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PROB. 7-1 (Adapted) Two basic costing systems for assigning costs to products or services are hoborder and process costing. These two costing systems are usually viewed as being on opposite ends of ... a spectrum. The fundamental criterion employed to determine whether job costing or process costing should be employed is a. Proportion of direct (traceable) costs expended to produce the product or service. b. Number of cost pools employed to allocate the indirect costs to the product or service. c. Type of bases used in allocating the indirect cost pools to the product or service. d. The nature and amount of the product or service brought to the market place for customer consumption. PROB. 7-2 (Adapted) In a manufacturing environment, the job order costing system and process cost system differ in the way a. Cost are assigned to production runs and the number of units for which costs are averaged. b. Orders are taken and the number of units in the orders. c. Product profitability is determined and compared with planned costs. d. Processes can be accomplished and the number of production runs that may be performed in a year. Edmarc Ramos PROB. 7-3 (Adapted) Which of the following best described direct labor? a. A prime cost b. A period cost c. A product costd. Both product cost and prime cost PROB. 7-4 (Adapted) There are several alternative denominator measures for applying overhead. Which is not commonly used? a. Direct labor hours b. Direct labor cost c. Machine hours d. Sales value of product produced PROB. 7-5 (Adapted) When the amount of overapplied factory overhead is significant, the entry to close overapplied factory overhead will most likely require a. A debit to cost of goods sold. b. Debits to cost of goods sold, finished goods inventory, and work in process inventory c. A credit to cost of goods sold. d. Credits to cost of goods sold, finished goods inventory, and work in process inventory PROB. 7-6 (AICPA) Under job order cost accumulation, the factory overhead control account controls: a. Factory overhead analysis sheets. b. Job order cost sheets. c. Cost reports by processes d. Material inventoriesPROB. 7-7 (AICPA) Supplies needed for use in the factory are issued on the basis of: a. Job cost sheets b. Material requisitions c. Time tickets d. Factory overhead analysis sheets Edmarc Ramos PROB. 7-8 (AICPA) In job order costing, when materials are returned to the storekeeper that were previously issued to the factory for cleaning supplies, the journal entry should be made to a. Materials Factory overhead b. Materials Work in process c. Purchase returns Work in process d. Factory overhead Work in process PROB. 7-9 (AICPA) In a traditional job order cost system, the issuance of supplies to a production department increases a. Stores control b. Work in process control c. Factory overhead control d. Factory overhead applied PROB. 7-10 (AICPA)In a job order cost system, the use of direct materials previously purchased usually recorded as an increase in a. Work in process control b. Factory overhead control c. Factory overhead applied d. Stores control PROB. 7 - 11 (AICPA) In a job order cost system, direct labor cost usually are recorded initially as an increase in a. Factory overhead applied b. Factory overhead control c. Finished goods control d. Work in process control PROB. 7-12 (AICPA) In a job order cost system, the application of factory overhead is usually reflected in the general ledger as an increase in a. Factory overhead control b. Finished goods control c. Work in process control d. Cost of goods sold Edmarc Ramos PROB. 7-13 (AICPA)A direct labor overtime premium should be charged to a specific job when the overtime is caused by the a. Increased overall level of activity. b. Customer's requirement for early completion of the job. c. Management's failure to include the job in the production schedule. d. Management's requirement that the job be completed before the annual factory vacation closure. PROB. 7-14 (Adapted) A company experienced a machinery breakdown on one of its production lines. As a consequence of the breakdown, manufacturing fell behind schedule and a decision was made to schedule overtime to return manufacturing to schedule. Which of the following methods is the proper way to account for the overtime paid to the direct laborers? a. The overtime hours times the sum of the straigh-time wages and overtime premium would be charged entirely to manufacturing overhead. b. The overtime hours times the sum of the straight-time wages and overtime premium would be treated as direct labor. c. The overtime hours times the overtime premium would be charged to repair and maintenance expense, and the overtime hours times the straight-time wages would be treated as direct labor. d. The overtime hours times the overtime premium would be charged to manufacturing overhead, and the overtime hours times the straight-time wages would be treated as direct labor. FEB 28TH, 9:39PM Edmarc Ramos PROB. 7-15 (AICPA)Under a job order cost system, the peso amount of the general ledger entry involved in the transfer of inventory from work in process to finished goods is the sum of costs charged to all jobs a. Started in process during the period. b. In process during the period. c. Completed and sold during the period. d. Completed during the period. PROB. 7-16 (AICPA) In job order cost system, payroll taxes paid by the employer for factory employees are usually accounted for as a. Direct labor b. Factory overhead c. Indirect labor d. Administrative cost PROB. 7-17 (AICPA) In a job order cost system, factory (manufacturing) overhead is An Indirect Cost of A Necessary Element Jobs of Production a. No Yes b. No No c. Yes Yes d. Yes No PROB. 7-18 (Adapted)When a manufacturing company has a highly automated plant producing many different products, probably the most appropriate basis of applying factory overhead costs to work in process is a. Units processed b. Machine hours c. Direct labor hours d. Direct labor costs Edmarc Ramos PROB. 7-19 (Adapted) The logical explanation for an entry that includes a debit to overhead control and a credit to Prepaid Insurance is a. The insurance company sent the company a refund of its policy premium. b. Overhead for insurance was applied to production c. Insurance for production equipment expired. d. Insurance was paid on production equipment. PROB. 7-20 (AICPA) Overapplied factory overhead would result if a. The plant were operated at less than normal capacity. b. Factory overhead costs incurred were less than cost charged to production. c. Factory overhead costs incurred were unreasonably large in relation to units produced. d. Factory overhead costs incurred were greater than costs charged to production . PROB. 7-21 (AICPA)In service businesses using job order costing, the most commonly used base for applying overhead to jobs is a. Machine hours b. Direct materials consumed c. Direct labor cost d. Meals, travel, and entertainment PROB. 7-22 (AICPA) In service businesses using job order costing, the hourly rate used to charge costs to a job usually includes a. Both labor and overhead cost b. Labor cost only c. Overhead cost only d. Labor overhead and miscellaneous costs Edmarc Ramos PROB. 7-23 (Adapted) Which of the following organization would be most likely to used a job order costing system? a. The loan department of a bank. b. The check clearing department of a bank. c. A manufacturer of processed cheese food. d. A manufacturer of video cassette tapes. PROB. 7-24 (AICPA)The Waitkins Co. estimated Department A' s overhead at P255,000 for the period based on an estimated volume of 100,000 direct labor hours. At the end of the period, the factory overhead control account for Department A had a balance of P265,500; actual direct labor hours were 105,000. What was the over or underapplied overhead for the period? a. 2,250 b. (2,250) c. 15 000 d. (15,000) PROB. 7-25 (AICPA) Cherokee Co. applies factory overhead on the basis of direct labor hours. Budget and actual data for direct labor and overhead for the year are as follows: Budget Actual Direct labor hours 600,000 650,000 Factory overhead costs P720,000 P760,000 The factory overhead for Cherokee for the year is a. Overapplied by P20,000. b. Overapplied by P40,000. c. Underapplied by P20,000. d. Underapplied by P40,000. MAR 1ST, 12:06AM PROB. 7-26 (Adapted) The appropriate method for the disposition of underapplied or overapplied factory overhead a. Is to cost of goods sold only.b. Is to finished goods inventory only. c. Is apportioned to cost of goods sold and finished goods inventory. d. Defends on the significance of the amount. PROB. 7-27 (Adapted) At the end of the year, Phil Co. had the following account balances after applied factory overhead had been closed to Factory Overhead Control: Factory overhead control P 1,000 cr. Cost of goods sold 980,000 dr. Work in process 38,000 dr. Finished goods 82,000 dr. The most common treatment of the balance in factory overhead control would be to a. Carry it as a deferred credit on the balance sheet. b. Report it as miscellaneous operating revenue on the income statement. c. Credit it to cost of goods sold. d. Prorate it among work in process, finished goods, and cost of goods sold. PROB. 7-28 (Adapted) During the current accounting period, a manufacturing company purchased P70,000 of raw materials, of which P50,000 of direct materials and P5,000 of indirect materials were used in production. The company also incurred P45,000 of total labor cost and P20,000 of other factory overhead costs. An