Chapter 2&3 Quiz Review Flashcards
The formula for computing the predetermined overhead rate is: Predetermined Overhead Rate= Estimated Total Amount of the Allocation Base/Estimated Total Manufacturing Overhead Cost. True or False?
False
The amount of overhead applied to a particular job equals the actual amount of overhead caused by the job. True or False?
False
The costs attached to products that have not been sold are included in ending inventory on the balance sheet. True or False?
True
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. True or False?
True.
Actual overhead costs are not assigned to jobs in a job costing system. True or False?
True.
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. True or False?
True.
The appeal of using multiple departmental overhead rates is that they presumably provide a more accurate accounting of the costs caused by jobs. True of False?
True
Which of the following would usually be found on a job cost sheet under a normal cost system?
Actual DM Cost Actual MOH Cost A) Yes Yes B) Yes No C) No Yes D) No No
Yes; No
In a job-order costing system that is based on machine-hours, which of the following formulas is correct?
A) POHR= Actual MOH/Estimated MHs
B) POHR= Estimated MOH/Actual MHs
C) POHR= Estimated MOH/Estimated MHs
D) POHR= Actual MOH/Actual MHs
POHR= Estimated MOH/Estimated MHs
Which of the following is the correct formula to compute the predetermined overhead rate?
A) POHR= Actual Total MOH Costs/Estimated Total Units in the Allocation Base
B) POHR= Estimated Total MOH Costs/Estimated Total Units in the Allocation Base
C) POHR= Estimated Total MOH Costs/Actual Total Units in the Allocation Base
D) POHR= Estimated Total Units in the Allocation Base/Estimated Total MOH Costs.
POHR= Estimated Total MOH Costs/Estimated Total Units in the Allocation Base
The following entry would be used to record depreciation on manufacturing equipment, True or False?:
Dr. Manufacturing Overhead
Cr. Accumulated Depreciation
True
Entry (11) in the below T-account could represented overhead cost applied to Work in Process. True or False?
Work in Process
Debit Credit Balance 40,000 (11) 330,000 (2) 100,000 (3) 90,000 (7) 120,000 Balance 20,000
False
Advertising costs should NOT be charged to the MOH account. True or False?
True
The journal entry to record the cost of goods sold during the period includes:
A) A credit to Finished Goods
B) A credit to Work in Process
C) A debit to Manufacturing Overhead
D) A credit to Cost of Goods Sold
A credit to Finished Goods
Which of the following statements is false?
A) Finished goods inventory is included in a balance sheet.
B) Finished goods inventory includes direct labor costs.
C) Finished goods inventory includes direct materials used in production.
D) Finished goods inventory includes actual manufacturing overhead costs assigned to jobs completed during the period.
Finished goods inventory includes actual manufacturing overhead costs assigned to jobs completed during the period.
The journal entry to record indirect labor used in production includes:
A) A credit to Manufacturing Overhead
B) A debit to Work in Process
C) A debit to Manufacturing Overhead
D) A credit to Work in Process
A debit to Manufacturing Overhead
The journal entry to record manufacturing overhead applied to production includes:
A) A debit to Work in Process
B) A credit to Finished Goods
C) A debit to Finished Goods
D) A credit to Work in Process
A debit to Work in Process
The journal entry to record the purchase of raw materials includes:
A) a debit to Raw Materials
B) a credit to Cost of Goods Sold
C) a credit to Raw Materials
D) a debit to Cost of Goods Sold
A debit to Raw Materials
The journal entry to record the cost of goods manufactured during the period includes:
A) A debit to Cost of Goods Sold
B) A debit to Work in Process
C) A credit to Manufacturing Overhead
D) A debit to Finished Goods
A debit to Finished Goods
The journal entry to record the requisition of indirect materials for use in production includes:
A) A debit to Manufacturing Overhead
B) A debit to Raw Materials
C) A debit to Work in Process
D) A credit to Manufacturing Overhead
A debit to Manufacturing Overhead
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. True or False?
False
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. True or False?
False
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) 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.
D) A company may choose to create a separate overhead rate for each of its production departments.
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.
In the Schedule of Cost of Goods Sold, Unadjusted Cost of Goods Sold= Beginning Finished Goods Inventory + Cost of Good Manufactured- Ending Finished Goods Inventory. True or False?
True
On a manufacturing company’s income statement, direct labor is separately listed as an expense. True or False?
False.
Entry (1) in the below T-account represents the purchase rather than use of raw materials. True or False?
Raw Materials
Debit Credit Balance 10,000 (2) 60,000 (1) 70,000 Balance 20,000
True
Which of the following is not one of the three inventory accounts reported on the balance sheet?
A) Work in Process
B) Cost of Goods Sold
C) Raw Materials
D) Finished Goods
Cost of Goods Sold
The journal entry to record the requisition of indirect materials for use in production includes:
A) A debit to Raw Materials
B) A debit to Work in Process
C) A debit to Manufacturing Overhead
D) A credit to Manufacturing Overhead
A debit to Manufacturing Overhead
The journal entry to record manufacturing overhead applied to production includes:
A) A debit to Finished Goods
B) A debit to Work in Process
C) A credit to Finished Goods
D) A credit to Work in Process
A debit to Work in Process
The journal entry to record direct labor used in production includes:
A) A debit to Manufacturing Overhead
B) A credit to Manufacturing Overhead
C) A debit to Work in Process
D) A credit to Work in Process
A debit to Work in Process
Which of the following statements is false?
A) Raw materials inventory excludes indirect materials.
B) Raw materials inventory is included in the balance sheet.
C) Raw materials include direct materials.
D) Raw materials inventory excludes selling expenses.
Raw materials inventory excludes indirect materials.
Which of the following statements is false?
A) Work in Process inventory includes direct materials used in production.
B) Work in Process inventory includes direct labor costs.
C) Work in Process inventory is included in the balance sheet.
D) Work in Process inventory includes actual manufacturing overhead costs assigned to jobs worked on during the period.
Work in Process inventory includes actual manufacturing overhead costs assigned to jobs worked on during the period.
The journal entry to record the incurrence of actual manufacturing overhead costs includes:
A) A debit to Work in Process
B) A debit to Manufacturing Overhead
C) A credit to Work in Process
D) A credit to Manufacturing Overhead
A debit to Manufacturing Overhead
