QUIZ # 2
QUESTION 1
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.
QUESTION 2
Which of the following would usually be found on a job cost sheet under
a normal cost system?
A.
B.
C.
D.
Actual direct materials cost; actual manufacturing overhead cost
Actual direct materials cost; applied manufacturing overhead cost
Estimated direct materials cost; applied manufacturing overhead cost
Actual indirect materials cost; actual manufacturing overhead cost
QUESTION 3
When manufacturing overhead is applied to production, it is added to:
A.
B.
C.
D.
the Cost of Goods Sold account.
the Raw Materials account.
the Work in Process account.
the Finished Goods inventory account.
QUESTION 4
When closing overapplied manufacturing overhead to Cost of Goods
Sold, which of the following would be true?
A.
B.
C.
D.
Work in Process will decrease.
Cost of Goods Sold will increase.
Net income will decrease.
Gross margin will increase.
QUESTION 5
Which of the following activities would be classified as a batch-level
activity?
A.
B.
C.
D.
Setting up equipment.
Designing a new product.
Training employees.
Milling a part required for the final product.
QUESTION 6
In activity-based costing, the total activity in an activity cost pool can be
computed by:
A. dividing the total overhead cost in the activity cost pool by the
activity cost pool's activity rate.
B. multiplying the total overhead cost in the activity cost pool by the
activity cost pool's activity rate.
C. dividing the activity cost pool's activity rate by the direct labor-hours
required to make a product.
D. multiplying the activity cost pool's activity rate by the direct laborhours required to make a product.
QUESTION 7
On December 1, Mogro Corporation had $26,000 of raw materials on
hand. During the month, the Corporation purchased an additional
$60,000 of raw materials. On December 31, only $24,000 of raw
materials were on hand. What amount of raw materials were
requisitioned from the storeroom for use in production?
QUESTION 8
Levron 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 $58,000, variable
manufacturing overhead of $2.00 per machine-hour, and 20,000
machine-hours. What is the pre-determined overhead rate?
QUESTIONS 9 - 10
Jennifer Company has two products: A and B. The company uses activitybased costing. The company identified three activities: product design,
assembling and supporting customers.
Activity Cost Pools
Product design
Assembling
Supporting customers
Estimated
Overhead Cost
Expected Activity
Product A Product B
$ 23,500
400
100
$ 18,000
500
200
$ 34,600
600
300
9. What is the activity rate for product design?
10. How much total overhead cost is allocated to Product B?
Total
500
700
900
QUESTIONS 11 - 12
Lister Corporation is a manufacturer that uses job-order costing.
The company has supplied the following data for the just completed year:
Estimated total manufacturing overhead
$624,000
Estimated direct labor-hours
39,000
Operations for the year resulted in the following:
Actual direct materials and direct labor costs
Actual direct labor-hours
Actual manufacturing overhead costs incurred
$680,000
36,000
$543,000
11. How much is total manufacturing overhead applied to production?
12. If 50% of the product was sold in the year, how much is cost of goods sold?