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In a service business that uses a job order costing system, the professional staff would normally keep precise records of time spent on each client. It is equally important that the clerical staff and other indirect labor personnel keep similar records of time spent on each client.

A) True
B) False

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Broxsie Fabrication Company issued $40,000 of direct materials to production and $5,500 of indirect materials to production. Please prepare the journal entry to record the transaction.       \begin{array}{|l|l|l|} \hline\quad \quad\quad \quad\quad \quad \quad \quad \quad \quad \quad \quad \quad &\quad \quad \quad & \quad \quad \quad \\\hline \text { } & \text { } & \text { }\\\hline \text { } & \text { } & \text { }\\ \hline\end{array}

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\[\begin{array} { | l | r | r | }
\hlin...

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Caltran Company has just completed manufacturing job number 445. It included $320 of direct materials cost, $1,240 of direct labor cost, and $560 of allocated overhead. Which of the following is the correct journal entry needed to record the completed job?


A)  Work in process inventory 2,120 Finished goods inventory 2,120\begin{array} { | l | r | r | } \hline \text { Work in process inventory } & 2,120 & \\\hline \text { Finished goods inventory } & & 2,120 \\\hline\end{array}
B)  Finished goods inventory 2,120 Materials inventory 2,120\begin{array} { | l | r | r | } \hline \text { Finished goods inventory } & 2,120 & \\\hline \text { Materials inventory } & & 2,120 \\\hline\end{array}
C)  Work in process inventory 40,000 Cost of goods sold 40,000\begin{array} { | l | r | r | } \hline \text { Work in process inventory } & 40,000 & \\\hline \text { Cost of goods sold } & & 40,000 \\\hline\end{array}
D)  Finished goods inventory 2,120 Work in process inventory 2,120\begin{array} { | l | r | r | } \hline \text { Finished goods inventory } & 2,120 & \\\hline \text { Work in process inventory } & & 2,120 \\\hline\end{array}

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

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Which of the following would be included in the journal entry to record the requisition of indirect materials?


A) Debit to Manufacturing overhead
B) Debit to Work in process inventory
C) Debit to Materials inventory
D) Debit to Finished goods inventory

E) None of the above
F) A) and C)

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Which of the following correctly describes the term cost driver?


A) The inflation rate which causes costs to rise
B) The initial purchase price of direct materials
C) The primary factor which is correlated with the amount of cost incurred to produce a product
D) The total material, labor, and overhead cost of a completed job

E) A) and B)
F) None of the above

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C

At the end of the year, Deltona Company has a preliminary debit balance in the Manufacturing overhead account of $3,950. Which of the following is the year-end adjusting entry needed to clear the balance to zero?


A) Debit Cost of goods sold $3,950, credit Manufacturing overhead $3,950
B) Debit Manufacturing overhead $3,950, credit Cost of goods sold
C) Debit Work in process $3,950, credit Manufacturing overhead $3,950
D) Debit Gross profit $3,950, credit Cost of goods sold $3,950

E) A) and C)
F) None of the above

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Haverhill Products just completed job number 440. In addition to direct labor and direct materials cost, Haverhill allocated $450 of manufacturing overhead to the job. Which of the following describes the correct journal entry to record the allocation of overhead to the job?


A) Debit Finished goods, credit Manufacturing overhead
B) Debit Work in process, credit Cash
C) Debit Manufacturing overhead, credit Work in process
D) Debit Work in process, credit Manufacturing overhead

E) B) and D)
F) B) and C)

