Chapter 7

Two jobs were worked on during the year: Job

A-101 and Job A-102. The number of direct
labor hours spent on Job A-101 and Job A-102
were 1,200 and 1,000, respectively. The actual
manufacturing overhead was $37,000.
What is the amount of the under- or overapplied
manufacturing overhead?
Selected Answer:

Question 2
0 out of 1 points

The Update Company does not maintain backup

documents for its computer files. In June, some
of the current data were lost, and you have been
Payroll records indicate that 5,200 direct labor
asked to help reconstruct the data. The
hours were recorded for June. It was verified
following beginning balances on June 1 are
that there were no variations in pay rates among
known:
employees during June.Another record kept
manually indicates that the Cost of Goods Sold
in June totaled $84,000.
The predetermined overhead rate was based on
an estimated 60,000 direct labor hours for the
year and an estimated $180,000 in
Reviewing old documents and interviewing
manufacturing overhead costs.What is the Cost
selected employees have generated the
of Goods Manufactured for June?
following additional information:
The production superintendent's job cost sheets
indicated that materials of $2,600 were included
in the June 30 Work-in-Process Inventory. Also,
300 direct labor hours had been paid at $6.00
per hour for the jobs in process on June 30.
The Accounts Payable account is only for direct
material purchases. The clerk remembers clearly
that the balance in the Accounts Payable on June
30 was $8,000. An analysis of canceled checks
indicated payments of $40,000 were made to
suppliers during June.

Records at the warehouse indicate that the

Finished Goods Inventory totaled $16,000 on
June 30.

Selected Answer:

Question 3
0 out of 1 points

Which of the following actions do not cause an

impropriety in job costing?
Selected
Answer:

Choosing an allocation method based on the results rather than choosing the
method based on resource usage.

Question 4
1 out of 1 points

A job is a product or service that can be easily

and conveniently distinguished from other
products/services.
Selected Answer:

Question 5
0 out of 1 points

What are the transfers-out from the Finished

Goods Inventory called?
Selected Answer:

Question 6
0 out of 1 points

Service organizations, by their nature, cannot

have a balance in Work-in-Process Inventory.

Selected Answer:

Question 7
0 out of 1 points

The predetermined overhead rate is computed

by dividing the estimated activity of the
allocation base into the estimated manufacturing
overhead costs.
Selected Answer:

Question 8
0 out of 1 points

The cost in the ending Finished Goods

inventory account consists of the direct
materials, direct labor, and manufacturing
overhead of all jobs still in process at the end of
the period.
Selected Answer:

Question 9
0 out of 1 points

The following events took place at a

manufacturing company for the current year:
(1) Purchased $95,000 in direct materials.
(2) Incurred labor costs as follows: (a) direct,
$56,000 and (b) indirect, $13,600.
(3) Other manufacturing overhead was
$107,000, excluding indirect labor.
(4) Transferred 80% of the materials to the
manufacturing assembly line.
(5) Completed 65% of the Work-in-Process
during the year.
(6) Sold 85% of the completed goods.
(7) There were no beginning inventories.
What is the value of the ending Work-in-Process

Inventory?
Selected Answer:

Question 10
0 out of 1 points

The following events took place at a

manufacturing company for the current year:
(1) Purchased $95,000 in direct materials.
(2) Incurred labor costs as follows: (a) direct,
$56,000 and (b) indirect, $13,600.
(3) Other manufacturing overhead was
$107,000, excluding indirect labor.
(4) Transferred 80% of the materials to the
manufacturing assembly line.
(5) Completed 65% of the Work-in-Process
during the year.
(6) Sold 85% of the completed goods.
(7) There were no beginning inventories.
What is the value of the ending Finished Goods
Inventory?
Selected Answer:

Question 11
1 out of 1 points

At the end of the accounting period,

manufacturing overhead costs are applied to
uncompleted jobs using the same predetermined
overhead rate that is used to apply
manufacturing overhead costs to completed
jobs.
Selected Answer:

Question 12
1 out of 1 points

Scottso Corporation applies overhead using a

normal costing approach based upon machinehours. Budgeted factory overhead was
$232,750, budgeted machine-hours were
17,500. Actual factory overhead was $227,830,
actual machine-hours were 16,150. How much
is the over- or underapplied overhead?
Selected Answer:

Question 13
1 out of 1 points

Indirect material and indirect labor are two

examples of manufacturing overhead costs.
Selected Answer:

Question 14
0 out of 1 points

Overapplied overhead occurs when the actual

overhead costs incurred during a period are
greater than the overhead costs applied during
the period.
Selected Answer:

Question 15
1 out of 1 points

Job shops have three types of inventory

accounts: Finished Goods, Work-in-Process, and
Direct Materials.
Selected Answer:

Question 16
1 out of 1 points

It is unethical to intentionally charge costs to the

wrong job.
Selected Answer:

Question 17
0 out of 1 points

The journal entry to record the completion of a

contract in a job costing system for a service
firm is

Selected Answer:

Question 18
0 out of 1 points

In a traditional job order costing system, the

issue of indirect materials to a production
department increases: (CPA adapted)
Selected Answer:

Question 19
0 out of 1 points

The Update Company does not maintain backup Payroll records indicate that 5,200 direct labor
documents for its computer files. In June, some hours were recorded for June. It was verified
of the current data were lost, and you have been that there were no variations in pay rates among
asked to help reconstruct the data. The
employees during June.
following beginning balances on June 1 are
Records at the warehouse indicate that the
known:
Finished Goods Inventory totaled $16,000 on

June 30.
Another record kept manually indicates that the
Reviewing old documents and interviewing
Cost of Goods Sold in June totaled $84,000.
selected employees have generated the
The predetermined overhead rate was based on
following additional information:
The production superintendent's job cost sheets an estimated 60,000 direct labor hours for the
indicated that materials of $2,600 were included year and an estimated $180,000 in
in the June 30 Work-in-Process Inventory. Also, manufacturing overhead costs.
300 direct labor hours had been paid at $6.00
per hour for the jobs in process on June 30.
How much manufacturing overhead was applied
The Accounts Payable account is only for direct to the Work-in-Process Inventory during June?
material purchases. The clerk remembers clearly
that the balance in the Accounts Payable on June
30 was $8,000. An analysis of canceled checks
indicated payments of $40,000 were made to
suppliers during June.
Selected Answer:

Question 20
1 out of 1 points

Accounting for direct materials and direct labor

is easier than accounting for manufacturing
overhead costs.
Selected Answer: