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A production department's output for the most recent month consisted of 9,400 units completed and transferred to the next stage of
production and 6,400 units in ending Work in Process inventory. The units in ending Work in Process inventory were 60% complete
with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming
the company uses the weighted average method.
 
8,200 units.
5,560 units.
15,800 units.
12,040 units.
13,240 units
 
9400 x 1.00 +
6400 x .60
   
Williams Company computed its cost per equivalent unit for direct materials to be $2.80 and its cost per equivalent unit for conversion to be $2.90.
A total of 232,000 units of product were completed and transferred out as finished goods during the month, and 40,000 of equivalent units remained
unfinished at the end of the month. The amount that should be reported in Finished Goods Inventory is:
 
$649,600.
$228,000.
$1,322,400
$1,434,400.
$116,000.
 
232000 x (2.80 + 2.90)
   
The following refers to units processed by a breakfast cereal maker in August.
Compute the total equivalent units of production with respect to conversion for August using the weighted-average inventory method.
 
Units of Product                      Percent of Conversion Added
Beginning Work in Process                                          287,000                                   60 %
Units started                                                               582,000                                   100%
Units completed                                                         655,600                                   100%
Ending Work in Process                                              213,400                                   40%
 
740,960
827,800
869,000
655,600
913,160
 
Equivalent units of production completed & transferred out = 655600 +
Equivalent units of production in Ending Work in Process = 213400 x .4
   
A company uses the FIFO method for inventory costing.
At the start of the period the production department had 54,000 units in beginning Work in Process inventory which were 33% complete;
the department completed and transferred 168,000 units. At the end of the period, 15,000 units were in the ending Work in Process
inventory and are 68% complete. The production department had labor costs in the beginning goods is process inventory of $90,000
and total labor costs added during the period are $726,625. Compute the equivalent cost per unit for labor.
 
$4.74.
$5.10.
$4.64.
$4.53.
$4.58
 
170000 + 27000(.8) = 191600
104000 + 726950 = 816625
816625 ÷ 178200 = $4.58
   
During March, the production department of a process operations system completed and transferred to finished goods 40,000
units that were in process at the beginning of March and 180,000 units that were started and completed in March. March's
beginning inventory units were 100% complete with respect to materials and 30% complete with respect to labor. At the end of March, 31,000
additional units were in process in the production department and were 100% complete with respect to materials and 55% complete with
respect to labor. The production department incurred direct materials cost of $255,400 and its beginning inventory included materials cost
of $94,200. Compute the direct materials cost per equivalent unit for the department using the weighted-average method.
 
$1.37.
$1.94.
$1.39
$1.59.
$1.42.
 
UP and cost per EUP DM
Completed and transferred 40,000 + 180,000 = 220,000
Direct materials 31,000 * 100% = 31000 =
Equivalent units 251,000
 
Costs of beginning inventory 94,200 +
Costs incurred this period 255,400 =
Total costs 349,600
 
Cost per equivalent unit 349,600  ÷  251,000 = 1.39
   
Richards Corporation uses the FIFO method of process costing. The following information is available for October in its Fabricating Department:
 
Units:
Beginning Inventory: 83,000 units, 70% complete as to materials and 25% complete as to conversion.
Units started and completed: 253,000.
Units completed and transferred out: 336,000.
Ending Inventory: 31,500 units, 40% complete as to materials and 10% complete as to conversion.
 
Costs:
Costs in beginning Work in Process - Direct Materials: $40,200.
Costs in beginning Work in Process - Conversion: $82,700.
Costs incurred in October - Direct Materials: $754,680.
Costs incurred in October - Conversion: $922,300
 
$2.62
$2.36
$2.09
$2.52
$2.22
 
Equivalent unit of materials = (83000 · .3) + 253000 + (31500 · 40%) = 290500
Cost per equivalent unit of materials = 759920 ÷ 301000 = $2.52
   
Wilturner Company incurs $91,000 of labor related directly to the product in the Assembly Department, $40,000 of labor not
directly related to the product but related to the Assembly Department as a whole, and $27,000 of labor for services that help
production in both the Assembly and Finishing departments. The amount of direct labor and factory overhead respectively are:
 
$91,000 and $67,000
$131,000 and $27,000.
$91,000 and $27,000.
$118,000 and $40,000.
$158,000 and $0
 
 
 
$91,000, ($40,000 + $27,000)
   
During December, the production department of a process operations system completed and transferred to finished goods a total of 75,000
units of product. At the end of March, 18,000 additional units were in process in the production department and were 55% complete with
respect to materials. The beginning inventory included materials cost of $57,900 and the production department incurred direct materials
cost of $184,200 during December. Compute the direct materials cost per equivalent unit for the department using the weighted-average method.
 
$2.85.
$2.46.
$3.23
$2.60.
$2.17.
 
 
EUP and cost per EUP DM
Completed and transferred 75000 * 100% 65,000
 
Direct materials 18000 x .8 = 12,000
Equivalent units 75000 x .55
Costs of beginning inventory 57900
Costs incurred this period 184200
Total costs 242100
Cost per equivalent unit 242100/75000 $3.228 - 3.23
   
Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June.
The journal entry to record June production activities for direct labor usage is:
                                     
Direct materials used $                                                          91,000              
Direct labor used                                                                     164,000            
Predetermined overhead rate (based on direct labor)          160%
Goods transferred to finished goods                                      436,000            
Cost of goods sold                                                                   448,000            
Credit sales                                                                             814,000            
 
Debit Factory Payroll Payable $164,000; credit Cash $164,000.
Debit Work in Process Inventory $164,000; credit Factory Payroll Payable $164,000.......
Debit Cost of Goods Sold $164,000; credit Factory Payroll Payable $164,000.
Debit Work in Process Inventory $164,000; credit Cash $164,000.
Debit Work in Process Inventory $164,000; credit Raw Materials Inventory $164,000
   
Richards Corporation uses the weighted-average method of process costing.
The following information is available for October in its Fabricating Department:
 
Units:
Beginning Inventory: 89,000 units, 80% complete as to materials and 25% complete as to conversion.
Units started and completed: 268,000.
Units completed and transferred out: 357,000.
Ending Inventory: 34,500 units, 30% complete as to materials and 10% complete as to conversion.
 
Costs:
Costs in beginning Work in Process - Direct Materials:          $46,200.
Costs in beginning Work in Process - Conversion:                  $88,700.
Costs incurred in October - Direct Materials:                         $722,370.
Costs incurred in October - Conversion:                                 $1,075,630.
 
Calculate the cost per equivalent unit of conversion.
 
$3.00
$3.25
$3.10
$2.72
$3.12
 
Units completed and transferred out: 357,000 + Ending Inventory: 34,500 x 10%
360450
88700 + 1,075,630 = 1277730
1277730 / 392925 = 3.25
   
Pitt Enterprises manufactures jeans. All materials are introduced at the beginning of the manufacturing process in the Cutting Department. Conversion costs are incurred uniformly throughout the manufacturing process. As the cutting of material is completed,
the pieces are immediately transferred to the Sewing Department. Information for the Cutting Department for the month of May follows.
Work in Process, May 1 (56,000 units, 100% complete for direct materials, 70% complete with respect to conversion costs; includes
$71,700 of direct material cost; $34,620 of conversion costs).
                         
Units started in May                 160,000            
Units completed in May          168,000            
 
Work in Process, May 31

48,000 units, 100% complete for direct materials
70% complete for conversion costs

Costs incurred in May                                      
Direct materials          $   343,200            
Conversion costs       $    354,150            
 
If Pitt Enterprises uses the FIFO method of process costing, compute the equivalent units for direct materials and
conversion respectively for May.
 
162,400 materials; 160,000 conversion.
162,400 materials; 162,400 conversion.
216,000 materials; 201,600 conversion.
160,000 materials; 162,400 conversion.
112,000 materials; 112,000 conversion.
 
 
168000 + 48000 = 216,000
168000 + (48000 x .7) = 201,600
   
Williams Company computed its cost per equivalent unit for direct materials to be $2.70 and its cost per equivalent unit for conversion
to be $3.28. A total of 381,000 units of product were completed and transferred out as finished goods during the month. The ending Work in Process inventory consists of 22,000 equivalent units of direct materials and 22,000 equivalent units of conversion costs.
The amount that should be reported in ending Work in Process Inventory is:
 
$72,160.
$59,400.
$2,337,780.
$2,278,380
$131,560.
 
381000 x (2.70 + 3.28)
   
Metaline Corp. uses the weighted average method for inventory costs and had the following information available for the year.
Calculate the equivalent units of production for the year:
 
Beginning Work in Process (50% complete, $1,800)             270      units     
Ending inventory of Work in Process (90% complete)           470      units     
Total units started during the year                             3,900   units   
 
4,400 units.
4,123 units
5,240 units.
4,816 units.
4,488 units.
 