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D

Archangel Manufacturing has just finished the year 2012. They created a predetermined manufacturing overhead allocation rate at the beginning of the year based on a percentage of direct labor costs. Below are various data:  Total manufacturing overhead estimated at the beginning of the year: $140,000 Total direct labor costs estimated at the beginning of the year: $350,000 Total direct labor hours estimated at the beginning of the year: 12,000 direct labor hours  Actual manufacturing overhead costs for the year: $159,000 Actual direct labor costs for the year: $362,000 Actual direct labor hours for the year: 12,400 direct labor hours \begin{array} { l l } \text { Total manufacturing overhead estimated at the beginning of the year: } & \$ 140,000 \\\text { Total direct labor costs estimated at the beginning of the year: } & \$ 350,000 \\\text { Total direct labor hours estimated at the beginning of the year: } & 12,000 \text { direct labor hours } \\\text { Actual manufacturing overhead costs for the year: } & \$ 159,000 \\\text { Actual direct labor costs for the year: } & \$ 362,000 \\\text { Actual direct labor hours for the year: } & 12,400 \text { direct labor hours }\end{array} - Based on the data above, what was the preliminary ending balance in the manufacturing overhead account, prior to the year-end adjustment to clear the balance to zero? (Please round to nearest whole dollar.)


A) $19,000 credit balance
B) $19,000 debit balance
C) $14,200 credit balance
D) $14,200 debit balance

E) A) and D)
F) A) and C)

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Arabica Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2012, they estimated total manufacturing overhead costs at $1,050,000, and they estimated total direct labor costs at $840,000. What was the predetermined manufacturing overhead rate?


A) 80% of direct labor cost
B) $1.25 per direct labor hour
C) 125% of direct labor cost
D) $35.00 per direct labor hour

E) B) and D)
F) B) and C)

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In 2012, the Cameratta Company used a predetermined manufacturing overhead rate of $4.75 per machine hour. Information for the year is as follows:  Actual overhead costs incurred:  Indirect materials $5,200 Indirect labor $3,750 Plant depreciation $4,800 Plant utilities and insurance $9,530 Other plant overhead costs $12,700 Total machine hours used during the year 7,520\begin{array}{l}\text { Actual overhead costs incurred: }\\\begin{array} { l r } \text { Indirect materials } & \$ 5,200 \\\text { Indirect labor } & \$ 3,750 \\\text { Plant depreciation } & \$ 4,800 \\\text { Plant utilities and insurance } & \$ 9,530 \\\text { Other plant overhead costs } & \$ 12,700 \\\text { Total machine hours used during the year } & 7,520\end{array}\end{array} What was the preliminary ending balance in the manufacturing overhead account before the year-end adjustment to clear the balance to zero?


A) Credit of $260
B) Debit of $550
C) Credit of $330
D) Debit of $260

E) None of the above
F) All of the above

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During 2012, a company incurs $500,000 of manufacturing overhead costs and allocates out $506,000 of manufacturing overhead costs. Overhead costs have been underallocated.

A) True
B) False

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The engineering firm of Dobbs and Smith uses a job order costing system to accumulate client-related costs. The overhead rate is 60% of direct labor cost. Staff engineer time is charged at a rate of $80 per hour. A recent job for a client involved 30 staff labor hours. How much was the total job cost?


A) $1,600
B) $2,400
C) $3,840
D) $360

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

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At the beginning of 2012, Conway Manufacturing Company had the following account balances: At the beginning of 2012, Conway Manufacturing Company had the following account balances: \begin{array}{l} \text { During the year, the following transactions took place: }\\ \begin{array} { l r } \text { Direct materials placed in production: } & \$ 80,000 \\ \text { Direct labor incurred: } & \$ 190,000 \\ \text { Manufacturing overhead incurred } & \$ 300,000 \\ \text { Manufacturing overhead allocated to production: } & \$ 295,000 \\ \text { Jobs completed with cost of : } & \$ 500,000 \end{array} \end{array} - After these transactions have been recorded, the preliminary balance in the Manufacturing overhead account is a: A) credit of $295,000. B) credit of $5,000. C) debit of $5,000. D) debit of $13,000.  During the year, the following transactions took place:  Direct materials placed in production: $80,000 Direct labor incurred: $190,000 Manufacturing overhead incurred $300,000 Manufacturing overhead allocated to production: $295,000 Jobs completed with cost of : $500,000\begin{array}{l}\text { During the year, the following transactions took place: }\\\begin{array} { l r } \text { Direct materials placed in production: } & \$ 80,000 \\\text { Direct labor incurred: } & \$ 190,000 \\\text { Manufacturing overhead incurred } & \$ 300,000 \\\text { Manufacturing overhead allocated to production: } & \$ 295,000 \\\text { Jobs completed with cost of : } & \$ 500,000\end{array}\end{array} - After these transactions have been recorded, the preliminary balance in the Manufacturing overhead account is a:


