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Exam 10: Accounting Systems for Manufacturing Businesses

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Question 41

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The Anderson Company forecasts that total overhead for the current year will be $15,000,000 and total machine hours will be 200,000 hours. However, the actual overhead is $8,000,000 and the actual machine hours are 100,000 hours. If the company uses a predetermined overhead rate based on machine hours for applying overhead, what is predetermined overhead rate?

A) $80 per machine hour
B) $150 per machine hour
C) $75 per machine hour
D) $40 per machine hour

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

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Question 42

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Which of the following are the two main types of cost accounting systems for manufacturing operations?

A) Process cost and general accounting systems
B) Job order cost and process cost systems
C) Job order cost and general accounting systems
D) Process cost and replacement cost systems

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

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Question 43

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Direct labor cost is an example of a product cost.

Which of the following would not be classified as direct materials for an auto manufacturer?

Inventories of finished products are reported as current assets on a manufacturer's balance sheet.

The finished goods account is a controlling account for the subsidiary:

Job order cost systems can be used to compare unit costs of similar jobs to determine if costs are staying within expected ranges.

A job order cost system accumulates costs for each of the departments or processes within the factory.

If factory overhead applied is less than the actual costs, the overhead is said to be underapplied.

The recording of the jobs completed would decrease:

Costs that are treated as assets until the product is sold are called:

The Harold Company forecasts that total overhead for the current year will be $12,000,000 and total machine hours will be 200,000 hours. However, the actual overhead is $4,000,000 and the actual machine hours are 100,000 hours. If the company uses a predetermined overhead rate based on machine hours for applying overhead, the overhead will be:

Which of the following manufacturing costs is an indirect cost of producing a product?

The current year's advertising costs are normally considered as product costs.

KCT Printing Company uses a job order cost system. (a) Incicate the source of the data for increasing Work in Process for each of the following: (1)Direct materials requisitioned (2)Direct labor used (b) Inclicate the source of the data for decreasing Work in Processs for jobs completed. (c) Present a list of the three controlling accounts used in the general ledger to record the inventories and, in each case, inclicate the related subsicliary ledger.

As product costs are incurred in the manufacturing process, they are accounted for as assets and reported on the balance sheet as inventory.

Increase in the Work-in-Process account occur when:

Which of the following is an example of a factory overhead cost?

Non-manufacturing costs are generally classified into two categories: selling and administrative.

For an automotive repair shop, the wages of mechanics would be classified as direct labor cost.