Question : 71. Penn Company uses a job order cost accounting system. : 1256518

 

 

71. Penn Company uses a job order cost accounting system. In the last month, the system accumulated labor time tickets totaling $24,600 for direct labor and $4,300 for indirect labor. These costs were accumulated in Factory Payroll as they were paid. Which entry should Penn make to assign the Factory Payroll? 

(A)

Payroll Expense

28,900

 

 

Cash

 

28,900

 

 

 

 

(B)

Payroll Expense

24,600

 

 

Factory Overhead

4,300

 

 

Factory Payroll

 

28,900

 

 

 

 

(C)

Goods in Process Inventory

24,600

 

 

Factory Overhead

4,300

 

 

Factory Payroll

 

28,900

 

 

 

 

(D)

Goods in Process Inventory

24,600

 

 

Factory Overhead

4,300

 

 

Accrued Wages Payable

 

28,900

 

 

 

 

(E)

Goods in Process Inventory

28,900

 

 

Factory Payroll

 

28,900

 

 

 

 

A. A B. B C. CD. DE.  E

 

 

72. Labor costs in manufacturing can be:A. Direct or indirect.B. Indirect or sunk.C. Direct or payroll.D. Indirect or payroll.E. Direct or sunk.

 

 

73. Canberra Company uses a job order cost accounting system. During the current month, the factory payroll of $180,000 was paid in cash. The amount of labor classified as direct labor was three times greater than the amount classified as indirect labor. What amount should be debited to Factory Overhead for indirect labor for this month?A. $135,000B. $180,000C. $45,000D. $60,000E. $20,000

 

 

74. A company has an overhead application rate of 125% of direct labor costs. How much overhead would be allocated to a job if it required total labor costing $20,000?A. $5,000B. $16,000C. $25,000D. $125,000E. $250,000

 

 

75. Canoe Company’s manufacturing accounting system uses direct labor costs to apply overhead to goods in process and finished goods inventories. Canoe Company’s manufacturing costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied, $6,000. The overhead application rate was:A. 5.0%B. 12.0%C. 20.0%D. 500.0%E. 16.7%

 

 

76. The overhead cost applied to a job during a period is recorded with a credit to Factory Overhead and a debit to:A. Jobs Overhead ExpenseB. Cost of Goods SoldC. Finished Goods InventoryD. Indirect LaborE. Goods in Process Inventory

 

 

77. The rate established prior to the beginning of a period that relates estimated overhead to an allocation factor such as estimated direct labor and that is used to assign overhead cost to jobs is the:A. Predetermined overhead allocation rate.B. Overhead variance rate.C. Estimated labor cost rate.D. Chargeable overhead rate.E. Miscellaneous overhead rate.

 

 

 

 

 

 

 

78. BVD Company uses a job order cost accounting system and last period incurred $80,000 of overhead and $100,000 of direct labor. BVD estimates that its overhead next period will be $75,000. It also expects to incur $100,000 of direct labor. If BVD bases applied overhead on direct labor cost, their overhead application rate for the next period should be:A. 75%B. 80%C. 107%D. 125%E. 133%

 

 

79. O.K. Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. O.K. expects to incur $800,000 of overhead during the next period and expects to use 50,000 labor hours at a cost of $10.00 per hour. What is O.K. Company’s overhead application rate?A. 6.25%B. 62.5%C. 160%D. 1600%E. 67%

 

 

 

 

 

 

 

80. Austin Company uses a job order cost accounting system. The company’s executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period. At the end of the period, the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate?A. $6.00 per direct labor hour.B. $7.50 per direct labor hour.C. $6.67 per direct labor hour.D. $8.33 per direct labor hour.E. $7.08 per direct labor hour.