(Test Bank) ACC 3200-16e_GNB_CH02_TB-final-REVIEWED AND VERIFIED B EXPERTS-GRADED A

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File: 16e_GNB_CH02_TB, Chapter 2, Job-Order Costing: Calculating Unit Product Costs True/False [QUESTION] 1. A cost driver is a factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes direct costs. Answer: F Difficulty: 2 Medium Learning Objective: 02-01 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 2. Job-order costing systems often use allocation bases that do not reflect how jobs actually use overhead resources. Answer: T Difficulty: 2 Medium Learning Objective: 02-01 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 3. An employee time ticket is an hour-by-hour summary of the employee’s activities throughout the day. Answer: T Difficulty: 1 Easy Learning Objective: 02-Other Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 4. The formula for computing the predetermined overhead rate is: Predetermined overhead rate = Estimated total amount of the allocation base ÷ Estimated total manufacturing overhead cost Answer: F Difficulty: 1 Easy Learning Objective: 02-01 Topic Area: Bloom’s: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION]5. Generally speaking, when going through the process of computing a predetermined overhead rate, the estimated total manufacturing overhead cost is determined before estimating the amount of the allocation base. Answer: F Difficulty: 1 Easy Learning Objective: 02-01 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 6. If a job is not completed at year end, then no manufacturing overhead cost would be applied to that job when a predetermined overhead rate is used. Answer: F Difficulty: 2 Medium Learning Objective: 02-02 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 7. Actual overhead costs are not assigned to jobs in a job costing system. Answer: T Difficulty: 1 Easy Learning Objective: 02-02 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 8. The amount of overhead applied to a particular job equals the actual amount of overhead caused by the job. Answer: F Difficulty: 1 Easy Learning Objective: 02-02 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 9. If the overhead rate is computed annually based on the actual costs and activity for the year, the manufacturing overhead assigned to any particular job can be computed as soon as the job is completed. Answer: F Difficulty: 1 Easy Learning Objective: 02-02 Topic Area:Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 10. Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job. Answer: F Difficulty: 2 Medium Learning Objective: 02-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 11. In a job-order cost system, indirect labor is assigned to a job using information from the employee time ticket. Answer: F Difficulty: 3 Hard Learning Objective: 02-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 12. If the allocation base in the predetermined overhead rate does not drive overhead costs, it will nevertheless provide reasonably accurate unit product costs because of the averaging process. Answer: F Difficulty: 1 Easy Learning Objective: 02-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 13. A job cost sheet is used to record how much a customer pays for the job once the job is completed. Answer: F Difficulty: 2 Medium Learning Objective: 02-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback:[QUESTION] 14. 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. Answer: F Difficulty: 2 Medium Learning Objective: 02-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 15. The fact that one department may be labor intensive while another department is machine intensive explains in part why multiple predetermined overhead rates are often used in larger companies. Answer: T Difficulty: 1 Easy Learning Objective: 02-04 Topic Area: Bloom’s: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 16. A company will improve job cost accuracy by using multiple overhead rates even if it cannot identify more than one overhead cost driver. Answer: F Difficulty: 2 Medium Learning Objective: 02-04 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 17. The appeal of using multiple departmental overhead rates is that they presumably provide a more accurate accounting of the costs caused by jobs. Answer: T Difficulty: 1 Easy Learning Objective: 02-04 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 18. The costs attached to products that have not been sold are included in ending inventory on the balance sheet. Answer: T Difficulty: 1 EasyLearning Objective: 02-Other Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 19. In absorption costing, nonmanufacturing costs are assigned to units of product. Answer: F Difficulty: 1 Easy Learning Objective: 02-Other Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 20. An employee time ticket is an hour-by-hour summary of the employee’s activities throughout the day. Answer: T Difficulty: 1 Easy Learning Objective: 02-Other Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 21. A bill of materials is a document that lists the type and quantity of each type of direct material needed to complete