question 10

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

Question 11

When the predetermined overhead rate is based on direct labor-hours, the amount of overhead applied to a job is proportional to the amount of actual direct labor-hours incurred on the job.

Question 12

Actual manufacturing overhead costs are traced to specific jobs.

Question 13

Predetermined overhead rates are based on actual cost and activity data.

Question 14

The sum of all amounts transferred from the Work in Process account and into the Finished Goods account represents the Cost of Goods Manufactured for the period.

Question 15

The labor time ticket contains the details of how much time an employee takes on each task throughout the day.

Question 16

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

Question 17

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

A) fast food restaurant
B) shipbuilding
C) crude oil refining
D) candy making

Question 18

In order to improve the accuracy of unit costs, most companies recompute the predetermined overhead rate each month.

Question 19

The three cost categories appearing on a job cost sheet are: selling expense, manufacturing expense, and administrative expense.

Question 20

The most common accounting treatment of underapplied manufacturing overhead is to transfer it to the Manufacturing Overhead control account.

Question 21

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 labor-hour, how many hours were worked during the year?

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

Question 22

Which of the following documents is used to specify the type and quantity of materials drawn from the storeroom, and identifies the job to which the costs of the materials are to be charged?

A) Job Cost Sheet
B) Bill of Materials
C) Material Requisition Form
D) Purchase Order

Question 23

When closing overapplied manufacturing overhead to cost of goods sold, which of the following would be true?

A) Work in process will decrease.
B) Cost of goods sold will increase.
C) Net income will decrease.
D) Gross margin will increase.

Question 24

In a job-order costing system, the entry to record depreciation on manufacturing equipment would include:

A) a debit to the Work in Process inventory account.
B) a debit to the Depreciation Expense account.
C) a debit to the Manufacturing Overhead account.
D) a credit to the Work in Process inventory account.

Question 25

Ivory Company uses a job-order costing system. What year-end journal entry could Ivory make to dispose of (close out) $4,150 of overapplied manufacturing overhead cost?

A)
B)
C)
D)

Question 26

At the beginning of the year, manufacturing overhead for the year was estimated to be $702,450. At the end of the year, actual direct labor-hours for the year were 33,100 hours, the actual manufacturing overhead for the year was $697,450, and manufacturing overhead for the year was overapplied by $40,680. If the predetermined overhead rate is based on direct labor-hours, then the estimated direct labor-hours at the beginning of the year used in the predetermined overhead rate must have been:

A) 31,500 direct labor-hours
B) 29,452 direct labor-hours
C) 31,276 direct labor-hours
D) 33,100 direct labor-hours

Question 27

Job 607 was recently completed. The following data have been recorded on its job cost sheet:
The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $14 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 607 would be:

A) $4,107
B) $6,319
C) $3,432
D) $4,863

Question 28

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

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

Question 29

Which of the following situations always results in underapplied overhead?

A) actual overhead is greater than applied overhead
B) actual overhead is less than applied overhead
C) estimated overhead is greater than actual overhead
D) estimated overhead is less than actual overhead

Question 30

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 labor. From this information, it appears that the company is using a predetermined overhead rate, as a percentage of direct labor costs, of:

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

Question 31

Harrell Company uses a predetermined overhead rate based on direct labor-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 labor-hours at 100,000 hours. The actual overhead cost incurred during the year was $350,000 and the actual direct labor-hours incurred on jobs during the year was 90,000 hours. The manufacturing overhead for the year would be:

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

Question 32

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:

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

Question 33

The following data have been recorded for recently completed Job 501 on its job cost sheet. Direct materials cost was $3,067. A total of 30 direct labor-hours and 104 machine-hours were worked on the job. The direct labor wage rate is $12 per labor-hour. The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $11 per machine-hour. The total cost for the job on its job cost sheet would be:

A) $4,571
B) $3,757
C) $3,090
D) $3,427

Question 34

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

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 35

In a job-order costing system, the journal entry to record the application of overhead cost to jobs would include:

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

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) 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 37

When applying manufacturing overhead to jobs, the formula to calculate the amount is as follows:

A) Predetermined overhead rate divided by the actual manufacturing overhead incurred on the particular job.
B) Predetermined overhead rate times the actual manufacturing overhead incurred on the particular job.
C) Predetermined overhead rate divided by the actual units of allocation base charged to the particular job.
D) Predetermined overhead rate times the actual units of allocation base charged to the particular job.

Question 38

Which of the following accounts is debited when indirect labor is recorded?

