1. Process costing is best described by which statement?

A.Only direct materials and manufacturing overhead are assigned to products under process costing.

B.Units produced in a process costing system are unique and are produced individually.

C.Product costs are tracked by department and assigned to products passing through each department.

D.There cannot be any beginning or ending Work in Process Inventory with process costing.

E.None of the answer choices is correct.

2. Silo Manufacturing received timesheets submitted by employees reflecting $5,000 of direct labor costs to be paid next week. Which one of the following journal entries should Silo record for this transaction? Wages Payable 5,000 Work in Process Inventory 5,000 Work in Process Inventory 5,000 Manufacturing Overhead 5,000

A.Work in Process Inventory 5,000

B.Direct Labor 5,000

C.Wages Payable 5,000

D.Work in Process Inventory 5,000

E.None of the answer choices is correct.

3. Underapplied manufacturing overhead results in a debit balance in the Manufacturing Overhead account.

A.True

B.False

4. All of the following are reasons that companies prefer normal costing except:

A.Normal costing averages overhead costs and levels out overhead fluctuations that might occur from month to month.

B.Normal costing tracks actual direct materials, actual direct labor costs, and actual manufacturing overhead costs.

C.Normal costing simplifies recordkeeping.

D.Normal costing provides information for managers to quote customers the price of products based on estimated costs.

E.None of the answer choices is correct.

5. Which of the following is typically used as a subsidiary ledger for Work in Process in a job cost system?

A.Job cost sheet.

B.Balance sheet.

C.Materials requisition.

D.Timesheet.

E.None of the answer choices is correct.

6. Kaplan Inc. applies overhead on the basis of direct labor hours. During 2012, the predetermined overhead rate used was $9.00. If overhead was underapplied by $16,500 during 2012, which of the following would not be a reason for the underapplied overhead?

A.Estimated direct labor hours differed from actual direct labor hours.

B.Applied overhead was lower than actual overhead.

C.Estimated overhead costs differed from actual overhead costs.

D.Applied overhead was higher than actual overhead.

E.None of the answer choices is correct.

7. The overhead costs applied to jobs using a predetermined overhead rate are recorded by debiting Work in Process Inventory and crediting Manufacturing Overhead.

A.True

B.False

8. When a manufacturing company purchases raw materials, the Raw Materials Inventory account is debited.

A.True

B.False

9. The entry to record wages owed to the production supervisor should include a debit to:

A.Wages Payable.

B.Wages Expense.

C.Work in Process Inventory.

D.Manufacturing Overhead.

E.None of the answer choices is correct.

10. Assume Clayton Company has an immaterial credit balance in the Manufacturing Overhead account. The entry to close the Manufacturing Overhead account should include a:

A.credit to Finished Goods Inventory.

B.credit to Work in Process Inventory.

C.credit to Cost of Goods Sold.

D.debit to Cost of Goods Sold.

E.None of the answer choices is correct.

11. If the Manufacturing Overhead account has a credit balance after overhead has been applied to products, manufacturing overhead:

A.has been closed.

B.has been applied incorrectly.

C.is underapplied.

D.is overapplied.

E.None of the answer choices is correct.

12. The three most common allocation bases for establishing a predetermined overhead rate include direct labor hours, machine hours, and direct labor costs.

A.True

B.False

13. A movie production company would likely use a job costing system to track revenues and costs.

A.True

B.False

14. Which of the following companies would probably not use job order costing?

A.A window washing service.

B.A milk manufacturer.

C.A car repair business.

D.An electrician.

E.None of the answer choices is correct.

15. Service organizations often use a predetermined overhead rate similar to manufacturing companies.

A.True

B.False

16. The journal entry for recording timesheet submissions by employees working on various jobs will include a debit to the Direct Labor account.

A.True

B.False

17. When direct materials are transferred into production, the journal entry includes a debit to the Work in Process Inventory account.

A.True

B.False

18. All account names for job costing systems in service organizations are the same as those used by manufacturing companies.

A.True

B.False

19. The Work in Process Inventory account for Baja Manufacturing Company shows a balance of $7,200 at the end of the accounting period. The job cost sheets of the only two uncompleted jobs, Jobs 4 and 7, show respective charges of $2,400 and $1,200 for direct materials used. Jobs 4 and 7 also show respective charges of $1,600 and $800 for direct labor used. Based on this information, what is the predetermined overhead rate as a percentage of direct labor costs that Morris is using? To find total overhead applied, take the total WIP Inventory balance and subtract direct materials and direct labor as follows: $7,200 ($2,400 + $1,200) ($1,600 + $800) = $1,200 total overhead applied to both jobs; Predetermined rate = cost applied / direct labor cost = $1,200 / ($1,600 + $800) = 50%

A.200%
B.50%
C.33.3%
D.16.7%
E.None of the answer choices is correct.