a unit of product. Answer: T Difficulty: 1 Easy Learning Objective: 02-Other Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 22. Most countries require some form of absorption costing for external reports. Answer: T Difficulty: 1 Easy Learning Objective: 02-Other Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback:Multiple Choice [QUESTION] 23. In a job-order costing system that is based on machine-hours, which of the following formulas is correct? A) Predetermined overhead rate = Actual manufacturing overhead ÷ Actual machine-hours B) Predetermined overhead rate = Actual manufacturing overhead ÷ Estimated machine-hours C) Predetermined overhead rate = Estimated manufacturing overhead ÷ Estimated machine-hours D) Predetermined overhead rate = Estimated manufacturing overhead ÷ Actual machine-hours Answer: C Difficulty: 1 Easy Learning Objective: 02-01 Topic Area: Blooms: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 24. Which of the following is the correct formula to compute the predetermined overhead rate? A) Predetermined overhead rate = Estimated total units in the allocation base ÷ Estimated total manufacturing overhead costs B) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base C) Predetermined overhead rate = Actual total manufacturing overhead costs ÷ Estimated total units in the allocation base D) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Actual total units in the allocation base. Answer: B Difficulty: 1 Easy Learning Objective: 02-01 Topic Area: Blooms: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 25. Assigning manufacturing overhead to a specific job is complicated by all of the below except: A) Manufacturing overhead is an indirect cost that is either impossible or difficult to trace to a particular job. B) Manufacturing overhead is incurred only to support some jobs. C) Manufacturing overhead consists of both variable and fixed costs. D) The average cost of actual fixed manufacturing overhead expenses will vary depending on how many units are produced in a period. Answer: B Difficulty: 2 Medium Learning Objective: 02-02 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback:[QUESTION] 26. Which of the following statements about using a plantwide overhead rate based on direct labor is correct? A) Using a plantwide overhead rate based on direct labor-hours will ensure that direct labor costs are correctly traced to jobs. B) Using a plantwide overhead rate based on direct labor costs will ensure that direct labor costs will be correctly traced to jobs. C) It is often overly simplistic and incorrect to assume that direct labor-hours is a company’s only manufacturing overhead cost driver. D) The labor theory of value ensures that using a plantwide overhead rate based on direct labor will do a reasonably good job of assigning overhead costs to jobs. Answer: C Difficulty: 2 Medium Learning Objective: 02-03 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 27. Which of the following would usually be found on a job cost sheet under a normal cost system? Actual direct material costActual manufacturing overhead cost A)Yes Yes B)Yes No C )No Yes D )No No Answer: B Difficulty: 1 Easy Learning Objective: 02-03 Topic Area: Blooms: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 28. Which of the following statements is not correct concerning multiple overhead rate systems? A) A multiple overhead rate system is more complex than a system based on a single plantwide overhead rate. B) A multiple overhead rate system is usually more accurate than a system based on a single plantwide overhead rate. C) A company may choose to create a separate overhead rate for each of its production departments. D) In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on machine- hours rather than on direct labor-hours. Answer: D Difficulty: 1 Easy Learning Objective: 02-04 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN MeasurementFeedback: [QUESTION] 29. Johansen Corporation uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for the next year: Direct materials...................................... $6,000 Direct labor............................................ $20,000 Rent on factory building .........................$15,000 Sales salaries........................................ $25,000 Depreciation on factory equipment ........$8,000 Indirect labor.......................................... $12,000 Production supervisor's salary ...............$15,000 Jameson estimates that 20,000 direct labor-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $2.00 per direct labor-hour B) $2.79 per direct labor-hour C) $3.00 per direct labor-hour D) $4.00 per direct labor-hour Answer: A Difficulty: 2 Medium Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Rent on factory building .........................$15,000 Depreciation on factory equipment ........8,000 Indirect labor.......................................... 12,000 Production supervisor's salary ...............15,000 Manufacturing overhead ........................$50,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $50,000 ÷ 20,000 direct labor-hours = $2.50 per direct labor-hour [QUESTION] 30. The Silver Corporation uses a predetermined overhead rate to apply manufacturing overhead to jobs. The predetermined overhead rate is based on labor cost in Dept. A and on machine-hours in Dept. B. At the beginning of the year, the Corporation made the following estimates: Dept. ADept. B Direct labor cost....................$60,000$40,000 Manufacturing overhead .......$90,000$45,000 Direct labor-hours.................6,0009,000 Machine-hours...................... 2,00015,000 What predetermined overhead rates would be used in Dept. A and Dept. B, respectively? A) 67% and $3.00 B) 150% and $5.00 C) 150% and $3.00 D) 67% and $5.00 Answer: CDifficulty: 1 Easy Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Dept. A Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $90,000 ÷ $60,000 = 150% of direct labor cost Dept. B Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base Predetermined overhead rate = $45,000 ÷ 15,000 machine-hours = $3.00 per machine-hour [QUESTION] 31. Purves Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $121,000 and 10,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $113,000 and 10,900 total direct labor-hours during the period. The predetermined overhead rate is closest to: A) $10.37 B) $12.10 C) $11.10 D) $11.30 Answer: B Difficulty: 1 Easy Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total fixed manufacturing overhead (a) ...$121,000 Estimated activity level (b) ...................................... 10,000 Predetermined overhead rate (a) ÷ (b)....................$12.10 [QUESTION] 32. Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year: Direct materials................................. $1,000 Direct labor....................................... $3,000 Sales commissions........................... $4,000 Salary of production supervisor ........$2,000 Indirect materials.............................. $400 Advertising expense......................... $800 Rent on factory equipment ................$1,000 Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $6.80 per machine-hour B) $6.00 per machine-hourC) $3.00 per machine-hour D) $3.40 per machine-hour Answer: D Difficulty: 2 Medium Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Salary of production supervisor ..............$2,000 Indirect materials.................................... 400 Rent on factory equipment .....................1,000 Total manufacturing overhead ................$3,400 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $3,400 ÷ 1,000 machine-hours = $3.40 per machine-hour [QUESTION] 33. Baj Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year .................................................... $534,000 Estimated activity level from the beginning of the year .....30,000machine-hours Actual total fixed manufacturing overhead ........................$487,000 Actual activity level........................................................... 27,400machine-hours The predetermined overhead rate per machine-hour would be closest to: A) $17.80 B) $19.49 C) $16.23 D) $17.77 Answer: A Difficulty: 1 Easy Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total fixed manufacturing overhead (a) ...$534,000 Estimated activity level (b) ...................................... 30,000 Predetermined overhead rate (a) ÷ (b)....................$17.80 [QUESTION] 34. Giannitti Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the upcoming year appear below: Estimated machine-hours ....................................... 36,000 Estimated variable manufacturing overhead ...........$3.01per machine-hour Estimated total fixed manufacturing overhead ........$1,058,040 The predetermined overhead rate for the recently completed year was closest to:A) $29.39 per machine-hour B) $32.40 per machine-hour C) $32.81 per machine-hour D) $3.01 per machine-hour Answer: B Difficulty: 2 Medium Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total manufacturing overhead = $1,058,040 + ($3.01 per machine-hour × 36,000 machine-hours) = $1,166,400 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $1,166,400 ÷ 36,000 machine-hours = $32.40 per machine-hour [QUESTION] 35. Gilchrist Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the machine-hours for the upcoming year at 79,000 machine-hours. The estimated variable manufacturing overhead was $7.38 per machine-hour and the estimated total fixed manufacturing overhead was $2,347,090. The predetermined overhead rate for the recently completed year was closest to: A) $37.09 per machine-hour B) $36.07 per machine-hour C) $7.38 per machine-hour D) $29.71 per machine-hour Answer: A Difficulty: 2 Medium Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total manufacturing overhead = $2,347,090 + ($7.38 per machine-hour × 79,000 machine-hours) = $2,930,110 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $2,930,110 ÷ 79,000 machine-hours = $37.09 per machine-hour [QUESTION] 36. Dearden Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $144,000, variable manufacturing overhead of $2.00 per machine-hour, and 60,000 machine-hours. The predetermined overhead rate is closest to: A) $2.40 per machine-hour B) $6.40 per machine-hour C) $4.40 per machine-hour D) $2.00 per machine-hour