2. Which of these documents authorizes the purchase of specific raw materials from a specific supplier?

Before the year began, Murphy Manufacturing estimated that manufacturing overhead for the year would be $175,500 and that 13,000 direct labor hours would be worked. Actual results for the year included the following:

Actual manufacturing overhead cost......................... $184,000

Actual direct labor hours.......................................... $14,500

3. The predetermined manufacturing overhead rate per direct labor hour is closest to

4. Manufacturers follow four steps to implement a manufacturing overhead allocation system. What is the first step?

5. Sales revenue is #750,000; actual manufacturing overhead is $120,000; allocated manufacturing overhead is $95,000; and cost of goods sold before adjustment is

$380,000. What is the actual gross profit?

6. Job order costing might be used by a

7. Management can use job cost information for each of the following except

8. In job costing, the journal entry to record the use of direct materials on jobs is to debit work in process inventory and credit

9. A typical manufacturing overhead cost would be

10. Manufacturing overhead is underallocated if the amount

11. Manufacturing overhead has an overallocated balance of $7,500; raw materials inventory balance is $62,000; work in process inventory is $34,000; finished goods inventory is $25,000; and cost of goods sold is $135,000. After adjusting for the overallocated manufacturing overhead, what is cost of goods sold?

12. How is the cost – plus price determined?

13. What is the primary factor causing a “cost” called?

14. Manufacturing overhead is allocated on the basis of

15. Under which of the following situations is finished goods inventory debited and work in process inventory credited?

16. In the flow of costs, which of the following comes first?

17. The                  substantiates the balance of the raw materials inventory account shown on the company’s balance sheet.

18. A job costing system can be used by which types of companies?

Ryan’s Paints allocates overhead based on machine hours. Selected data for the most recent year follow.

Estimated manufacturing overhead cost.................. $235,000

Actual manufacturing overhead cost....................... $244,000

Estimated machine hours........................................ $20,000

Actual machine hours.............................................. $22,500

19. The estimates were made as of the beginning of the year, while the actual results were for the entire year.

The predetermined manufacturing overhead rate per machine hour is closest to

20. If manufacturing overhead has been overallocated during the period, and most of the jobs produced have been sold, then

Challenge Tennis & Recreation’s operating activities for the year are listed below.

Purchases..................................... $174,000

Operating expenses...................... $62,000

Beginning inventory...................... $27,000

Ending inventory........................... $37,000

Sales revenue................................ $333,000

21. What is the cost of goods sold for the year?

22. Which of the following are classified as manufacturing overhead?

23. A factory janitor’s wages would be classified as                            when determining the cost of a manufactured product.

24. Macy’s (the department store chain) classifies its clothing held for sale as

25. Where would period costs be found on the financial statements?

26. Subtracting the costs of one alternative from the costs of the other alternative would be called the                                                     cost.

27. Which type of company makes up the largest sector of the United States economy?

28. Testing ways to increase the strength of your product would be classified as which part of the value chain?

29. Average variable costs

30. Which of the following terms describes the process of reevaluating activities to reduce costs while satisfying customers’ needs?

31. If a company were to increase its appraisal costs by inspecting more units as the units are are in production (during production), the company’s external failure costs would most likely

Kramer Company manufactures coffee tables and uses an activity – based costing system to allocate all manufacturing conversion costs. Each coffee tables consists of 20 separate parts totaling $240 in direct materials, and requires 5.0 hours of machine time to produce. Additional information follows:

32. What is the cost of assembling per coffee table?

33. Using traditional costing instead of ABC costing might lead to all of the following except

34. Which of the following is most likely to be the cost driver for the packaging and shipping activity?

James Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding.

The Assembly Department uses a departmental overhead rate of $35 per machine hour, while the Sanding Department uses a departmental overhead rate of $20 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two departments:

The cost for direct labor is $30 per direct labor hour and the cost of the direct materials used by Job 603 is $1,400

35. How much manufacturing overhead would be allocated to Job 603 using the departmental overhead rates?

36. The goal of value – engineering is to