Accounting Cost test manaual

File: 16e_GNB_CH03_TB, Chapter 3, Job Order Costing: Cost Flows and External Reporting True/False [QUESTION] 1. When raw materials are purchased, they are recorded as an asset. Answer: T Difficulty: 2 Medium Learning Objective: 03-01 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 2. The absorption cost approach provides for the absorption of all manufacturing costs, fixed and variable, into units of product. Answer: T Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Bloom’s: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 3. The following entry would be used to record depreciation on manufacturing equipment: Manufacturing Overhead XXX Accumulated Depreciation XXX Answer: T Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 4. If a company uses a predetermined overhead rate, actual manufacturing overhead costs of a period will be recorded in the Manufacturing Overhead account and will be recorded on the job cost sheets. Answer: F Difficulty: 2 Medium Learning Objective: 03-01 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 5. The journal entry for cost of goods manufactured includes the costs of units that are partially completed. Answer: F Difficulty: 2 Medium Learning Objective: 03-01 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 6. Advertising costs should NOT be charged to the Manufacturing Overhead account. Answer: T Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Bloom’s: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 7. The following entry would be used to record the transfer of $40,000 of direct material and $10,000 of indirect material from the storeroom to production: Direct Materials 40,000 Indirect Materials 10,000 Raw Materials 50,000 Answer: F Difficulty: 2 Medium Learning Objective: 03-01 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 8. Entry (16) in the below T-account represents the cost of goods manufactured transferred to Finished Goods from Work in Process. Finished Goods Bal. 40,000 (16) 520,000 (15) 540,000 Bal. 60,000 Answer: F Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 9. Entry (11) in the below T-account could represent overhead cost applied to Work in Process. Work In Process Bal. 40,000 (11) 330,000 (2) 100,000 (3) 90,000 (7) 120,000 Bal. 20,000 Answer: F Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 10. Entry (1) in the below T-account represents the purchase rather than use of raw materials. Raw Materials Bal. 10,000 (2) 60,000 (1) 70,000 Bal. 20,000 Answer: T Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 11. Entry (4) in the below T-account could represent the cost of overhead applied to Work in Process. Manufacturing Overhead (2) 4,000 (7) 180,000 (3) 30,000 (4) 80,000 (5) 40,000 (6) 36,000 190,000 180,000 Bal. 10,000 Answer: F Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 12. Entry (4) in the T-account below represents raw materials requisitioned for use in production. Raw Materials Bal. 15,000 (4) 87,000 (3) 94,000 Bal. 22,000 Answer: T Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 13. Entry (4) in the below T-account could represent the cost of property taxes and insurance incurred on the factory. Manufacturing Overhead (2) 4,000 (7) 180,000 (3) 30,000 (4) 80,000 (5) 40,000 (6) 36,000 190,000 180,000 Bal. 10,000 Answer: T Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 14. The $10,000 balance in the T-account below represents overapplied manufacturing overhead for the period. Manufacturing Overhead (2) 4,000 (7) 180,000 (3) 30,000 (4) 80,000 (5) 40,000 (6) 36,000 190,000 180,000 Bal. 10,000 Answer: F Difficulty: 1 Easy Learning Objective: 03-02 Learning Objective: 03-04 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 15. In the Schedule of Cost of Goods Manufactured, Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory – Ending work in process inventory. Answer: T Difficulty: 1 Easy Learning Objective: 03-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 16. Assume that a company closes out any manufacturing overhead overapplied or underapplied to cost of goods sold. Then in the Schedule of Cost of Goods Sold, Adjusted cost of goods sold = Unadjusted cost of goods sold + Overapplied overhead – Underapplied overhead. Answer: F Difficulty: 1 Easy Learning Objective: 03-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 17. In the Schedule of Cost of Goods Manufactured, Total raw materials available = Ending raw materials inventory + Purchases of raw materials. Answer: F Difficulty: 1 Easy Learning Objective: 03-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 18. In the Schedule of Cost of Goods Sold, Cost of goods available for sale = Ending finished goods inventory + Cost of goods manufactured. Answer: F Difficulty: 1 Easy Learning Objective: 03-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 19. In the Schedule of Cost of Goods Sold, Unadjusted cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured ? Ending finished goods inventory. Answer: T Difficulty: 1 Easy Learning Objective: 03-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 20. On a manufacturing company’s income statement, direct labor is separately listed as an expense. Answer: F Difficulty: 1 Easy Learning Objective: 03-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 21. In the Schedule of Cost of Goods Manufactured, Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials ? Ending raw materials inventory. Answer: T Difficulty: 1 Easy Learning Objective: 03-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 22. The schedule of cost of goods manufactured contains three elements of product costs—direct materials, direct labor, and manufacturing overhead—and it summarizes the portions of those costs that remain in ending Work in Process inventory and that are transferred out of Work in Process into Finished Goods. Answer: T Difficulty: 1 Easy Learning Objective: 03-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 23. In the Schedule of Cost of Goods Manufactured, Total direct materials = Raw materials used in production – Ending raw materials inventory. Answer: F Difficulty: 1 Easy Learning Objective: 03-03 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 24. If a company closes any underapplied or overapplied manufacturing overhead to the Cost of Goods Sold account, then Cost of Goods Sold will be debited if manufacturing overhead is overapplied for the period. Answer: F Difficulty: 2 Medium Learning Objective: 03-04 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 25. A credit balance in the Manufacturing Overhead account at the end of the year means that manufacturing overhead was overapplied. Answer: T Difficulty: 2 Medium Learning Objective: 03-04 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 26. Two of the reasons why manufacturing overhead may be underapplied are: (1) the estimated total manufacturing overhead cost may have been too high; and (2) the estimated total amount of the allocation base may have been too low. Answer: F Difficulty: 2 Medium Learning Objective: 03-04 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 27. If the actual manufacturing overhead cost for a period exceeds the manufacturing overhead cost applied, then manufacturing overhead would be considered to be overapplied. Answer: F Difficulty: 2 Medium Learning Objective: 03-04 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 28. The entire difference between the actual manufacturing overhead cost for a period and the applied manufacturing overhead cost is typically closed to the Work In Process account. Answer: F Difficulty: 2 Medium Learning Objective: 03-04 Topic Area: Bloom’s: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Multiple Choice [QUESTION] 29. Which of the following statements is true? I. Overhead can be applied slowly as a job is worked on. II. Overhead can be applied when the job is completed. III. Overhead should be applied to any job not completed at year-end in order to properly value the work in process inventory. A) Only statement I is true. B) Only statement II is true. C) Both statements I and II are true. D) Statements I, II, and III are all true. Answer: D Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 30. In a job-order costing system, indirect labor cost is usually recorded as a debit to: A) Manufacturing Overhead. B) Finished Goods. C) Work in Process. D) Cost of Goods Sold. Answer: A Difficulty: 2 Medium Learning Objective: 03-01 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 31. In a job-order costing system, manufacturing overhead applied is recorded as a debit to: A) Raw Materials inventory. B) Finished Goods inventory. C) Work in Process inventory. D) Cost of Goods Sold. Answer: C Difficulty: 2 Medium Learning Objective: 03-01 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 32. In a job-order costing system, which of the following events would trigger recording data on a job cost sheet? A) the purchase of direct materials B) the payment of fire insurance on the factory building C) the payment for product advertising D) none of the above Answer: D Difficulty: 2 Medium Learning Objective: 03-01 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 33. The journal entry to record applying overhead during the production process is: A) Manufacturing Overhead XXX Work In Process XXX B) Finished Goods XXX Manufacturing Overhead XXX C) Manufacturing Overhead XXX Finished Goods XXX D) Work In Process XXX Manufacturing Overhead XXX Answer: D Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 34. Refer to the T-account below: Manufacturing Overhead (2) 9,000 (12) 167,000 (3) 15,000 (4) 80,000 (5) 30,000 (6) 25,000 159,000 167,000 Bal. 8,000 The ending balance of $8,000 represents which of the following? A) Underapplied overhead. B) Manufacturing overhead that will be carried over to the next period. C) Overapplied overhead. D) A bookkeeping error. Answer: C Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 35. Refer to the T-account below: Raw Materials Bal. 15,000 (9) 75,000 (5) 85,000 Bal. 25,000 Entry (5) could represent which of the following? A) Payments for raw materials. B) Requisitions of raw materials to be used in production. C) Purchases of raw materials. D) Overhead cost applied to Work in Process. Answer: C Difficulty: 2 Medium Learning Objective: 03-02 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 36. Refer to the T-account below: Prepaid Insurance Bal. 30,000 (8) 9,000 Entry (8) could represent which of the following? A) Payment of insurance for the upcoming period. B) Insurance cost incurred on the factory which is added to the Manufacturing Overhead account. C) Overhead cost applied to Work in Process. D) Overhead cost applied to Finished Goods. Answer: B Difficulty: 2 Medium Learning Objective: 03-02 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 37. When manufacturing overhead is applied to production, it is added to: A) the Cost of Goods Sold account. B) the Raw Materials account. C) the Work in Process account. D) the Finished Goods inventory account. Answer: C Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Blooms: Remember AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 38. Under a job-order costing system, the dollar amount transferred from Work in Process to Finished Goods is the sum of the 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. Answer: D Difficulty: 2 Medium Learning Objective: 03-02 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 39. Refer to the T-account below: Manufacturing Overhead (2) 4,000 (9) 150,000 (3) 15,000 (4) 80,000 (5) 30,000 (6) 25,000 154,000 150,000 Bal. 4,000 Entry (4) could represent which of the following except? A) Indirect labor cost incurred. B) Factory insurance cost. C) Overhead cost applied to Work in Process. D) Depreciation on factory equipment. Answer: C Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 40. Refer to the T-account below: Work In Process Bal. 30,000 (12) 270,000 (4) 90,000 (6) 70,000 (9) 110,000 Bal. 30,000 Entry (12) could represent which of the