Professional Documents
Culture Documents
CoMa Quiz 2
CoMa Quiz 2
Choice E
Choice A
Choice C
Choice B
Choice D
If the amount of effort and attention to products varies substantially throughout a company's
various manufacturing operations, the company might consider the use of:
actual overhead rates instead of predetermined overhead rates.
departmental overhead rates.
a plant wide overhead rate.
direct labor hours to determine the overhead rate.
machine hours to determine the overhead rate.
Which of the following would not likely be used by service providers to accumulate job costs?
All of these, because service providers cannot use job-costing systems.
Processes.
Contracts.
Projects.
Clients.
Which of the following entities would not likely be a user of job-costing systems?
None of these, because all are likely users.
Accounting firms.
Repair shops.
Hospitals.
Custom-furniture manufacturers.
Trenton worked on four jobs during its first year of operation: nos. 401, 402, 403, and 404. A
review of job no. 403's cost record revealed direct material charges of $40,900 and total
manufacturing costs of $51,000. If Trenton applies overhead at 150% of direct labor cost, the
overhead applied to job no. 403 must have been:
$4,040.
$0.
$6,060.
$5,050.
$3,367.
When using normal costing, the total production cost of a job is composed of:
direct material, direct labor, and applied manufacturing overhead.
direct material, direct labor, manufacturing overhead, and outlays for selling costs.
direct material, direct labor, and actual manufacturing overhead.
direct material and direct labor.
direct material, direct labor, manufacturing overhead, and outlays for both selling and
administrative costs.
Strong Company applies overhead based on machine hours. At the beginning of 20x1, the
company estimated that manufacturing overhead would be $756,000 and machine hours would
total 28,000. By 20x1 year-end, actual overhead totaled $782,800, and actual machine hours
were 26,800. On the basis of this information, the 20x1 predetermined overhead rate was:
$23 per machine hour.
$22 per machine hour.
$2.04 per machine hour.
$2.05 per machine hour.
$27 per machine hour.
Trenton worked on four jobs during its first year of operation: nos. 401, 402, 403, and 404. A
review of job no. 403's cost record revealed direct material charges of $40,000 and total
manufacturing costs of $50,000. If Trenton applies overhead at 150% of direct labor cost, the
overhead applied to job no. 403 must have been:
$4,000.
$5,000.
$3,333.
$6,000.
$0.
Which of the following methods would be of little use when allocating service department costs to
production departments?
The dual-cost allocation method.
The net-realizable-value method.
The direct method.
The step-down method.
The reciprocal method.
Metro Corporation uses a predetermined overhead rate of $20 per machine hour. In deriving this
figure, the company's accountant used:
a denominator of actual machine hours for the current accounting period.
a denominator of budgeted machine hours for the current accounting period.
a denominator of actual machine hours for the previous accounting period.
a numerator of actual machine hours for the current accounting period.
a numerator of budgeted machine hours for the current accounting period.
Which of the following types of companies would most likely use process costing?
Aircraft manufacturers.
Textile manufacturers.
Textbook publishers.
Custom-machining firms.
Shipbuilders.
At the Nassau Advertising Agency, partner and staff compensation cost is a key driver of agency
overhead. In light of this fact, which of the following is the correct expression to determine the
amount of overhead applied to a particular client job?
(Budgeted compensation ÷ budgeted overhead) × budgeted compensation cost on the job.
(Budgeted overhead ÷ budgeted compensation) × actual compensation cost on the job.
(Budgeted compensation ÷ budgeted overhead) × actual compensation cost on the job.
None of these, because service providers do not apply overhead to jobs.
(Budgeted overhead ÷ budgeted compensation) × budgeted compensation cost on the job.
Simone uses a predetermined overhead application rate of $8 per direct labor hour. A review of
the company's accounting records for the year just ended discovered the following:
Trenton worked on four jobs during its first year of operation: nos. 401, 402, 403, and 404. A
review of job no. 403's cost record revealed direct material charges of $40,000 and total
manufacturing costs of $50,000. If Trenton applies overhead at 150% of direct labor cost, the
overhead applied to job no. 403 must have been:
$4,000.
