Question 1

Sales revenue is $600,000; actual manufacturing overhead is $104,000; allocated manufacturing overhead is $95,000; and cost of goods sold before adjustment is $375,000.What is the actual gross profit?

Accepted Answer

To calculate the actual gross profit, we need to subtract the cost of goods sold (before adjustment) and the actual manufacturing overhead from the sales revenue:

Actual Gross Profit = Sales Revenue - Cost of Goods Sold - Actual Manufacturing Overhead
Actual Gross Profit = $600,000 - $375,000 - $104,000
Actual Gross Profit = $121,000

However, the question asks for the actual gross profit, which means we should not use the allocated manufacturing overhead in the calculation. Allocated manufacturing overhead is just an estimate, and it may not reflect the actual overhead expenses incurred. Therefore, we should use the actual manufacturing overhead instead.

The only option that matches this calculation is D, with an actual gross profit of $121,000.

Question 2

Addison Company uses a job costing system.Addison Company's schedule of cost of goods manufactured showed the following amounts for the month ended August 31. $$\begin{array} { | l | r | } 
\hline \text { Cost of goods manufactured } & \$ 101,000 \
\hline \text { Cost of direct materials used } & 38,000 \
\hline \text { Cost of direct labor (\$25 per hour) } & 80,000 \
\hline \text { Work in process inventory, August 1 } & 12,000 \
\hline
\end{array}$$
- Manufacturing overhead cost is allocated at the rate of $10 per direct labor hour.
What is the amount of allocated manufacturing overhead costs for August?
A)$101,000
B)$ 80,000
C)$ 32,000
D)$ 80,000

Accepted Answer

The answer of  Addison Company uses a job costing...

Question 3

Job 241 has an ending balance of $26,000.It has been charged manufacturing overhead costs of $6,000.The rate is 75% of direct labor.What was the amount of direct materials charged to the job?

Accepted Answer

Manufacturing overhead costs = 75% of direct labor$6,000 = 75% of direct laborDirect labor = $6,000 / 75% = $8,000Direct materials = Ending balance - Manufacturing overhead costs - Direct laborDirect materials = $26,000 - $6,000 - $8,000 = $12,000

Question 4

Sykes Company has sales revenue of $610,000.Cost of goods sold before adjustment is $350,000.The company's actual manufacturing overhead is $93,000,while allocated manufacturing overhead is $101,500.What is the actual gross profit?

Accepted Answer

The answer of  Sykes Company has sales revenue of...

Question 5

The total cost of a job shown on the job cost record is the sum of the direct labor traced to the job and the manufacturing overhead allocated to the job.

Accepted Answer

The total cost of a job includes direct materials, direct labor, and manufacturing overhead allocated to the job.

Question 6

Management can use job cost information for each of the following EXCEPT:

Accepted Answer

Job cost information is used to determine the cost of producing each product or service. This information can be used by management to assess the profitability of each product type and use the cost information to determine the bid price for custom orders. However, job cost information is not used to determine the balance in raw materials inventory or prepare the financial statements. These tasks would involve other types of accounting information, such as inventory management and financial accounting, respectively.

Question 7

Manufacturing overhead has an overallocated balance of $5,000; raw materials inventory balance is $55,000; work in process inventory is $32,000; finished goods inventory is $27,000; and cost of goods sold is $120,000.After adjusting for the overallocated manufacturing overhead,what is cost of goods sold?

Accepted Answer

Since manufacturing overhead was overallocated by $5,000, we need to subtract that amount from the total cost of goods sold. Therefore, the adjusted cost of goods sold is $120,000 - $5,000 = $115,000. So, the best choice is C.

Question 8

The difference between the sales price and the job cost is:

Accepted Answer

The difference between the sales price and the job cost is the gross profit. Gross profit is the amount of money a company makes after deducting the cost of goods sold.

Question 9

Carlisle Carts manufactures custom carts for a variety of uses.The following data have been recorded for Job 557,which was recently completed.Direct materials used cost $6,300.There were 180 direct labor hours worked on this job at a direct labor wage rate of $20 per hour.There were 75 machine hours used on this job.The predetermined overhead rate is $32 per machine hour used. What is the total manufacturing cost of Job 557?

Accepted Answer

To calculate the total manufacturing costs, we need to add the total of direct materials, direct labor, and overhead costs.

Direct materials used = $6,300 
Direct labor cost = 180 hours x $20 per hour = $3,600 
Overhead = 75 machine hours x $32 per machine hour = $2,400

Total manufacturing cost of Job 557 = $6,300 + $3,600 + $2,400 = $12,300

Therefore, the correct answer is B, $12,300.

Question 10

The cost-plus price is determined as:

Accepted Answer

Cost-plus pricing involves adding a markup to the cost of an item in order to determine its selling price. Therefore, the cost-plus price would be determined by adding the markup to the cost, which is represented by the formula: cost + markup on cost.

Question 11

Fulton Corporation uses estimated direct labor hours of 210,000 and estimated manufacturing overhead costs of $840,000 in establishing manufacturing overhead rates.Actual manufacturing overhead was $960,000,and allocated manufacturing overhead was $980,000.What were the number of actual direct hours worked?

Accepted Answer

To find the actual direct hours worked, we need to use the formula: 
Actual Manufacturing Overhead ÷ Manufacturing Overhead Rate = Actual Direct Labor Hours

Manufacturing Overhead Rate = Estimated Manufacturing Overhead Costs ÷ Estimated Direct Labor Hours 
Manufacturing Overhead Rate = $840,000 ÷ 210,000 = $4 per direct labor hour

Using this rate: 
Actual Direct Labor Hours = Actual Manufacturing Overhead ÷ Manufacturing Overhead Rate 
Actual Direct Labor Hours = $960,000 ÷ $4 per direct labor hour = 240,000

Therefore, the answer is B, 245,000, which is the closest answer choice to 240,000.

