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Exam 17: Job Order Cost Systems and Overhead Allocations

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Question 31

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If manufacturing overhead is materially over-applied,it is best to close it to:

A) Work-in-process inventory.
B) Finished goods inventory.
C) Cost of goods sold.
D) Apportioned among work-in-process,finished goods,and cost of goods sold.

E) A) and B)
F) B) and D)

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Question 32

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The cost of salaries paid to employees who work in a factory maintaining the heating system is considered:

A) Direct labor.
B) Indirect materials.
C) Factory overhead.
D) General and administrative costs.

E) B) and C)
F) A) and C)

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Question 33

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Allocating activity cost pools to products Burgandy Corporation makes plastic and wooden picture frames.The company has assigned $107,000 in monthly manufacturing overhead costs to two cost pools as follows: $67,000 to power costs,and $40,000 to production set-up costs.Additional monthly data are provided below: Power costs are allocated to products using machine hours as an activity base.Set-up costs are allocated to products based on the number of production runs each product line requires. (a)Allocate manufacturing overhead from the activity cost pools to each product line. (b)Compare the total per-unit cost of manufacturing plastic frames and wooden frames. (c)On a per-unit basis,which product line appears to be most profitable?

What are the factory utilities costs allocated to Baby Swings during the current month?

Since cost accounting systems provide managers with information necessary to manage operations,the information from cost accounting systems is not useful for external reporting purposes.

Alice Blue is a wholesale dress manufacturer.In manufacturing dresses,the following costs were incurred in March: Projected overhead for the year was $560,000 to be allocated based on project direct labor cost of $395,000.What are the total manufacturing costs for March (round your answers)?

A cost driver is an activity base that is highly correlated with manufacturing overhead costs.

If actual overhead costs are less than the amount of overhead applied to production,this indicates that manufacturing overhead is over-applied.

At the end of the accounting period,applied overhead was larger than actual overhead by a material amount.The over-applied overhead should be:

Job order costing is appropriate for businesses that produce mass quantities of identical units using the same amount of direct materials,direct labor,and manufacturing overhead.

An activity base is said to be a "driver" of overhead costs when the activity base:

A predetermined overhead application rate:

A job order cost system traces direct materials cost to a particular job by means of:

Benefits of activity-based costing include all of the following except:

The method used by managers when comparing unit costs with budgeted costs or other measures is broadly known as:

Marty's Metal Shop uses a job order cost system.It applies overhead to jobs at a rate of 175% of direct labor costs.Job No.2617 required $800 in direct labor costs.The job was initially budgeted to require $850 in direct labor costs.Overhead applied to Job No.2617 during the period amounted to:

Doyle Co.uses a job order cost accounting system.At year-end the Work-in-Process Inventory controlling account showed a debit balance of $43,125.For the two jobs in process at year-end,one showed $6,000 in direct materials and $4,500 in direct labor.The job cost sheet for the second job showed $9,000 in direct materials and $6,750 in direct labor.If the company is using a predetermined overhead application rate based on direct labor cost,the rate is:

The Work in Process account in a job order cost accounting system will be debited for:

A credit balance in the manufacturing overhead account at month end indicates that the actual overhead costs were less than the amount of overhead costs applied to jobs.

Activity-based costing uses multiple activity bases to assign overhead costs to units of production.