$0.
$3,333.
$6,000.
$5,000.
Media, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional
labor hours. Overhead was estimated to be $299,000, direct professional labor hours were
estimated to be 23,000, and direct professional labor cost was projected to be $368,000. During
the year, Media incurred actual overhead costs of $293,500, actual direct professional labor
hours of 22,500, and actual direct labor cost of $231,000. By year-end, the firm's overhead was:
$5,500 overapplied.
$5,500 underapplied.
$1,000 underapplied.
$6,500 underapplied.
$1,000 overapplied.
Metro Corporation uses a predetermined overhead rate of $20 per machine hour. In deriving this
figure, the company's accountant used:
a denominator of actual machine hours for the previous accounting period.
a numerator of actual machine hours for the current accounting period.
a denominator of budgeted machine hours for the current accounting period.
a denominator of actual machine hours for the current accounting period.
a numerator of budgeted machine hours for the current accounting period.
Eastside Hospital has two service departments (Patient Records and Accounting) and two
"production" departments (Internal Medicine and Surgery). Which of the following allocations
would likely take place under the reciprocal-services method of cost allocation?
Allocation of Patient Records cost to Internal Medicine.
Both Allocation of Accounting cost to Patient Records and Allocation of Patient Records cost
to Internal Medicine.
Allocation of Accounting cost to Patient Records.
Allocation of Internal Medicine cost to Surgery.
Allocation of Surgery cost to Accounting.
Which of the following manufacturers would most likely use job-order costing?
Custom-furniture manufacturers.
Gasoline refiners.
Chemical manufacturers.
Microchip processors.
Fertilizer manufacturers.
Which of the following methods would be of little use when allocating service department costs to
production departments?
The reciprocal method.
The step-down method.
The net-realizable-value method.
The direct method.
The dual-cost allocation method.
Which of the following types of companies would most likely use process costing?
Shipbuilders.
Textile manufacturers.
Textbook publishers.
Aircraft manufacturers.
Custom-machining firms.
Choice A
Choice B
Choice E
Choice D
Choice C
Which of the following statements about the use of direct labor as a cost driver is false?
Direct labor is gaining importance in many manufacturing applications with respect to
being a significant cost driver.
Direct labor is an inappropriate cost driver to use if a company is highly automated.
Companies can use either direct labor cost or direct labor hours as a cost driver.
Direct labor is the most commonly used cost driver when calculating a predetermined overhead
rate.
If direct labor is a good cost driver, increases in direct labor are matched with increases in
manufacturing overhead.
Which of the following would be considered a service department for an airline?
All of the other answers are correct.
Maintenance.
Purchasing.
Information Systems.
Flight Catering.
Which of the following choices is the correct status of manufacturing overhead at year-end?
rev: 11_13_2014_QC_59180
Underapplied by $12,000.
Underapplied by $32,000.
Overapplied by $32,000.
Overapplied by $44,000.
Overapplied by $12,000.
Which of the following methods would be of little use when allocating service department costs to
production departments?
The dual-cost allocation method.
The net-realizable-value method.
The reciprocal method.
The direct method.
The step-down method.
Which of the following choices is the correct status of manufacturing overhead at year-end?
rev: 11_13_2014_QC_59180
Underapplied by $62,000.
Overapplied by $10,000.
Underapplied by $10,000.
Overapplied by $62,000.
Overapplied by $72,000.
If the amount of effort and attention to products varies substantially throughout a company's
various manufacturing operations, the company might consider the use of:
departmental overhead rates.
direct labor hours to determine the overhead rate.
a plant wide overhead rate.
actual overhead rates instead of predetermined overhead rates.
machine hours to determine the overhead rate.
Strong Company applies overhead based on machine hours. At the beginning of 20x1, the
company estimated that manufacturing overhead would be $500,000, and machine hours would
total 20,000. By 20x1 year-end, actual overhead totaled $525,000, and actual machine hours
were 25,000. On the basis of this information, the 20x1 predetermined overhead rate was:
$20 per machine hour.
$0.05 per machine hour.
$21 per machine hour.
$25 per machine hour.
$0.04 per machine hour.
