1. When job order costing is used in a service business, the allocation of direct labor costs is normally based on direct labor hours, and the allocation of indirect costs is normally based on the indirect labor hours.

True

False

2. Which of the following would NOT be considered a manufacturing overhead cost?

Depreciation of plant equipment

Direct Labor Cost

Plant Utilities Cost

Indirect Labor

Answer

3. Which of the following describes the allocation base for allocating manufacturing overhead costs?

The factor that reflects the relationship between goods produced and the amount of overhead costs incurred

The estimated base amount of manufacturing overhead costs in a year

The percentage used to allocate direct labor to work in process

The formula for allocating depreciation expense over the life on an asset

Answer

4. During 2012, a company incurs $500,000 of manufacturing overhead costs and allocates out $460,000 of manufacturing overhead costs. At year-end, the adjustment entry needed to clear the overhead balance to zero will include a debit to Cost of goods sold.

True

False

5.

The records at Smith and Jones Company show Job. No. 110 charged with $11,000 of direct materials and $12,500 of direct labor. Smith and Jones Company allocates manufacturing overhead at 85% of direct labor cost. What is the total cost of Job No. 110?

20625

34125

22500

21625

6. Which of the following would be included in the journal entry to record direct labor costs actually incurred?

Debit to work in process inventory

Debit to Wages Payable

Debit to Manufacturing Overhead

Debit to finished goods inventory

7. At the end of the year, Martin Company has a preliminary credit balance in the Manufacturing overhead account of $95. Which of the following is the year-end adjusting entry needed to clear the balance to zero?

Debit Cost of goods sold 95, credit finished goods inventory 95

Debit Manufacturing overhead 95, credit finished goods inventory 95

Debit Manufacturing overhead 95 Credit cost of goods sold 95

Debit cost of goods sold 95 credit manufacturing overhead 95

8.

If there are 500 units in Department 1 Work in process account at the end of the month, and they are 80% complete with respect to conversion costs, they would be accounted for as 400 equivalent units with respect to conversion costs.

True

False

9. Altina Company just finished job A40. It included $400 of direct materials, and $3,600 of direct labor. Altina uses a predetermined manufacturing overhead rate based on a percentage of direct labor costs. That rate is 40%. The entry to record the completion of the job should be a:

Answer

		debit to Finished goods $5,440, and a credit to Materials inventory $5,440.
		debit to Cost of goods sold $5,440, and a credit to Finished goods $5,440.
		debit to Finished goods $5,440, and a credit to Work in process $5,440.
		debit to Work in process $5,440, and a credit to Finished goods $5,440.

Answer

Answe