270 + 3900 - 470 = 3700 + (470 x .9) = 4123
   
Luker Corporation uses a process costing system. The company had $176,500 of beginning Finished Goods Inventory on October 1.
It transferred in $853,000 of units completed during the period. The ending Finished Goods Inventory balance on October 31 was
$174,200. The entry to account for the cost of goods manufactured during October is:
 
Multiple Choice
 
Debit Finished Goods Inventory $852,000; credit Work in Process Inventory $852,000
Debit Cost of Goods Sold $854,300; credit Finished Goods Inventory $854,300.
Debit Cost of Goods Sold $854,300; credit Work in Process Inventory $854,300.
Debit Finished Goods Inventory $173,200; credit Cost of Goods Sold $173,200.
Debit Cost of Goods Sold $852,000; credit Finished Goods Inventory $852,000.
 
 
176500 + 853000 - 174200 = 854,300
   
A company uses the weighted average method for inventory costing. At the beginning of a period the production department had
40,000 units in beginning Work in Process inventory which were 50% complete; the department completed and transferred
175,000 units. At the end of the period, 32,000 units were in the ending Work in Process inventory and are 85% complete.
Compute the number of equivalent units produced by the department.
 
Multiple Choice
 
207,000.
135,000.
202,200.
175,000.
195,500.
 
175,000 + (32000 x .85) = 202,200
   
A production department's output for the most recent month consisted of 13,000 units completed and transferred to the next stage
of production and 13,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete
with respect to both direct materials and conversion costs. There were 1,600 units in beginning Work in Process inventory, and they were
70% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month,
assuming the company uses the weighted average method.
 
Multiple Choice
 
19,980 units.
19,500 units.
14,120 units.
13,480 units.
13,000 units.
 
13000 + (13000 x .5) = 19500
   
Sparky Corporation uses the FIFO method of process costing. The following information is available for February in its Molding Department:
 
Units:
Beginning Inventory: 42,000 units, 100% complete as to materials and 55% complete as to conversion.
Units started and completed: 127,000.
Units completed and transferred out: 169,000.
Ending Inventory: 38,500 units, 100% complete as to materials and 25% complete as to conversion.
 
Costs:
Costs in beginning Work in Process - Direct Materials: $60,000.
Costs in beginning Work in Process - Conversion: $65,850.
Costs incurred in February - Direct Materials: $401,010.
Costs incurred in February - Conversion: $616,150.
 
Calculate the cost per equivalent unit of conversion.
 
$3.96
$2.32
$4.99
$3.14
$3.23
 
42000 · (100% - 55%) + 127000 + 38500 · (.25) = 155,525
616150 ÷ 155525 = 3.96
   
During January, the production department of a process operations system completed and transferred to finished goods
a total of 54,000 units. At the end of January, 11,000 additional units were in process in the production department and
were 50% complete with respect to labor. The beginning inventory included labor cost of $39,000 and the production
department incurred direct labor cost of $309,500 during January. Compute the direct labor cost per equivalent unit for
the department using the weighted-average method.
 
Multiple Choice
 
$6.45.
$5.20.
$5.73.
$5.86.....
$5.36.
 
54000 + 11000 x .5 = 59500
39000 + 309500 = 348500
348500 / 59500 = 5.857 = $5.86
   
Following is a partial process cost summary for Mitchell Manufacturing's Canning Department.
 
Equivalent Units of Production           Direct Materials          Conversion
Units Completed and transferred out                           96,000                       96,000              
Units in Ending Work in Process:                                                                                                         
Direct Materials (18,000 * 100%)                                 18,000                                                                        
Conversion (18,000 * 70%)                                                                              12,600             
Equivalent Units of Production                                     114,000                      108,600           
                                                                                                             
Cost per Equivalent Unit                                                                                                          
Costs of beginning work in process                  $42,800                       $62,900          
Costs incurred this period                                143,300                        192,700                      
Total costs                   $186,100                                  $255,600         
Cost per equivalent unit                       $1.63 per EUP             $2.35 per EUP
             
 
If the units completed were transferred to the Labeling Department, what is the appropriate journal entry to transfer the conversion costs?
 
Finished Goods $255,600; Work in Process $255,600.
Finished Goods—Labeling $192,700; Finished Goods—Canning $192,700.
Work in Process—Labeling $192,700; Work in Process—Canning $192,700.
Work in Process—Labeling $225,600; Work in Process—Canning $225,600.
Work in Process—Labeling $225,600; Finished Goods—Canning $225,600.
 
