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Exam 11: Incremental Analysis

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Question 1

Multiple Choice

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Under an effective system of internal control the authorization for issuing materials is made

A) orally.
B) on a prenumbered materials requisition slip.
C) by the accounting department.
D) by anyone on the production line.

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Question 2

Multiple Choice

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An important feature of a job order cost system is that each job

A) must be similar to previous jobs completed.
B) has its own distinguishing characteristics.
C) must be completed before a new job is accepted.
D) consists of one unit of output.

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B

Question 3

Multiple Choice

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The flow of costs in a job order cost system

The existence of under- or overapplied overhead at the end of the year

If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period overhead is said to be

Cost of goods manufactured equals $85000 for 2022.Finished Goods Inventory is $2000 at the beginning of the year and $5500 at the end of the year.Beginning and ending Work in Process for 2022 are $4000 and $5000 respectively.How much is Cost of Goods Sold for the year?

During 2022 Durham Manufacturing estimated Job No.51 to cost $300000 of overhead $500000 of materials and $200000 in labor.Durham applied overhead based on direct labor cost.Actual production required an overhead cost of $295000 $570000 in materials used and $220000 in labor.All of the goods were completed.What amount was transferred to Finished Goods?

Recording the acquisition of raw materials is a part of accumulating manufacturing costs.

A cost accounting system consists of manufacturing cost accounts that are fully integrated into the accounting rewards of a company.

Usually under- or overapplied overhead is considered to be an adjustment to

If actual overhead is less than applied manufacturing overhead then manufacturing overhead is:

If manufacturing overhead has been overapplied during the year the adjustment at the end of the year will show a(n)

Time tickets should be approved by

A company estimated its annual overhead costs to be $1500000 and direct labor costs to be $1000000.Actual overhead was $1450000 and actual labor costs totaled $1100000.How much is the company's predetermined overhead rate to the nearest cent?

The perpetual inventory method cannot be used in a job order cost system.

A major purpose of cost accounting is to

Vektek Inc.thinks machine hours is the best activity base for its manufacturing overhead.The estimate of annual overhead costs for its jobs was $2050000.The company used 1000 hours of processing on Job No.B12 during the period and incurred overhead costs totaling $2100000.The estimated machine hours for the year totaled 20000.How much overhead should be applied to Job No.B12?

At the end of the year underapplied overhead usually decreases Cost of Goods Sold.

During 2022 Tanner Manufacturing estimated Job No.26 to cost $300000 of overhead $500000 of materials and $200000 in labor.Tanner applied overhead based on direct labor cost.Actual production required an overhead cost of $290000 $550000 in materials used and $220000 in labor.All of the goods were completed.What amount was transferred to Finished Goods?

Gannon Company had the following information at December 31: $\begin{array}{l}\text { Finished goods inventory, January } 1 & \$ 50,000\\\text { Finished goods inventory, December } 31&\$150,000\end{array}$ If the cost of goods manufactured during the year amounted to $2200000 and annual sales were $2750000 the amount of gross profit for the year is