following? A) Direct labor cost incurred in production. B) Purchases of raw materials. C) The cost of goods manufactured transferred to Finished Goods. D) The cost of indirect materials incurred in production. Answer: C Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 41. In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the “Total raw materials available” is computed by adding together the “Beginning raw materials inventory” and: A) Ending raw materials inventory B) Raw materials used in production C) Purchases of raw materials D) Indirect materials included in manufacturing overhead Answer: C Difficulty: 2 Medium Learning Objective: 03-03 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 42. In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold, the cost of goods manufactured is computed according to which of the following equations? A) Cost of goods manufactured = Total manufacturing costs + Ending work in process inventory – Beginning work in process inventory B) Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory – Ending work in process inventory C) Cost of goods manufactured = Total manufacturing costs + Beginning finished goods inventory – Ending finished goods inventory D) Cost of goods manufactured = Total manufacturing costs + Ending finished goods inventory – Beginning finished goods inventory Answer: B Difficulty: 2 Medium Learning Objective: 03-03 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 43. When closing overapplied manufacturing overhead to Cost of Goods Sold, which of the following would be true? A) Work in Process will decrease. B) Cost of Goods Sold will increase. C) Net income will decrease. D) Gross margin will increase. Answer: D Difficulty: 2 Medium Learning Objective: 03-04 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 44. If manufacturing overhead is underapplied, then: A) actual manufacturing overhead cost is less than estimated manufacturing overhead cost. B) the amount of manufacturing overhead cost applied to Work in Process is less than the actual manufacturing overhead cost incurred. C) the predetermined overhead rate is too high. D) the Manufacturing Overhead account will have a credit balance at the end of the year. Answer: B Difficulty: 2 Medium Learning Objective: 03-04 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 45. Overapplied manufacturing overhead would result if: A) the plant was operated at less than normal capacity. B) manufacturing overhead costs incurred were less than estimated manufacturing overhead costs. C) manufacturing overhead costs incurred were less than manufacturing overhead costs charged to production. D) manufacturing overhead costs incurred were greater than manufacturing overhead costs charged to production. Answer: C Difficulty: 2 Medium Learning Objective: 03-04 Topic Area: Blooms: Understand AACSB: Reflective Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: [QUESTION] 46. During July at Loeb Corporation, $83,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,000. The journal entry to record the requisition from the storeroom would include a: A) debit to Work in Process of $79,000 B) debit to Work in Process of $83,000 C) credit to Manufacturing Overhead of $4,000 D) debit to Raw Materials of $83,000 Answer: A Difficulty: 2 Medium Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Work in Process 79,000 Manufacturing Overhead 4,000 Raw Materials 83,000 [QUESTION] 47. Gullett Corporation had $26,000 of raw materials on hand on November 1. During the month, the Corporation purchased an additional $75,000 of raw materials. The journal entry to record the purchase of raw materials would include a: A) debit to Raw Materials of $101,000 B) credit to Raw Materials of $75,000 C) debit to Raw Materials of $75,000 D) credit to Raw Materials of $101,000 Answer: C Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Raw Materials 75,000 Accounts Payable 75,000 [QUESTION] 48. Gallon Corporation had $24,000 of raw materials on hand on April 1. During the month, the Corporation purchased an additional $52,000 of raw materials. During April, $62,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $2,000. The debits to the Work in Process account as a consequence of the raw materials transactions in April total: A) $60,000 B) $62,000 C) $0 D) $52,000 Answer: A Difficulty: 2 Medium Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Work in Process 60,000 Manufacturing Overhead 2,000 Raw Materials 62,000 [QUESTION] 49. Farrel Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Direct labor cost $574,000 Manufacturing overhead: Indirect labor cost $163,000 Other manufacturing overhead costs incurred $584,000 What is the journal entry to record the direct and indirect labor costs incurred during the year? A) Wages Payable 737,000 Direct Labor 574,000 Manufacturing Overhead 163,000 B) Work in Process 574,000 Manufacturing Overhead 163,000 Wages Payable 737,000 C) Wages Payable 737,000 Work in Process 574,000 Manufacturing Overhead 163,000 D) Direct Labor 574,000 Manufacturing Overhead 163,000 Wages Payable 737,000 Answer: B Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The journal entry to record the direct and indirect labor costs is: Work in Process 574,000 Manufacturing Overhead 163,000 Wages Payable or Cash 737,000 [QUESTION] 50. Piekos Corporation incurred $90,000 of actual Manufacturing Overhead costs during June. During the same period, the Manufacturing Overhead applied to Work in Process was $92,000. The journal entry to record the application of Manufacturing Overhead to Work in Process would include a: A) debit to Manufacturing Overhead of $92,000 B) debit to Work in Process of $90,000 C) credit to Manufacturing Overhead of $92,000 D) credit to Work in Process of $90,000 Answer: C Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: To record application of Manufacturing Overhead to Work In Process: Work in Process $92,000 Manufacturing Overhead $92,000 [QUESTION] 51. Lister Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $624,000 Estimated