Question 1

In a job order cost accounting system for a service business,materials costs are normally included as part of overhead.

Accepted Answer

A) True 
 B)False

Question 2

Activity-based costing is a method of accumulating and allocating costs by department.

Accepted Answer

A) True 
 B)False

Question 3

An activity-based costing system allocates factory overhead rates to products or
Services using

Accepted Answer

A)  a single plantwide rate.
B)  the cost of activities based on an activity rate times the number of activity-based usage quantities.
C)  an allocation of budgeted revenues produced by a product or service .
D)  an end-of-year allocation of costs to products or services.E) A) and C)
F) B) and C)

Question 4

Bell Manufacturers Inc.has estimated total factory overhead costs of $60,000 and 10,000 direct labor hours for the current fiscal year.If job number 117 incurred 2,000 direct labor hours,the work in process account will be increased and factory overhead will be
Decreased for

Accepted Answer

A)  $10,000.
B)  $0.
C)  $12,000.
D)  $2,000.E) A) and D)
F) A) and B)

Question 5

Cambridge Corporation applied factory overhead costs of $205,000 to production during the current year.At the end of the year,total overapplied factory overhead is $17,000.What was the amount of actual factory overhead cost incurred during the year?

Accepted Answer

A)  $222,000
B)  $200,000
C)  $205,000
D)  $188,000E) A) and B)
F) A) and D)

Question 6

Increases in the Work in Process account occur when

Accepted Answer

A)  materials are received into the storeroom.
B)  factory overhead costs are incurred.
C)  direct labor is recorded from the time sheets.
D)  All of these increase work in process.E) None of the above
F) A) and B)

Question 7

If factory overhead applied exceeds the actual costs,overhead is said to be overapplied.

Accepted Answer

A) True 
 B)False

Question 8

The finished goods account is the controlling account for the

Accepted Answer

A)  sales ledger.
B)  materials ledger.
C)  work in process ledger.
D)  stock ledger.E) B) and D)
F) A) and C)

Question 9

Which of the following manufacturing costs is an indirect cost of producing a product?

Accepted Answer

A)  Oil lubricants used for factory machinery
B)  Commissions for sales personnel
C)  Hourly wages of an assembly worker
D)  Memory chips for a microcomputer manufacturerE) B) and D)
F) A) and D)

Question 10

The cost of materials entering directly into the manufacturing process is classified as

Accepted Answer

A)  direct labor cost.
B)  factory overhead cost.
C)  burden cost.
D)  direct materials cost.E) A) and D)
F) B) and D)

Question 11

Pull manufacturing is driven by which of the following?

Accepted Answer

A)  Customer demand
B)  Forecasting customers' requirements
C)  A production schedule rather than line status
D)  Pushing inventory ahead to the next stationE) None of the above
F) C) and D)

Question 12

The cost of a manufactured product generally consists of which of the following costs?

Accepted Answer

A)  Direct materials cost and factory overhead cost
B)  Direct labor cost and factory overhead cost
C)  Direct labor cost,direct materials cost,and factory overhead cost
D)  Direct materials cost and direct labor costE) None of the above
F) A) and C)

Question 13

Which of the following would most likely be a period cost?

Accepted Answer

A)  Depreciation on factory lunchroom furniture
B)  Salary of telephone receptionist in the sales office
C)  Salary of a security guard for the factory parking lot
D)  Computer chips used by a computer manufacturerE) B) and C)
F) C) and D)

Question 14

The following information is available for the first month of operations for Brandt,Inc.:
 
-Calculate direct labor cost for Brandt,Inc.

Accepted Answer

A)  $226,000
B)  $206,000
C)  $231,000
D)  $218,000E) A) and B)
F) A) and C)

Question 15

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the materials account to

Accepted Answer

A)  work in process and cost of goods sold.
B)  work in process and factory overhead.
C)  finished goods and cost of goods sold.
D)  work in process and finished goods.E) A) and D)
F) C) and D)

Question 16

Hudson,Inc.has estimated total factory overhead costs of $400,000 and 20,000 direct labor hours for the current fiscal year.If direct labor hours for Job N41 total 1,500,calculate applied factory overhead applied to this job.

Accepted Answer

A)  $40,000
B)  $20,000
C)  $3,000
D)  $30,000E) A) and D)
F) A) and C)

Question 17

A difference in quantity of materials used on two comparable jobs may be caused by

Accepted Answer

A)  inadequately trained employees.
B)  poor quality materials.
C)  employee carelessness.
D)  all of these.E) A) and D)
F) A) and B)

Question 18

The underapplied factory overhead amount may be transferred to Cost of Goods Sold at the end of the fiscal year.

Accepted Answer

A) True 
 B)False

Question 19

Materials inventory contains the costs of direct and indirect materials that have NOT yet entered the manufacturing process.

Accepted Answer

A) True 
 B)False

Question 20

As product costs are incurred in the manufacturing process,they are accounted for as assets and reported on the balance sheet as inventory.

Accepted Answer

A) True 
 B)False

Exam 10: Accounting Systems for Manufacturing Businesses

Activity-based costing is a method of accumulating and allocating costs by department.

Correct AnswerverifiedShow Answer

If factory overhead applied exceeds the actual costs,overhead is said to be overapplied.

Correct AnswerverifiedShow Answer

The following information is available for the first month of operations for Brandt,Inc.: -Calculate direct labor cost for Brandt,Inc.

Correct AnswerverifiedShow Answer

The cost of a manufactured product generally consists of which of the following costs?

Correct AnswerverifiedShow Answer

Pull manufacturing is driven by which of the following?

Correct AnswerverifiedShow Answer

An activity-based costing system allocates factory overhead rates to products or Services using

Correct AnswerverifiedShow Answer

Bell Manufacturers Inc.has estimated total factory overhead costs of $60,000 and 10,000 direct labor hours for the current fiscal year.If job number 117 incurred 2,000 direct labor hours,the work in process account will be increased and factory overhead will be Decreased for

Correct AnswerverifiedShow Answer

Increases in the Work in Process account occur when

Correct AnswerverifiedShow Answer

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the materials account to

Correct AnswerverifiedShow Answer

Which of the following manufacturing costs is an indirect cost of producing a product?

Correct AnswerverifiedShow Answer

A difference in quantity of materials used on two comparable jobs may be caused by

Correct AnswerverifiedShow Answer

Materials inventory contains the costs of direct and indirect materials that have NOT yet entered the manufacturing process.

Correct AnswerverifiedShow Answer

The cost of materials entering directly into the manufacturing process is classified as

Correct AnswerverifiedShow Answer

In a job order cost accounting system for a service business,materials costs are normally included as part of overhead.

Correct AnswerverifiedShow Answer

The underapplied factory overhead amount may be transferred to Cost of Goods Sold at the end of the fiscal year.

Correct AnswerverifiedShow Answer

The finished goods account is the controlling account for the

Correct AnswerverifiedShow Answer

Cambridge Corporation applied factory overhead costs of $205,000 to production during the current year.At the end of the year,total overapplied factory overhead is $17,000.What was the amount of actual factory overhead cost incurred during the year?

Correct AnswerverifiedShow Answer

Hudson,Inc.has estimated total factory overhead costs of $400,000 and 20,000 direct labor hours for the current fiscal year.If direct labor hours for Job N41 total 1,500,calculate applied factory overhead applied to this job.

Correct AnswerverifiedShow Answer

As product costs are incurred in the manufacturing process,they are accounted for as assets and reported on the balance sheet as inventory.

Correct AnswerverifiedShow Answer

Which of the following would most likely be a period cost?

Correct AnswerverifiedShow Answer

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