Question 12

When using cost-plus pricing,the markup is added to the job cost to help:

Accepted Answer

Cost-plus pricing is a method where the markup is added to the job cost, which includes operating expenses and desired profit. Therefore, the correct answer is D, which is "do all of the above". Cost-plus pricing helps to cover the operating expenses, generate profit, and determine the price to charge for the job.

Question 13

Chilson Company manufactures custom engines for use in the lawn and garden equipment industry.The company allocates manufacturing overhead based on machine hours.Selected data for costs incurred for Job 612 are as follows: $$\begin{array} { | l | r | } 
\hline \text { Direct materials used } & \$ 3,500 \
\hline \text { Direct labor hours warked } & 300 \
\hline \text { Machine hours used } & 400 \
\hline \text { Direct labor rate per hour } & \$ 16 \
\hline \text { Predetermined overhead rate based an machine hours } & \$ 18 \
\hline
\end{array}$$ What is the total manufacturing cost of Job 612?

Accepted Answer

The answer of  Chilson Company manufactures custom engines for...

Question 14

Wesley Corporation charged Job 110 with $12,000 of direct materials and $13,500 of direct labor.Allocation for manufacturing overhead is 80% of direct labor costs.What is the total cost of Job 110?

Accepted Answer

Total manufacturing overhead cost is calculated by multiplying the direct labor cost by the allocation rate of 80%, which is:

$13,500 x 0.80 = $10,800

The total cost of the job is the sum of the direct materials, direct labor, and manufacturing overhead costs, which is:

$12,000 + $13,500 + $10,800 = $36,300

Therefore, the answer is C.

Question 15

Job 2301 requires $12,000 of direct materials,$5,000 of direct labor,500 direct labor hours,and 300 machine hours.Manufacturing overhead is computed at $15 per direct labor hour used and $12 per machine hour used. The total cost of Job 1547 is:

Accepted Answer

The total cost of Job 2301 includes direct materials, direct labor, and manufacturing overhead. Direct materials cost $12,000, direct labor costs $5,000, and manufacturing overhead is calculated as follows: $15 per direct labor hour for 500 hours equals $7,500, and $12 per machine hour for 300 hours equals $3,600. Adding these amounts gives a total cost of $28,100.

Question 16

The gross profit on the sale of a job is the difference between the sales price and the total cost reported on the job cost record.

Accepted Answer

This statement is true. Gross profit is calculated by subtracting the total cost of a job from the sales price received for that job. The result is the gross profit earned on the job.

Question 17

If a job consists of a batch of identical units,managers find the unit cost by:

Accepted Answer

The best choice is to divide the total job cost by the number of units in the job, as this will give the unit cost of each identical unit. Tracing direct materials or labor to each unit may not be necessary if they are identical, and multiplying the total job cost by the number of units would give the total cost of all units, not the unit cost.

Question 18

Management can use job cost information for each of the following EXCEPT:

Accepted Answer

All the listed choices are possible uses of job cost information, so there is no exception.

Question 19

The total cost of a job shown on the job cost record is the sum of the direct materials and direct labor traced to the job plus the manufacturing overhead allocated to the job.

Accepted Answer

The total cost of a job (or product) is calculated by adding direct materials, direct labor, and manufacturing overhead costs assigned to that specific job (or product) through the job cost record system.

Question 20

Manufacturing overhead has an underallocated balance of $16,000; raw materials inventory balance is $150,000; work in process inventory is $130,000; finished goods inventory is $120,000; and cost of goods sold is $180,000.After adjusting for the underallocated manufacturing overhead,what is cost of goods sold?

Accepted Answer

The underallocated overhead of $16,000 should be added to the cost of goods sold, increasing it from $180,000 to $196,000.

Quiz 3: Job Costing

Sales revenue is $600,000; actual manufacturing overhead is $104,000; allocated manufacturing overhead is $95,000; and cost of goods sold before adjustment is $375,000.What is the actual gross profit?

Job 241 has an ending balance of $26,000.It has been charged manufacturing overhead costs of $6,000.The rate is 75% of direct labor.What was the amount of direct materials charged to the job?

Sykes Company has sales revenue of $610,000.Cost of goods sold before adjustment is $350,000.The company's actual manufacturing overhead is $93,000,while allocated manufacturing overhead is $101,500.What is the actual gross profit?

The total cost of a job shown on the job cost record is the sum of the direct labor traced to the job and the manufacturing overhead allocated to the job.

Management can use job cost information for each of the following EXCEPT:

The difference between the sales price and the job cost is:

The cost-plus price is determined as:

When using cost-plus pricing,the markup is added to the job cost to help:

Wesley Corporation charged Job 110 with $12,000 of direct materials and $13,500 of direct labor.Allocation for manufacturing overhead is 80% of direct labor costs.What is the total cost of Job 110?

Job 2301 requires $12,000 of direct materials,$5,000 of direct labor,500 direct labor hours,and 300 machine hours.Manufacturing overhead is computed at $15 per direct labor hour used and $12 per machine hour used. The total cost of Job 1547 is:

The gross profit on the sale of a job is the difference between the sales price and the total cost reported on the job cost record.

If a job consists of a batch of identical units,managers find the unit cost by:

Management can use job cost information for each of the following EXCEPT:

The total cost of a job shown on the job cost record is the sum of the direct materials and direct labor traced to the job plus the manufacturing overhead allocated to the job.