direct labor-hours at the beginning of the year 39,000 direct labor-hours Results of operations: Actual direct labor-hours 36,000 direct labor-hours Manufacturing overhead: Indirect labor cost $131,000 Other manufacturing overhead costs incurred $543,000 The total amount of manufacturing overhead applied to production is: A) $1,547,000 B) $576,000 C) $624,000 D) $674,000 Answer: B Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $624,000 ÷ 39,000 direct labor-hours = $16.00 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $16.00 per direct labor-hour × 36,000 direct labor-hours = $576,000 [QUESTION] 52. Leelanau Corporation uses a job-order costing system. The following data are for last year: Work in process beginning balance $10,500 Work in process ending balance $19,000 Cost of goods manufactured $323,000 Direct materials $115,000 Direct Labor $78,000 Leelanau applies overhead using a predetermined rate. What amount of overhead was applied to work in process last year? A) $138,500 B) $121,500 C) $130,000 D) $203,500 Answer: A Difficulty: 3 Hard Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Cost of Goods Manufactured Direct materials $115,000 Direct labor $78,000 Manufacturing overhead cost applied to work in process X Total manufacturing costs $193,000 + X Add: Beginning work in process inventory $10,500 $203,500 + X Deduct: Ending work in process inventory $19,000 Cost of goods manufactured $184,500 + X $323,000 = $184,500 + X X = $323,000 – $184,500 = $138,500 [QUESTION] 53. During March, Zea Inc. transferred $50,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $56,000. The journal entries to record these transactions would include a: A) credit to Cost of Goods Sold of $56,000 B) debit to Finished Goods of $56,000 C) credit to Work in Process of $50,000 D) credit to Finished Goods of $50,000 Answer: C Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Finished Goods 50,000 Work in Process 50,000 Cost of Goods Sold 56,000 Finished Goods 56,000 [QUESTION] 54. Firlit Corporation incurred $69,000 of actual Manufacturing Overhead costs during October. During the same period, the Manufacturing Overhead applied to Work in Process was $70,000. The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a: A) debit to Work in Process of $70,000 B) credit to Work in Process of $70,000 C) debit to Manufacturing Overhead of $69,000 D) credit to Manufacturing Overhead of $69,000 Answer: C Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: To record the incurrence of actual Manufacturing Overhead costs: Manufacturing Overhead 69,000 Accounts Payable, Cash, other asset accounts 69,000 [QUESTION] 55. Brendal 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 at the beginning of the year $693,000 Estimated direct labor-hours at the beginning of the year 42,000 direct labor-hours Results of operations: Raw materials (all direct) requisitioned for use in production $525,000 Direct labor cost $690,000 Actual direct labor-hours 49,000 direct labor-hours Manufacturing overhead: Indirect labor cost $138,000 Other manufacturing overhead costs incurred $506,000 How much is the total manufacturing cost added to Work in Process during the year? A) $1,215,000 B) $1,803,000 C) $1,498,500 D) $2,023,500 Answer: D Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $693,000 ÷ 42,000 direct labor-hours = $16.50 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $16.50 per direct labor-hour × 49,000 direct labor-hours = $808,500 Direct materials $525,000 Direct labor 690,000 Manufacturing overhead applied 808,500 Total manufacturing cost $2,023,500 [QUESTION] 56. Firebaugh Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Raw materials purchased on account $520,000 Raw materials (all direct) requisitioned for use in production $467,000 What is the journal entry to record raw materials used in production? A) Raw Materials 520,000 Work in Process 520,000 B) Raw Materials 467,000 Work in Process 467,000 C) Work in Process 520,000 Raw Materials 520,000 D) Work in Process 467,000 Raw Materials 467,000 Answer: D Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The journal entry to record the raw materials used in production is: Work in Process 467,000 Raw Materials 467,000 [QUESTION] 57. 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. During December, $62,000 of raw materials were requisitioned from the storeroom for use in production. The debits entered in the Raw Materials account during the month of December total: A) $26,000 B) $86,000 C) $60,000 D) $62,000 Answer: C Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Raw Materials 60,000 Accounts Payable 60,000 Work in Process 62,000 Raw Materials 62,000 [QUESTION] 58. In October, Raddatz Inc. incurred $73,000 of direct labor costs and $6,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a: A) debit to Manufacturing Overhead of $6,000 B) debit to Work in Process of $79,000 C) credit to Manufacturing Overhead of $6,000 D) credit to Work in Process of $79,000 Answer: A Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Work in Process 73,000 Manufacturing Overhead 6,000 Salaries and Wages Payable 79,000 [QUESTION] 59. During June, Buttrey Corporation incurred $67,000 of direct labor costs and $7,000 of indirect labor costs. The journal entry to record the accrual of these wages would include a: A) debit to Work in Process of $67,000 B) credit to Work in Process of $74,000 C) debit to Work in Process of $74,000 D) credit to Work in Process of $67,000 Answer: A Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Work in Process 67,000 Manufacturing Overhead 7,000 Salaries and Wages Payable 74,000 [QUESTION] 60. At the beginning of December, Altro Corporation had $26,000 of raw materials on hand. During the month, the Corporation purchased an additional $76,000 of raw materials. During December, $72,000 of raw materials were requisitioned from the storeroom for use in production. The credits entered in the Raw Materials account during the month of December total: A) $26,000 B) $102,000 