16) Assigning manufacturing overhead to a specific job is complicated by all of the below except:…
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Question “16) Assigning manufacturing overhead to a specific job is complicated by all of the below except:…”
16) Assigning manufacturing overhead to a specific job is
complicated by all of the below except:
A) Manufacturing overhead is an indirect cost that is either
impossible or difficult to trace to a particular job.
B) Manufacturing overhead is incurred only to support some
jobs.
C) Manufacturing overhead consists of both variable and fixed
costs.
D) The average cost of actual fixed manufacturing overhead
expenses will vary depending on how many units are produced in a
period.
17) Which of the following statements about using a plantwide
overhead rate based on direct labor is correct?
A) Using a plantwide overhead rate based on direct labor-hours
will ensure that direct labor costs are correctly traced to
jobs.
B) Using a plantwide overhead rate based on direct labor costs
will ensure that direct labor costs will be correctly traced to
jobs
C) It is often overly simplistic and incorrect to assume that
direct labor-hours is a company’s only manufacturing overhead cost
driver.
D) The labor theory of value ensures that using a plantwide
overhead rate based on direct labor will do a reasonably good job
of assigning overhead costs to jobs.
18) Which of the following would usually be found on a job cost
sheet under a normal cost system?
Actual direct material cost | Actual manufacturing overhead cost | |
A) | Yes | Yes |
B) | Yes | No |
C) | No | Yes |
D) | No | No |
A) Choice A
B) Choice B
C) Choice C
D) Choice D
19) Which of the following statements is not correct concerning
multiple overhead rate systems?
A) A multiple overhead rate system is more complex than a system
based on a single plantwide overhead rate.
B) A multiple overhead rate system is usually more accurate than
a system based on a single plantwide overhead rate.
C) A company may choose to create a separate overhead rate for
each of its production departments
D) In departments that are relatively labor-intensive, their
overhead costs should be applied to jobs based on machine-hours
rather than on direct labor-hours.
20) Johansen Corporation uses a predetermined overhead rate
based on direct labor-hours to apply manufacturing overhead to
jobs. The Corporation has provided the following estimated costs
for the next year:
Direct materials | $ | 6,000 |
Direct labor | $ | 20,000 |
Rent on factory building | $ | 15,000 |
Sales salaries | $ | 25,000 |
Depreciation on factory equipment | $ | 8,000 |
Indirect labor | $ | 12,000 |
Production supervisor’s salary | $ | 15,000 |
Jameson estimates that 20,000 direct labor-hours will be worked
during the year. The predetermined overhead rate per hour will
be:
A) $2.50 per direct labor-hour
B) $2.79 per direct labor-hour
C) $3.00 per direct labor-hour
D) $4.00 per direct labor-hour
21) Purves Corporation is using a predetermined overhead rate
that was based on estimated total fixed manufacturing overhead of
$121,000 and 10,000 direct labor-hours for the period. The company
incurred actual total fixed manufacturing overhead of $113,000 and
10,900 total direct labor-hours during the period. The
predetermined overhead rate is closest to:
A) $10.37
B) $12.10
C) $11.10
D) $11.30
Answer
Answer 16
C) Manufacturing overhead includes both fixed and variable costs.
Answer 17
D) According to the labor theory of value, a plantwide overhead rate that is based on direct labor will do an acceptable job at assigning overhead costs for jobs.
Answer 18
Choice A
Answer 19
B) Multiple overhead rates are usually more accurate than systems based on one plantwide overhead rate.
Answer 20
A) 2.50 dollars per hour of direct labor
Answer 21
A) $10.37
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