Answer: C Difficulty: 1 Easy Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical ThinkingAICPA: FN Measurement Feedback: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $144,000 + ($2.00 per machine-hour × 60,000 machine-hours) = $144,000 + $120,000 = $264,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $264,000 ÷ 60,000 machine-hours = $4.40 per machine-hour [QUESTION] 37. Longobardi Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the labor-hours for the upcoming year at 46,000 labor-hours. The estimated variable manufacturing overhead was $6.25 per labor-hour and the estimated total fixed manufacturing overhead was $1,026,260. The actual labor-hours for the year turned out to be 41,200 labor-hours. The predetermined overhead rate for the recently completed year was closest to: A) $28.56 per labor-hour B) $22.31 per labor-hour C) $6.25 per labor-hour D) $31.16 per labor-hour Answer: A Difficulty: 2 Medium Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total manufacturing overhead = $1,026,260 + ($6.25 per labor-hour × 46,000 labor-hours) = $1,313,760 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $1,313,760 ÷ 46,000 labor-hours = $28.56 per labor-hour [QUESTION] 38. Valvano Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $440,000, variable manufacturing overhead of $2.20 per machine-hour, and 50,000 machine-hours. The estimated total manufacturing overhead is closest to: A) $440,000 B) $110,000 C) $440,002 D) $550,000 Answer: D Difficulty: 1 Easy Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $440,000 + ($2.20 per machine-hour × 50,000 machine-hours) = $440,000 + $110,000 = $550,000 [QUESTION] 39. Brothern Corporation bases its predetermined overhead rate on the estimated machine-hours for the upcoming year. Data for the most recently completed year appear below:Estimates made at the beginning of the year: Estimated machine-hours ........................................ 39,000 Estimated variable manufacturing overhead ............$6.76 per machine-hour Estimated total fixed manufacturing overhead .........$794,430 Actual machine-hours for the year ............................... 42,700 The predetermined overhead rate for the recently completed year was closest to: A) $25.37 per machine-hour B) $27.13 per machine-hour C) $6.76 per machine-hour D) $20.37 per machine-hour Answer: B Difficulty: 2 Medium Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total manufacturing overhead =$794,430 + ($6.76 per machine-hour × 39,000 machine-hours) = $1,058,070 Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base = $1,058,070 ÷ 39,000 machine-hours = $27.13 per machine-hour [QUESTION] 40. Steele Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. Steele Corporation has provided the following estimated costs for next year: Direct materials................................. $20,000 Direct labor....................................... $60,000 Sales commissions........................... $80,000 Salary of production supervisor ........$40,000 Indirect materials.............................. $8,000 Advertising expense......................... $16,000 Rent on factory equipment ................$20,000 Steele estimates that 10,000 direct labor-hours and 16,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $4.25 B) $8.00 C) $9.00 D) $10.25 Answer: A Difficulty: 2 Medium Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Salary of production supervisor ........$40,000 Indirect materials.............................. 8,000 Rent on factory equipment ................20,000 Manufacturing overhead ........................$68,000Predetermined overhead rate = Estimated total manufacturing overhead ÷ Estimated total amount of the allocation base Predetermined overhead rate = $68,000 ÷ 16,000 machine-hours = $4.25 per machine-hour [QUESTION] 41. Helland Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours ........................................................... 30,000 Total fixed manufacturing overhead cost ................................ $189,000 Variable manufacturing overhead per direct labor-hour ..........$2.50 The predetermined overhead rate is closest to: A) $2.50 per direct labor-hour B) $11.30 per direct labor-hour C) $6.30 per direct labor-hour D) $8.80 per direct labor-hour Answer: D Difficulty: 1 Easy Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $189,000 + ($2.50 per direct labor-hour × 30,000 direct labor-hours) = $189,000 + $75,000 = $264,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $264,000 ÷ 30,000 direct labor-hours = $8.80 per direct labor-hour [QUESTION] 42. Laflame Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours ............................................................... 70,000 Total fixed manufacturing overhead cost ................................ $357,000 Variable manufacturing overhead per machine-hour ..............$3.90 The estimated total manufacturing overhead is closest to: A) $273,000 B) $630,000 C) $357,004 D) $357,000 Answer: B Difficulty: 1 Easy Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback:Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $357,000 + ($3.90 per machine-hour × 70,000 machine-hours) = $357,000 + $273,000 = $630,000 [QUESTION] 43. Almaraz Corporation has two manufacturing departments--Forming and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: FormingFinishingTotal Estimated total machine-hours (MHs) ................................. 