9.

 To the nearest whole dollar, what should be the total cost of operating the helpline costs at a volume
of 34,800 calls in a month? (Assume that this call volume is within the relevant range.) 
A. $742,500
B. $783,000
C. $704,095
D. $762,750
Discussion: From the initial data, the cost per call is $742,500/33,000 = $22.48; Therefore the cost at
34,800 calls would be $22.48*34,800=78472

 10. To the nearest whole cent, what should be the average cost of operating the helpline per call at a
volume of 36,100 calls in a month? (Assume that this call volume is within the relevant range.) 
A. $21.54
B. $20.57
C. $21.34
D. $22.50
Discussion: See above.

Chapter 3

1. In computing its predetermined overhead rate, Marple Company inadvertently left its indirect labor
costs out of the computation. This oversight will cause: 
A. Manufacturing Overhead to be overapplied.
B. The Cost of Goods Manufactured to be understated.
C. The debits to the Manufacturing Overhead account to be understated.
D. The ending balance in Work in Process to be overstated.
Discussion: If indirect labor is omitted from the predetermined overhead rate, then the
predetermined overhead rate is too low. (C) is correct because Cost of Goods Manufactured is
increased by the amount of overhead applied. So if overhead applied is too low, then Cost of
Goods Manufactured would be too low. (A) would be true if the predetermined overhead rate
were too high. (D) could be true if predetermined overhead rate were too high. (C) refers to the
increases in Manufacturing Overhead when overhead is incurred. It decreases as it is applied to
jobs based on the predetermined overhead rate, so it is the credits to Manufacturing Overhead
that could be effected by this error.

2.  In a job-order costing system, the use of direct materials that have been previously purchased is
recorded as a debit to: 
A. Raw Materials inventory.
B. Finished Goods inventory.
C. Work in Process inventory.
D. Manufacturing Overhead.
Discussion: A debit increases an asset account. When direct materials are used Raw Materials
inventory decreases and Work in Process increases.

3. In a job-order costing system, indirect materials that have been previously purchased and that are
used in production are recorded as a debit to: 
A. Work in Process inventory.
B. Manufacturing Overhead.