A) Work in Process
B) Salaries and Wages Expense
C) Salaries and Wages Payable
D) Manufacturing Overhead

Question 39

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

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

Question 40

Choice of allocation base should be made based on:

A) the relative size of the base.
B) the base's relation to direct labor.
C) the base's activity.
D) whether the base actually drives the cost being allocated.

Question 41

Melillo Corporation has provided data concerning the company's Manufacturing Overhead account for the month of October. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $67,000 and the total of the credits to the account was $57,000. Which of the following statements is true?

A) Manufacturing overhead for the month was overapplied by $10,000.
B) Actual manufacturing overhead for the month was $67,000.
C) Manufacturing overhead applied to Work in Process for the month was $67,000.
D) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $57,000.

Question 42

During December, Fleeger Corporation incurred $51,000 of direct labor costs and $5,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a:

A) debit to Work in Process of $56,000
B) credit to Work in Process of $51,000
C) debit to Work in Process of $51,000
D) credit to Work in Process of $56,000

Question 43

Inks Corporation incurred $69,000 of actual Manufacturing Overhead costs during June. During the same period, the Manufacturing Overhead applied to Work in Process was $70,000. The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a:

A) debit to Manufacturing Overhead of $69,000
B) debit to Work in Process of $70,000
C) credit to Manufacturing Overhead of $69,000
D) credit to Work in Process of $70,000

Question 44

During August at Schlappi Corporation, $80,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $2,000. The journal entry to record this requisition would include a debit to Manufacturing Overhead of:

A) $2,000
B) $80,000
C) $78,000
D) $0

Question 45

Crimp Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 15,000 hours and the total estimated manufacturing overhead was $258,000. At the end of the year, actual direct labor-hours for the year were 13,100 hours and the actual manufacturing overhead for the year was $253,000. Overhead at the end of the year was:

A) $27,680 overapplied
B) $32,680 overapplied
C) $27,680 underapplied
D) $32,680 underapplied

Question 46

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 labor $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) $6.50
B) $6.00
C) $5.70
D) $5.50

Question 47

Simplex Company has the following estimated costs for next year:
Simplex estimates that 10,000 direct labor 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) $7.63
C) $6.94
D) $3.50

Question 48

During May at Landreth Corporation, $81,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $7,000. The journal entry to record the requisition from the storeroom would include a:

A) debit to Raw Materials of $81,000
B) debit to Work in Process of $81,000
C) credit to Manufacturing Overhead of $7,000
D) debit to Work in Process of $74,000

Question 49

Mcmackin Corporation had $35,000 of raw materials on hand on August 1. During the month, the company purchased an additional $66,000 of raw materials. During August, $81,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $7,000. The debits to the Work in Process account as a consequence of the raw materials transactions in August total:

A) $66,000
B) $0
C) $74,000
D) $81,000

Question 50

During October, Kreitner Inc. transferred $73,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $76,000. The journal entries to record these transactions would include a:

A) credit to Work in Process of $73,000
B) credit to Cost of Goods Sold of $76,000
C) debit to Finished Goods of $76,000
D) credit to Finished Goods of $73,000

Question 51

Brabo Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 15,700 hours. At the end of the year, actual direct labor-hours for the year were 16,700 hours, the actual manufacturing overhead for the year was $352,960, and manufacturing overhead for the year was overapplied by $27,800. The estimated manufacturing overhead at the beginning of the year used in the predetermined overhead rate must have been:

A) $327,124
B) $357,960
C) $380,760
D) $347,960

Question 52

Mincks Corporation incurred $64,000 of actual Manufacturing Overhead costs during November. During the same period, the Manufacturing Overhead applied to Work in Process was $61,000. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a:

A) debit to Work in Process of $64,000
B) credit to Manufacturing Overhead of $61,000
C) credit to Work in Process of $64,000
D) debit to Manufacturing Overhead of $61,000

Question 53

Danoff Corporation has provided data concerning the company's Manufacturing Overhead account for the month of October. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $68,000 and the total of the credits to the account was $77,000. Which of the following statements is true?

A) Actual manufacturing overhead incurred during the month was $77,000.
B) Manufacturing overhead applied to Work in Process for the month was $68,000.
C) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $68,000.
D) Manufacturing overhead for the month was overapplied by $9,000.