C) $76,000 D) $72,000 Answer: D Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Raw Materials 76,000 Accounts Payable 76,000 Work in Process 72,000 Raw Materials 72,000 [QUESTION] 61. During September at Renfro Corporation, $65,000 of raw materials were requisitioned from the storeroom for use in production. These raw materials included both direct and indirect materials. The indirect materials totaled $4,000. The journal entry to record this requisition would include a debit to Manufacturing Overhead of: A) $65,000 B) $4,000 C) $0 D) $61,000 Answer: B Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Work in Process 61,000 Manufacturing Overhead 4,000 Raw Materials 65,000 [QUESTION] 62. Tomlison Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Cost of goods manufactured $1,589,000 Cost of goods sold (unadjusted) $1,517,000 The journal entry to record the unadjusted Cost of Goods Sold is: A) Finished Goods 1,517,000 Cost of Goods Sold 1,517,000 B) Cost of Goods Sold 1,517,000 Finished Goods 1,517,000 C) Finished Goods 1,589,000 Cost of Goods Sold 1,589,000 D) Cost of Goods Sold 1,589,000 Finished Goods 1,589,000 Answer: B Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The journal entry to record the unadjusted Cost of Goods Sold is: Cost of Goods Sold 1,517,000 Finished Goods 1,517,000 [QUESTION] 63. Ruddick Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Cost of goods manufactured $1,486,000 Cost of goods sold (unadjusted) $1,337,000 The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is: A) Finished Goods 1,337,000 Work in Process 1,337,000 B) Finished Goods 1,486,000 Work in Process 1,486,000 C) Work in Process 1,337,000 Finished Goods 1,337,000 D) Work in Process 1,486,000 Finished Goods 1,486,000 Answer: B Difficulty: 1 Easy Learning Objective: 03-01 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is: Finished Goods 1,486,000 Work in Process 1,486,000 [QUESTION] 64. Calfee Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Beginning inventories: Raw materials $40,000 Work in process $19,000 Estimated total manufacturing overhead at the beginning of the year $595,000 Estimated direct labor-hours at the beginning of the year 35,000 direct labor-hours Results of operations: Raw materials purchased on account $423,000 Raw materials (all direct) requisitioned for use in production $420,000 Direct labor cost $641,000 Actual direct labor-hours 33,000 direct labor-hours Manufacturing overhead: Indirect labor cost $143,000 Other manufacturing overhead costs incurred $531,000 Cost of goods manufactured $1,441,000 The ending balance in the Work in Process inventory account is: A) $200,000 B) $162,000 C) $220,000 D) $181,000 Answer: A Difficulty: 1 Easy Learning Objective: 03-01 Learning Objective: 03-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Refer To: CH03-Ref Feedback: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $595,000 ÷ 35,000 direct labor-hours = $17.00 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $17.00 per direct labor-hour × 33,000 direct labor-hours = $561,000 Work In Process Balance, beginning 19,000 Cost of goods manufactured 1,441,000 Direct materials 420,000 Direct labor 641,000 Manufacturing overhead applied 561,000 Balance, ending* 200,000 *19,000 + (420,000 + 641,000 + 561,000) ? 1,441,000 = 19,000 + (1,622,000) ? 1,441,000 = 200,000 [QUESTION] 65. Tusa Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $638,250 Estimated direct labor-hours at the beginning of the year 37,000 direct labor-hours Results of operations: Actual direct labor-hours 34,000 direct labor-hours Manufacturing overhead: Indirect labor cost $148,000 Other manufacturing overhead costs incurred $450,000 Cost of goods manufactured $1,611,000 Cost of goods sold (unadjusted) $1,518,000 The adjusted Cost of Goods Sold for the year is: A) $1,518,000 B) $1,506,500 C) $1,642,000 D) $1,529,500 Answer: D Difficulty: 2 Medium Learning Objective: 03-01 Learning Objective: 03-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $638,250 ÷ 37,000 direct labor-hours = $17.25 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $17.25 per direct labor-hour × 34,000 direct labor-hours = $586,500 Actual manufacturing overhead incurred ($148,000 + $450,000) $598,000 Manufacturing overhead applied to Work in Process 586,500 Underapplied (overapplied) manufacturing overhead $11,500 Unadjusted cost of goods sold $1,518,000 Underapplied (overaplied) overhead 11,500 Adjusted cost of goods sold $1,529,500 [QUESTION] 66. Plasencia Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Beginning inventories: Finished goods $33,000 Estimated total manufacturing overhead at the beginning of the year $635,500 Estimated direct labor-hours at the beginning of the year 41,000 direct labor-hours Results of operations: Actual direct labor-hours 42,000 direct labor-hours Manufacturing overhead: Indirect labor cost $177,000 Other manufacturing overhead costs incurred $444,000 Selling and administrative: Selling and administrative salaries $280,000 Other selling and administrative expenses $310,000 Cost of goods manufactured $1,501,000 Sales revenue $2,704,000 Cost of goods sold (unadjusted) $1,416,000 The net operating income is: A) $1,318,000 B) $1,008,000 C) $728,000 D) $1,038,000 Answer: C Difficulty: 2 Medium Learning Objective: 03-01 Learning Objective: 03-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $635,500 ÷ 41,000 direct labor-hours = $15.50 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $15.50 per direct labor-hour × 42,000 direct labor-hours = $651,000 Actual manufacturing overhead incurred ($177,000 + $444,000) $621,000 Manufacturing overhead applied to Work in Process 651,000 Underapplied (overapplied) manufacturing overhead $(30,000) Unadjusted cost of goods sold $1,416,000 Underapplied (overaplied) overhead (30,000) Adjusted cost of goods sold $1,386,000 Sales $2,704,000 Cost of goods sold (adjusted) 1,386,000 Gross margin 1,318,000 Selling and administrative expenses: Selling and administrative salaries 280,000 Other selling and