Question 1

When the company assigns factory labor costs to jobs, the direct labor cost is debited to

Accepted Answer

The answer of When the company assigns factory labor costs...

Question 2

Which of the following is not a control account?

Accepted Answer

The answer of Which of the following is not a...

Question 3

In a manufacturing company, the cost of factory labor consists of all of the following except

Accepted Answer

The cost of factory labor includes gross earnings of factory workers, employer payroll taxes, and fringe benefits incurred by the employer. However, it does not include the net earnings of factory workers as this is the amount paid to workers after deducting income tax, social security, and other deductions.

Question 4

During the first year of operations, Shapiro Tool accumulated the following manufacturing costs:  
Instructions
Prepare separate journal entries for each manufacturing cost.

Accepted Answer

The answer of During the first year of operations, Shapiro...

Question 5

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)

Accepted Answer

Manufacturing overhead is assigned to work in process using a predetermined overhead rate, which is based on estimated overhead costs and estimated activity levels. This rate is used to allocate overhead costs to products, rather than using the actual overhead costs incurred during the period.

Question 6

The following amounts were reported by Burke Company before adjusting its immaterial overapplied manufacturing overhead of $8,000.  
Instructions
Compute what amount Burke will report as cost of goods sold after it disposes of its overapplied overhead.

Accepted Answer

The answer of The following amounts were reported by Burke...

Question 7

Usually, under- or overapplied overhead is considered to be an adjustment to

Accepted Answer

The answer of Usually, under- or overapplied overhead is considered...

Question 8

Jinnah Company applies overhead on the basis of 200% of direct labor cost. Job No. 501 is charged with $240,000 of direct materials costs and $320,000 of manufacturing overhead. The total manufacturing costs for Job No. 501 is

Accepted Answer

- The formula to calculate manufacturing costs is:
Manufacturing Costs = Direct Materials + Direct Labor + Manufacturing Overhead
- We know Direct Materials costs is $240,000
- We don't know Direct Labor costs, but we know that Manufacturing Overhead is charged at 200% of Direct Labor costs. We can use this information to find the Direct Labor cost:
Manufacturing Overhead = 200% x Direct Labor
$320,000 = 2 x Direct Labor
Direct Labor = $160,000
- To find the total manufacturing costs for Job No. 501, we can apply the formula:
Manufacturing Costs = $240,000 + $160,000 + $320,000
Manufacturing Costs = $720,000
Therefore, the best choice is C, with an explanation as shown above.

Question 9

At December 31, Ding Company reported the following balances in its accounts:  
The company's balance in its Manufacturing Overhead account at the same date was a debit of $2,800.
Instructions
Prepare the entry to adjust the over- or underapplied overhead amount at December 31.

Accepted Answer

The answer of At December 31, Ding Company reported the...

Question 10

The manufacturing operations of Bryant, Inc. had the following balances for the month of January:  
Bryant transferred $290,000 of completed goods out of work in process during January.
Instructions
Compute the cost of goods sold.

Accepted Answer

The answer of The manufacturing operations of Bryant, Inc. had...

Question 11

Overapplied manufacturing overhead exists when overhead assigned to work in process is

Accepted Answer

Overapplied manufacturing overhead occurs when the overhead assigned to work in process exceeds the actual overhead incurred, resulting in a credit balance in the Manufacturing Overhead account at the end of the period.

Question 12

Lando Company reported the following amounts for 2016:  
Instructions
Calculate the cost of materials used in production

Accepted Answer

The answer of Lando Company reported the following amounts for...

Question 13

Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows:  
Instructions
Compute the predetermined overhead rate.

Accepted Answer

The answer of Martin Company applies manufacturing overhead based on...

Question 14

Builder Bug Company allocates overhead at $9 per direct labor hour. Job A45 required 4 boxes of direct materials at a cost of $30 per box and took employees 20 hours to complete. Employees earn $15 per hour.
Instructions
Compute the total cost of Job A45.

Accepted Answer

The answer of Builder Bug Company allocates overhead at $9...

Question 15

In January, Harlan, Inc. production supervisor requisitioned raw materials for production as follows: Job 1 $700, Job 2 $900, Job 3 $400, and general factory use, $520.
Instructions
Prepare a summary journal entry to record raw materials used.

Accepted Answer

The answer of In January, Harlan, Inc. production supervisor requisitioned...