Question 54

On December 1, Catherman Corporation had $21,000 of raw materials on hand. During the month, the company purchased an additional $61,000 of raw materials. During December, $70,000 of raw materials were requisitioned from the storeroom for use in production. The debits to the Raw Materials account for the month of December total:

A) $82,000
B) $70,000
C) $61,000
D) $21,000

Question 55

In December, Perone Inc. incurred $78,000 of direct labor costs and $4,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a:

A) debit to Work in Process of $82,000
B) debit to Manufacturing Overhead of $4,000
C) credit to Work in Process of $82,000
D) credit to Manufacturing Overhead of $4,000

Question 56

At the beginning of October, Cozier Corporation had $34,000 of raw materials on hand. During the month, the company purchased an additional $78,000 of raw materials. During October, $92,000 of raw materials were requisitioned from the storeroom for use in production. The credits to the Raw Materials account for the month of October total:

A) $92,000
B) $34,000
C) $78,000
D) $112,000

Question 57

The balance in White Company's Work in Process inventory account was $15,000 on August 1 and $18,000 on August 31. The company incurred $30,000 in direct labor cost during August and requisitioned $25,000 in raw materials (all direct material). If the sum of the debits to the Manufacturing Overhead account total $28,000 for the month, and if the sum of the credits totaled $30,000, then:

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

Question 58

Dagnon Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the total estimated manufacturing overhead was $299,130. At the end of the year, actual direct labor-hours for the year were 17,400 hours, manufacturing overhead for the year was overapplied by $13,850, and the actual manufacturing overhead was $294,130. The predetermined overhead rate for the year must have been closest to:

A) $17.70
B) $17.19
C) $18.22
D) $16.90

Question 59

Waldvogel Corporation has provided data concerning the company's Manufacturing Overhead account for the month of April. Prior to the closing of the overapplied or underapplied balance to Cost of Goods Sold, the total of the debits to the Manufacturing Overhead account was $55,000 and the total of the credits to the account was $56,000. Which of the following statements is true?

A) Manufacturing overhead for the month was underapplied by $1,000.
B) Manufacturing overhead applied to Work in Process for the month was $56,000.
C) Actual manufacturing overhead incurred during the month was $56,000.
D) Manufacturing overhead transferred from Finished Goods to Cost of Goods Sold during the month was $55,000.

Question 60

Hards Corporation had $38,000 of raw materials on hand on September 1. During the month, the company purchased an additional $54,000 of raw materials. The journal entry to record the purchase of raw materials would include a:

A) debit to Raw Materials of $54,000
B) debit to Raw Materials of $92,000
C) credit to Raw Materials of $92,000
D) credit to Raw Materials of $54,000

Question 61

Munos Publishing Company uses a job-order costing system to collect costs related to the manufacture of specialty publications for corporate training.
What journal entry would Munos make to record $9,500 of depreciation on its printing presses?

A)
B)
C)
D)

Question 62

The actual manufacturing overhead incurred at Huberty Corporation during January was $73,000, while the manufacturing overhead applied to Work in Process was $78,000. The company's Cost of Goods Sold was $349,000 prior to closing out its Manufacturing Overhead account. The company closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true?

A) Manufacturing overhead was overapplied by $5,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $354,000
B) Manufacturing overhead was underapplied by $5,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $344,000
C) Manufacturing overhead was underapplied by $5,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $354,000
D) Manufacturing overhead was overapplied by $5,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $344,000

Question 63

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

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

Question 64

Niglio Inc. has provided the following data for the month of December. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
Manufacturing overhead for the month was underapplied by $10,000.
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The finished goods inventory at the end of December after allocation of any underapplied or overapplied overhead for the month is closest to:

A) $56,950
B) $51,750
C) $51,691
D) $57,009

Question 65

Rinks Inc. has provided the following data for the month of December. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
Manufacturing overhead for the month was underapplied by $1,000.
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied overhead for December would include the following:

A) debit to Finished Goods of $120
B) credit to Finished Goods of $42,480
C) debit to Finished Goods of $42,480
D) credit to Finished Goods of $120

Question 66

Munos Publishing Company uses a job-order costing system to collect costs related to the manufacture of specialty publications for corporate training.

-What journal entry would Munos make to record the completion of Job KN668 at a total cost of $7,600?

