1. Neon Lighting is comparing actual and applied overhead amounts at the end of the year and finds the factory overhead account has a credit balance. What does this mean

a.Actual costs are higher than applied costs.

b.The entire balance is charged back to work in process inventory.

c. Applied costs are higher than actual costs.

d. The balance should be carried over from year to year.

2. During July, the Jamal Company incurred factory overhead as follows: utilities, $6,500; accumulated depreciation, $2,500; and indirect salaries, $3,600. Which of the following journal entries is correct?

a.Work in process, $12,600 Dr.; Utilities Expense, $6,500 Cr.; Accumulated Depreciation, $2,500 Cr.; Wages Payable, $3,600 Cr.

b. Factory Overhead, $12,600 Dr.; Utilities Payable, $6,500 Cr.; Accumulated Depreciation, $2,500 Cr.; Wages Payable, $3,600 Cr.

c. Utilities Expense, $6,500 Dr.; Depreciation Expense, $2,500 Dr.; Wages Expense, $3,600 Dr.; Accounts Payable, $12,600 Cr.

d. Accounts Payable, $12,600 Dr.; Utilities Expense, $6,500 Cr.; Depreciation Expense, $2,500 Cr.; Wages Payable, $3,600 Cr.

3. Joelle Company accumulated 530 hours of direct labor costs on Job 233 and 615 hours on Job 234. The total direct labor was incurred at a rate of $20 per direct labor hour. Which of the following journal entries is correct?

a. Work in Process $22,900 Dr. and Wages Payable $22,900 Cr.

b. Factory Overhead $22,900 Dr. and Wages Expense $22,900 Cr.

c. Direct Labor $22,900 Dr. and Wages Payable $22,900 Cr.

d. Wages Payable $22,900 Dr. and Work in Process $22,900 Cr.

4. A law firm, Morris & Morris, accumulates costs associated with individual cases using a job order cost system. On August 5, the firm charged 200 hours of professional (lawyer) time to the Micro Systems Co. breech of contract suit to prepare for the trial, at a rate of $340 per hour. What is the journal entry for this transaction?

a.Debit Work in Process and credit Firm Overhead for $68,000.

b.Debit Salaries Payable and credit Work in Process for $68,000.

c.Debit Work in Process and credit Salaries Payable for $68,000.

d. Debit Salaries Expense and credit Cost of Services for $68,000.