Metro Corporation uses a predetermined overhead rate of $20 per machine hour. In deriving this
figure, the company's accountant used:
a numerator of budgeted machine hours for the current accounting period.
a denominator of actual machine hours for the previous accounting period.
a numerator of actual machine hours for the current accounting period.
a denominator of actual machine hours for the current accounting period.
a denominator of budgeted machine hours for the current accounting period.
Eastside Hospital has two service departments (Patient Records and Accounting) and two
"production" departments (Internal Medicine and Surgery). Which of the following allocations
would likely take place under the reciprocal-services method of cost allocation?
Allocation of Surgery cost to Accounting.
Allocation of Patient Records cost to Internal Medicine.
Both Allocation of Accounting cost to Patient Records and Allocation of Patient Records cost
to Internal Medicine.
Allocation of Accounting cost to Patient Records.
Allocation of Internal Medicine cost to Surgery.
Dixie Company, which applies overhead at the rate of 190% of direct material cost, began work
on job no. 101 during June. The job was completed in July and sold during August, having
accumulated direct material and labor charges of $27,000 and $15,000, respectively. On the
basis of this information, the total overhead applied to job no. 101 amounted to:
$28,500.
$79,800.
$70,500.
$0.
$51,300.
Which of the following would not likely be used by service providers to accumulate job costs?
Processes.
All of these, because service providers cannot use job-costing systems.
Contracts.
Projects.
Clients.
Ricardo Corporation has two service departments (Maintenance and Human Resources) and
three production departments (Machining, Assembly, and Finishing). The two service
departments service each other, and studies have shown that Maintenance provides the greater
amount of service. Given the various cost allocation methods, which of the following choices
correctly denotes whether Maintenance cost would be allocated to Human Resources?
Choice B
Choice D
Choice C
Choice A
Choice E
Trenton worked on four jobs during its first year of operation: nos. 401, 402, 403, and 404. A
review of job no. 403's cost record revealed direct material charges of $40,000 and total
manufacturing costs of $50,000. If Trenton applies overhead at 150% of direct labor cost, the
overhead applied to job no. 403 must have been:
$6,000.
$3,333.
$5,000.
$0.
$4,000.
Which of the following manufacturers would most likely use job-order costing?
Fertilizer manufacturers.
Gasoline refiners.
Chemical manufacturers.
Custom-furniture manufacturers.
Microchip processors.
Which of the following entities would not likely be a user of job-costing systems?
Repair shops.
Custom-furniture manufacturers.
Accounting firms.
None of these, because all are likely users.
Hospitals.
Media, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional
labor hours. Overhead was estimated to be $216,000, direct professional labor hours were
estimated to be 18,000, and direct professional labor cost was projected to be $270,000. During
the year, Media incurred actual overhead costs of $212,000, actual direct professional labor
hours of 17,500, and actual direct labor cost of $317,000. By year-end, the firm's overhead was:
$2,000 underapplied.
$4,000 overapplied.
$6,000 underapplied.
$2,000 overapplied.
$4,000 underapplied.
Eastside Hospital has two service departments (Patient Records and Accounting) and two
"production" departments (Internal Medicine and Surgery). Which of the following allocations
would likely take place under the reciprocal-services method of cost allocation?
Both Allocation of Accounting cost to Patient Records and Allocation of Patient Records
cost to Internal Medicine.
Allocation of Surgery cost to Accounting.
Allocation of Accounting cost to Patient Records.
Allocation of Patient Records cost to Internal Medicine.
Allocation of Internal Medicine cost to Surgery.
The primary difference between normalized and actual costing methods lies in the determination
of a job's:
selling costs.
direct labor costs.
direct material costs.
manufacturing overhead costs.
administrative costs.
Dixie Company, which applies overhead at the rate of 190% of direct material cost, began work
on job no. 101 during June. The job was completed in July and sold during August, having
accumulated direct material and labor charges of $27,000 and $15,000, respectively. On the
basis of this information, the total overhead applied to job no. 101 amounted to:
$79,800.
$0.
$70,500.
$28,500.
$51,300.
