26. The predetermined overhead rate is usually calculated
a.
at the end of each month.
b.
at the beginning of each month.
c.
at the beginning of the year.
d.
at the end of the year.
27. A normal job-order costing system is a system that uses:
a.
actual costs for direct materials and estimated costs for direct labor and overhead.
b.
estimated costs for direct materials, direct labor, and overhead.
c.
actual costs for direct materials and direct labor and estimated costs for overhead.
d.
actual costs for direct materials and overhead, estimated costs for direct labor.
28. The Kraig Corporation manufactures custom-made purses. The following data pertains to Job XY5:
Direct materials placed into production
$4,000
Direct labor hours worked
50 hours
Direct labor rate per hour
$ 15
Machine hours worked
100 hours
Plantwide overhead is applied using a plant-wide rate based on direct labor hours. Plantwide overhead
was budgeted at $60,000 for the year and the direct labor hours were estimated to be 15,000. Job XY5
consists of 50 units. What is overhead cost assigned to Job XY5?
a.
$200
b.
$400
c.
$750
d.
$1,500
29. Carlson Company uses a predetermined rate to apply overhead. At the beginning of the year, Carlson
estimated its overhead costs at $240,000, direct labor hours at 40,000, and machine hours at 10,000.
Actual overhead costs incurred were $249,280, actual direct labor hours were 41,000, and actual
machine hours were 11,000.
If the predetermined overhead rate is based on machine hours, what is the total amount credited to the
plantwide overhead account for the year for Carlson?
a.
$249,280
b.
$246,000
c.
$240,000
d.
$264,000
30. The document that lists the total cost for a single job is a
a.
job-order cost sheet.
b.
materials requisition form.
c.
time ticket.
d.
purchase order.
e.
None of these are correct.
31. Which of the following is true about the job-order cost sheet?
a.
It is prepared for every job.
b.
It is subsidiary to the work-in-process account.
c.
It is the primary document for accumulating all costs related to a particular job.
d.
It contains all information pertinent to a job.
e.
All of these are correct.
32. Which of the following is not on a time ticket?
a.
employee’s name
b.
employee’s wage rate
c.
hours worked on each job
d.
cost of materials
e.
All of these are on a time ticket.
33. Which form asks for type, quantity, unit price of direct materials issued, and for the number of the job?
a.
time ticket
b.
materials requisition form
c.
job-order cost sheet
d.
None of these are correct.
e.
All of these are correct.
34. A source document that would not be used to help decide the cost of a job is (are)
a.
a material requisition form.
b.
a time ticket for direct labor.
c.
a time ticket for indirect labor.
d.
a material requisition form and a time ticket for direct labor.
e.
all items listed are helpful to decide the cost of a job.
35. Which of the following costs is not included on a job-order cost sheet?
a.
direct material costs
b.
applied plantwide overhead costs
c.
direct labor costs
d.
actual plantwide overhead costs
36. What items may be on a materials requisition form to maintain proper control over a firm’s inventory
of direct materials?
a.
cost of supplies
b.
cost of lubricants for production machinery
c.
the date and a signature
d.
All of these are correct.
e.
None of these are correct.
37. Time tickets are filled out for
a.
indirect laborers.
b.
direct laborers.
c.
both direct laborers and indirect laborers.
d.
direct materials.
e.
supervisors.
38. Which of the following is not true about job-order costing?
a.
It is used in firms that produce homogeneous products.
b.
The cost of each job is accumulated on the job-order cost sheet.
c.
The key document for accumulating manufacturing costs is the job-order cost sheet.
d.
All of these are correct.
e.
None of these are correct.
39. Which of the following can serve as a subsidiary ledger for the finished goods inventory?
a.
completed job-order cost sheets
b.
incomplete job-order cost sheets
c.
work-in-process inventory
d.
raw material inventory
e.
All of these are correct.
40. Which of the following statements is true?
a.
There will be many different jobs on a job-order cost sheet.
b.
Direct labor is allocated to jobs along with overhead using a cost driver.
c.
Work-in-process consists of all complete work.
d.
Time tickets are used to post the cost of direct labor to individual jobs.
e.
None of these.
41. Labor cost flows reflect
a.
direct labor cost.
b.
indirect labor cost.
c.
administration cost.
d.
both indirect and direct labor cost.
e.
administration cost and indirect cost.
42. Sanders Manufacturing has the following amounts listed before reconciling the overhead variance.
Estimated overhead
$760,000
Applied overhead
756,000
Actual overhead
740,000
Cost of goods sold
935,000
Assuming that any overhead variance is immaterial, calculate the adjusted Cost of Goods Sold after
adjusting for the overhead variance.
a.
$919,000
b.
$951,000
c.
$939,000
d.
$955,000
e.
$915,000
43. Using normal costing requires that
a.
actual overhead costs are not assigned directly to jobs.
b.
predetermined rates are not used to assign overhead.
c.
applied overhead is not calculated on a job specific basis.
d.
Neither plantwide or departmental rates can be used to assign overhead.
e.
All of these are correct.
44. Using normal costing, which costs never enter the work-in–process account?
a.
applied overhead
b.
actual overhead
c.
direct materials
d.
direct labor
e.
None of these.
45. Using normal costing, which of the following is false about actual overhead?
a.
Actual overhead is recorded to the overhead control account during the period.
b.
It is reconciled at the end of a period with applied overhead.
c.
It is separated into many smaller accounts, such as indirect labor, supplies, etc.
d.
All of these are correct.
e.
None of these.
46. When a job is completed but not sold, the accounts affected are
a.
Raw Materials and Work-in-Process.
b.
Work-in-Process and Finished Goods.
c.
Work-in-Process and Cost of Goods Sold.
d.
Finished Goods and Cost of Goods Sold.
e.
Finished Goods and Overhead Control.
47. A schedule that is used to ensure accuracy in computing product costs is (are)
a.
the schedule of the cost of goods manufactured.
b.
the schedule of the cost of goods sold.
c.
the schedules of the cost of goods manufactured and cost of goods sold.
d.
the schedule of raw materials used.
e.
None of the schedules listed here.
48. Which account can sometimes be skipped when a good is produced for a particular customer?
a.
raw materials
b.
work-in-process
c.
finished goods
d.
cost of goods sold
e.
accounts can never be skipped
49. The order that cost elements flow through accounts until they are recognized as an expense is
a.
Work-in-Process, Cost of Goods Sold, Finished Goods
b.
Finished Goods, Work-in-Process, Cost of Goods Sold
c.
Finished Goods, Cost of Goods Sold, Work-in-Process
d.
Work-in-Process, Finished Goods, Cost of Goods Sold
e.
None of these are correct.
50. Which of the following is not a manufacturing cost element?
a.
direct materials
b.
direct labor
c.
advertising expense
d.
overhead
e.
All of these are correct.
51. Which of the following sentences is not true?
a.
Actual overhead costs always enter the Work-in-Process account.
b.
The cost of a job includes direct materials, direct labor, and applied overhead.
c.
When a job is complete, it must leave Work-in-Process and be entered into Finished
Goods or Cost of Goods Sold.
d.
All of these are correct.
e.
None of these are correct.
52. Which of the following is true?
a.
The adjusted cost of goods sold is equal to normal cost of goods sold plus or minus the
overhead variance.
b.
If the overhead variance shows overapplied overhead, then that amount would be
subtracted from normal cost of goods sold.
c.
Variances in overhead are expected every month.
d.
All of these.
e.
None of these.
53. Costs associated with selling and general administrative activities are not
a.
period costs.
b.
nonmanufacturing costs.
c.
manufacturing costs.
d.
period costs and nonmanufacturing costs.
e.
any of these.
54. Ring Company designs and builds jewelry. During June it had applied overhead of $120,000.
Overhead is applied at the rate of 75% of direct labor cost. Direct labor wages average $20 per hour.
How many direct labor hours did Ring Company have for the month of June?
a.
12,000
b.
6,000
c.
10,000
d.
8,000
e.
9,000
55. Bryant Company designs and builds fancy dining room tables for individual customers. On July 1,
there were two jobs in process: Job 391 with a beginning balance of $21,700 and Job 392 with a
beginning balance of $8,790. Overhead costs are applied by using a rate of 70% of direct labor costs.
Both jobs are unfinished on July 31. Data on July costs for both jobs are as follows:
Job 391
Job 392
Direct materials
$5,100
$ 9,200
Direct labor cost
2,700
11,000
What is the total of the work-in-process account at July 31?
a.
$28,000
b.
$58,490
c.
$68,080
d.
$37,590
e.
none of these
Job 391
Job 392
BWIP
$ 8,790
DM
5,100
9,200
DL
11,000
Total
56. Ending Work-in-Process for Lee’s Carpentry was $64,000 for January. Direct labor and direct
materials together for the month were $39,000. Direct labor was twice as much as direct materials. The
overhead rate is 70% of direct labor. No jobs were finished during the month. What was beginning
Work-in-Process?
a.
$6,800
b.
$25,000
c.
$4,250
d.
$15,250
e.
$0
26,000
57. Wright’s Construction builds custom houses for individual buyers. On June 1, it had one job started
with a beginning Work-in-Process of $56,000. During June the job was finished and sold. Direct labor
for the job in June was $75,000 and direct materials used were $57,000. Overhead is computed at a
rate of 65% of direct labor. There is a markup of 35% on all sales. What was the selling price of the
house?
a.
$319,612.50
b.
$236,750
c.
$82,862.5
d.
$272,600
e.