Question 16

In a job order cost system, it would be correct in recording the purchase of raw materials to debit

Accepted Answer

Raw materials are initially stored in Raw Materials Inventory until they are used in production. Therefore, the purchase of raw materials should be recorded as a debit to Raw Materials Inventory in a job order cost system.

Question 17

A process cost system would be used for all of the following except the

Accepted Answer

A process cost system is designed for industries that produce large quantities of identical products, where production is continuous and the costs of the production process are relatively uniform. The printing of wedding invitations is typically a job order costing system, where each order is customized and has a unique set of costs, making it unsuitable for a process cost system. The manufacture of cereal, refining of petroleum, and production of automobiles are all examples of industries that could benefit from a process cost system.

Question 18

Which of the following statements about under- or overapplied manufacturing overhead is correct?

Accepted Answer

After the entry to transfer over- or underapplied overhead to Cost of Goods Sold is posted, Manufacturing Overhead will have a zero balance. This is because the over or underapplied amount is transferred to Cost of Goods Sold as an adjustment.

Question 19

Colby Company estimates that annual manufacturing overhead costs will be $600,000. Estimated annual operating activity bases are: direct labor cost $460,000, direct labor hours 40,000 and machine hours 80,000. The actual manufacturing overhead cost for the year was $601,000 and the actual direct labor cost for the year was $456,000. Actual direct labor hours totaled 39,800 and machine hours totaled 79,000. Colby applies overhead based on direct labor hours.
Instructions
Compute the predetermined overhead rate and determine the amount of manufacturing overhead applied. Determine if overhead is over- or underapplied and the amount.

Accepted Answer

The answer of Colby Company estimates that annual manufacturing overhead...

Question 20

During 2016, Arb Company incurred the following direct labor costs: January $20,000 and February $30,000. Arb uses a predetermined overhead rate of 120% of direct labor cost. Estimated overhead for the 2 months, respectively, totaled $19,500 and $35,700. Actual overhead for the 2 months, respectively, totaled $25,000 and $33,500.
Instructions
Determine if overhead is over- or underapplied for each of the two months and the respective amounts.

Accepted Answer

The answer of During 2016, Arb Company incurred the following...

Quiz 15: Job Order Costing

When the company assigns factory labor costs to jobs, the direct labor cost is debited to

Which of the following is not a control account?

In a manufacturing company, the cost of factory labor consists of all of the following except

During the first year of operations, Shapiro Tool accumulated the following manufacturing costs: Instructions Prepare separate journal entries for each manufacturing cost.

Companies assign manufacturing overhead to work in process on an estimated basis through the use of a(n)

The following amounts were reported by Burke Company before adjusting its immaterial overapplied manufacturing overhead of $8,000. Instructions Compute what amount Burke will report as cost of goods sold after it disposes of its overapplied overhead.

Usually, under- or overapplied overhead is considered to be an adjustment to

Jinnah Company applies overhead on the basis of 200% of direct labor cost. Job No. 501 is charged with $240,000 of direct materials costs and $320,000 of manufacturing overhead. The total manufacturing costs for Job No. 501 is

At December 31, Ding Company reported the following balances in its accounts: The company's balance in its Manufacturing Overhead account at the same date was a debit of $2,800. Instructions Prepare the entry to adjust the over- or underapplied overhead amount at December 31.

The manufacturing operations of Bryant, Inc. had the following balances for the month of January: Bryant transferred $290,000 of completed goods out of work in process during January. Instructions Compute the cost of goods sold.

Overapplied manufacturing overhead exists when overhead assigned to work in process is

Lando Company reported the following amounts for 2016: Instructions Calculate the cost of materials used in production

Martin Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year follows: Instructions Compute the predetermined overhead rate.

Builder Bug Company allocates overhead at $9 per direct labor hour. Job A45 required 4 boxes of direct materials at a cost of $30 per box and took employees 20 hours to complete. Employees earn $15 per hour. Instructions Compute the total cost of Job A45.

In January, Harlan, Inc. production supervisor requisitioned raw materials for production as follows: Job 1 $700, Job 2 $900, Job 3 $400, and general factory use, $520. Instructions Prepare a summary journal entry to record raw materials used.

In a job order cost system, it would be correct in recording the purchase of raw materials to debit

A process cost system would be used for all of the following except the

Which of the following statements about under- or overapplied manufacturing overhead is correct?