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Chapter 2.docx-Chapter 2 1. Which of the
Chapter_2.docx-Chapter 2 1. Which of the
Chapter 2.docx-Chapter 2 1. Which o...
Chapter_2.docx-Chapter 2 1. Which of the
Page 1
Chapter 2
1.
Which of the following companies would be most likely to use a job-order costing
system rather than a process costing system?
A. fast food restaurant
B. shipbuilding
C. crude oil
refining
D. candy making
2.
Which of the following documents is used to specify the type and quantity of
materials drawn from the storeroom, and identifies the job to which the costs of the
materials are to be charged?
A. Job Cost Sheet
B. Bill of Materials
C.
Material
Requisition
Form
D. Purchase Order
3. Choice of allocation base should be made based on:
A. the relative size of the base.
B. the base's relation to direct labor.
C. the base's activity.
D.
whether
the
base
actually drives
the
cost
being
allocated.
4.
In a job-order costing system, direct labor costs usually are recorded initially with a
debit to
:
A. Manufacturing
Overhead.
B. Finished Goods inventory.
C. Direct Labor Expense.
D.
Work
in
Process.


Page 2
5.
When applying manufacturing overhead to jobs, the formula to calculate the
amount is as follows:
A. Predetermined overhead rate divided by the actual manufacturing overhead
incurred on the particular job.
B. Predetermined overhead rate times the actual manufacturing overhead incurred on
the particular job.
C. Predetermined overhead rate divided by the actual units of allocation base charged
to the particular job.
D.
Predetermined
overhead
rate
times
the
actual
units
of
allocation
base
charged
to
the
particular
job.
6. Which of the following situations always results in underapplied overhead?
A.
actual
overhead
is
greater
than
applied
overhead
B. actual overhead is less than applied overhead
C. estimated overhead is greater than actual overhead
D. estimated overhead is less than actual overhead
7.
Job 607 was recently completed. The following data have been recorded on its job
cost sheet:
The company applies manufacturing overhead on the basis of machine-hours. The
predetermined overhead rate is $14 per machine-hour. The total cost that would
be recorded on the job cost sheet for Job 607 would be:
A. $4,107
B. $6,319
C. $3,432
D. $4,863


Page 3
8.
Freeman Company uses a predetermined overhead rate based on direct labor-hours
to apply manufacturing overhead to jobs. At the beginning of the year, the company
estimated manufacturing overhead would be $150,000 and direct labor-hours would be
10,000. The actual figures for the year were $186,000 for manufacturing overhead and
12,000 direct labor-hours. The cost records for the year will show:
A. overapplied overhead of $30,000
B. underapplied overhead of $30,000
C. underapplied overhead of $6,000
D. overapplied overhead of $6,000
9.
The Watts Company uses predetermined overhead rates 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 company made the
following estimates:
What predetermined overhead rates would be used in Dept A and Dept
B, respectively?
A. 50% and $8.00
B. 50% and $5.00
C. $15 and 110%
D.
200%
and
$5.00


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