A)
B)
C)
D)

Question 67

Wandrie Inc. has provided the following data for the month of October. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
Manufacturing overhead for the month was overapplied by $3,000.
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The cost of goods sold for October after allocation of any underapplied or overapplied overhead for the month is closest to:

A) $215,600
B) $210,980
C) $210,290
D) $216,290

Question 68

Acer Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its most recent year of operations. The estimates of the manufacturing overhead and of machine-hours were made at the beginning of the year for the purpose of computing the company's predetermined overhead rate for the year.
The predetermined overhead rate is closest to:

A) $49.23
B) $49.90
C) $49.78
D) $50.45

Question 69

Pitzer Corporation, a manufacturing company, has provided data concerning its operations for March. The beginning balance in the raw materials account was $29,000 and the ending balance was $38,000. Raw materials purchases during the month totaled $74,000. Manufacturing overhead cost incurred during the month was $106,000, of which $7,000 consisted of raw materials classified as indirect materials. The direct materials cost for March was:

A) $83,000
B) $58,000
C) $74,000
D) $65,000

Question 70

Roswick Inc. has provided the following data for the month of August. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
Manufacturing overhead for the month was underapplied by $3,000.
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied overhead for August would include the following:

A) debit to Cost of Goods Sold of $142,300
B) credit to Cost of Goods Sold of $2,220
C) credit to Cost of Goods Sold of $142,300
D) debit to Cost of Goods Sold of $2,220

Question 71

Munos Publishing Company uses a job-order costing system to collect costs related to the manufacture of specialty publications for corporate training.
What journal entry would Munos make to record the application of $1,200 of manufacturing overhead to Job KN672?

A)
B)
C)
D)

Question 72

Beaver Company used a predetermined overhead rate last year of $2 per direct labor-hour, based on an estimate of 25,000 direct labor-hours to be worked during the year. Actual costs and activity during the year were:
The underapplied or overapplied overhead last year was:

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

Question 73

Mieras Inc. has provided the following data for the month of November. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
Manufacturing overhead for the month was underapplied by $2,000.
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The journal entry to record the allocation of any underapplied or overapplied overhead for November would include the following:

A) credit to Work in Process of $140
B) debit to Work in Process of $140
C) credit to Work in Process of $13,670
D) debit to Work in Process of $13,670

Question 74

Jarratt Inc., a manufacturing company, has provided the following data for the month of September. The balance in the Work in Process inventory account was $21,000 at the beginning of the month and $24,000 at the end of the month. During the month, the company incurred direct materials cost of $69,000 and direct labor cost of $31,000. The actual manufacturing overhead cost incurred was $54,000. The manufacturing overhead cost applied to Work in Process was $58,000. The cost of goods manufactured for September was:

A) $158,000
B) $154,000
C) $151,000
D) $155,000

Question 75

Paul Company used a predetermined overhead rate during the year just completed of $3.50 per direct labor-hour, based on an estimate of 22,000 direct labor-hours to be worked during the year. Actual overhead cost and activity during the year were:
The underapplied or overapplied overhead for the year would be:

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

Question 76

Molano Corporation has provided the following data concerning manufacturing overhead for June:
The company's Cost of Goods Sold was $255,000 prior to closing out its Manufacturing Overhead account. The company closes out its Manufacturing Overhead account to Cost of Goods Sold. Which of the following statements is true?

A) Manufacturing overhead was underapplied by $7,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $248,000
B) Manufacturing overhead was overapplied by $7,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $248,000
C) Manufacturing overhead was underapplied by $7,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $262,000
D) Manufacturing overhead was overapplied by $7,000; Cost of Goods Sold after closing out the Manufacturing Overhead account is $262,000

Question 77

Erholm Inc. has provided the following data for the month of March. The balance in the Finished Goods inventory account at the beginning of the month was $43,000 and at the end of the month was $42,000. The cost of goods manufactured for the month was $221,000. The actual manufacturing overhead cost incurred was $45,000 and the manufacturing overhead cost applied to Work in Process was $49,000. The adjusted cost of goods sold that would appear on the income statement for March is:

A) $218,000
B) $220,000
C) $222,000
D) $221,000

Question 78

Pricton Corporation has a job-order costing system. For the month of April, the following debits (credits) appeared in the Work in Process account:
Pricton applies overhead at a predetermined rate of 90% of direct labor cost. Job No. 50, the only job still in process at the end of April, has been charged with manufacturing overhead of $2,250. The amount of direct materials charged to Job No. 50 was:

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

Question 79

Chaffey Inc. has provided the following data for the month of January. There were no beginning inventories; consequently, the direct materials, direct labor, and manufacturing overhead applied listed below are all for the current month.
Manufacturing overhead for the month was underapplied by $7,000.
The company allocates any underapplied or overapplied overhead among work in process, finished goods, and cost of goods sold at the end of the month on the basis of the overhead applied during the month in those accounts.
The work in process inventory at the end of January after allocation of any underapplied or overapplied overhead for the month is closest to:

A) $5,975
B) $6,340
C) $5,920
D) $6,285

Question 80

The following data have been provided by a company:
Compute the amount of direct materials used during November if $20,000 in raw materials were purchased during the month.

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