administrative expenses 310,000 590,000 Net operating income $728,000 [QUESTION] 67. Molzahn Corporation is a manufacturer that uses job-order costing. The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year. The company has supplied the following data for the just completed year: Estimated total manufacturing overhead at the beginning of the year $481,250 Estimated direct labor-hours at the beginning of the year 35,000 direct labor-hours Results of operations: Actual direct labor-hours 40,000 direct labor-hours Manufacturing overhead: Indirect labor cost $179,000 Other manufacturing overhead costs incurred $465,000 Manufacturing overhead is overapplied or underapplied by: A) $165,000 Overapplied B) $94,000 Underapplied C) $165,000 Underapplied D) $94,000 Overapplied Answer: B Difficulty: 1 Easy Learning Objective: 03-01 Learning Objective: 03-04 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Predetermined overhead rate = Estimated total manufacturing overhead cost ÷ Estimated total amount of the allocation base = $481,250 ÷ 35,000 direct labor-hours = $13.75 per direct labor-hour Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred = $13.75 per direct labor-hour × 40,000 direct labor-hours = $550,000 Actual manufacturing overhead incurred ($179,000 + $465,000) $644,000 Manufacturing overhead applied to Work in Process 550,000 Underapplied (overapplied) manufacturing overhead $94,000 [QUESTION] 68. Cai Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Raw Materials Bal. 1/1 17,000 Credits ? Debits 97,000 Bal. 12/31 30,000 Work In Process Bal. 1/1 19,000 Credits 506,000 Direct materials 74,000 Direct labor 13,000 Overhead applied 257,000 Bal. 12/31 ? The cost of indirect materials requisitioned for use in production during the year was: A) $74,000 B) $10,000 C) $40,000 D) $13,000 Answer: B Difficulty: 2 Medium Learning Objective: 03-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Raw materials inventory, 1/1 $17,000 Add: Debits (purchases of raw materials) 97,000 Materials available for use 114,000 Deduct: Raw materials inventory, 12/31 30,000 Materials requisitioned for use in production 84,000 Deduct: Direct materials 74,000 Indirect materials $10,000 [QUESTION] 69. The following accounts are from last year’s books at Sharp Manufacturing: Raw Materials Bal 0 (b) 154,000 (a) 164,000 10,000 Work In Process Bal 0 (f) 510,000 (b) 132,000 (c) 168,000 (e) 210,000 0 Finished Goods Bal 0 (g) 460,000 (f) 510,000 50,000 Manufacturing Overhead (b) 22,000 (e) 210,000 (c) 26,000 (d) 156,000 6,000 Cost of Goods Sold (g) 460,000 Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the manufacturing overapplied or underapplied for the year? A) $6,000 underapplied B) $6,000 overapplied C) $26,000 underapplied D) $26,000 overapplied Answer: B Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The manufacturing overhead is overapplied by $6,000 because the manufacturing overhead applied of $210,000 exceeds the manufacturing overhead incurred by $6,000. [QUESTION] 70. Fisher Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs. The following information about Fisher Corporation's Work in Process inventory account has been provided for the month of May: May 1 balance $26,000 Debits During May: Direct Materials $40,000 Direct Labor $50,000 Manufacturing Overhead $37,500 During the month, Fisher Corporation's Work in Process inventory account was credited for $120,500, which represented the Cost of Goods Manufactured for the month. Only one job remained in process on May 31; this job had been charged with $9,600 of applied overhead cost. The amount of direct materials cost in the unfinished job would be: A) $10,600 B) $16,700 C) $12,800 D) $23,400 Answer: A Difficulty: 3 Hard Learning Objective: 03-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Work In Process Bal 26,000 120,500 40,000 50,000 37,500 33,000 Overhead applied = Predetermined overhead rate × Amount of the allocation base incurred $37,500 = Predetermined overhead rate × $50,000 Predetermined overhead rate = $37,500 ÷ $50,000 = 0.75 $9,600 = 0.75 × Amount of the allocation base incurred by the job Amount of the allocation base incurred by the job = $9,600 ÷ 0.75 = $12,800 Work In Process inventory = Direct materials + Direct labor + Manufacturing overhead $33,000 = Direct materials + $12,800 + $9,600 Direct materials = $33,000 – ($12,800 + $9,600) = 10,600 [QUESTION] 71. Tatar Corporation is a manufacturer that uses job-order costing. The company has supplied the following data for the just completed year: Beginning inventories: Raw materials $37,000 Work in process $15,000 Results of operations: Raw materials purchased on account $480,000 Raw materials (all direct) requisitioned for use in production $434,000 How much is the ending balance in the Raw Materials inventory account? A) $37,000 B) $120,000 C) $83,000 D) $517,000 Answer: C Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The ending balance in Raw Materials is computed as follows: Raw Materials Balance, beginning 37,000 Raw materials used in production 434,000 Purchases 480,000 Balance, ending* 83,000 *37,000 + 480,000 ? 434,000 = 83,000 [QUESTION] 72. Hougham Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Raw Materials Bal. 1/1 15,000 Credits ? Debits 109,000 Bal. 12/31 21,000 The cost of raw materials requisitioned for use in production during the year was: A) $109,000 B) $145,000 C) $103,000 D) $124,000 Answer: C Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Raw materials inventory, 1/1 $15,000 Add: Debits (purchases of raw materials) 109,000 Materials available for use 124,000 Deduct: Raw materials inventory, 12/31 21,000 Materials requisitioned for use in production $103,000 Alternatively, Raw Materials Bal. 1/1 15,000 Credits (plug) 103,000 Debits 109,000 Bal. 12/31 21,000 [QUESTION] 73. The following accounts are from last year's books of Sharp Manufacturing: Raw Materials Bal 0 (b) 154,000 (a) 164,000 10,000 Work In Process Bal 0 (f) 510,000 (b) 132,000 (c) 168,000 (e) 210,000 0 Finished Goods Bal 