Question

Which of the following would probably be the least appropriate allocation base for allocating overhead in a highly automated manufacturer of specialty valves? A. machine-hours B. power consumption C. direct labor-hours D. machine setups 1 points QUESTION 6 In a job-order costing system, the amount of overhead cost that has been applied to a job that remains incomplete at the end of a period: A. is deducted on the Income Statement as overapplied overhead. B. is closed to Cost of Goods Sold. C. is transferred to Finished Goods at the end of the period. D. is part of the ending balance of the Work in Process inventory account. 1 points QUESTION 7 Overapplied manufacturing overhead means that: A. the applied manufacturing overhead cost was less than the actual manufacturing overhead cost. B. the applied manufacturing overhead cost was greater than the actual manufacturing overhead cost. C. the estimated manufacturing overhead cost was less than the actual manufacturing overhead cost. D. the estimated manufacturing overhead cost was less than the applied manufacturing overhead cost. 1 points QUESTION 8 A good description of "cost of goods manufactured" is the recorded cost of the: A. units completed during the period. B. units started and completed during the period. C. work done on all units during the period. D. work done this period on units completed this period. 1 points QUESTION 9 Clear Colors Company uses a predetermined overhead rate based on direct labor costs to apply manufacturing overhead to jobs. At the beginning of the year the company estimated its total manufacturing overhead cost at $350,000 and its direct labor costs at $200,000. The actual overhead cost incurred during the year was $362,000 and the actual direct labor costs incurred on jobs during the year was $208,000. The manufacturing overhead for the year would be: A. $12,000 underapplied. B. $12,000 overapplied. C. $2,000 underapplied. D. $2,000 overapplied. 1 points QUESTION 10 Parker Corporation has a job-order costing system and uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. At the beginning of the year, manufacturing overhead and direct labor-hours for the year were estimated at $50,000 and 20,000 hours, respectively. In June, Job #461 was completed. Materials costs on the job totaled $4,000 and labor costs totaled $1,500 at $5 per hour. At the end of the year it was determined that the company worked 24,000 direct labor-hours for the year and incurred $54,000 in actual manufacturing overhead costs. If Job #461 contained 100 units, the unit product cost on the completed job cost sheet would be: A. $61.75 B. $62.50 C. $63.10 D. $55.00 1 points QUESTION 11 Caber Corporation applies manufacturing overhead on the basis of machine-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $60,600. Actual manufacturing overhead for the year amounted to $59,000 and actual machine-hours were 5,900. The company's predetermined overhead rate for the year was $10.10 per machine-hour. The predetermined overhead rate was based on how many estimated machine-hours? A. 5,783 B. 6,000 C. 5,900 D. 5,842 1 points QUESTION 12 Baker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $210,600 and 6,000 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $209,000 and actual direct labor-hours were 5,980. The predetermined overhead rate for the year was closest to: A. $34.95 B. $34.83 C. $34.98 D. $35.10 1 points QUESTION 13 Kapanga Manufacturing Corporation uses a job-order costing system and started the month of October with a zero balance in its work in process and finished goods inventory accounts. During October, Kapanga worked on three jobs and incurred the following direct costs on those jobs: Job B18 Job B19 Job C11 Direct materials $12,000 $25,000 $18,000 Direct labor $8,000 $10,000 $5,000 What is Kapanga's work in process inventory balance at the end of October? Kapanga applies manufacturing overhead at a rate of 150% of direct labor cost. During October, Kapanga completed Jobs B18 and B19 and sold Job B19. A. $23,000 B. $30,500 C. $32,000 D. $43,000 1 points QUESTION 14 Adams Corporation makes two products: Product A and Product B. Annual production and sales are 500 units of Product A and 900 units of Product B. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit. The total estimated overhead for next period is $67,522. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools—Activity 1, Activity 2, and General Factory—with estimated overhead costs and expected activity as follows: Activity Cost Pool Estimated Overhead Costs Expected Activity Product A Product B Total Activity 1 $6,915 300 200 500 Activity 2 24,948 2,100 700 2,800 General Factory 35,659 200 450 650 Total $67,522 The predetermined overhead rate under the traditional costing system is closest to: (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.) A. $103.88 B. $13.83 C. $54.86 D. $8.91 1 points QUESTION 15 Adams Corporation makes two products: Product A and Product B. Annual production and sales are 500 units of Product A and 900 units of Product B. The company has traditionally used direct labor-hours as the basis for applying all manufacturing overhead to products. Product A requires 0.4 direct labor-hours per unit and Product B requires 0.5 direct labor-hours per unit. The total estimated overhead for next period is $67,522. The company is considering switching to an activity-based costing system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost pools—Activity 1, Activity 2, and General Factory—with estimated overhead costs and expected activity as follows: Activity Cost Pool Estimated Overhead Costs Expected Activity Product A Product B Total Activity 1 $6,915 300 200 500 Activity 2 24,948 2,100 700 2,800 General Factory 35,659 200 450 650 Total $67,522 The overhead cost per unit of Product A under the activity-based costing system is closest to: (Note: The General Factory activity cost pool's costs are allocated on the basis of direct labor-hours.) A. $67.66 B. $21.94 C. $48.23 D. $41.55 1 points

Answer 1

5. C) Direct Labour Hours, as it is highly automated manufacturing unit - the labour basis allocation of overheads will not be suitable

6. A) is deducted on the Income Statement as overapplied overhead

7. B) the applied manufacturing overhead cost was greater than the actual manufacturing overhead cost.

8. A) units completed during the period

9. A) $12,000 underapplied, as the estimated cost was less than the actual overheads incurred.

11. B) 6,000, Predetermined Hours =(predetermined Overheads/Per Hour Overhead Cost)

12.  D) $35.10, Predetermined rate = (predetermined Overheads/Estimated Labour Hours)

13. B) $30,500, As the Jobs B18 and B19 are complete only the costs of Job C11 will be WIP.