Units Completed and transferred out · Conversion per EUP
96000 x 2.35
 Work in Process — Labeling $225,600; Work in Process — Canning $225,600.
   
During November, the production department of a process operations system completed and transferred to finished goods
37,000 units that were in process at the beginning of November and 180,000 that were started and completed in November.
November's beginning inventory units were 100% complete with respect to materials and 45% complete with respect to
conversion. At the end of November, 26,000 additional units were in process in the production department and were 100%
complete with respect to materials and 30% complete with respect to conversion. Compute the number of equivalent units
with respect to conversion for November using the weighted-average method.
 
Multiple Choice
 
240,000.
165,900.
140,000.
277,000
264,050.
 
37000 + 180000 = 217,000
217000 + 37000 = 277,000
   
At the beginning of the month, the Forming Department of Martin Manufacturing had 24,000 units in inventory, 30% complete
as to materials, and 10% complete as to conversion. During the month the department started 74,000 units and transferred 83,000
units to the next manufacturing department. At the end of the month, the department had 15,000 units in inventory, 85% complete
as to materials and 70% complete as to conversion. If Martin Manufacturing uses the weighted average method of process costing,
compute the equivalent units for materials and conversion respectively for the Forming Department.
 
 95,750 materials; 93,500 conversion.
71,750 materials; 69,500 conversion.
88,550 materials; 93,500 conversion.
71,600 materials; 76,400 conversion.
88,550 materials; 91,100 conversion
 
83000 + (15000 x .85) = 95750
83000 + (15000 x .7) = 93500
  The following cost data pertain to the operations of Quinonez Department Stores, Inc., for the month of September.

Corporate headquarters building lease                                            $87,100
Cosmetics Department sales commissions--Northridge Store        $5,830
Corporate legal office salaries                                                           $63,700
Store manager's salary-Northridge Store                                         $10,400
Heating-Northridge Store                                                                  $15,200
Cosmetics Department cost of sales--Northridge Store                   $33,400
Central warehouse lease cost                                                            $12,500
Store security-Northridge Store                                                        $22,600
Cosmetics Department manager's salary--Northridge Store           $4,340

The Northridge Store is just one of many stores owned and operated by the company.
The Cosmetics Department is one of many departments at the Northridge Store.
The central warehouse serves all of the company's stores.

What is the total amount of the costs listed above that are NOT direct costs of the Northridge Store?
 
$163,300

(87,100+63,700+12,500)
   
Dake Corporation's relevant range of activity is 4,900 units to 5,500 units.
When it produces and sells 5,200 units, its average costs per unit are as follows:

Direct materials                                              $6.50
Direct labor                                                     $3.70
Variable manufacturing overhead                  $2.10
Fixed manufacturing overhead                       $3.00
Fixed selling expense                                      $1.00
Fixed administrative expense                         $0.70
Sales commissions                                          $0.80
Variable administrative expense                     $0.70

If 5,000 units are produced, the total amount of direct manufacturing cost incurred is closest to:
 
$51,000

(6.50 + 3.70) x 5000
   
The following costs were incurred in May:

Direct materials                      $42,700
Direct labor                             $29,400
Manufacturing overhead        $27,300
Selling expenses                      $23,600
Administrative expenses         $33,700

Conversion costs during the month totaled:
 
$56,700

Conversion Cost = Direct Labor + Manufacturing Overhead

29,400 + 27,300
   
Schwiesow Corporation has provided the following information:
 
Cost per Unit               Cost per Period

Direct materials                                              $7.50                                                  
Direct labor                                                     $4.00                                                  
Variable manufacturing overhead                  $1.90                                                  
Fixed manufacturing overhead                                                           $18,000          
Sales commissions                                          $1.00                                                  
Variable administrative expense                     $0.70                                                  
Fixed selling and administrative expense                                           $5,800

If 8,500 units are produced, the total amount of manufacturing overhead cost is closest to:
 
$34,150

1.90 x 8,500 + 18,000
  Pedregon Corporation has provided the following information:
 
Cost per Unit               Cost per Period
Direct materials                                              $7.30
Direct labor                                                     $4.20
Variable manufacturing overhead                  $1.55
Fixed manufacturing overhead                                                                                   $23,400
Sales commissions                                          $0.75
Variable administrative expense                     $0.85
Fixed selling and administrative expense                                                       $4,900

If 6,000 units are produced, the total amount of manufacturing overhead cost is closest to:
 
$32,700

[1.55 x 6000 + 23,400
   
A manufacturing company prepays its insurance coverage for a three-year period.
The premium for the three years is $5,490 and is paid at the beginning of the first year.
Seventy percent of the premium applies to manufacturing operations and thirty percent applies to selling and administrative activities.
What amounts should be considered product and period costs respectively for the first year of coverage?

