Assignment
Question 1. Which of the following statements is correct concerning job-order costing? Job-order costing would be appropriate for a textbook publisher.
All the costs appearing on a job cost sheet are actual costs.
Indirect materials are charged to a specific job.
Job-order costing is mainly used in firms with homogeneous products such as oil refineries.
Question 2. Job-order costing is used in manufacturing companies and process costing is used in service companies.
True
False
Question 3. A flour manufacturer is more likely to use process costing than job-order costing whereas a manufacturer of customized leather jackets is more likely to use job-order costing than process costing.
True
False
Question 4. Which of the following types of companies would typically use process costing rather than job-order costing?
A small appliance repair shop.
A manufacturer of commercial passenger aircraft.
A specialty equipment manufacturer.
A breakfast cereal manufacturer.
Question 5. Including manufacturing overhead costs in product costs ensures that each product will earn a profit.
True
False
Question 6. Normally a job cost sheet is not prepared for a job until after the job has been completed.
True
False
Question 7. In a job-order costing system, the incurrence of indirect labor costs would be recorded as a charge to:
Manufacturing Overhead Incurred.
Finished Goods.
Work in Process.
Cost of Goods Sold.
Question 8. Overapplied overhead would result if:
the plant was operated at less than normal capacity.
manufacturing overhead costs incurred were less than estimated manufacturing overhead costs.
manufacturing overhead costs incurred were less than manufacturing overhead costs charged to production.
manufacturing overhead costs incurred were greater than manufacturing overhead charged to production.
Question 9. Crichman Corporation uses direct labor-hours in its predetermined overhead rate. At the beginning of the year, the estimated direct labor-hours were 14,900 hours and the total estimated manufacturing overhead was $362,070. At the end of the year, actual direct labor-hours for the year were 16,000 hours and the actual manufacturing overhead for the year was $357,070. Overhead at the end of the year was:
$31,730 overapplied
$26,730 overapplied
$31,730 underapplied
$26,730 underapplied
Question 10. Chipata Corporation applies manufacturing overhead to jobs on the basis of machine-hours. Chipata estimated 25,000 machine-hours and $10,000 of manufacturing overhead cost for the year. During the year, Chipata incurred 26,200 machine-hours and $11,300 of manufacturing overhead. What was Chipata's underapplied or overapplied overhead for the year?
$480 overapplied
$820 underapplied
$1,300 overapplied
$1,300 underapplied
Question 11. Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $239,700 and 4,700 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $242,000 and actual direct labor-hours were 4,600.
The applied manufacturing overhead for the year was closest to:
$229,586
$234,600
$242,006
$236,854
Question 12. Dacosta Company had only one job in process on May 1. The job had been charged with $1,800 of direct materials, $6,966 of direct labor, and $9,936 of manufacturing overhead cost. The company assigns overhead cost to jobs using the predetermined overhead rate of $18.40 per direct labor-hour. During May, the activity was recorded:
Work in process inventory on May 30 contains $3,741 of direct labor cost. Raw materials consist solely of items that are classified as direct materials.
The cost of goods manufactured for May was:
$97,110
$110,600
$98,770
$100,535
Question 13. Rediger Inc. a manufacturing company, has provided the following data for the month of June. The balance in the Work in Process inventory account was $22,000 at the beginning of the month and $17,000 at the end of the month. During the month, the company incurred direct materials cost of $55,000 and direct labor cost of $28,000. The actual manufacturing overhead cost incurred was $53,000. The manufacturing overhead cost applied to jobs was $51,000. The cost of goods manufactured for June was:
$141,000
$139,000
$134,000
$136,000
Question 14. Hamilton Company uses job-order costing. Manufacturing overhead is applied using a predetermined rate of 150% of direct labor cost. Any underapplied or overapplied manufacturing overhead is closed to Cost of Goods Sold at the end of each month. Additional information is available as follows:
Job 101 was the only job in process at January 31. The job cost sheet for this job contained the following costs at the beginning of the month:
Jobs 102, 103, and 104 were started during February.
Direct materials requisitions for February totaled $26,000.
Direct labor cost of $20,000 was incurred for February.
Actual manufacturing overhead was $32,000 for February.
The only job still in process at February 28 was Job 104, with costs of $2,800 for direct materials and $1,800 for direct labor.
For the month of February, the manufacturing overhead was:
$700 overapplied
$1,000 overapplied
$2,000 overapplied
$2,000 underapplied
Question 15. Job 910 was recently completed. The following data have been recorded on its job cost sheet:
The company applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $15 per machine-hour. The total cost that would be recorded on the job cost sheet for Job 910 would be:
$3,220
$3,760
$5,935
$3,445