Question :
71. Penn Company uses a job order cost accounting system. In : 1225491
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. Debit Payroll Expense $28,900; credit Cash $28,900.
B. Debit Payroll Expense $24,600; debit Factory Overhead $4,300; credit Factory Payroll $28,900.
C. Debit Goods in Process Inventory $24,600; debit Factory Overhead $4,300; credit Factory Payroll $28,900.
D. Debit Goods in Process Inventory $24,600; debit Factory Overhead $4,300; credit Wages Payable $28,900.
E. Debit Goods in Process Inventory $28,900; credit Factory Payroll $28,900.
72. Labor costs in production can be:
A. Direct or indirect.
B. Indirect or sunk.
C. Direct or payroll.
D. Indirect or payroll.
E. Direct or sunk.
73. 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. $5,000.
B. $16,000.
C. $25,000.
D. $125,000.
E. $250,000.
74. The rate established prior to the beginning of a period that uses estimated overhead and 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.
75. Canoe Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. Canoe Company’s production 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. Alton Company has an overhead application rate of 160% and allocates overhead based on direct materials. During the current period, direct labor is $50,000 and direct materials used are $80,000. Determine the amount of overhead Alton Company should record in the current period.
A. $31,250.
B. $50,000.
C. $80,000.
D. $128,000.
E. $208,000.
77. 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 Expense.
B. Cost of Goods Sold.
C. Finished Goods Inventory.
D. Indirect Labor.
E. Goods in Process Inventory.
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. The R&R Company’s production costs for August are: direct labor, $13,000; indirect labor, $6,500; direct materials, $15,000; property taxes on production equipment, $800; heat, lights and power, $1,000; and insurance on plant and equipment, $200. R&R Company’s factory overhead incurred for August is:
A. $2,000.
B. $6,500.
C. $8,500.
D. $21,500.
E. $36,500.