Product Period
A) $5,490 $0
B) $3,843 $1,647
C) $2,562 $1,098
D) $1,281 $549

5490 / 3 = 1830
1830 * 0.7 = 1281
1830 * 0.3 = 549
   
Dake Corporation's relevant range of activity is 2,300 units to 5,500 units.
When it produces and sells 3,900 units, its average costs per unit are as follows:
 
Average Cost per Unit
Direct materials                                                          $6.80
Direct labor                                                                 $4.00
Variable manufacturing overhead                              $1.55
Fixed manufacturing overhead                                   $2.50
Fixed selling expense                                                  $1.15
Fixed administrative expense                                     $0.85
Sales commissions                                                      $0.95
Variable administrative expense                                 $0.85

For financial reporting purposes, the total amount of product costs incurred to make 3,900 units is closest to:
 
$57,915

6.80 + 4.00 + 1.55 = 12.35
12.35 x 3900 = 48,165
2.50 x 3900 = 9,750
48,165 + 9,750 = 57,915
   
Lagle Corporation has provided the following information:
 
Cost per Unit               Cost per Period
Direct materials                                              $4.85
Direct labor                                                     $3.90
Variable manufacturing overhead                  $1.55
Fixed manufacturing overhead                                                           $12,600
Sales commissions                                          $1.90
Variable administrative expense                     $0.30
Fixed selling and administrative expense                                           $7,200

If 4,500 units are sold, the variable cost per unit sold is closest to:
 
$12.50
 
4.85 + 3.90 + 1.55 + 1.90 + 0.30
   
An income statement for Sam's Bookstore for the first quarter of the year is presented below:

Sam's Bookstore Income Statement For Quarter
Ended March 31
 
Sales                                                                            $910,000
Cost of goods sold                                                       565,000
Gross margin                                                               345,000
Selling and administrative expenses Selling               $120,000
Administration                                                            144,000           264,000
Net operating income                                                 $81,000

On average, a book sells for $70. Variable selling expenses are $5 per book with the remaining selling expenses being fixed.
The variable administrative expenses are 4% of sales with the remainder being fixed.
The contribution margin for Sam's Bookstore for the first quarter is:
 
$243,600

Explanation:

Sales                                        910,000
Variable Expenses:
COGS                                       565,000 +
Variable Selling                      65,000 +
Variable Admin                      36,400 =
                                                666,400
 
910,000 - 666,400 = 243,600
   
Pedregon Corporation has provided the following information:
 
Cost per Unit               Cost per Period
Direct materials                                              $6.95
Direct labor                                                     $3.50
Variable manufacturing overhead                  $1.75
Fixed manufacturing overhead                                                                       $19,800
Sales commissions                                          $0.40
Variable administrative expense                     $0.50
Fixed selling and administrative expense                                                       $7,700

If 4,500 units are sold, the total variable cost is closest to:
 
$58,950
 
6.95 + 3.50 + 1.75 + 0.40 + 0.50 x 4,500
   
At a sales volume of 42,000 units, Choice Corporation's sales commissions
(a cost that is variable with respect to sales volume) total $596,400.
To the nearest whole dollar, what should be the total sales commissions at a sales volume of 39,700 units?
(Assume that this sales volume is within the relevant range.) (Round intermediate calculations to 2 decimal places.)
 
$563,740


596,400 / 42,000 = 14.20
$.20 x 39,700 = 563,740
   
Kogler Corporation's relevant range of activity is 7,000 units to 11,000 units.
When it produces and sells 9,000 units, its average costs per unit are as follows:
 
Average Cost per Unit
Direct materials                                                          $5.20
Direct labor                                                                 $5.40
Variable manufacturing overhead                              $2.00
Fixed manufacturing overhead                                   $9.00
Fixed selling expense                                                  $3.80
Fixed administrative expense                                     $1.50
Sales commissions                                                      $0.70
Variable administrative expense                                 $0.65
 
If the selling price is $28.00 per unit, the contribution margin per unit sold is closest to:
 