Westside Hospital has two service departments (Patient Records and Accounting) and two
"production" departments (Internal Medicine and Surgery). Which of the following allocations
would not take place under the reciprocal-services method of cost allocation?
Allocation of Patient Records cost to Internal Medicine.
Allocation of Accounting cost to Patient Records.
Both Allocation of Surgery cost to Accounting and Allocation of Internal Medicine cost to
Surgery.
Allocation of Surgery cost to Accounting.
Allocation of Internal Medicine cost to Surgery.
Simone uses a predetermined overhead application rate of $8 per direct labor hour. A review of
the company's accounting records for the year just ended discovered the following:
Choice C
Choice A
Choice B
Choice D
Choice E
Strong Company applies overhead based on machine hours. At the beginning of 20x1, the
company estimated that manufacturing overhead would be $500,000, and machine hours would
total 20,000. By 20x1 year-end, actual overhead totaled $525,000, and actual machine hours
were 25,000. On the basis of this information, the 20x1 predetermined overhead rate was:
$21 per machine hour.
$20 per machine hour.
$0.05 per machine hour.
$25 per machine hour.
$0.04 per machine hour.
Which of the following would not likely be used by service providers to accumulate job costs?
Clients.
All of these, because service providers cannot use job-costing systems.
Contracts.
Processes.
Projects.
Choice A
Choice B
Choice E
Choice C
Choice D
Manufacturing overhead:
is a pool of indirect production costs that must somehow be attached to each unit
manufactured.
includes all selling costs.
includes direct materials, indirect materials, indirect labor, and factory depreciation.
should not be assigned to individual jobs because it bears no obvious relationship to them.
is easily traced to jobs.
Trenton worked on four jobs during its first year of operation: nos. 401, 402, 403, and 404. A
review of job no. 403's cost record revealed direct material charges of $40,000 and total
manufacturing costs of $50,000. If Trenton applies overhead at 150% of direct labor cost, the
overhead applied to job no. 403 must have been:
$3,333.
$0.
$4,000.
$6,000.
$5,000.
Which of the following statements about the use of direct labor as a cost driver is false?
Direct labor is an inappropriate cost driver to use if a company is highly automated.
Direct labor is gaining importance in many manufacturing applications with respect to
being a significant cost driver.
Companies can use either direct labor cost or direct labor hours as a cost driver.
If direct labor is a good cost driver, increases in direct labor are matched with increases in
manufacturing overhead.
Direct labor is the most commonly used cost driver when calculating a predetermined overhead
rate.
Westside Hospital has two service departments (Patient Records and Accounting) and two
"production" departments (Internal Medicine and Surgery). Which of the following allocations
would not take place under the reciprocal-services method of cost allocation?
Both Allocation of Surgery cost to Accounting and Allocation of Internal Medicine cost to
Surgery.
Allocation of Internal Medicine cost to Surgery.
Allocation of Accounting cost to Patient Records.
Allocation of Patient Records cost to Internal Medicine.
Allocation of Surgery cost to Accounting.
Eastside Hospital has two service departments (Patient Records and Accounting) and two
"production" departments (Internal Medicine and Surgery). Which of the following allocations
would likely take place under the reciprocal-services method of cost allocation?
Allocation of Internal Medicine cost to Surgery.
Allocation of Surgery cost to Accounting.
Both Allocation of Accounting cost to Patient Records and Allocation of Patient Records
cost to Internal Medicine.
Allocation of Accounting cost to Patient Records.
Allocation of Patient Records cost to Internal Medicine.
Dixie Company, which applies overhead at the rate of 190% of direct material cost, began work
on job no. 101 during June. The job was completed in July and sold during August, having
accumulated direct material and labor charges of $27,000 and $15,000, respectively. On the
basis of this information, the total overhead applied to job no. 101 amounted to:
$51,300.
$0.
$79,800.
$70,500.
$28,500.
Which of the following entities would not likely be a user of job-costing systems?
Hospitals.
None of these, because all are likely users.
Accounting firms.
Custom-furniture manufacturers.
Repair shops.
At the Nassau Advertising Agency, partner and staff compensation cost is a key driver of agency
overhead. In light of this fact, which of the following is the correct expression to determine the
amount of overhead applied to a particular client job?
