Quiz 2

1.  A normal cost system applies overhead to jobs ________.

by multiplying a predetermined overhead rate by the estimated amount of the allocation base incurred by the job
by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the job
using the actual amount of overhead caused by each job
using the normal amount of overhead caused by each job

2.  Spartan Corporation estimates that it will incur $200,000 of total manufacturing overhead cost at an estimated activity level of 10,000 direct labor-hours. What is the amount of manufacturing overhead that would be applied to a job that required 200 direct labor-hours?

$2,000
$4,000
$6,000

3.  Wilson Products uses a plantwide predetermined overhead rate of $10 per direct labor-hour. Direct material and direct labor associated with Job X23 are $4,000 and $1,200, respectively.  If Job X23 used 100 direct labor-hours, what is the total cost assigned to this job?

$5,000
$5,200
$6,000
$6,200

Wilson Products uses a plantwide predetermined overhead rate of $10 per direct labor-hour. Direct material and direct labor associated with Job X23 are $4,000 and $1,200, respectively.  If Job X23 used 100 direct labor-hours to produce 50 audio controllers, what is this job’s unit product cost (per audio controller)?

$52
$62
$100
$124

4.  Companies can improve job cost accuracy by using ________.

a plantwide overhead rate
direct-labor hours to apply overhead
multiple predetermined overhead rates
number of units in the job to apply overhead

5.  What is the term used when a company applies less overhead to production than it actually incurs?

Misapplied
Overapplied
Unadjusted
Underapplied

The adjustment for overapplied overhead ________.

decreases cost of goods sold and decreases net operating income.
decreases cost of goods sold and increases net operating income.

increases cost of goods sold and decreases net operating income.
increases cost of goods sold and increases net operating income.

Knowledge Check 03
When all of a company’s job cost sheets are viewed collectively they form what is known as a ________.

general ledger
inventory
job-order costing system
subsidiary ledger

6.  The following data have been recorded for recently completed Job 450 on its job cost sheet. Direct materials cost was $2,132. A total of 40 direct labor-hours and 238 machine-hours were worked on the job. The direct labor wage rate is $17 per labor-hour. The Corporation applies manufacturing overhead on the basis of machine-hours. The predetermined overhead rate is $23 per machine-hour. The total cost for the job on its job cost sheet would be:

$10,431
$5,242
$8,286
$5,661