Question : 51. Teresa Summerlin manufactures hand-crafted pottery. Overhead applied to products based : 1295567

 

 

51. Teresa Summerlin manufactures hand-crafted pottery. Overhead is applied to products based on direct labor hours. At the beginning of the current year, Teresa estimated total overhead costs would be $30,000 and estimated direct labor hours would be 20,000. Actual overhead costs for the year totaled $36,000 for 18,000 actual direct labor hours.

Refer to the Teresa Summerlin information above. How much overhead was applied during the year? 
A. $27,000
B. $40,000
C. $32,400
D. $33,400

 

52. Teresa Summerlin manufactures hand-crafted pottery. Overhead is applied to products based on direct labor hours. At the beginning of the current year, Teresa estimated total overhead costs would be $30,000 and estimated direct labor hours would be 20,000. Actual overhead costs for the year totaled $36,000 for 18,000 actual direct labor hours.

Refer to the Teresa Summerlin information above. By how much was overhead underapplied for the year? 
A. $2,600 underapplied
B. $9,000 underapplied
C. $3,000 underapplied
D. $6,000 underapplied

 

53. Nelson Manufacturing applies overhead to its manufactured products based on direct labor hours. Last year, total overhead costs were estimated to be $100,000. Actual overhead costs ended up totaling $115,000 when 10,000 direct labor hours were actually worked. At the end of the year, overhead was overapplied by $6,000.

What was the predetermined overhead rate that must have been used during the year? 
A. $11.50 per direct labor hour
B. $10.60 per direct labor hour
C. $12.10 per direct labor hour
D. $10.90 per direct labor hour

 

54. Southern Manufacturing applies overhead to its products based on direct labor hours. During 2005, the company allocated overhead using a predetermined overhead rate of $5.25. At the end of 2005, it was determined that overhead was underapplied by $10,000. Which of the following could not be a possible reason for overhead being underapplied? 
A. Estimated overhead costs differed from actual overhead costs.
B. Estimated direct labor hours differed from actual direct labor hours.
C. The cost driver does not have enough correlation with overhead costs.
D. Applied overhead was higher than actual overhead.

 

55. Wintergreen Products allocates overhead based on direct labor hours. During 2005, overhead was overapplied by $4,000. Assuming that the year-end adjustment to clear out the overapplied overhead has not yet been done, which of the following statements is most likely true if there are no ending inventories? 
A. Cost of goods manufactured is understated
B. Direct labor costs are overstated
C. Cost of goods sold is overstated
D. Net income is overstated

 

56. Newman Manufacturing underapplied its manufacturing overhead during 2005. Which of the following statements is true regarding the adjustment to clear out the underapplied overhead? 
A. Period expenses will be increased
B. Cost of goods sold will be increased
C. Work-in-process will be decreased
D. Finished goods will be decreased

 

57. If the under- or overapplied overhead amount is considered material, which of the following accounts would be the least likely to be adjusted at the end of the year? 
A. Work-in-process
B. Finished goods
C. Cost of goods sold
D. Raw materials

 

58. Which of the following statements is true regarding process costing? 
A. Product costs are tracked and assigned to each job.
B. Product costs are tracked to particular departments and then assigned evenly to the products that pass through each department.
C. There should not be any beginning or ending work-in-process inventory.
D. The units produced by a processing department should all be different in some way or another.

 

59. Which type(s) of cost(s) are accumulated, tracked, and assigned to products when a company uses process costing? 
A. Direct materials only
B. Direct labor only
C. Direct labor and overhead
D. Direct materials, direct labor, and overhead

 

60. In its initial year of operation, Montoya Manufacturing started and completed 4,000 identical widgets and had 1,000 widgets that were 40% complete in work-in-process at the end of the year. Total production costs for the year were $55,000. How many total equivalent units were completed during the year? 
A. 4,600
B. 5,000
C. 4,000
D. 4,400

 

 

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