Problem 1. In the year-end financial statements, the Manufacturing Overhead account should have:
a. A debit balance, representing overhead on hand and available for use.
b. A credit balance, representing accumulated depreciation and amounts owed to suppliers of overhead items.
c. Either a debit or a credit balance, depending upon whether the overhead application rate used throughout the year was higher or lower than 100%.
d. A zero balance, since all overhead costs incurred during the period should be assigned to the production of the period.
Problem 2. Since manufacturing costs (direct materials, direct labor, and overhead) are incurred in the process of manufacturing units of product, these costs are debited to:
a. The Direct Materials Inventory, Direct Labor, and
Manufacturing Overhead accounts.
b. Expense accounts.
c. The Work in Process Inventory account.
d. The Cost of Goods Sold account.
Problem 3. Per-unit costs:
a. Are relevant only when a company is engaged in manufacturing activities.
b. Are determined in job order cost systems but cannot be computed when a process cost system is in use.
c. Are relevant in manufacturing, merchandising, and service industries, regardless of the type of cost accounting system in use.
d. Are determined by relating manufacturing costs to the number of units sold.
Problem 4. Debits to the Manufacturing Overhead account record:
a. The actual amounts of overhead costs incurred during a period.
b. The amount of overhead applied to production during a period.
c. The amount of overhead incurred on a specific job.
d. All conversion costs of a period.