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Ace Architects employs two architects,each having a different area of specialization.Caitlin specializes in industrial commercial construction and Zachary specializes in residential construction.Ace expects to incur total overhead costs of $779,625 during the year and applies overhead based on annual salary costs.Caitlin is a senior partner,her annual salary is $168,750,and she is expected to bill 2,000 hours during the year.Zachary is a senior associate,his annual salary is $91,125,and he is expected to bill 1,800 hours during the year. a.Calculate the predetermined overhead rate. b.Assuming that the hourly billing rate should be set to cover the total cost of services plus a 20% markup,compute the hourly billing rates for Caitlin and Zachary.

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a.Predetermined Overhead Rate: $779,625 ...

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Which of the following would be used to record the depreciation of manufacturing equipment?


A) Raw Materials Inventory would be debited.
B) Work in Process Inventory would be debited.
C) Manufacturing Overhead would be debited.
D) Manufacturing Overhead would be credited.

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

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Cadbury Company uses a job order costing system.Manufacturing overhead is applied on the basis of direct labor cost.Total manufacturing overhead was estimated to be $120,000 for the year;direct labor was estimated to total $150,000. Cadbury Company uses a job order costing system.Manufacturing overhead is applied on the basis of direct labor cost.Total manufacturing overhead was estimated to be $120,000 for the year;direct labor was estimated to total $150,000. The following transactions have occurred during the year. a.Calculate the predetermined overhead rate. b.Calculate cost of goods manufactured. c.Calculate the over- or underapplied overhead. d.Calculate adjusted cost of goods sold. The following transactions have occurred during the year. Cadbury Company uses a job order costing system.Manufacturing overhead is applied on the basis of direct labor cost.Total manufacturing overhead was estimated to be $120,000 for the year;direct labor was estimated to total $150,000. The following transactions have occurred during the year. a.Calculate the predetermined overhead rate. b.Calculate cost of goods manufactured. c.Calculate the over- or underapplied overhead. d.Calculate adjusted cost of goods sold. a.Calculate the predetermined overhead rate. b.Calculate cost of goods manufactured. c.Calculate the over- or underapplied overhead. d.Calculate adjusted cost of goods sold.

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a.80% b. Cost of goods manufactured is computed as follows: 11eac99e_8c86_a007_92f1_695e0c240dd1_TB7948_00 c. Overapplied overhead computed as follows: 11eac99e_8c86_a008_92f1_99862acc6849_TB7948_00 d. Adjusted cost of goods sold computed as follows: 11eac99e_8c86_c719_92f1_195d830b74cb_TB7948_00 a.Calculate the predetermined overhead rate by dividing estimated overhead by estimated allocation base of direct labor cost (80% = $120,000/$150,000). b.Apply overhead by multiplying the predetermined overhead rate by the actual allocation base ($100,000 = 80% × $125,000).Cost of goods manufactured equals the sum of direct materials,direct labor,and applied overhead,plus beginning WIP,less ending WIP ($313,000 = $91,000 + $125,000 + $100,000 +$19,000 - $22,000). c.Actual manufacturing overhead is the sum of indirect materials,indirect labor,factory equipment depreciation,factory rent,factory utilities,and other factory costs ($98,000 = $12,000 + $18,000 + $28,000 + $22,000 + $9,500 + $8,500).Subtract applied manufacturing overhead by actual manufacturing overhead to determine it is overapplied ($2,000 = $98,000 - $100,000). d.Unadjusted cost of goods sold is the sum of beginning finished goods inventory and cost of goods manufactured,less ending finished goods inventory ($322,000 = $41,000 + $313,000 - $32,000).Adjust cost of goods sold for the overapplied overhead by reducing it by $2,000 ($320,000 = $322,000 - $2,000).

Which of the following would be used to transfer the cost of completed goods during the period to the Finished Goods account?


A) Credit to Raw Materials Inventory.
B) Credit to Work in Process Inventory.
C) Debit to Manufacturing Overhead.
D) Credit to Manufacturing Overhead.

E) A) and D)
F) All of the above

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Kilt Company had the following information for the year: Kilt Company had the following information for the year: Kilt Company used a predetermined overhead rate of $42.00 per direct labor hour for the year and estimated that direct labor hours would total 5,500 hours.Assume the only inventory balance is an ending Work in Process balance of $17,000.How much overhead was applied during the year? A) $231,000 B) $150,000 C) $166,000 D) $210,000 Kilt Company used a predetermined overhead rate of $42.00 per direct labor hour for the year and estimated that direct labor hours would total 5,500 hours.Assume the only inventory balance is an ending Work in Process balance of $17,000.How much overhead was applied during the year?


A) $231,000
B) $150,000
C) $166,000
D) $210,000

E) All of the above
F) A) and D)

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D

Cost of goods completed is the same as:


A) Cost of Goods Sold.
B) Work in Process Inventory.
C) Cost of Goods Manufactured.
D) Finished Goods Inventory.