None of these, because service providers do not apply overhead to jobs.
(Budgeted overhead ÷ budgeted compensation) × actual compensation cost on the job.
(Budgeted overhead ÷ budgeted compensation) × budgeted compensation cost on the job.
(Budgeted compensation ÷ budgeted overhead) × budgeted compensation cost on the job.
(Budgeted compensation ÷ budgeted overhead) × actual compensation cost on the job.
Simone uses a predetermined overhead application rate of $8 per direct labor hour. A review of
the company's accounting records for the year just ended discovered the following:
Trenton worked on four jobs during its first year of operation: nos. 401, 402, 403, and 404. A
review of job no. 403's cost record revealed direct material charges of $56,200 and total
manufacturing costs of $68,000. If Trenton applies overhead at 150% of direct labor cost, the
overhead applied to job no. 403 must have been:
$4,720.
$7,080.
$3,933.
$5,900.
$0.
Which of the following choices is the correct status of manufacturing overhead at year-end?
rev: 11_13_2014_QC_59180
Overapplied by $19,000.
Underapplied by $13,000.
Overapplied by $13,000.
Underapplied by $19,000.
Overapplied by $32,000.
Media, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional
labor hours. Overhead was estimated to be $168,000, direct professional labor hours were
estimated to be 21,000, and direct professional labor cost was projected to be $357,000. During
the year, Media incurred actual overhead costs of $167,000, actual direct professional labor
hours of 20,500, and actual direct labor cost of $298,000. By year-end, the firm's overhead was:
$3,000 underapplied.
$1,000 overapplied.
$1,000 underapplied.
$3,000 overapplied.
$4,000 underapplied.
Which of the following types of companies would most likely use process costing?
Shipbuilders.
Textile manufacturers.
Textbook publishers.
Aircraft manufacturers.
Custom-machining firms.
Strong Company applies overhead based on machine hours. At the beginning of 20x1, the
company estimated that manufacturing overhead would be $500,000, and machine hours would
total 20,000. By 20x1 year-end, actual overhead totaled $525,000, and actual machine hours
were 25,000. On the basis of this information, the 20x1 predetermined overhead rate was:
$0.04 per machine hour.
$21 per machine hour.
$25 per machine hour.
$0.05 per machine hour.
$20 per machine hour.
Which of the following methods would be of little use when allocating service department costs to
production departments?
The reciprocal method.
The step-down method.
The net-realizable-value method.
The dual-cost allocation method.
The direct method.
Which of the following would not likely be used by service providers to accumulate job costs?
Processes.
All of these, because service providers cannot use job-costing systems.
Contracts.
Clients.
Projects.
If the amount of effort and attention to products varies substantially throughout a company's
various manufacturing operations, the company might consider the use of:
a plant wide overhead rate.
actual overhead rates instead of predetermined overhead rates.
departmental overhead rates.
machine hours to determine the overhead rate.
direct labor hours to determine the overhead rate.
Trenton worked on four jobs during its first year of operation: nos. 401, 402, 403, and 404. A
review of job no. 403's cost record revealed direct material charges of $40,000 and total
manufacturing costs of $50,000. If Trenton applies overhead at 150% of direct labor cost, the
overhead applied to job no. 403 must have been:
$4,000.
$6,000.
$5,000.
$3,333.
$0.
Simone uses a predetermined overhead application rate of $8 per direct labor hour. A review of
the company's accounting records for the year just ended discovered the following:
Underapplied manufacturing overhead: $7,200
Actual manufacturing overhead: $392,000
Budgeted labor hours: 50,000
Simone's actual labor hours worked totaled:
50,900.
49,100.
49,900.
48,100.
cannot be determined based on the information presented.
The primary difference between normalized and actual costing methods lies in the determination
of a job's:
direct material costs.
administrative costs.
direct labor costs.
manufacturing overhead costs.
selling costs.