A) credit of $295,000.
B) credit of $5,000.
C) debit of $5,000.
D) debit of $13,000.

E) B) and C)
F) C) and D)

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At the end of the year, Martin Company has a preliminary credit balance in the Manufacturing overhead account of $95. Which of the following is the year-end adjusting entry needed to clear the balance to zero?


A) Debit Cost of goods sold $95, credit Finished goods inventory $95
B) Debit Manufacturing overhead $95, credit Finished goods inventory $95
C) Debit Manufacturing overhead $95, credit Cost of goods sold $95
D) Debit Cost of goods sold $95, credit Manufacturing overhead $95

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

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Arabica Manufacturing Company uses a predetermined manufacturing overhead rate based on a percentage of direct labor cost. At the beginning of 2012, they estimated total manufacturing overhead costs at $1,050,000, and they estimated total direct labor costs at $840,000. In June, 2012, Arabica completed job number 511. Job stats are as follows:  Direct materials cost $27,500 Direct labor cost $13,000 Direct labor hours 400 hours  Units of product produced: 200 crates \begin{array} { l l } \text { Direct materials cost } & \$ 27,500 \\\text { Direct labor cost } & \$ 13,000 \\\text { Direct labor hours } & 400 \text { hours } \\\text { Units of product produced: } & 200 \text { crates }\end{array} - How much was the cost per unit (cost per crate) of finished product? (Please round to the nearest cent.)


A) $374.38
B) $202.50
C) $254.50
D) $283.75

E) A) and B)
F) All of the above

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Carlton Manufacturing Company purchased $65,000 of raw materials on account. The materials will be used to produce furniture. Please provide the journal entry for the purchase of materials.    \begin{array}{|l|l|l|} \hline\quad \quad\quad \quad\quad \quad \quad \quad \quad \quad \quad \quad \quad &\quad \quad \quad & \quad \quad \quad \\\hline \text { } & \text { } & \text { }\\\hline \end{array}

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\[\begin{array} { | l | r | r | } \hline \text { Materials inventory } & 65,000 & \\ \hline \text { Accounts payable } & & 65,000 \\ \hline \end{array}\]

Halcyon Company just completed job number 10-B. See details below. Direct labor cost: $2,040 Direct materials cost: $90 Direct labor hours: 75 Predetermined manufacturing overhead allocation rate: $34.00 per direct labor hour Number of units of finished product: 200 units What was cost per unit of finished product? (Please round to nearest cent.)


