Chapter 03 Practice Test

<i4 prev I Question # 1 (of 18)

1 . value: 10.00 points

Which of the following statements is (are) true?

0 A. Companies that produce many different products or services would use job-order costing systems.

0 B. Job-order costing systems cannot be used by service firms.

0 C. Costs are traced to departments and then allocated to units of product when job-order costing is used.

f'. D. All of the above. -,,.-

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Chapter 03 Practice Test

~prov I Question #2 (of 18)

2. value: 10.00 points

In a job-order costing system, the basic document for accumulating costs for a specific job is:

0 the materials requisition form

0 the labor time ticket

0 the job cost sheet

0 the Work in Process inventory account

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Chapter 03 Practice Test

~prov I Question #3 (of 18)

3. value: 10.00 points

Harrington Company uses predetermined overhead rates to apply manufacturing overhead to jobs. The predetermined overhead rate is based on machine hours in the Machining Department and on direct labor cost in the Assembly Department. At the beginning of the year, the company made the following estimates:

Direct labor hours Direct labor cost Machine hours Manufacturing overhead

Machining 12,000

$18,000 5,000

$23,000

Assembly 11,000

$18,000 3,000

$36,000

What predetermined overhead rates would be used in the Machining and the Assembly Department, respectively? (Round your answers to 2 decimal places.)

0 $4.60 and 50.00°/o

0 $6.00 and 63.89°/o

0 $4.60 and 200.00°/o

(', $8.20 and 50.00°/o -r-

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Chapter 03 Practice Test

~prov I Question #4 (of 18)

4. value: 10.00 points

Hiassen Company's predetermined overhead rate is based on direct labor costs. The company's Work in process inventory account has a balance of $5,360, which relates to the one job that was in process at the end of an accounting period. The related job cost sheet includes total charges of $1,440 for direct materials and $2,000 for direct labor. The company's predetermined overhead rate, as a percentage of direct labor costs, must be:

0 96%.

0 48%.

0 27%.

n 1s%. --

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Chapter 03 Practice Test

~prov I Question #5 (of 18)

5. value: 10.00 points

Unit product cost information is used for:

0 raw materials used in production.

0 manufacturing overhead costs.

0 valuing unsold units in ending inventory and for determining cost of goods sold.

0 determining nonmanufacturing costs.

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Chapter 03 Practice Test

~prov I Question #6 (of 18)

6. value: 10.00 points

Vahedi Company manufactures a specialty line of silk-screened ties. The company uses a job-order costing system. During the month, the following costs were incurred on Job 1041: direct materials $57,200 and direct labor $14,900. In addition, selling and shipping costs of $36,000 were incurred on the job. Manufacturing overhead was applied at the rate of $40 per machine-hour (MH) and Job 1041 required 460 MHs. If Job 1041 consisted of 5,000 ties, the cost of goods sold per tie was: (Round your answer to 2 decimal places.)

0 $80.00

0 $25.30

0 $14.42

0 $18.10 ,,.-

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Chapter 03 Practice Test

~prov I Question #7 (of 18)

7. value: 10.00 points

Suppose $52,000 of raw materials is withdrawn from the storeroom to be used in production. Of this amount, $31,000 consists of direct materials and $21,000 consists of indirect materials. What account or accounts will be debited?

0 Work in process $31,000 and Raw materials $21,000

0 Work in process $31,000 and Manufacturing overhead $21,000

0 Raw materials $31,000 and Manufacturing overhead $21,000

0 Manufacturing overhead $31,000 and Work in process $21,000 ~

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Chapter 03 Practice Test

~prov I Question #8 (of 18)

8. value: 10.00 points

Suppose a total of $30,000 of overhead is applied to jobs. What account will be debited?

0 Manufacturing overhead $30,000

0 Finished goods $30,000

0 Work in process $30,000

0 Cost of goods sold $30,000 -

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Chapter 03 Practice Test

~prov I Question #9 (of 18)

9. value: 10.00 points

The ending Finished goods account balance is determined by adding the beginning balance to the:

0 cost of goods manufactured and then subtracting the cost of goods sold.

0 cost of goods sold and then subtracting the cost of goods manufactured.

0 direct materials, direct labor, and overhead applied.

