horngren exam 2 Questions With Latest Solutions
2024/25
Which product costing system would be better for custom-order products? - CORRECT ANSWER Job-
costing system
Which of these documents authorizes the purchase of specific raw materials from a specific supplier? -
CORRECT ANSWER Purchase order
A _____________ is used to accumulate the costs of a job - CORRECT ANSWER Job cost record
The assignment of direct and indirect materials to a cost object reduces the _________ - CORRECT
ANSWER Raw materials inventory account
A _______________ is the primary factor that causes a cost to be incurred - CORRECT ANSWER Cost
driver
A ______________ is an estimated manufacturing overhead rate computed at the beginning of the year
- CORRECT ANSWER Predetermined manufacturing overhead rate
Squire corporation charged Job 110 with $14,000 of direct materials and $12,600 of direct labor.
Allocation for manufacturing overhead is 70% of direct labor costs. What is the total cost of Job 110? -
CORRECT ANSWER (0.7 * 12,600) + 12,600 + 14,000 = $35,420
Maple Company uses a job costing system. Maple Company's schedule of cost of goods manufactured
showed the following amounts for the month ended August 31.
Cost of DM used: $42,800
COGM: $124,900
Cost of DL ($26/hr): 76,700
WIP August 1: 15,500
, MOH cost is allocated at the rate of $21 per direct labor hours.
What is the amount of allocated MOH costs for August? - CORRECT ANSWER (76,700/26) * 21 = $61,950
Sales revenue is $750,200; actual MOH is $120,500; allocated MOH is $96,000; and COGS before
adjustments is $380,800. What is actual gross profit? - CORRECT ANSWER (120,500 - 96,000 = 24,500)
750,000 - 24,500 - 380,800 = $344,900
Underallocated MOH results when - CORRECT ANSWER Actual overhead is greater than allocated
overhead
If MOH has been under-allocated during the period, then which of the following is true? - CORRECT
ANSWER None of the above
When calculating a departmental overhead rate, what should the numerator be? - CORRECT ANSWER
Total estimated departmental overhead cost pool
Lucas industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The
company has two departments: Assembly and Sanding. The Assembly department uses a departmental
overhead rate of $50 per machine hour while sanding department uses a departmental overhead rate of
$25 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two
departments:
Assembly:
-Direct Labor Hours: 7
-Machine Hours used: 11
Sanding:
-Direct Labor Hours: 5
-Machine Hours used: 6
The cost of DL is $25 per direct labor hour and the cost of the direct materials used by Job 603 is $1600.
2024/25
Which product costing system would be better for custom-order products? - CORRECT ANSWER Job-
costing system
Which of these documents authorizes the purchase of specific raw materials from a specific supplier? -
CORRECT ANSWER Purchase order
A _____________ is used to accumulate the costs of a job - CORRECT ANSWER Job cost record
The assignment of direct and indirect materials to a cost object reduces the _________ - CORRECT
ANSWER Raw materials inventory account
A _______________ is the primary factor that causes a cost to be incurred - CORRECT ANSWER Cost
driver
A ______________ is an estimated manufacturing overhead rate computed at the beginning of the year
- CORRECT ANSWER Predetermined manufacturing overhead rate
Squire corporation charged Job 110 with $14,000 of direct materials and $12,600 of direct labor.
Allocation for manufacturing overhead is 70% of direct labor costs. What is the total cost of Job 110? -
CORRECT ANSWER (0.7 * 12,600) + 12,600 + 14,000 = $35,420
Maple Company uses a job costing system. Maple Company's schedule of cost of goods manufactured
showed the following amounts for the month ended August 31.
Cost of DM used: $42,800
COGM: $124,900
Cost of DL ($26/hr): 76,700
WIP August 1: 15,500
, MOH cost is allocated at the rate of $21 per direct labor hours.
What is the amount of allocated MOH costs for August? - CORRECT ANSWER (76,700/26) * 21 = $61,950
Sales revenue is $750,200; actual MOH is $120,500; allocated MOH is $96,000; and COGS before
adjustments is $380,800. What is actual gross profit? - CORRECT ANSWER (120,500 - 96,000 = 24,500)
750,000 - 24,500 - 380,800 = $344,900
Underallocated MOH results when - CORRECT ANSWER Actual overhead is greater than allocated
overhead
If MOH has been under-allocated during the period, then which of the following is true? - CORRECT
ANSWER None of the above
When calculating a departmental overhead rate, what should the numerator be? - CORRECT ANSWER
Total estimated departmental overhead cost pool
Lucas industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The
company has two departments: Assembly and Sanding. The Assembly department uses a departmental
overhead rate of $50 per machine hour while sanding department uses a departmental overhead rate of
$25 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two
departments:
Assembly:
-Direct Labor Hours: 7
-Machine Hours used: 11
Sanding:
-Direct Labor Hours: 5
-Machine Hours used: 6
The cost of DL is $25 per direct labor hour and the cost of the direct materials used by Job 603 is $1600.