$14.05

28.00 - (5.20 + 5.40 + 2.00 + 0.70 + 0.65)
   
Kesterson Corporation has provided the following information:
 
Cost per Unit               Cost per Period
Direct materials                                              $6.85
Direct labor                                                     $3.60
Variable manufacturing overhead                  $1.25
Fixed manufacturing overhead                                                           $10,400
Sales commissions                                          $1.50
Variable administrative expense                     $0.50
Fixed selling and administrative expense                                           $3,200

The incremental manufacturing cost that the company will incur if it increases production from 4,000 to 4,001 units is closest to:
 
$11.70

6.85 + 3.60 + 1.25
   
Bolka Corporation, a merchandising company, reported the following results for October:
 
Sales                                                                            $433,000
Cost of goods sold (all variable)                                 $176,100
Total variable selling expense                                     $26,700
Total fixed selling expense                                          $19,700
Total variable administrative expense                        $8,700
Total fixed administrative expense                             $37,300

The contribution margin for October is:
 
$221,500

433,000 - 176,100 - 26,700 - 8,700 = 211,500
   
If one unit of Product Z2 used $2.80 of direct materials and $3.30 of direct labor, sold for $11.00, and was
assigned overhead at the rate of 33% of direct labor costs, how much gross profit was realized from this sale?
 
3.81
   
A system of accounting for production operations that provides managers with information to control costs and set
selling prices is called a(n):
 
Cost accounting system.
   
Mesa Corporation allocates overhead to production on the basis of direct labor costs. Mesa's total estimated overhead is $275,000
and estimated direct labor is $110,000. Determine the amount of overhead applied to a job which used $21,000 of direct labor.
$52,500
   
Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw
Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000
of direct materials and $13,000 of indirect materials. What is the ending Raw Materials Inventory balance for March?
33,000
   
A type of production that yields customized products or services for each customer is called:
Job order production.
   
Minstrel Manufacturing uses a job order costing system. During the month, Minstrel purchased $189,000 of raw materials on credit;
issued materials to production of $214,000 of which $11,000 were indirect. Minstrel incurred a factory payroll of $158,000, of which
$21,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost.
The total manufacturing costs added during the period is:
 
$545,500
   
Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year, Adams
estimated total overhead of $284,700; materials of $409,000 and direct labor of $219,000. During the year Adams incurred
$417,000 in materials costs, $413,100 in overhead costs and $223,000 in direct labor costs.
Compute the amount of overhead applied to jobs during the year.
 
289,900
   
Dallas Company uses a job order costing system. The company's executives estimated that direct labor would be $2,000,000
(200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period. At the end of the period,
the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs. Using direct
labor hours as a base, what was the predetermined overhead rate?
 
$7.50 per direct labor hour.
   
A custom manufacturer completed Jobs 103 and 104. Job 103 cost $24,000 and was sold (on credit) for $40,000. Job 104
cost $30,000. The journal entry to record the sale of Job 103 consists of a:
 
Debit to Accounts Receivable $40,000
Credit to Sales $40,000.
   
Finished goods inventory is $186,000. If overhead applied to these goods is $78,000, and the overhead rate is 120% of direct
labor, how much direct materials cost was incurred in producing the inventory?
 
43,000
   
Cosi Company uses a job order costing system and allocates its overhead on the basis of direct labor costs. Cosi expects
to incur $870,000 of overhead during the next period, and expects to use 57,000 labor hours at a cost of $10.00 per hour.
What is Cosi Company's predetermined overhead rate?
 
153%
   
Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation used $2,500
of direct materials and used $4,000 of direct labor. The job was not finished in September. An additional $3,000 of direct
materials and $6,500 of direct labor were needed to finish the job in October. The company applies overhead at the end
of each month at a rate of 200% of the direct labor cost incurred.
What is the balance in the Work in Process account at the end of September relative to Job A3B?
 
14,500
   
Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year,
Adams estimated total overhead of $396,000; materials of $410,000 and direct labor of $220,000. During the year Adams
 incurred $418,000 in materials costs, $413,200 in overhead costs and $224,000 in direct labor costs.
Compute the amount of under- or overapplied overhead for the year.
 
10,000 underapplied
   
Production activities for a customized product represent a(n):
Job
   
A perpetual record that is updated each time materials are purchased and each time materials are issued for use in production is called a(n):
Materials ledger card.
   
A company that uses job order costing reports the following information. Overhead is applied at the rate of 60%
of direct materials. The company has no beginning Work in Process or Finished Goods inventories. Jobs 1 and 3
are not finished by the end of March, and Job 2 is finished but not sold by the end of March.
 
