Question 1 (10 points)
Which one of the following is used in assigning manufacturing costs to work in process inventory?
Question 1 options:
A) Estimated manufacturing overhead
B) Finished goods inventory costs
C) Materials purchased invoices
D) Actual manufacturing overhead
Question 2 (10 points)
What is the cause of a debit balance remaining in the Manufacturing Overhead account at the end of the accounting period?
Question 2 options:
A) The overhead assigned to Work in Process Inventory is more than the overhead incurred.
B) More overhead cost was incurred than the amount applied during the year.
C) Overhead has been over-applied.
D) Not all costs have been posted to the jobs.
Question 3 (10 points)
If the Manufacturing Overhead account has a debit balance at the end of a period, it means that
Question 3 options:
A) actual overhead costs were less than overhead costs applied to jobs.
B) actual overhead costs were greater than overhead costs applied to jobs.
C) actual overhead costs were equal to overhead costs applied to jobs.
D) no jobs have been completed.
Question 4 (10 points)
Which one of the following is a major purpose of cost accounting?
Question 4 options:
A) To classify all costs as direct or indirect
B) To provide gross profit rates to managers
C) To allocate overhead costs to jobs
D) To measure, record, and report product costs
Question 5 (10 points)
Which of the following would be accounted for using a job order cost system?
Question 5 options:
A) The pasteurization of milk
B) The production of textbooks
C) The production of luxury town homes
D) The production of cans of spinach
Question 6 (10 points)
The labor costs that have been identified as indirect labor should be charged to
Question 6 options:
A) salary expense.
B) direct labor.
C) manufacturing overhead.
D) the individual jobs worked on.
Question 7 (10 points)
Manufacturing overhead is applied to each job
Question 7 options:
A) by means of a predetermined overhead rate.
B) at the end of the year when actual costs are known.
C) at the time when the overhead cost is incurred.
D) only if the overhead costs can be directly traced to that job.
Question 8 (10 points)
If annual overhead costs are expected to be $600,000 and direct labor costs are expected to be $1,000,000, then
Question 8 options:
A) $1.67 is the predetermined overhead rate.
B) for every dollar of manufacturing overhead, 60 cents of direct labor will be assigned.
C) a predetermined overhead rate cannot be determined.
D) for every dollar of direct labor, 60 cents of manufacturing overhead will be assigned.
Question 9 (10 points)
At the end of each month, the sum of the costs shown on the job cost sheets should equal the balance in
Question 9 options:
A) Cost of Goods Sold.
B) Manufacturing Overhead.
C) Finished Goods Inventory.
D) Work in Process Inventory.
Question 10 (10 points)
Which one of the following is true about under- or over-applied overhead at the end of a particular year?
Question 10 options:
A) It requires a correction to the costs of all jobs completed.
B) Its existence implies the company has made an error.
C) It is combined with cost of goods sold.
D) The company can offset it during future months.
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