7,0003,00010,000 Estimated total fixed manufacturing overhead cost .............$40,600$8,100$48,700 Estimated variable manufacturing overhead cost per MH ...$1.30$2.80 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. That predetermined manufacturing overhead rate is closest to: A) $6.62 B) $4.87 C) $4.10 D) $7.10 Answer: A Difficulty: 2 Medium Learning Objective: 02-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead .......................................................... $40,600 Estimated variable manufacturing overhead ($1.30 per MH × 7,000 MHs) ......9,100 Estimated total manufacturing overhead cost ................................................... $49,700 Finishing Estimated fixed manufacturing overhead .......................................................... $8,100 Estimated variable manufacturing overhead ($2.80 per MH × 3,000 MHs) ......8,400 Estimated total manufacturing overhead cost ................................................... $16,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($49,700 + $16,500 = $66,200) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost .......$66,200 Estimated total machine hours ............................... 10,000MHs Predetermined overhead rate ................................ $6.62per MH [QUESTION] 44. Bernson Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $492,000 and 30,000 machine-hours for the period. The company incurred actual total fixed manufacturing overhead of $517,000 and 28,300 total machine-hours during the period. The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: A) $464,120 B) $492,000 C) $487,703 D) $25,000Answer: A Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total fixed manufacturing overhead (a) ...$492,000 Estimated activity level (b) ...................................... 30,000 Predetermined overhead rate (a) ÷ (b)....................$16.40 Actual activity level.................................................. 28,300 Manufacturing overhead applied ............................. $464,120 [QUESTION] 45. Beat Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours ............................................................... 40,000 Total fixed manufacturing overhead cost ................................ $344,000 Variable manufacturing overhead per machine-hour ..............$3.90 Recently, Job M759 was completed. It required 60 machine-hours. The amount of overhead applied to Job M759 is closest to: A) $750 B) $516 C) $984 D) $234 Answer: A Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $344,000 + ($3.90 per machine-hour × 40,000 machine-hours) = $344,000 + $156,000 = $500,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $500,000 ÷ 40,000 machine-hours = $12.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $12.50 per machine-hour × 60 machine-hours = $750 [QUESTION] 46. Mundorf Corporation has two manufacturing departments--Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: FormingAssemblyTotal Estimated total machine-hours (MHs) ................................. 9,0001,00010,000 Estimated total fixed manufacturing overhead cost .............$52,200$2,400$54,600 Estimated variable manufacturing overhead cost per MH ...$2.00$2.10During the most recent month, the company started and completed two jobs--Job B and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job BJob H Forming machine-hours ...........6,1002,900 Assembly machine-hours .........400600 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job B is closest to: A) $48,555 B) $35,490 C) $2,988 D) $45,567 Answer: A Difficulty: 2 Medium Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The first step is to calculate the estimated total overhead costs in the two departments. Forming Estimated fixed manufacturing overhead .......................................................... $52,200 Estimated variable manufacturing overhead ($2.00 per MH × 9,000 MHs) ......18,000 Estimated total manufacturing overhead cost ................................................... $70,200 Assembly Estimated fixed manufacturing overhead .......................................................... $2,400 Estimated variable manufacturing overhead ($2.10 per MH × 1,000 MHs) ......2,100 Estimated total manufacturing overhead cost ................................................... $4,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($70,200 + $4,500 = $74,700) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost .......$74,700 Estimated total machine hours ............................... 10,000MHs Predetermined overhead rate ................................ $7.47per MH The overhead applied to Job B is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $7.47 per MH x (6,100 MHs + 400 MHs) = $7.47 per MH x (6,500 MHs) = $48,555 [QUESTION] 47. Parido Corporation has two manufacturing departments--Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: CastingAssemblyTotal Estimated total machine-hours (MHs) ................................. 