The most common accounting treatment of underapplied manufacturing overhead is to transfer it to the Manufacturing Overhead control account.

True or False

Indirect materials are NOT charged to a specific job but rather are included in manufacturing overhead.

True or False

The predetermined overhead rate is computed by dividing the total estimated manufacturing overhead cost for the period by the estimated total amount of the allocation base.

True or False

Normally, a job cost sheet is NOT prepared for a job until after the job has been completed.

True or False

Non-manufacturing costs are expensed as incurred, rather than going into the Work in Process account.

True or False

Job-order costing is more likely to be used than process costing in situations where many different products or services are produced each period to customer specifications.

True or False

Which of the following companies is most likely to use a job-order costing system?

Multiple Choice

• Plastic bag manufacturer

• Automobile repair shop

• Crude oil refinery

• Candy maker

For Candy Company, overhead is overapplied for the year by $2,500. The unadjusted cost of goods sold is $360,000. Closing manufacturing overhead into the cost of goods sold will result in which of the following?

Multiple Choice

• Adjusted cost of goods sold of $363,000.

• A credit balance in manufacturing overhead of $6,000.

• Adjusted cost of goods sold of $357,000.

• Adjusted cost of goods sold of $357,500

Sawyer Manufacturing Company uses a predetermined overhead rate based on direct labour hours to apply manufacturing overhead to jobs. Last year, the company worked 60,000 actual direct labour hours and used 42,100 machine hours. The company had estimated that it would work 55,000 direct labour hours using 51,000 machine hours during the year and incur $330,000 of manufacturing overhead cost. What was the company's manufacturing overhead applied for the year?

Multiple Choice

• $342,000

• $360,000

• $330,000

• $388,235