                                                Job 1                Job 2                Job 3
Direct materials used              $ 13,200          $ 17,200          $ 6,200
Direct labor used                     $ 21,200          $ 11,200          $ 9,200
 
Determine the total dollar amount of Work in Process Inventory at the end of March.
 
61,440
   
CWN Company uses a job order costing system and last period incurred $80,000 of actual overhead and $100,000
of direct labor. CWN estimates that its overhead next period will be $75,000. It also expects to incur $100,000 of
direct labor cost. If CWN bases applied overhead on direct labor cost, its predetermined overhead rate for the next period should be:
 
75%
   
Copy Center pays an average wage of $12 per hour to employees for printing and copying jobs and allocates $18 of overhead
for each employee hour worked. Direct materials are assigned to each job according to actual cost. If Job M-47 used $350 of
direct materials and took 20 direct labor hours of labor to complete, what is the total cost that should be assigned to the job?
 
950
   
A job cost sheet includes:
 
Direct material, direct labor, and applied overhead.
   
A document in a job order costing system that is a cost record maintained for each job is known as a(n
 
Job cost sheet.
   
Mango Company applies overhead based on direct labor costs. For the current year, Mango Company estimated
total overhead costs to be $420,000, and direct labor costs to be $210,000. Actual overhead costs for the year
totaled $444,000, and actual direct labor costs totaled $236,000. At year-end, the balance in the Factory Overhead account is a:
 
28,000 Credit balance.
   
Kayak Company uses a job order costing system and allocates its overhead on the basis of direct labor costs.
Kayak Company's production costs for the year were: direct labor, $20,000; direct materials, $40,000; and factory
overhead applied $5,000. The predetermined overhead rate was:
 
25.00%
   
Minstrel Manufacturing uses a job order costing system. During the month, Minstrel purchased $198,000 of raw materials
on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll of
$150,000, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost. The journal entry to record indirect labor cost is:
 
Debit Factory Overhead $40,000
Credit Factory Wages Payable $40,000.
   
Job order costing would be used for all of the following except:
 
Production of standard running shoes
   
Adams Manufacturing allocates overhead to production on the basis of direct labor costs. At the beginning of the year,
Adams estimated total overhead of $292,500; materials of $415,000 and direct labor of $225,000. During the year Adams
incurred $423,000 in materials costs, $415,100 in overhead costs and $229,000 in direct labor costs.
Compute the predetermined overhead rate.
 
130.00
   
B&T Company's production costs for May are: direct labor, $13,000; indirect labor, $6,500; direct materials, $15,000;
property taxes on production facility, $800; factory heat, lights and power, $1,000; and insurance on plant and equipment,
$200. B&T Company's factory overhead incurred for May is:
 
8,500
   
A company that uses job order costing reports the following information for March. Overhead is applied at the rate of
60% of direct materials cost. The company has no beginning Work in Process or Finished Goods inventories at March 1.
Jobs 1 and 3 are not finished by the end of March, and Job 2 is finished but not sold by the end of March.
 
                                    Job 1                Job 2                Job 3
Direct materials used $ 13,800          $ 17,800          $ 6,800
Direct labor used       $ 21,800          $ 11,800          $ 9,800
 
Determine the total dollar amount of Finished Goods Inventory at the end of March.
 
40,280
   
Morris Company applies overhead based on direct labor costs. For the current year, Morris Company estimated total
overhead costs to be $424,000, and direct labor costs to be $2,120,000. Actual overhead costs for the year totaled
$398,000, and actual direct labor costs totaled $1,860,000. At year-end, the balance in the Factory Overhead account is a:
 
$398,000 Debit balance
   
The Work in Process Inventory account for DG Manufacturing follows.
Compute the cost of jobs completed and transferred to Finished Goods Inventory.
 
Work in Process Inventory
                                    DR       CR       
Beginning balance     5,600              
Direct materials          48,200                        
Direct labor                30,700              ?
Applied overhead      16,900                        
Ending balance                      11,100                        
 
90,300
   
Minstrel Manufacturing uses a job order costing system. During the month, Minstrel purchased $198,000 of raw materials
on credit; issued materials to production of $195,000 of which $30,000 were indirect. Minstrel incurred a factory payroll
of $150,000, of which $40,000 was indirect labor. Minstrel uses a predetermined overhead rate of 150% of direct labor cost.
The journal entry to record the purchase of materials is:
 
Debit Raw Materials Inventory $198,000
credit Accounts Payable $198,000.
   