A) $26.40
B) $46.80
C) $25.50
D) $23.40

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

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LDR Manufacturing produces a pesticide chemical and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. On January 1, 2012, the first department, Mixing, had a zero beginning balance. During January, 40,000 liters of chemicals were started into production. During the month, 32,000 liters were completed, and 8,000 remained in process, partially completed. In the Mixing Department, all raw materials are added at the beginning of the production process, and conversion costs are applied evenly through the process. At the end of the month, LDR calculated equivalent units in the Mixing Department as shown below:  EQUIVALENT UNITS  Equinulent Units  Units to account for  Transferred In  Direct Mtls Cost  Conversion Cost  Completed 32,000032,00032,000 End bal WIP * 8,00008,0004,80040,000040,00036,800∗% of completion for  direct materials costs: 100%% of completion for  conversion costs: 60%\begin{array} { | l | r | r | r | r | } \hline \text { EQUIVALENT UNITS } & & & \text { Equinulent Units } & \\\hline \text { Units to account for } & & \text { Transferred In } & \text { Direct Mtls Cost } & \text { Conversion Cost } \\\hline \text { Completed } & 32,000 & 0 & 32,000 & 32,000 \\\hline \text { End bal WIP * } & 8,000 & 0 & 8,000 & 4,800 \\\hline & 40,000 & 0 & 40,000 & 36,800 \\\hline \\\hline \begin{array} { c } * \% \text { of completion for } \\\text { direct materials costs: }\end{array} & & & 100 \% \\\hline \begin{array} { c } \% \text { of completion for } \\\text { conversion costs: }\end{array} & & & 60 \% & \\\hline\end{array} During January, the Mixing Department incurred $48,000 in direct materials costs and $211,600 in conversion costs. How much was the cost per equivalent unit for materials and for conversion costs? (Please round all amounts to the nearest cent.)


A) $6.00 for materials, $44.08 for conversion
B) $1.20 for materials, $6.61 for conversion
C) $1.50 for materials, $6.61 for conversion
D) $1.20 for materials, $5.75 for conversion

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

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At the beginning of 2012, Conway Manufacturing Company had the following account balances: At the beginning of 2012, Conway Manufacturing Company had the following account balances: During the year, the following transactions took place: \begin{array} { l r } \text { Direct materials placed in production: } & \$ 80,000 \\ \text { Direct labor incurred: } & \$ 190,000 \\ \text { Manufacturing overhead incurred } & \$ 300,000 \\ \text { Manufacturing overhead allocated to production: } & \$ 295,000 \\ \text { Jobs completed with cost of : } & \$ 500,000 \\ \text { Jobs sold for total revenue of : } & \$ 750,000 \\ \text { Jobs sold with cost of: } & \$ 440,000 \end{array} Remaining balance of Manufacturing overhead cleared to zero - As a result of these transactions, how much gross profit will Conway report? A) $315,000 B) $305,000 C) $310,000 D) $345,000 During the year, the following transactions took place:  Direct materials placed in production: $80,000 Direct labor incurred: $190,000 Manufacturing overhead incurred $300,000 Manufacturing overhead allocated to production: $295,000 Jobs completed with cost of : $500,000 Jobs sold for total revenue of : $750,000 Jobs sold with cost of: $440,000\begin{array} { l r } \text { Direct materials placed in production: } & \$ 80,000 \\\text { Direct labor incurred: } & \$ 190,000 \\\text { Manufacturing overhead incurred } & \$ 300,000 \\\text { Manufacturing overhead allocated to production: } & \$ 295,000 \\\text { Jobs completed with cost of : } & \$ 500,000 \\\text { Jobs sold for total revenue of : } & \$ 750,000 \\\text { Jobs sold with cost of: } & \$ 440,000\end{array} Remaining balance of Manufacturing overhead cleared to zero - As a result of these transactions, how much gross profit will Conway report?


A) $315,000
B) $305,000
C) $310,000
D) $345,000

E) A) and D)
F) A) and C)

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Rankin Food Products produces cane sugar syrup in bulk quantities and uses process costing. There are three processing departments-Mixing, Refining, and Packaging. Using process costing analysis, Rankin determined that the cost of the units completed and transferred out of the Refining Department during the month was $20,000. Which of the following is the correct journal entry to record the cost of the units completed and transferred out to the next department?


A) Debit $20,000 to Work in process - Refining, credit $20,000 to Work in process - Packaging
B) Debit $20,000 to Work in process - Refining, credit $20,000 to Work in process - Mixing
C) Debit $20,000 to Work in process - Packaging, credit $20,000 to Work in process - Refining
D) Debit $20,000 to Work in process - Packaging, credit $20,000 to Finished goods

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

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