Managerial Accounting Exam

Answer Key: 1. B 2. B 3. D 4. B 5. D 6. A 7. B 8. A 9. B 10. D 11. D 12. B 13. B 14. A 15. A 16. D 17. D 18. C 19. B 20. B Managerial Accounting Sample Quiz 1) Which of the following is the correct formula to compute the predetermined overhead rate? A) Predetermined overhead rate = Estimated total units in the allocation base ÷ Estimated total manufacturing overhead costs B) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Estimated total units in the allocation base C) Predetermined overhead rate = Actual total manufacturing overhead costs ÷ Estimated total units in the allocation base D) Predetermined overhead rate = Estimated total manufacturing overhead costs ÷ Actual total units in the allocation base. 2) Which of the following would usually be found on a job cost sheet under a normal cost system? A) B) C) D) Actual direct material cost Yes Yes No No Actual manufacturing overhead cost Yes No Yes No A) Choice A B) Choice B C) Choice C D) Choice D 3) Which of the following statements is not correct concerning multiple overhead rate systems? A) A multiple overhead rate system is more complex than a system based on a single plantwide overhead rate. B) A multiple overhead rate system is usually more accurate than a system based on a single plantwide overhead rate. C) A company may choose to create a separate overhead rate for each of its production departments. D) In departments that are relatively labor-intensive, their overhead costs should be applied to jobs based on machine-hours rather than on direct labor-hours. 4) Purves Corporation is using a predetermined overhead rate that was based on estimated total fixed manufacturing overhead of $121,000 and 10,000 direct labor-hours for the period. The company incurred actual total fixed manufacturing overhead of $113,000 and 10,900 total direct labor-hours during the period. The predetermined overhead rate is closest to: A) $10.37 B) $12.10 C) $11.10 D) $11.30 5) Reamer Corporation uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The Corporation has provided the following estimated costs for next year: Direct materials Direct labor Sales commissions Salary of production supervisor Indirect materials Advertising expense Rent on factory equipment $ $ $ $ $ $ $ 1,000 3,000 4,000 2,000 400 800 1,000 Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be: A) $6.80 per machine-hour B) $6.00 per machine-hour C) $3.00 per machine-hour D) $3.40 per machine-hour 6) Longobardi Corporation bases its predetermined overhead rate on the estimated labor-hours for the upcoming year. At the beginning of the most recently completed year, the Corporation estimated the labor-hours for the upcoming year at 46,000 labor-hours. The estimated variable manufacturing overhead was $6.25 per labor-hour and the estimated total fixed manufacturing overhead was $1,026,260. The actual labor-hours for the year turned out to be 41,200 laborhours. The predetermined overhead rate for the recently completed year was closest to: A) $28.56 per labor-hour B) $22.31 per labor-hour C) $6.25 per labor-hour D) $31.16 per labor-hour 7) Laflame Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on machine-hours. The company based its predetermined overhead rate for the current year on the following data: Total machine-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour The estimated total manufacturing overhead is closest to: A) $273,000 B) $630,000 C) $357,004 D) $357,000 70,000 $ 357,000 $ 3.90 8) Mundorf Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH Forming Assembly Total 9,000 1,000 10,000 $ 52,200 $ 2,400 $ 54,600 $ 2.00 $ 2.10 During the most recent month, the company started and completed two jobs—Job B and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job B Job H 6,100 2,900 400 600 Forming machine-hours Assembly machine-hours Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job B is closest to: A) $48,555 B) $35,490 C) $2,988 D) $45,567 9) Parido Corporation has two manufacturing departments—Casting and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH Forming Assembly Total 8,000 2,000 10,000 $ 44,000 $ 4,200 $ 48,200 $ 1.90 $ 3.00 During the most recent month, the company started and completed two jobs—Job A and Job H. There were no beginning inventories. Data concerning those two jobs follow: Job A Job H Casting machine-hours 5,400 2,600 Assembly machine-hours 800 1,200 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. The amount of manufacturing overhead applied to Job H is closest to: A) $8,328 B) $26,372 C) $18,316 D) $18,044 10) Juanita Corporation uses a job-order costing system and applies overhead on the basis of direct labor cost. At the end of October, Juanita had one job still in process. The job cost sheet for this job contained the following information: Direct materials Direct labor Manufacturing overhead applied $ 480 $ 150 $ 600 An additional $100 of labor was needed in November to complete this job. For this job, how much should Juanita have transferred to finished goods inventory in November when it was completed? A) $1,330 B) $500 C) $1,230 D) $1,730 11) Tancredi Corporation has two manufacturing departments—Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Molding Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH Customizing Total 5,000 5,000 10,000 $ 22,000 $ 11,500 $ 33,500 $ 1.80 $ 3.00 During the most recent month, the company started and completed two jobs—Job E and Job J. There were no beginning inventories. Data concerning those two jobs follow: Direct materials Direct labor cost Machining machine-hours Customizing machine-hours Job E Job J $ 12,800 $ 7,000 $ 17,600 $ 7,700 3,400 1,600 2,000 3,000 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours. If both jobs are sold during the month, the company's cost of goods sold for the month would be closest to: A) $61,450 B) $41,150 C) $110,808 D) $102,600 12) Stockmaster Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH Forming Assembly Total 5,000 5,000 10,000 $ 27,000 $ 10,500 $ 37,500 $ 1.10 $ 2.80 During the most recent month, the company started and completed two jobs—Job C and Job H. There were no beginning inventories. Data concerning those two jobs follow: Direct materials Direct labor cost Forming machine-hours Assembly machine-hours Job C Job H $ 11,200 $ 7,500 $ 21,000 $ 7,800 3,400 1,600 2,000 3,000 Assume that the company uses a plantwide predetermined manufacturing overhead rate based on machine-hours and uses a markup of 40% on manufacturing cost to establish selling prices. The calculated selling price for Job C is closest to: A) $96,989 B) $88,172 C) $25,192 D) $62,980 13) Doakes Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per direct labor-hour 60,000 $ 378,000 $ 2.20 Recently, Job M843 was completed with the following characteristics: Number of units in the job Total direct labor-hours Direct materials Direct labor cost The unit product cost for Job M843 is closest to: A) $33.75 60 120 $ 630 $ 2,400 B) $67.50 C) $27.50 D) $50.50 14) Molash Corporation has two manufacturing departments—Machining and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH Assembly 2000 $ 9,400 $ $ 1.80 $ Total 3000 5000 8,100 $ 17,500 2.40 During the most recent month, the company started and completed two jobs—Job B and Job L. There were no beginning inventories. Data concerning those two jobs follow: Direct materials Direct labor cost Machining machine-hours Assembly machine-hours Job B Job L $ 14,400 $ 7,100 $ 23,500 $ 6,700 1,400 600 1,200 1,800 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 50% on manufacturing cost to establish selling prices. The calculated selling price for Job L is closest to: A) $40,320 B) $41,933 C) $13,440 D) $26,880 15) Columbo Corporation has two production departments, Forming and Finishing. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Forming Department's predetermined overhead rate is based on machine-hours and the Finishing Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Forming Finishing 17,000 10,000 1,000 9,000 $ 110,500 $ 78,300 $ 1.60 Variable manufacturing overhead per machine-hour $ 3.30 During the current month the company started and finished Job A948. The following data were recorded for this job: Job A948: Machine-hours Direct labor-hours Direct materials Direct labor cost Forming Finishing 70 10 $ 650 $ 380 30 50 $ 330 $ 1,900 If the company marks up its manufacturing costs by 40% then the selling price for Job A948 would be closest to: A) $6,197.80 B) $1,770.80 C) $4,427.00 D) $6,818.00 16) Ashe Corporation has two manufacturing departments—Machining and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Machining Estimated total machine-hours (MHs) Estimated total fixed manufacturing overhead cost Estimated variable manufacturing overhead cost per MH Customizing 1,000 4,000 $ 4,700 $ $ $ 1.10 Total 5,000 9,200 $ 13,900 2.60 During the most recent month, the company started and completed two jobs—Job B and Job K. There were no beginning inventories. Data concerning those two jobs follow: Machining machine-hours Customizing machine-hours Job B Job K 700 300 1,600 2,400 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. The manufacturing overhead applied to Job K is closest to: A) $11,760 B) $1,740 C) $13,716 D) $13,500 17) Boward Corporation has two production departments, Milling and Assembly. The company uses a job-order costing system and computes a predetermined overhead rate in each production department. The Milling Department's predetermined overhead rate is based on machine-hours and the Assembly Department's predetermined overhead rate is based on direct labor-hours. At the beginning of the current year, the company had made the following estimates: Machine-hours Direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per machine-hour Variable manufacturing overhead per direct labor-hour Milling Assembly 18,000 12,000 2,000 7,000 $ 120,600 $ 76,300 $ 2.00 $ 4.30 During the current month the company started and finished Job T818. The following data were recorded for this job: Job T818: Machine-hours Direct labor-hours Milling 50 10 Assembly 30 40 The total amount of overhead applied in both departments to Job T818 is closest to: A) $1,651 B) $608 C) $435 D) $1,043 18) Camm Corporation has two manufacturing departments—Forming and Assembly. The company used the following data at the beginning of the year to calculate predetermined overhead rates: Forming Assembly Total Estimated total machine-hours (MHs) 3,000 2,000 5000 Estimated total fixed manufacturing overhead cost $ 12,600 $ 4,600 $ 17,200 Estimated variable manufacturing overhead cost per MH $ 1.70 $ 2.50 Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments. The departmental predetermined overhead rate in the Assembly Department is closest to: A) $2.50 B) $2.30 C) $4.80 D) $5.46 19) Huang Aerospace Corporation manufactures aviation control panels in two departments, Fabrication and Assembly. In the Fabrication department, Huang uses a predetermined overhead rate of $30 per machine-hour. In the Assembly department, Huang uses a predetermined overhead rate of $12 per direct labor-hour. During the current year, Job #X2984 incurred the following number of hours in each department: Machine-hours Direct labor-hours Fabrication 40 3 Assembly 12 25 What is the total amount of manufacturing overhead that Huang should have applied to Job #X2984 during the current year? A) $1,200 B) $1,500 C) $1,560 D) $1,734 20) Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hours. The company based its predetermined overhead rate for the current year on the following data: Total direct labor-hours Total fixed manufacturing overhead cost Variable manufacturing overhead per direct labor-hour 40,000 $ 96,000 $ 3.00 Recently, Job P951 was completed with the following characteristics: Number of units in the job Total direct labor-hours Direct materials Direct labor cost The unit product cost for Job P951 is closest to: A) $237.75 B) $264.75 C) $64.75 D) $52.95 20 100 $ 755 $ 4,000