A company has an overhead application rate of 125% of direct labor costs. How much overhead would be allocated
to a job if it required direct labor costing $21,000?
 
26,250
   
A company that makes which of the following types of products would best be suited for a job costing system?
 
Custom jewelry
   
The ending inventory of finished goods has a total cost of $9,000 and consists of 600 units. If the overhead applied to these
goods is $3,000, and the overhead rate is 75% of direct labor, how much direct materials cost was incurred in producing these units?
 
2,000
   
At the beginning of the year, a company estimates total direct materials costs of $1,800,000 and total overhead costs of
$2,340,000. If the company uses direct materials costs as its activity base to apply overhead, what is the predetermined
overhead rate it should use during the year?
 
130
   
The amount by which overhead incurred during a period exceeds the overhead applied to jobs is:
 
Underapplied overhead
   
Clemens Company applies overhead based on direct labor cost. Estimated overhead and direct labor costs for the year were
$119,500 and $124,200, respectively. During the year, actual overhead was $106,600 and actual direct labor cost was $112,000.
The entry to close the over- or underapplied overhead at year-end, assuming an immaterial amount, would include
(Round predetermined overhead rate to nearest whole percentage.)
 
A credit to Cost of Goods Sold for $920.
   
A company makes bikes from recycled metal. For a recent job lot of 200 bikes, the company incurred direct materials costs
of $6,000 and direct labor costs of $2,000. Factory overhead applied to this job is $9,000.
What is the total manufacturing cost of this job lot?
 
17,000
   
Large custom aircraft manufacturers normally use:
 
Job order costing.
  Under a job order cost system, costs are assigned to each job or to each batch of goods.
 
 True
   
Labor costs are debited to Work in Process Inventory when they are incurred.
 
False
 
Each entry to Work in Process Inventory must be accompanied by a corresponding posting to one or more job cost sheets.
 
True
   
The predetermined overhead rate is based on the relationship between actual annual overhead costs and expected annual operating activity.
 
False
   
Finished Goods Inventory is a control account that controls individual finished goods records in a finished goods subsidiary ledger.
 
True
   
Cost accounting involves the:
 
Measuring product costs.
Recording of product costs
Reporting of product costs.
All of these options.
   
A process cost system would be used for all of the following except the
 
Printing of wedding invitations.
   
When a job is completed in a job order cost accounting system, the cost of the job is transferred to
Finished Goods Inventory.
   
In a manufacturing company, the cost of factory labor consists of all of the following except
Net earnings of factory workers.
   
Assigning manufacturing costs to work in process results in credits to all of the following except
 
Finished Goods Inventory.
   
Job cost sheets constitute the subsidiary ledger for
 
Work in Process Inventory.
   
When factory labor costs are assigned to jobs, the direct labor cost is debited to
 
Work in Process Inventory.
   
Manufacturing overhead is assigned to Work in Process through the use of a (an)
 
Predetermined overhead rate.
   
The predetermined overhead rate may be based on any of the following bases except
 
Any of the options may be used.
   
In recent years, there has been a significant trend toward use of _______________ as the activity base in assigning overhead.
 
Machine hours.
   
When a completed job is sold an entry is made crediting
 
Finished Goods Inventory.
   
All of the following are control accounts except
 
Finished Goods Inventory.
Raw Materials Inventory.
Work in Process Inventory.
All of the options are control accounts.
   
Work in Process Inventory is debited for all of the following except
 
Manufacturing overhead incurred.
   
Underapplied overhead is shown in the financial statements as a (an)
Prepaid expense.
   
If actual manufacturing overhead is less than applied manufacturing overhead, the difference is reported as a (an)
 
Unearned revenue.
   
Materials used in a factory that are not an integral part of the final product, such as cleaning supplies, should be classified as:
 
manufacturing overhead.
   
The relevant range concept is applicable to mixed costs.
 
True
   
Most companies use the contribution approach in preparing financial statements for external reporting purposes.
 
False
   
In a job-order costing system, costs are traced to individual units of product. The sum total of such traced costs is called
the unit product cost.
 
False
   
When designing an activity-based costing system, related activities are frequently combined to reduce the amount of
detail and record-keeping cost.
 
True
   
Facility-level costs cannot be traced on a cause-and-effect basis to individual products.
 
True
   
An activity rate is computed for each product.
 
False

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