Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
Name:
Class:
Date:
chapter 10
94. Loise Inc., a manufacturing company, forecasts that total overhead for the current year will be $19,250,000, and total
machine hours will be 350,000 hours. However, the actual overhead is $6,095,000, and the actual machine hours are
142,000 hours. If the company uses a predetermined overhead rate based on machine hours for applying overhead, what is
the predetermined overhead rate?
a. $23 per machine hour
b. $192 per machine hour
c. $55 per machine hour
d. $43 per machine hour
95. At the end of the fiscal year, if the balance in Factory Overhead is small, it would normally be _____.
a. transferred to Work in Process
b. transferred to Cost of Goods Sold
c. transferred to Finished Goods
d. allocated between Work in Process and Finished Goods
96. For a manufacturing business, work-in-process inventories consist of inventories that have _____.
a. not yet entered the manufacturing process
b. entered the manufacturing process but not been completed
c. entered and completed manufacturing process but have not been sold
d. entered and completed manufacturing process and have been sold
97. Which of the following is most likely a period cost?
a. Depreciation on factory lunchroom furniture
b. Salary of telephone receptionist in the sales office
c. Salary of a security guard for the factory parking lot
d. Computer chips used by a computer manufacturer
98. The recording of the factory labor costs incurred for general factory use would include a debit to _____.
a. Factory Overhead
b. Wages Payable
c. Wages Expense
d. Cost of Goods Sold
99. A _____ is prepared when materials that have been ordered are received and inspected.
a. supplier's invoice
b. materials ledger
c. receiving report
d. materials requisition
100. Which of the following costs appear on a balance sheet?
a. Selling expenses
b. Product costs
c. Period costs
d. Opportunity costs
Name:
Class:
Date:
chapter 10
101. Direct materials, work in process, and finished goods inventory are most likely to be reported on the balance sheet of
a(n) _____.
a. financial consultant
b. apparel boutique
c. automobile company
d. insurance company
102. Which of the following is a period cost?
a. Power in a building
b. Depreciation on factory equipment
c. Sales commissions
d. Wages of an assembly worker
103. Dividing estimated total factory overhead costs by estimated activity base will give the _____.
a. underabsorbed factory overhead rate
b. predetermined factory overhead rate
c. overabsorbed factory overhead rate
d. actual factory overhead rate
104. For an automobile company, the total overhead applied was $48,000,000 at the end of the year. Actual overhead was
$52,850,000. Closing over/underapplied overhead into cost of goods sold would cause net income to _____.
a. increase by $4,850,000
b. decrease by $4,850,000
c. stay the same
d. decrease by $400,000
105. Contia Inc. forecasts that total overhead for the current year will be $12,600,000, and total machine hours will be
300,000 hours. However, the actual overhead is $3,250,000, and the actual machine hours are 98,500 hours. If the
company uses a predetermined overhead rate based on machine hours for applying overhead, the overhead will be _____.
a. overapplied by $887,000
b. underapplied by $887,000
c. overapplied by $9,350,000
d. underapplied by $9,350,000
106. Which of the following statements is true of managerial accounting?
a. Reporting under managerial accounting is constrained by rules such as generally accepted accounting principles.
b. Managerial accounting is required to be reported annually but also may be reported monthly or quarterly.
c. Managerial accounting provides information to the external stakeholders of the company.
d. Managerial accounting is primarily concerned with generating information for use by managers.
107. A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the
materials from the Materials account to _____.
a. Work in Process and Cost of Goods Sold
b. Work in Process and Factory Overhead
c. Finished Goods and Cost of Goods Sold
d. Work in Process and Finished Goods
Name:
Class:
Date:
chapter 10
108. Which of the following is true of a direct materials cost?
a. A direct materials cost is included in factory overhead.
b. It is sometimes called factory burden.
c. It is not a significant portion of the total product cost.
d. It is the cost of any material that is an integral part of the finished product.
109. Heedy Winery accumulates the costs incurred in the labeling process in an activity cost pool. Costs for the labeling
process are estimated to be $320,000, and the winery expects to generate 640,000 labels for the coming year. Production
for its top-selling wine is estimated at 160,000 bottles. How much overhead from the labeling process will be allocated to
this particular variety of wine?
a. $40,000
b. $80,000
c. $160,000
d. $320,000
110. Which of the following is true of job order cost systems?
a. Examples of companies that use job order cost systems would be oil refineries, paper producers, chemical
processors, and food processors.
b. Job order cost systems are not widely used.
c. Job order cost systems are often used by companies that manufacture custom products for customers or batches of
similar products.
d. Job order cost systems provide product costs for each manufacturing department or process.
111. Costs are often classified by their relationship to a segment of operations, called a _____.
a. prime cost
b. controlling account
c. cost object
d. cost sheet
112. If the cost of direct materials is not a significant portion of the total product cost, it may be classified as _____.
a. direct labor costs
b. selling and administrative costs
c. miscellaneous costs
d. factory overhead costs
113. KCT Printing Company uses a job order cost system.
(a) Indicate the source of the data for increasing Work in Process for each of the following:
(1) Direct materials requisitioned
(2) Direct labor used
(b) Indicate the source of the data for decreasing Work in Process for jobs completed.
(c) Present a list of the three controlling accounts used in the general ledger to record the inventories and, in
each case, indicate the related subsidiary ledger.
114. The following information is available for the first month of operations of Diacox Inc., a manufacturer of sports
apparel:
Name:
Class:
Date:
chapter 10
Sales $2,050,000
Gross profit 490,000
Indirect labor 152,000
Indirect materials 45,000
Other factory overhead 515,000
Materials purchased 801,000
Total manufacturing costs for the period 1,710,000
Materials inventory, end of period 36,800
Using the given information, determine the following:
a. Cost of goods sold
b. Direct materials cost
c. Direct labor cost
115. Use the correct number to designate each item in the following list:
1) direct materials
2) selling and administrative expenses
3) factory overhead
4) direct labor
a) rent expense on factory building
b) sales supplies used
c) factory supplies used
d) indirect materials used
e) wages of assembly line personnel
f) depreciation on office equipment
g) rent on office facilities
h) insurance expired on factory equipment
i) cost of primary material used to assemble product
116. Matt, Inc., a toy manufacturing company, uses job order cost system. The time tickets from September jobs are
summarized as follows.
Job 100 $3,500
Job 101 1,800
Job 102 1,200
Job 103 2,800
Factory supervision $1,700
Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $25 per direct labor hour. The direct
labor rate is $30 per hour.
a. Determine the total factory labor costs transferred to Work in Process and Factory Overhead for September.
b. Determine the amount of factory overhead applied to production for September.
117. Indicate whether each of the following costs of a cabinet manufacturer would be classified as direct materials cost,
direct labor cost, factory overhead cost, or period cost.
a. Plant manager's salary
b. Office administrative assistant's salary
c. Depreciation on factory equipment
Name:
Class:
Date:
chapter 10
e. Varieties of wood
f. Varnish for coating cabinets
g. Utilities cost on the factory
h. Cabinet assembly worker's salary
i. Advertising costs
j. Screws and glue used in assembly process
Name:
Class:
Date:
chapter 10
Answer Key
Name:
Class:
Date:
chapter 10
Name:
Class:
Date:
chapter 10
Name:
Class:
Date:
chapter 10
Name:
Class:
Date:
chapter 10
Name:
Class:
Date:
chapter 10