0 (g) 460,000 (f) 510,000 50,000 Manufacturing Overhead (b) 22,000 (e) 210,000 (c) 26,000 (d) 156,000 6,000 Cost of Goods Sold (g) 460,000 Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the amount of direct materials used for the year? A) $164,000 B) $154,000 C) $132,000 D) $168,000 Answer: C Difficulty: 2 Medium Learning Objective: 03-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: The journal entry to record Issue of direct and indirect materials was entry (b) above: Work in Process 132,000 Manufacturing Overhead 22,000 Raw Materials 154,000 Direct materials are debited to Work in Process; indirect materials are debited to Manufacturing Overhead. [QUESTION] 74. The following accounts are from last year’s books at Sharp Manufacturing: Raw Materials Bal 0 (b) 154,000 (a) 164,000 10,000 Work In Process Bal 0 (f) 510,000 (b) 132,000 (c) 168,000 (e) 210,000 0 Finished Goods Bal 0 (g) 460,000 (f) 510,000 50,000 Manufacturing Overhead (b) 22,000 (e) 210,000 (c) 26,000 (d) 156,000 6,000 Cost of Goods Sold (g) 460,000 Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs. What is the amount of cost of goods manufactured for the year? A) $252,000 B) $454,000 C) $510,000 D) $460,000 Answer: C Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Cost of goods manufactured is represented by the debit to Finished Goods and the credit to Work in Process (entry f) = $510,000 cost of goods manufactured [QUESTION] 75. Solt Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Finished Goods Bal. 1/1 38,000 Credits ? Debits ? Bal. 12/31 50,000 The Cost of Goods Manufactured for the year was $415,000. The unadjusted Cost of Goods Sold for the year was: A) $503,000 B) $415,000 C) $403,000 D) $453,000 Answer: C Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Finished goods inventory, 1/1 38,000 Add: Debits (Cost of goods manufactured) 415,000 Goods available for sale 453,000 Deduct: Finished goods inventory, 12/31 50,000 Cost of goods sold 403,000 Alternatively, Finished Goods Bal. 1/1 38,000 Credits (plug) 403,000 Debits (Cost of Goods Manufactured) 415,000 Bal. 12/31 50,000 [QUESTION] 76. Compute the amount of raw materials used during November if $30,000 of raw materials were purchased during the month and if the inventories were as follows: Balance Balance Inventories November 1 November 30 Raw materials $7,000 $4,000 Work in process $6,000 $7,500 Finished goods $10,000 $12,000 A) $31,500 B) $29,500 C) $27,000 D) $33,000 Answer: D Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials – Ending raw materials inventory Raw materials used in production = $7,000 + $30,000 – $4,000 = $33,000 [QUESTION] 77. Maysonet Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. Work in Process Bal. 1/1 18,000 Credits ? Debits 520,000 Bal. 12/31 34,000 The cost of completed jobs transferred from Work in Process to Finished Goods during the year was: A) $520,000 B) $572,000 C) $538,000 D) $504,000 Answer: D Difficulty: 1 Easy Learning Objective: 03-02 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Work in process inventory, 1/1 18,000 Add: Debits (Additions to work in process) 520,000 538,000 Deduct: Work in process inventory, 12/31 34,000 Cost of completed jobs transferred from Work in Process to Finished Goods 504,000 Alternatively, Work in Process Bal. 1/1 18,000 Credits (plug) 504,000 Debits 520,000 Bal. 12/31 34,000 [QUESTION] 78. St. Johns Corporation uses a job-order costing system and has provided the following partially completed summary T-accounts for the just completed period: Work In Process Bal. 22,000 Credits 534,000 Direct materials 85,000 Direct labor 161,000 Overhead applied 273,000 Bal. ? Manufacturing Overhead Debits 200,000 Credits ? Manufacturing overhead for the period was: A) $7,000 Underapplied B) $73,000 Underapplied C) $73,000 Overapplied D) $7,000 Overapplied Answer: C Difficulty: 2 Medium Learning Objective: 03-02 Learning Objective: 03-04 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Actual manufacturing overhead incurred (Debits to Manufacturing Overhead) $200,000 Deduct: Manufacturing overhead applied to Work in Process 273,000 Underapplied (overapplied) manufacturing overhead $(73,000) Alternatively, Manufacturing Overhead Debits 200,000 Credits 273,000 Bal. 73,000 A credit balance in Manufacturing Overhead means that manufacturing overhead is overapplied by the amount of the balance. [QUESTION] 79. Tenneson Corporation’s cost of goods manufactured for the just completed month was $151,000 and its inventories were as follows: Beginning Ending Work in process inventory $63,000 $66,000 Finished goods inventory $34,000 $48,000 How much was the cost of goods available for sale on the Schedule of Cost of Goods Sold? A) $137,000 B) $185,000 C) $151,000 D) $136,000 Answer: B Difficulty: 1 Easy Learning Objective: 03-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Beginning finished goods inventory $34,000 Add: Cost of goods manufactured 151,000 Cost of goods available for sale $185,000 [QUESTION] 80. Shane Corporation has provided the following data concerning last month’s operations. Direct materials $23,000 Direct labor $58,000 Manufacturing overhead applied to Work in Process $92,000 Beginning Ending Work in process inventory $56,000 $69,000 Finished goods inventory $33,000 $36,000 How much is the unadjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $161,000 B) $157,000 C) $160,000 D) $193,000 Answer: B Difficulty: 2 Medium Learning Objective: 03-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Direct materials $23,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 92,000 Total manufacturing costs 173,000 Add: Beginning work in process inventory 56,000 229,000 Deduct: Ending work in process inventory 69,000 Cost of goods manufactured $160,000 Beginning finished goods inventory $33,000 Add: Cost of goods manufactured 160,000 Cost of goods available for sale 193,000 Deduct: Ending finished goods inventory 36,000 Unadjusted cost of goods sold $157,000 [QUESTION] 81. Dipaola Corporation has provided the following