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Chapter 3 Examination
February 15, 2000
Choose the best answer.
1. As production takes place, all manufacturing costs are added to the:
A) Work-in-Process Inventory account.
B) Manufacturing Overhead Inventory account.
C) Cost-of-Goods-Sold account.
D) Finished-Goods Inventory account.
E) Production Labor account.
2. Which of the following entities would not likely be a user of job-costing systems?
A) Custom-furniture manufacturers.
B) Consulting firms.
D) Law firms.
E) None of the above, as all are likely users.
3. A manufacturing firm produces goods in accordance with customer specifications, commencing production upon receipt of a purchase order. To accumulate the cost of each order, the company would use a:
A) job-cost sheet.
B) batch sheet.
C) budget sheet.
D) overhead sheet.
E) manufacturing cost sheet.
4. Fog Company, which uses labor hours to apply overhead to manufacturing, may have increased amounts of underapplied overhead at month-end if:
A) suppliers of direct materials have an across-the-board price increase.
B) the company terminates two production supervisors.
C) employees are hit hard with a widespread outbreak of the flu.
D) direct laborers are granted a wage increase.
E) outlays for advertising expenditures are increased.
5. When underapplied or overapplied manufacturing overhead is prorated, amounts can be assigned to which of the following accounts?
A) Raw-Material Inventory, Manufacturing Overhead, and Direct Labor.
B) Cost of Goods Sold, Work-in-Process Inventory, and Finished-Goods Inventory.
C) Work-in-Process Inventory, Raw-Material Inventory, and Cost of Goods Sold.
D) Raw-Material Inventory, Finished-Goods Inventory, and Cost of Goods Sold.
E) Raw-Material Inventory, Work-in-Process Inventory, and Finished- Goods Inventory
6. A print shop would likely utilize:
A) job-order costing.
B) process costing.
C) job-order budgeting.
D) process budgeting.
E) joint costing.
7. Which of the following manufacturers would most likely use job-order costing?
A) Chemical manufacturers.
B) Microchip processors.
C) Custom-furniture manufacturers.
D) Gasoline refiners.
E) Fertilizer manufacturers.
8. The assignment of direct labor cost to individual jobs is based on:
A) an estimate of the total time spent on the job.
B) actual total payroll cost divided equally among all jobs in process.
C) estimated total payroll cost divided equally among all jobs in process.
D) the actual time spent on each job multiplied by the wage rate.
E) the estimated time spent on each job multiplied by the wage rate.
9. The total production cost of a job is composed of:
A) direct material and direct labor.
B) direct material, direct labor, manufacturing overhead, and outlays for selling costs.
C) direct material, direct labor, manufacturing overhead, and outlays for both selling and administrative costs.
D) direct material, direct labor, and applied manufacturing overhead.
E) direct material, direct labor, and actual manufacturing overhead.
10. Gratis Company applies overhead based on direct labor hours. At the beginning of the year, the company estimated that manufacturing overhead would be $550,000, direct labor hours would be 100,000, and direct labor cost would be $1,100,000. The company's predetermined overhead rate is:
A) $0.18 per direct labor hour.
B) $0.50 per direct labor hour.
C) $2.00 per direct labor hour.
D) $5.50 per direct labor hour.
E) $11.00 per direct labor hour.
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