8,0002,00010,000 Estimated total fixed manufacturing overhead cost .............$44,000$4,200$48,200Estimated variable manufacturing overhead cost per MH ...$1.90$3.00 During the most recent month, the company started and completed two jobs--Job A and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job AJob H Casting machine-hours ............5,4002,600 Assembly machine-hours .........8001,200 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job H is closest to: A) $8,328 B) $26,372 C) $18,316 D) $18,044 Answer: B Difficulty: 2 Medium Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead .......................................................... $44,000 Estimated variable manufacturing overhead ($1.90 per MH × 8,000 MHs) ......15,200 Estimated total manufacturing overhead cost ................................................... $59,200 Assembly Estimated fixed manufacturing overhead .......................................................... $4,200 Estimated variable manufacturing overhead ($3.00 per MH × 2,000 MHs) ......6,000 Estimated total manufacturing overhead cost ................................................... $10,200 The second step is to combine the estimated manufacturing overhead costs in the two departments ($59,200 + $10,200 = $69,400) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost .......$69,400 Estimated total machine hours ............................... 10,000MHs Predetermined overhead rate ................................ $6.94per MH The overhead applied to Job H is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $6.94 per MH x (2,600 MHs + 1,200 MHs) = $6.94 per MH x (3,800 MHs) = $26,372 [QUESTION] 48. Juanita Corporation uses a job-order costing system and applies overhead on the basis of direct labor cost. At the end of October, Juanita had one job still in process. The job cost sheet for this job contained the following information: Direct materials.................................. $480 Direct labor........................................ $150Manufacturing overhead applied .......$600 An additional $100 of labor was needed in November to complete this job. For this job, how much should Juanita have transferred to finished goods inventory in November when it was completed? A) $1,330 B) $500 C) $1,230 D) $1,730 Answer: D Difficulty: 2 Medium Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred $600 = Predetermined overhead rate × $150 Predetermined overhead rate = $600 ÷ $150 = 4.0 Direct materials...................................................... $480 Direct labor ($150 + $100) ..................................... 250 Manufacturing overhead applied (4.0 × $250)........1,000 Total product cost................................................... $1,730 [QUESTION] 49. Carradine Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $105,000, variable manufacturing overhead of $3.00 per machine-hour, and 70,000 machine-hours. The company recently completed Job P233 which required 60 machine-hours. The amount of overhead applied to Job P233 is closest to: A) $90 B) $270 C) $450 D) $180 Answer: B Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $105,000 + ($3.00 per machine-hour × 70,000 machine-hours) = $105,000 + $210,000 = $315,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $315,000 ÷ 70,000 machine-hours = $4.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $4.50 per machine-hour × 60 machine-hours = $270 [QUESTION]50. Fusaro Corporation uses a predetermined overhead rate base on machine-hours that it recalculates at the beginning of each year. The company has provided the following data for the most recent year. Estimated total fixed manufacturing overhead from the beginning of the year .................................................... $684,000 Estimated activity level from the beginning of the year .....40,000machine-hours Actual total fixed manufacturing overhead ........................$616,000 Actual activity level........................................................... 37,700machine-hours The amount of manufacturing overhead that would have been applied to all jobs during the period is closest to: A) $644,670 B) $684,000 C) $68,000 D) $580,580 Answer: A Difficulty: 1 Easy Learning Objective: 02-01 Learning Objective: 02-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total fixed manufacturing overhead (a) ...$684,000 Estimated activity level (b) ...................................... 40,000 Predetermined overhead rate (a) ÷ (b)....................$17.10 Actual activity level.................................................. 37,700 Manufacturing overhead applied ............................. $644,670 [QUESTION] 51. Koelsch Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: MoldingCustomizingTotal Estimated total machine-hours (MHs) ................................. 1,0009,00010,000 Estimated total fixed manufacturing overhead cost .............$4,000$25,200$29,200 Estimated variable manufacturing overhead cost per MH ...$2.00$3.00 During the most recent month, the company started and completed two jobs--Job F and Job K. There were no beginning inventories. Data concerning those two jobs follow: Job FJob K Direct materials........................