Strong Company applies overhead based on machine hours. At the beginning of 20x1, the
company estimated that manufacturing overhead would be $572,000 and machine hours would
total 22,000. By 20x1 year-end, actual overhead totaled $599,600, and actual machine hours
were 27,600. On the basis of this information, the 20x1 predetermined overhead rate was:
$1.05 per machine hour.
$22 per machine hour.
$21 per machine hour.
$1.04 per machine hour.
$26 per machine hour.
Which of the following types of companies would most likely use process costing?
Shipbuilders.
Textile manufacturers.
Textbook publishers.
Aircraft manufacturers.
Custom-machining firms.
Westside Hospital has two service departments (Patient Records and Accounting) and two
"production" departments (Internal Medicine and Surgery). Which of the following allocations
would not take place under the reciprocal-services method of cost allocation?
Allocation of Internal Medicine cost to Surgery.
Both Allocation of Surgery cost to Accounting and Allocation of Internal Medicine cost to
Surgery.
Allocation of Accounting cost to Patient Records.
Allocation of Surgery cost to Accounting.
Allocation of Patient Records cost to Internal Medicine.
Strong Company applies overhead based on machine hours. At the beginning of 20x1, the
company estimated that manufacturing overhead would be $728,000 and machine hours would
total 26,000. By 20x1 year-end, actual overhead totaled $753,100, and actual machine hours
were 25,100. On the basis of this information, the 20x1 predetermined overhead rate was:
$28 per machine hour.
$24 per machine hour.
$23 per machine hour.
$3.04 per machine hour.
$3.05 per machine hour.
Which of the following would not likely be used by service providers to accumulate job costs?
Projects.
Processes.
Contracts.
All of these, because service providers cannot use job-costing systems.
Clients.
Media, Inc., an advertising agency, applies overhead to jobs on the basis of direct professional
labor hours. Overhead was estimated to be $230,000, direct professional labor hours were
estimated to be 23,000, and direct professional labor cost was projected to be $368,000. During
the year, Media incurred actual overhead costs of $226,500, actual direct professional labor
hours of 22,500, and actual direct labor cost of $259,000. By year-end, the firm's overhead was:
$1,500 underapplied.
$3,500 underapplied.
$5,000 underapplied.
$3,500 overapplied.
$1,500 overapplied.
Which of the following manufacturers would most likely use job-order costing?
Microchip processors.
Fertilizer manufacturers.
Custom-furniture manufacturers.
Chemical manufacturers.
Gasoline refiners.
Strong Company applies overhead based on machine hours. At the beginning of 20x1, the
company estimated that manufacturing overhead would be $500,000, and machine hours would
total 20,000. By 20x1 year-end, actual overhead totaled $525,000, and actual machine hours
were 25,000. On the basis of this information, the 20x1 predetermined overhead rate was:
$0.05 per machine hour.
$25 per machine hour.
$21 per machine hour.
$20 per machine hour.
$0.04 per machine hour.
The Hearts and Hands Clinic has two service departments (Human Resources and Information
Systems) and two "production" departments (In-patient Treatment and Out-patient Treatment).
The service departments service the "production" departments as well as each other, and
studies have shown that Information Systems provides the greater amount of service. Which of
the following allocations would not occur if Hearts uses the step-down method of cost allocation?
Both Human Resources cost would be allocated to Information Systems and In-patient
Treatment cost would be allocated to Out-patient Treatment.
In-patient Treatment cost would be allocated to Out-patient Treatment.
Human Resources cost would be allocated to Information Systems.
Human Resources cost would be allocated to In-patient Treatment.
Information Systems cost would be allocated to Human Resources.
Dixie Company, which applies overhead at the rate of 190% of direct material cost, began work
on job no. 101 during June. The job was completed in July and sold during August, having
accumulated direct material and labor charges of $27,000 and $15,000, respectively. On the
basis of this information, the total overhead applied to job no. 101 amounted to:
$0.
$51,300.
$70,500.
$28,500.
$79,800.
Manufacturing overhead:
is easily traced to jobs.
is a pool of indirect production costs that must somehow be attached to each unit
manufactured.
includes direct materials, indirect materials, indirect labor, and factory depreciation.
includes all selling costs.
should not be assigned to individual jobs because it bears no obvious relationship to them.