data concerning last month’s operations. Purchases of raw materials $26,000 Indirect materials included in manufacturing overhead $6,000 Direct labor cost $58,000 Manufacturing overhead applied to Work in Process $87,000 Overapplied overhead $6,000 Beginning Ending Raw materials inventory $12,000 $18,000 Work in process inventory $46,000 $64,000 Finished goods inventory $31,000 $46,000 How much is the direct materials cost for the month on the Schedule of Cost of Goods Manufactured? A) $38,000 B) $32,000 C) $14,000 D) $26,000 Answer: C Difficulty: 2 Medium Learning Objective: 03-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Direct materials: Beginning raw materials inventory $12,000 Add: Purchases of raw materials 26,000 Total raw materials available 38,000 Deduct: Ending raw materials inventory 18,000 Raw materials used in production 20,000 Deduct: Indirect materials included in manufacturing overhead 6,000 Direct materials $14,000 [QUESTION] 82. Emigh Corporation’s cost of goods manufactured for the just completed month was $146,000 and its overhead was overapplied by $5,000. The beginning finished goods inventory was $35,000 and the ending finished goods inventory was $37,000. The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. How much was the adjusted cost of goods sold on the Schedule of Cost of Goods Sold? A) $144,000 B) $146,000 C) $181,000 D) $139,000 Answer: D Difficulty: 1 Easy Learning Objective: 03-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Schedule of Cost of Goods Sold Beginning finished goods inventory $35,000 Add: Cost of goods manufactured 146,000 Cost of goods available for sale 181,000 Deduct: Ending finished goods inventory 37,000 Unadjusted cost of goods sold 144,000 Deduct: Overapplied overhead 5,000 Add: Underapplied overhead 0 Adjusted cost of goods sold $139,000 [QUESTION] 83. Luebke Inc. has provided the following data for the month of November. The balance in the Finished Goods inventory account at the beginning of the month was $52,000 and at the end of the month was $30,000. The cost of goods manufactured for the month was $212,000. The actual manufacturing overhead cost incurred was $55,000 and the manufacturing overhead cost applied to Work in Process was $58,000. The company closes out any underapplied or overapplied manufacturing overhead to cost of goods sold. The adjusted cost of goods sold that would appear on the income statement for November is: A) $231,000 B) $190,000 C) $234,000 D) $212,000 Answer: A Difficulty: 2 Medium Learning Objective: 03-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Manufacturing overhead underapplied (overapplied) = Actual manufacturing overhead incurred – Manufacturing overhead applied = $55,000 – $58,000 = $3,000 overapplied Adjusted cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured – Ending finished goods inventory – Manufacturing overhead overapplied = $52,000 + $212,000 – $30,000 – $3,000 = $231,000 [QUESTION] 84. Able Corporation uses a job-order costing system. In reviewing its records at the end of the year, the company has discovered that $2,000 of raw materials has been drawn from the storeroom and used in the production of Job 110, but that no entry has been made in the accounting records for the use of these materials. Job 110 has been completed but it is unsold at year end. This error will cause: A) Work in Process to be understated by $2,000 at year end. B) Cost of Goods Manufactured to be overstated by $2,000 for the year. C) Finished Goods to be understated by $2,000 at the end of the year. D) Cost of Goods Sold to be overstated by $2,000 for the year. Answer: C Difficulty: 2 Medium Learning Objective: 03-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Job 110 has been completed, but has not been sold. Therefore, the error will reduce Raw Materials and increase Finished Goods by $2,000. [QUESTION] 85. Frankin Corporation has provided the following data concerning last month’s operations. Purchases of raw materials $26,000 Indirect materials included in manufacturing overhead $6,000 Direct labor cost $58,000 Manufacturing overhead applied to Work in Process $97,000 Beginning Ending Raw materials inventory $11,000 $17,000 Work in process inventory $52,000 $66,000 How much is the cost of goods manufactured for the month on the Schedule of Cost of Goods Manufactured? A) $175,000 B) $221,000 C) $155,000 D) $169,000 Answer: C Difficulty: 2 Medium Learning Objective: 03-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Direct materials: Beginning raw materials inventory $11,000 Add: Purchases of raw materials 26,000 Total raw materials available 37,000 Deduct: Ending raw materials inventory 17,000 Raw materials used in production 20,000 Deduct: Indirect materials included in manufacturing overhead 6,000 $14,000 Direct labor 58,000 Manufacturing overhead cost applied to work in process 97,000 Total manufacturing costs 169,000 Add: Beginning work in process inventory 52,000 221,000 Deduct: Ending work in process inventory 66,000 Cost of goods manufactured $155,000 [QUESTION] 86. Rediger Inc., a manufacturing Corporation, has provided the following data for the month of June. The balance in the Work in Process inventory account was $22,000 at the beginning of the month and $17,000 at the end of the month. During the month, the Corporation incurred direct materials cost of $55,000 and direct labor cost of $28,000. The actual manufacturing overhead cost incurred was $53,000. The manufacturing overhead cost applied to Work in Process was $51,000. The cost of goods manufactured for June was: A) $141,000 B) $139,000 C) $134,000 D) $136,000 Answer: B Difficulty: 2 Medium Learning Objective: 03-03 Topic Area: Blooms: Apply AACSB: Analytical Thinking AICPA: BB Critical Thinking AICPA: FN Measurement Feedback: Cost of goods manufactured = Direct materials + Direct labor + Manufacturing overhead applied + Beginning work in process inventory – Ending work in process inventory = $55,000 + $28,000 + $51,000 + $22,000 – $17,000 = $139,000 [QUE