0 actual amount of overhead and the subtracting the amount of overhead applied. -

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Chapter 03 Practice Test

~prov I Question #10 (of 18)

10. value: 10.00 points

On January 1, Hessler Company's Work in Process account had a balance of $30,000. During the year, direct materials costing $40,000 were placed into production. Direct labor cost for the year was $65,000. The predetermined overhead rate for the year was set at 150°/o of direct labor cost. Actual overhead costs for the year totaled $99,500. Jobs costing $209,500 to manufacture according to their job cost sheets were completed during the year. On December 31, the balance in the Work in Process inventory account was:

0 $25,000

0 $12,500

0 $30,000

0 $23,000 ,,.-

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Chapter 03 Practice Test

~prov I Question #11 (of 18)

11. value: 10.00 points

Walston Manufacturing Company has provided the following data concerning its raw materials inventories last month:

Beginning raw materials inventory Purchases of raw materials Ending raw materials inventory

$ 50,000 420,000

20,000

The cost of the raw materials used in production for the month was:

0 $390,000

0 $470,000

0 $450,000

0 $440,000 ,,.-

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Chapter 03 Practice Test

~prov I Question #12 (of 18)

12. value: 10.00 points

Juniper Company has provided the following data concerning its manufacturing costs and work in process inventories last month:

Raw materials used in production Direct labor Manufacturing overhead Beginning work in process inventory Ending work in process inventory

$ 360,000 260,000 310,000

65,000 95,000

The cost of goods manufactured for the month was:

0 $1,090,000

0 $930,000

0 $900,000

0 $960,000 -

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Chapter 03 Practice Test

~prov I Question #13 (of 18)

13. value: 10.00 points

Jurden Company bases its predetermined overhead rates on machine-hours. At the beginning of the year, the company estimated $75,850 of manufacturing overhead and 41,000 machine-hours for the year. Actual manufacturing overhead for year amounted to $81,000 and the actual machine-hours totaled 43,000. Manufacturing overhead for the year was: (Round your intermediate calculations to 2 decimal places.)

0 Overapplied by $5, 150

0 Overapplied by $3, 700

0 Underapplied by $1,450

0 Underapplied by $3,700 -

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Chapter 03 Practice Test

~prov I Question #14 (of 18)

14. value: 10.00 points

Malt Company's Manufacturing overhead account showed a $17,000 underapplied overhead balance on December 31. Other accounts showed the following amounts of overhead applied from the current period in their ending balances:

Work in process Finished goods Cost of goods sold

$ 81,000 40,500

148,500

If the company allocates the underapplied overhead among Cost of goods sold, Work in process, and Finished goods, the amount allocated to Work in process was:

0 $3,770

0 $10,200

0 $3,570

0 $5,100 -

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Chapter 03 Practice Test

-'4 prov I Question #15 (of 18) , ,.. , next _..

15. value: 10.00 points

Traditionally, the predetermined overhead rate is based on the estimated total amount of the allocation base for the next year. If demand falls due to a recession or other reason, the estimated total amount of the allocation base:

0 is likely to increase.

® is likely to decrease.

0 may change in any manner.

0 is likely to stay the same.

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Chapter 03 Practice Test

-'4 prov I Question #16 (of 18) , ,.. , next _..

16. value: 10.00 points

A long-established practice in industry is to determine the predetermined overhead rate as follows:

® estimated total manufacturing overhead cost divided by estimated or budgeted activity.

0 estimated total manufacturing overhead cost at capacity divided by estimated or budgeted activity at capacity.

0 estimated total manufacturing overhead cost divided by estimated or budgeted activity at capacity.

0 estimated total manufacturing overhead cost at capacity divided by estimated or budgeted activity.

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Chapter 03 Practice Test

~prov I Question #17 (of 18)

17. value: 10.00 points

All of the following statements regarding idle time are correct except:

0 Idle time is treated as part of manufacturing overhead.

0 Idle time refers to the costs of direct labor workers who are unable to perform their assignments due to material shortages.

0 Idle time is treated as part of direct labor cost.

0 Idle time refers to the costs of direct labor workers who are unable to perform their assignments due to power failures.

~

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Chapter 03 Practice Test

~prov I Question #18 (of 18) I• I next ~

18. value: 10.00 points

A machinist earns $26 per hour. During a given week he works 35 hours, of which he is idle 5 hours. For the week:

0 $130 cost should be charged to overtime premium.

0 $975 cost should be charged to direct labor and $65 cost should be charged to overhead.

0 $130 cost should be charged to overhead

0 $910 cost should be charged to direct labor. r-

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