262,087.5
BWIP
57,000
75,000
Total Cost
58. Wright Corporation had the following information available for December of the current year:
Work in Process, December 1
$20,000
Materials placed into production, December
27,500
Direct labor, December
37,500
Plantwide overhead rate is 150% of direct labor costs. Job cost sheets had the following balances:
Job Z1
$32,500
Job Z2
55,000
Job Z3
35,000
Job Z4
18,750
Jobs Z3 and Z4 were not completed at the end of December. What is the balance in work-in process
for Wright at the end of December?
a.
$85,000
b.
$87,500
c.
$56,250
d.
$53,750
Figure 5-4.
Hill Company uses job-order costing. At the end of the month, the following data was gathered:
Job #
Total Cost
Complete?
Sold?
803
$611
yes
yes
804
$423
yes
no
805
$805
no
no
806
$682
yes
yes
807
$525
yes
no
808
$250
no
no
809
$440
yes
yes
810
$773
yes
no
811
$267
no
no
812
$341
no
no
Hill’s selling price is cost plus 50% for each of its products.
59. Refer to Figure 5-4. What is the total in the work-in–process account?
a.
$1,980
b.
$2,510
c.
$1,663
d.
$1,840
e.
$1,163
60. Refer to Figure 5-4. What is the total in Finished Goods?
a.
$1,721
b.
$2,230
c.
$1,700
d.
$1,860
e.
$2,163
61. Refer to Figure 5-4. What is Cost of Goods Sold for the month?
a.
$1,760
b.
$1,181
c.
$1,733
d.
$1,353
e.
$2,440
62. Refer to Figure 5-4. What is the selling price of Job 806?
a.
$682
b.
$1,320
c.
$1,440
d.
$920
e.
$1,023
Figure 5-5.
Brillant Design Company makes custom chairs for individual customers. On October 1, there was one
job in process, Job 243, with a cost of $1,300. Jobs 244, 245, and 246 were started during the month of
October. Data on costs added during the month are as follows:
Job 243
Job 244
Job 245
Job 246
Direct Materials
$8,400
$2,300
$5,550
$9,200
Direct Labor
$3,100
$980
$2,200
$5,010
Overhead is applied to production at the rate of 70% of direct labor cost. Job 245 was completed on
October 14 and the client was billed at cost plus 55%. All other jobs remained in process.
63. Refer to Figure 5-5. Calculate the balance in Work-in-Process on October 31.
a.
$17,717
b.
$22,875
c.
$36,653
d.
$32,820
e.
$15,820
64. Refer to Figure 5-5. What is the price of Job 245?
a.
$20,204.20
b.
$10,627.70
c.
$22,310.50
d.
$18,761.20
e.
$14,399.50
$5,550
$1,540
total cost
$9,290
price
BWIP
$9,200
$980
$5,010
$686
$3,507
Total
65. Refer to Figure 5-5. If selling and administrative expense for the month of October equaled $ 2,000,
what is operating income for the month of October?
a.
$14,399.50
b.
$3,109.50
c.
$5,109.50
d.
$2,000.00
Figure 5-6.
Stutz, Inc. designs and builds basketball gymnasiums. Each gymnasium is custom-built to individual
customers’ specifications. Stutz uses job-order costing to keep track of its costs. In February it worked
on three jobs. Data for these jobs are as follows:
Job 175
Job 178
Job 179
Balance 2/1
$13,790
$ 0
$ 0
Direct Materials
16,200
8,500
30,500
Direct Labor Cost
23,300
7,600
45,000
Machine Hours
400
300
2,000
Overhead is applied to jobs at the rate of $25 per machine hour. By February 28, Job 178 is the only
one unfinished. The balance of Finished Goods on February 1 is $94,000 (consisting of Job 177). Jobs
177 and 179 are sold during February. Stutz sells its product at cost plus 40%.
66. Refer to Figure 5-6. Calculate the balance in Work–in-Process on February 28.
a.
$23,600
b.
$16,100
c.
$212,390
d.
$0
$ 8,500
$ 7,600
$ 7,500 ($25 300)
$23,600
67. Refer to Figure 5-6. Calculate the balance of Finished Goods at February 28.
a.
$63,290
b.
$39,500
c.
$53,290
d.
$63,690
e.
$0
68. Refer to Figure 5-6. What is Cost of Goods Sold for February?
a.
$125,500
b.
$219,500
c.
$307,300
d.
$175,700
e.
$310,100
69. Refer to Figure 5-6. What is sales revenue for February?
a.
$219,500
b.
$175,700
c.
$131,600
d.
$307,300
e.
$237,300
70. Refer to Figure 5-7. Compute the total cost of Job #3.
a.
$229,000
b.
$112,000
c.
$134,600
d.
$145,800
e.
$231,600
71. Refer to Figure 5-7. Compute the cost per unit.
a.
$11.58
b.
$5.60
c.
$5.73
d.
$11.45
e.
none of these
Figure 5-8.
John’s Water Slides makes custom water slides for hotels. On September 1, there were three jobs in
process, Jobs 812, 813, and 814. Two more jobs were started during September, Jobs 815 and 816. By
September 30, Jobs 812, 814, and 816 were finished. The following data has been collected:
Job 812
Job 813
Job 814
Job 815
Job 816
$615
$830
$ 945
—
—
750
235
1,280
$200
$915
420
115
560
320
875
Overhead is applied at the rate of 120% of direct labor cost. Jobs are sold at cost plus 60%. Selling and
administrative expenses for September totaled $2,950. By September 30, Jobs 812 were 816 are sold,
but the customer who ordered Job 814 decided he did not want the slide so it is still in the warehouse.
72. Refer to Figure 5-8. Calculate the ending balance in Work-in-Process as of September 30.
a.
$2,222
b.
$1,700
c.
$1,961
d.
$3,555.20
e.
$1,392
73. Refer to Figure 5-8. What is the ending balance of Finished Goods if the beginning balance was $0?
a.
$3,457
b.
$5,531.20
c.
$8,206.40
d.
$13,737.60
e.
$2,785
74. Refer to Figure 5-8. What is the selling price of Job 816?
BWIP
$ 830
Direct materials
235
200
Direct labor
115
320
Overhead
Total
$904
a.
$4,544
b.
$2,840
c.
$2,864
d.
$3,408
e.
$0, it is not completed yet.
75. Refer to Figure 5-8. What is the cost of goods sold for September?
a.
$5,129
b.
$8,206.40
c.
$5,720
d.
$3,575
e.
$8,586
76. Refer to Figure 5-8. What is John’s operating income for the month of September?
a.
$127.40
b.
$8,206.40
c.
$3,077.40
d.
$0
e.
None of these.
Figure 5-9.
Warwick Company has the following transactions for the month of September:
Purchased materials on account for $220,384.
Materials requisitioned for $91,562.
Direct labor for the month was incurred (but not yet paid) of $69,000
Actual overhead for the month was $41,000. It has not been paid yet (Charge to various payables)
Overhead is applied to production at the rate of 65% of direct labor.
Jobs totaling $42,500 were transferred from Work-in-Process to Finished Goods.
Jobs costing $23,000 were sold.
Balances at the beginning of the month were:
Materials
22,760
Work-in-Process
0
Finished Goods
10,040
77. Refer to Figure 5-9. Calculate the Ending Balance of Raw Materials.
a.
$220,384
b.
$151,582
c.
$185,320
d.
$22,760
e.
91,562
78. Refer to Figure 5-9. What is the ending balance in Work-in-Process?
a.
$162,912
b.
$113,083
c.
$166,414
d.
$123,870
e.
$0
79. Refer to Figure 5-9. What is the correct journal entry to record actual overhead for the month?
a.
Overhead Control 41,000
Various Payables 41,000
b.
Work-in-Process 41,000
Various Payables 41,000
c.
Various Payables 41,000
Work-in–Process 41,000
d.
Various Payable 41,000
Overhead Control 41,000
e.
none of these are correct
80. Refer to Figure 5-9. What is the journal entry to record applied overhead for the month?
a.
Work-in-Process 44,850
Overhead Control 44,850
b.
Various Payables 44,850
Overhead Control 44,850
c.
Overhead Control 44,850
Work-in-Process 44,850
d.
Overhead Control 44,850
Various Payables 44,850
81. Refer to Figure 5-9. What is the ending balance of Finished Goods?
a.
$23,321
b.
$29,540
c.
$64,321
d.
$0
e.
$10,040
Figure 5-10.
The King Corporation manufactures custom-made furniture. The following data pertains to Job X4A:
Direct materials placed into production
$9,000
Direct labor hours worked
300 hours
Direct labor rate per hour
$ 15
Machine hours worked
100 hours
Plantwide overhead rate is $22.50 per machine hour.
82. Refer to Figure 5-10. One-half of Job X4A was sold for $10,000. What is the total amount of costs
assigned to Job X4A?
a.
$9,000
b.
$20,250
c.
$13,500
d.
$15,750
83. Refer to Figure 5-10. Job X4A consists of 500 units. One-half of Job X4A was sold for $10,000. What
is the cost per unit for Job X4A?
a.
$18
b.
$31.50
c.
$27
d.
$40.50
84. When the work-in-process account is debited for direct labor, what account is usually credited?
a.
Cost of Goods Sold
b.
Sales Revenue
c.
Wages Payable
d.
Overhead Control
e.
Accounts Receivable
85. When overhead is debited to Overhead Control, what is the credit?
a.
Various payable accounts
b.
Cost of Goods Sold
c.
Work in Process
d.
Finished Goods
e.
Accounts Receivable