Ryan's Paints allocates overhead based on machine hours

1. Ryan's Paints allocates overhead based on machine hours. Selected data for the most recent year follow.
   Estimated manufacturing overhead cost $300,000
   Actual manufacturing overhead cost $290,000
   Estimated machine hours 20,000
   Actual machine hours 22,000
   The estimates were made as of the beginning of the year, while the actual results were for the entire year.
   The manufacturing overhead for the year would have been
   $40,000 over allocated.
   $10,000 under allocated.
   $10,000 over allocated.
   $40,000 under allocated.

$40,000 overallocated.

2. The difference between the sales price and the job cost is
   cost or goods sold,
   net income,
   operating income,
   gross profit.

gross profit.

3. Ryan Fabrication allocates manufacturing overhead to each job using departmental overhead rates. Ryan's operations are divided into a metal casting department and a metal finishing department. The
   casting department uses a departmental overhead rate of $52 per machine hour, while the finishing department uses a departmental overhead rate of $28 per direct labor hour. Job A216 used the following
   direct labor hours and machine hours in the two departments:
   Casting Finishing
   Actual results Department Department
   Direct labor hours used 5 12
   Machine hours used 4 3
   The cost for direct labor is $32 per direct labor hour and the cost of the direct materials used by Job A216 is $1,800.
   How much manufacturing overhead would be allocated to Job A216 using the deoartmental overhead rates?
   $1,360
   $454
   $596
   $544

$544

4. Which of the following product costing systems is normally used to assign costs to goods that are mass produced?
   Process costing
   LIFO costing
   Job costing
   Fixed costing

Process costing

5. At Onyx Incorporated, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include:
   WIP beginning (70% for conversion) 15,200 units
   Units started 150,000 units
   Units completed and transferred out 120,000 units
   WIP ending (50% for conversion) 45,200 units
   Beginning WIP direct materials $52,500
   Beginning WIP conversion costs $25,200
   Costs of materials added $443,100
   Costs of conversion added $260,000
   What are the total equivalent units for conversion costs?
   130,460
   165,200
   142,600
   151,640

142,600

6. Chicago Steel's operating activities for the year are listed below.
   Beginning inventory $ 1,000,000
   Ending inventory $ 350,000
   Purchases $ 750,000
   Sales revenue $ 1,500,000
   Operating expenses $ 700,000
   What is the cost of goods sold for the year?
   $50,000
   $750,000
   $1,400,000
   $1,750,000

$1,400,000

7. Cost of goods sold is debited and finished goods inventory is credited for
   transfer of materials into work in process inventory,
   purchase of goods on account,
   transfer of goods to the finished goods storeroom,
   the sale of goods to a customer.

the sale of goods to a customer.

8. Which of the following types of information differs between alternatives and can affect the future?
   Relevant
   Predictable
   Historical
   Irrelevant

Relevant

9. Which product costing system would better account for a unique product?
   Product costing system
   Overhead costing system
   Process costing system
   Job costing system

Job costing system

10. Color Wheel has 3,500 gallons of paint in WIP inventory, with 75% of materials already added. The paint is 60% through the process. Assuming all conversion costs are added evenly throughout the process,
    what are the equivalent units for conversion costs?
    2,625
    525
    2,100
    0

2,100