$12,300$8,400 Direct labor cost.......................$18,200$6,800 Molding machine-hours ............700300 Customizing machine-hours .....3,6005,400 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job K is closest to: A) $72,561 B) $79,817 C) $24,187 D) $48,374 Answer: ADifficulty: 2 Medium Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The first step is to calculate the estimated total overhead costs in the two departments. Molding Estimated fixed manufacturing overhead .......................................................... $4,000 Estimated variable manufacturing overhead ($2.00 per MH × 1,000 MHs) ......2,000 Estimated total manufacturing overhead cost ................................................... $6,000 Customizing Estimated fixed manufacturing overhead .......................................................... $25,200 Estimated variable manufacturing overhead ($3.00 per MH × 9,000 MHs) ......27,000 Estimated total manufacturing overhead cost ................................................... $52,200 The second step is to combine the estimated manufacturing overhead costs in the two departments ($6,000 + $52,200 = $58,200) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost .......$58,200 Estimated total machine hours ............................... 10,000MHs Predetermined overhead rate ................................ $5.82per MH The overhead applied to Job K is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $5.82 per MH x (300 MHs + 5,400 MHs) = $5.82 per MH x (5,700 MHs) = $33,174 Job K’s manufacturing cost: Direct materials.................................. $8,400 Direct labor cost................................. 6,800 Manufacturing overhead applied .......33,174 Total manufacturing cost ....................$48,374 The selling price for Job K: Total manufacturing cost ................$48,374 Markup (50%)................................ 24,187 Selling price................................... $72,561 [QUESTION] 52. Thach Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on total fixed manufacturing overhead cost of $665,000, variable manufacturing overhead of $3.00 per machine-hour, and 70,000 machine-hours. Recently, Job T321 was completed with the following characteristics: Number of units in the job ...............30 Total machine-hours ....................... 90 Direct materials.............................. $630Direct labor cost............................. $2,880 The unit product cost for Job T321 is closest to: A) $117.00 B) $58.50 C) $154.50 D) $51.50 Answer: C Difficulty: 2 Medium Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $665,000 + ($3.00 per machine-hour × 70,000 machine-hours) = $665,000 + $210,000 = $875,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $875,000 ÷ 70,000 machine-hours = $12.50 per machine-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $12.50 per machine-hour × 90 machine-hours = $1,125 Direct materials.................................. $630 Direct labor........................................ 2,880 Manufacturing overhead applied .......1,125 Total cost of Job T321 ........................ $4,635 e.Total cost of Job T321 (a) ..................$4,635 Number of units (b)............................ 30 Unit product cost (a) ÷ (b)..................$154.50 [QUESTION] 53. Tancredi Corporation has two manufacturing departments--Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: MachiningCustomizingTotal Estimated total machine-hours (MHs) ................................. 5,0005,00010,000 Estimated total fixed manufacturing overhead cost .............$22,000$11,500$33,500 Estimated variable manufacturing overhead cost per MH ...$1.80$3.00 During the most recent month, the company started and completed two jobs--Job E and Job J. There were no beginning inventories. Data concerning those two jobs follow: Job EJob J Direct materials........................$12,800$7,000 Direct labor cost.......................$17,600$7,700 Machining machine-hours ........3,4001,600 Customizing machine-hours .....2,0003,000 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. If both jobs are sold during the month, the company's cost of goods sold for the month would be closest to: A) $61,450B) $41,150 C) $110,808 D) $102,600 Answer: D Difficulty: 2 Medium Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The first step is to calculate the estimated total overhead costs in the two departments. Machining Estimated fixed manufacturing overhead .......................................................... $22,000 Estimated variable manufacturing overhead ($1.80 per MH × 5,000 MHs) ......9,000 Estimated total manufacturing overhead cost ................................................... $31,000 Customizing Estimated fixed manufacturing overhead .......................................................... $11,500 Estimated variable manufacturing overhead ($3.00 per MH × 5,000 MHs) ......15,000 Estimated total manufacturing overhead cost ................................................... $26,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($31,000 + $26,500 = $57,500) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost .......$57,500 Estimated total machine hours ............................... 10,000MHs Predetermined overhead rate ................................ $5.75per MH The overhead applied to Job E is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $5.75 per MH x (3,400 MHs + 2,000 MHs) = $5.75 per MH x (5,400 MHs) = $31,050 Job E’s manufacturing cost: Direct materials.................................. $12,800 Direct labor cost................................. 17,600 Manufacturing overhead applied .......31,050 Total manufacturing cost ....................$61,450 The overhead applied to Job J is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $5.75 per MH x (1,600 MHs + 3,000 MHs) = $5.75 per MH x (4,600 MHs) = $26,450 Job J’s manufacturing cost: Direct materials.................................. $7,000 Direct labor cost................................. 7,700 Manufacturing overhead applied .......26,450Total manufacturing cost ....................$41,150 Total manufacturing cost assigned to Job E .........$61,450 Total manufacturing cost assigned to Job J .........41,150 Cost of goods sold...............................................$102,60 0 [QUESTION] 54. Session Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours ........................................................... 70,000 Total fixed manufacturing overhead cost ................................ $511,000 Variable manufacturing overhead per direct labor-hour ..........$2.10 Recently, Job K913 was completed with the following characteristics: Total direct labor-hours ...................150 Direct materials.............................. $705 Direct labor cost............................. $4,650 The total job cost for Job K913 is closest to: A) $6,060 B) $2,115 C) $6,765 D) $5,355 Answer: C Difficulty: 2 Medium Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Estimated total manufacturing overhead cost = Estimated total fixed manufacturing overhead cost + (Estimated variable overhead cost per unit of the allocation base × Estimated total amount of the allocation base) = $511,000 + ($2.10 per direct labor-hour × 70,000 direct labor-hours) = $511,000 + $147,000 = $658,000 Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $658,000 ÷ 70,000 direct labor-hours = $9.40 per direct labor-hour Overhead applied to a particular job = Predetermined overhead rate x Amount of the allocation base incurred by the job = $9.40 per direct labor-hour × 150 direct labor-hours = $1,410 Direct materials.................................. $705 Direct labor........................................ 4,650 Manufacturing overhead applied .......1,410 Total cost of Job K913 .......................$6,765 [QUESTION] 55. Pebbles Corporation has two manufacturing departments--Casting and Finishing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: CastingFinishingTotalEstimated total machine-hours (MHs) ................................. 2,0003,0005,000 Estimated total fixed manufacturing overhead cost .............$9,800$6,300$16,100 Estimated variable manufacturing overhead cost per MH ...$2.00$2.40 During the most recent month, the company started and completed two jobs--Job A and Job L. There were no beginning inventories. Data concerning those two jobs follow: Job AJob L Direct materials........................$15,400$9,600 Direct labor cost.......................$24,900$6,200 Casting machine-hours ............1,400600 Finishing machine-hours ..........1,2001,800 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The total manufacturing cost assigned to Job L is closest to: A) $9,600 B) $6,200 C) $28,904 D) $13,104 Answer: C Difficulty: 2 Medium Learning Objective: 02-01 Learning Objective: 02-02 Learning Objective: 02-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The first step is to calculate the estimated total overhead costs in the two departments. Casting Estimated fixed manufacturing overhead .......................................................... $9,800 Estimated variable manufacturing overhead ($2.00 per MH × 2,000 MHs) ......4,000 Estimated total manufacturing overhead cost ................................................... $13,800 Finishing Estimated fixed manufacturing overhead .......................................................... $6,300 Estimated variable manufacturing overhead ($2.40 per MH × 3,000 MHs) ......7,200 Estimated total manufacturing overhead cost ................................................... $13,500 The second step is to combine the estimated manufacturing overhead costs in the two departments ($13,800 + $13,500 = $27,300) to calculate the plantwide predetermined overhead rate as follow: Estimated total manufacturing overhead cost .......$27,300 Estimated total machine hours ............................... 5,000MHs Predetermined overhead rate ................................ $5.46per MH The overhead applied to Job L is calculated as follows: Overhead applied to a particular job = Predetermined overhead rate x Machine-hours incurred by the job = $5.46 per MH x (600 MHs + 1,800 MHs) = $5.46 per MH x (2,400 MHs) = $13,104 Job L’s manufacturing cost: