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Exam 11: Incremental Analysis

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Question 41

Multiple Choice

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The acquisition of raw materials will

A) Increase Work in Process.
B) Increase Manufacturing Overhead and decrease Raw Materials Inventory.
C) Increase Raw Materials Inventory and Manufacturing Overhead.
D) Increase Raw Materials Inventory.

E) B) and C)
F) A) and D)

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Question 42

Multiple Choice

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Sportly Inc.completed Job No.B14 during 2022.The job cost sheet listed the following: $\begin{array} { l r } \text { Direct materials } & \$ 110,000 \\\text { Direct labor } & \$ 60,000 \\\text { Manufacturing overhead applied } & \$ 82,000 \\\text { Units produced } & 3,000 \text { units } \\\text { Units sold } & 1,800 \text { units }\end{array}$ How much is the cost of the finished goods on hand from this job?

A) $210000
B) $126000
C) $100800
D) $102000

E) A) and B)
F) A) and C)

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Question 43

True/False

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Requisitions for direct materials are recorded daily to the individual job cost sheets.

Direct materials requisitioned from the storeroom should increase the Work In Process Inventory account and the job cost sheets for the individual jobs on which the materials were used.

If Manufacturing Overhead has a negative balance at the end of the period then

The two basic types of cost accounting systems are

Process costing is not used when

At the end of the year the accountant records the amount of the overapplied overhead as a decrease to Cost of Goods Sold.

Raw Materials Inventory Factory Labor and Manufacturing Overhead are all control accounts when a job order cost accounting system is used.

Gulick Company developed the following data for the current year: $\begin{array}{lr}\text { Beginning work in process inventory } & \$ 240,000 \\\text { Direct materials used } & 144,000 \\\text { Actual overhead } & 288,000 \\\text { Overhead applied } & 216,000 \\\text { Cost of goods manufactured } & 264,000 \\\text { Total manufacturing costs } & 720,000\end{array}$ Gulick Company's direct labor cost for the year is

A job order cost system is most appropriate when a large volume of uniform products are produced.

The Work in Process account is decreased for all raw materials purchase returns and allowances.

Process costing is used when

Redman Company manufactures customized desks.The following pertains to Job No.978: $\begin{array}{lr}\text { Direct materials used } & \$ 15,450 \\\text { Direct labor hours worked } & 360 \\\text { Direct labor rate per hour } & \$ 15.00 \\\text { Machine hours used } & 300 \\\text { Predetermined overhead rate per machine hour } & \$ 22.00\end{array}$ What is the total manufacturing cost for Job No.978?

Barnes Company applies overhead on the basis of machine hours.Given the following data compute overhead applied and the under- or overapplication of overhead for the period: $\begin{array}{lr}\text { Estimated annual overhead cost } & \$ 3,000,000 \\\text { Actual annual overhead cost } & \$ 2,970,000 \\\text { Estimated machine hours } & 300,000 \\\text { Actual machine hours } & 295,000\end{array}$

At the beginning of the year Monroe Company estimates annual overhead costs to be $2400000 and that 300000 machine hours will be incurred.Using machine hours as a base the amount of overhead applied during the year if actual machine hours for the year was 315000 hours is

Factory labor should be assigned to selling and administrative expenses on a proportionate basis.

When goods are sold the Cost of Goods Sold is increased and Work in Process Inventory account is decreased.

Fringe benefits and payroll taxes associated with factory workers should be accumulated as a part of Factory Labor.

The job cost sheet does not show