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

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Santos Inc.had the following information for the preceding year: Santos Inc.had the following information for the preceding year: Additional information for the year is as follows: What was the ending Work in Process Inventory balance on 12/31? A) $20,000 B) $11,000 C) $50,000 D) $54,000 Additional information for the year is as follows: Santos Inc.had the following information for the preceding year: Additional information for the year is as follows: What was the ending Work in Process Inventory balance on 12/31? A) $20,000 B) $11,000 C) $50,000 D) $54,000 What was the ending Work in Process Inventory balance on 12/31?


A) $20,000
B) $11,000
C) $50,000
D) $54,000

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

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McGown Corp.has the following information: McGown Corp.has the following information: Additional information for the year is as follows: Compute the unadjusted cost of goods sold. A) $133,000 B) $242,000 C) $252,000 D) $255,000 Additional information for the year is as follows: McGown Corp.has the following information: Additional information for the year is as follows: Compute the unadjusted cost of goods sold. A) $133,000 B) $242,000 C) $252,000 D) $255,000 Compute the unadjusted cost of goods sold.


A) $133,000
B) $242,000
C) $252,000
D) $255,000

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

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Which of the following would be used to apply manufacturing overhead to production for the period?


A) Raw Materials Inventory would be debited.
B) Work in Process Inventory would be debited.
C) Manufacturing Overhead would be debited.
D) Work in Process Inventory would be credited.

E) All of the above
F) A) and B)

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A marketing consulting firm would most likely use process costing.

A) True
B) False

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The total amount of cost assigned to jobs that were completed during the year is the cost of goods sold.

A) True
B) False

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When job order costing is used,costs are accumulated on a job cost sheet.

A) True
B) False

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Manufacturing overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $225,000,and actual direct labor hours were 19,000.To dispose of the balance in the Manufacturing Overhead account,which of the following would be correct?


A) Cost of Goods Sold would be credited for $25,000.
B) Cost of Goods Sold would be credited for $12,500.
C) Cost of Goods Sold would be debited for $12,500.
D) Cost of Goods Sold would be debited for $25,000.

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

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Which of the following represents the cost of materials purchased but not yet issued to production?


A) Raw Materials Inventory
B) Work in Process Inventory
C) Finished Goods Inventory
D) Cost of Goods Sold

E) All of the above
F) None of the above

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Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $215,000 and actual labor hours were 21,000.The predetermined overhead rate per direct labor hour would be:


A) $10.00.
B) $1.05.
C) $10.75.
D) $10.24.

E) All of the above
F) A) and B)

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Overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours.Actual overhead was $225,000,and actual direct labor hours were 19,000.The amount debited to the manufacturing overhead account would be:


A) $250,000.
B) $225,000.
C) $213,750.
D) $237,500.

E) All of the above
F) A) and B)

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Koebel Corp.uses a job order costing system with manufacturing overhead applied to products on the basis of direct labor hours.For the upcoming year,Koebel Corp.estimated total manufacturing overhead cost at $500,000 and total direct labor hours of 50,000.Koebel Corp.started the year with no beginning balances in either Work in Process Inventory or Finished Goods Inventory.During the year,actual manufacturing overhead incurred was $512,500 and 49,000 direct labor hours were used. a.Calculate the predetermined overhead rate. b.Calculate how much manufacturing overhead will be applied to production. c.Is overhead over or underapplied? By how much? d.What account should be adjusted for over or underapplied overhead? Should the balance be increased or decreased?

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a.$10
b.$490,000
c.$22,500 underapplied
...

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Which of the following is incorrect regarding service firms?


A) Each client or account is equivalent to a process in a process costing firm.
B) The accounting system will track the time and resources spent serving a specific client or account.
C) Managers of service firms need cost information to price their services,to budget and control costs,and to determine the profitability of different types of clients.
D) The primary driver used to assign costs is billable hours.

E) All of the above
F) A) and B)

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A

Green Cabinets is a custom cabinet builder.They recently completed a set of kitchen cabinets (Job Number 1478),as summarized below: Green Cabinets is a custom cabinet builder.They recently completed a set of kitchen cabinets (Job Number 1478),as summarized below: Green Cabinets applies overhead to jobs at a rate of $12 per direct labor hour. a.How much overhead would be applied to Job #1478? b.What is the total cost of Job #1478? Green Cabinets applies overhead to jobs at a rate of $12 per direct labor hour. a.How much overhead would be applied to Job #1478? b.What is the total cost of Job #1478?

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a.$612
b.$2,480
To apply manufacturing o...

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Optimum Finance Inc.provides budget,savings,and investment services to clients who want a stress-free financial lifestyle.The company customizes a program for each client based on their individual goals that includes budget recommendations,investment counseling,and savings techniques.The company uses a job order cost system that keeps track of the cost of the amount of time financial consultants spend with each client. Optimum applies all indirect operating costs (e.g. ,rent,utilities,and management salaries) as a percentage of the consultant's labor cost.During the most recent year,the firm estimated that it would pay $500,000 to its consultants and incur indirect operating costs of $750,000.Actual consultant labor costs were $537,500 and actual indirect operating costs were $725,000.What is the predetermined overhead rate that Optimum will use for the current year?


A) $1.50 per dollar of consultant labor cost
B) $1.35 per dollar of consultant labor cost
C) $0.67 per dollar of consultant labor cost
D) $1.45 per dollar of consultant labor cost

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

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