analysis of the work in process control account revealed P40,000 of direct labor costs. Based upon the above information, what is the total amount accumulated in the factory overhead control account?a. 25,000 b. 30,000 c. 45,000 d. 50,000 Edmarc Ramos PROB. 7-29 (AICPA) Application rates for factory overhead best reflect anticipated fluctuations in sales over a cycle of years when they are computed under the concept of a. Maximum capacity b. Normal capacity c. Practical capacity d. Expected actual capacity PROB. 7-30 (AICPA) Cox Co. found the differences in product costs resulting from the application of predetermined overhead rates rather than actual overhead rates were immaterial even though actual production was substantially less than planned production. The most likely explanation is that a. Overhead was composed chiefly of variable costs. b. Several products were produced simultaneously . c. Fixed factory overhead was significant cost. d. Costs of overhead items were substantially higher than anticipated. PROB. 7-31 (AICPA) A job order cost system uses a predetermined factory overhead rate based on expected volume and expected fixed cost. At the end of the year, underapplied overhead might be explained by which of the following situations?Actual Volume Actual Fixed Costs a. Greater than expected Greater than expected b. Greater than expected Less than expected c. Less than expected Greater than expected d. Less than expected Less than expected MAR 1ST, 10:52AM PROB. 7-32 (AICPA) Mason Co. uses a job order cost system and applies manufacturing overhead to jobs using a predetermined overhead rate based on direct labor pesos. The rate for the current year is 200% of direct labor pesos. This rate was calculated last December and will be used throughout the current year. Mason had one job, No. 150, in process on August with raw materials cost of P2,000 and direct labor costs of P3,000. During August, raw materials and direct labor added were as follows: No. 150 No. 151 No. 152 Raw materials P - P 4,000 P1,000 Direct labor 1,500 5,000 2,500 Actual manufacturing overhead for the month of August was P20,000. During the month. Mason completed Job Nos. 150 and 151. For August, manufacturing overhead was a. Overapplied by P4,000. b. Underapplied by P7,000. c. Underapplied by P2,000. d. Underapplied by P1,000. PROB. 7-33 (AICPA)Worley Co. has underapplied overhead of P45,000 for the year. Before disposition of underapplied overhead, selected year-end balances from worley's accounting records were Sales 1,200,000 Cost of goods sold 720, 000 Direct materials inventory 36,000 Work in process inventory 54,000 Finished goods inventory 90,000 Under Worley's cost accounting system, over or underapplied overhead is assigned to appropriate inventories and cost of goods sold based on yearend balances. In its year-end income statement, Worley should report cost of goods sold of a. 682,500 b. 684,000 c. 757,500 d. 765,000 FRI 4:08PM PROB. 7-34 (Adapted) At the end of the last fiscal year, Baehr Co. had the following account balances: Overapplied overhead 6,000 Cost of goods sold 980,000 Work in process 38,000 Finished goods 82,000 If the most common treatment of assigning overapplied overhead was used, the final balance in cost of goods sold would have been a. 985,340b. 974,660 c. 974,000 d. 986,000 PROB. 7-35 (Adapted) Carley Products has no works in process or finished goods inventories at the close of business on December 31. The balances of Carley's account as of December 31 are as follows: Cost of goods sold 2,040,000 Selling and administrative expenses 900,000 Sales 3,600,000 Factory overhead control 700,000 Factory overhead applied 648,000 Carley Products' pretax income for the year is a. 608,000 b. 660,000 c. 712,000 d. 52,000 PROB. 7-36 (Adapted) Baker Co. has two departments (Processing and Packaging) and uses a job order costing system. Baker applies overhead in Processing based on machine hours and on direct labor cost in Packaging. The following information is available for July: Processing Packaging Machine hours 2,500 1,000 Direct labor cost P 44 500 P 23,000 Applied overhead 55,000 51,750a. What is the overhead application rate per machine hour for processing? a. 22.00 b. 1.24 c. 17.80 d. 0.81 b. What is the overhead application rate for Packaging? a. 23.00 b. 51.75 c. 2.25 d. 0.44 PROB. 7-37 (Adapted) Zew Co. has a job order costing system and an overhead application rate of 120% of direct labor cost. Job #33 is charged with direct material of P 12,000 and overhead of P 7,200. Job #34 has direct material of P 2,000 and direct labor of P 9,000. What amount of direct labor cost has been charged to Job #33? a. 6,000 b. 8,640 c. 7,200 d. 14,400 Edmarc Ramos PROB. 7-38 (Adapted) [Show More]

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