ACCT 526 LATEST CORE EXAM TEST QUESTIONS AND
SOLUTIONS RATED A+
✔✔Which of the following is a reason for the occurrence of overhead variances?
a.Nonuniform production and nonuniform actual overhead costs
b.Only nonuniform production costs
c.Only nonuniform actual overhead costs
d.Nonuniform production and nonuniform direct materials cost - ✔✔a.Nonuniform
production and nonuniform actual overhead costs
✔✔Beta Corporation is planning operations for the coming year. Beta uses normal
costing and applies overhead on the basis of direct labor hours. The estimated
overhead cost amounts to $10,000,000, estimated direct labor hours are 100,000,
estimated direct labor cost amounts to $3,100,000, and estimated direct materials cost
is $24,000,000. What is Beta's predetermined overhead rate?
a.$100 per direct labor hour
b.$42 per direct labor hour
c.$70 per direct labor hour
d.$31 per direct labor hour - ✔✔a.$100 per direct labor hour
10,000,000/100,000=100
✔✔When a job is complete, the costs of the completed job are transferred from: -
✔✔the work-in-process account to the finished goods account.
✔✔the journal entry to record application of overhead to jobs, under the job-order
costing system. - ✔✔Debit Work in Process; Credit Overhead Control
✔✔At the end of a period, all the nonmanufacturing costs flow to the: - ✔✔period's
income statement.
✔✔A company has $2,900 of overapplied overhead for a period. Identify the journal
entry made to adjust the overapplied overhead at the end of the period. - ✔✔Debit
Overhead Control for $2,900; Credit Cost of Goods Sold for $2,900
✔✔Which of the following is true of the direct method of support department cost
allocation?
a.It assigns support department costs only to the producing departments.
b.It assigns support department costs in a step-down fashion of allocation.
c.It allocates support department costs by following a predetermined ranking procedure.
d.It recognizes the interaction between support departments. - ✔✔a.It assigns support
department costs only to the producing departments.
, ✔✔Which of the following methods of support department cost allocation recognizes all
the interaction among the support departments?
a.The direct method
b.The sequential method
c.The reciprocal method
d.The proportional method - ✔✔c.The reciprocal method
✔✔Normal costing determines unit cost by adding: - ✔✔direct materials, direct labor,
and estimated overhead.
✔✔If actual overhead is greater than applied overhead, then the variance is called: -
✔✔underapplied overhead.
✔✔Wisteria Corp. has an overhead rate of $8 per machine hour. In the month of March,
the company used 10,000 hours of machine time. The actual overhead cost for the
month is $99,000. If Wisteria follows normal costing, determine the overhead applied to
the month's production.
a.$19,000
b.$80,000
c.$179,000
d.$99,000 - ✔✔b.$80,000
$8 × 10,000 = $80,000
✔✔Which of the following details is provided by a materials requisition form?
a.Beginning balance of material
b.Unit cost of material
c.Name of supplier of material
d.Closing balance of material - ✔✔b.Unit cost of material
✔✔A job-order cost sheet includes information related to: - ✔✔direct materials, direct
labor, and applied overhead.
✔✔Which of the following costs are a part of the manufacturing cost flows?
a.Office salaries
b.Advertising costs
c.Direct materials cost
d.Sales commission - ✔✔c.Direct materials cost
✔✔The following information relates to Langley Inc. for the month of May:
Beginning raw materials inventory$16,000
Purchases of raw materials during May$7,300
Ending raw materials inventory$5,000
Determine the amount of raw materials used in production during May.
SOLUTIONS RATED A+
✔✔Which of the following is a reason for the occurrence of overhead variances?
a.Nonuniform production and nonuniform actual overhead costs
b.Only nonuniform production costs
c.Only nonuniform actual overhead costs
d.Nonuniform production and nonuniform direct materials cost - ✔✔a.Nonuniform
production and nonuniform actual overhead costs
✔✔Beta Corporation is planning operations for the coming year. Beta uses normal
costing and applies overhead on the basis of direct labor hours. The estimated
overhead cost amounts to $10,000,000, estimated direct labor hours are 100,000,
estimated direct labor cost amounts to $3,100,000, and estimated direct materials cost
is $24,000,000. What is Beta's predetermined overhead rate?
a.$100 per direct labor hour
b.$42 per direct labor hour
c.$70 per direct labor hour
d.$31 per direct labor hour - ✔✔a.$100 per direct labor hour
10,000,000/100,000=100
✔✔When a job is complete, the costs of the completed job are transferred from: -
✔✔the work-in-process account to the finished goods account.
✔✔the journal entry to record application of overhead to jobs, under the job-order
costing system. - ✔✔Debit Work in Process; Credit Overhead Control
✔✔At the end of a period, all the nonmanufacturing costs flow to the: - ✔✔period's
income statement.
✔✔A company has $2,900 of overapplied overhead for a period. Identify the journal
entry made to adjust the overapplied overhead at the end of the period. - ✔✔Debit
Overhead Control for $2,900; Credit Cost of Goods Sold for $2,900
✔✔Which of the following is true of the direct method of support department cost
allocation?
a.It assigns support department costs only to the producing departments.
b.It assigns support department costs in a step-down fashion of allocation.
c.It allocates support department costs by following a predetermined ranking procedure.
d.It recognizes the interaction between support departments. - ✔✔a.It assigns support
department costs only to the producing departments.
, ✔✔Which of the following methods of support department cost allocation recognizes all
the interaction among the support departments?
a.The direct method
b.The sequential method
c.The reciprocal method
d.The proportional method - ✔✔c.The reciprocal method
✔✔Normal costing determines unit cost by adding: - ✔✔direct materials, direct labor,
and estimated overhead.
✔✔If actual overhead is greater than applied overhead, then the variance is called: -
✔✔underapplied overhead.
✔✔Wisteria Corp. has an overhead rate of $8 per machine hour. In the month of March,
the company used 10,000 hours of machine time. The actual overhead cost for the
month is $99,000. If Wisteria follows normal costing, determine the overhead applied to
the month's production.
a.$19,000
b.$80,000
c.$179,000
d.$99,000 - ✔✔b.$80,000
$8 × 10,000 = $80,000
✔✔Which of the following details is provided by a materials requisition form?
a.Beginning balance of material
b.Unit cost of material
c.Name of supplier of material
d.Closing balance of material - ✔✔b.Unit cost of material
✔✔A job-order cost sheet includes information related to: - ✔✔direct materials, direct
labor, and applied overhead.
✔✔Which of the following costs are a part of the manufacturing cost flows?
a.Office salaries
b.Advertising costs
c.Direct materials cost
d.Sales commission - ✔✔c.Direct materials cost
✔✔The following information relates to Langley Inc. for the month of May:
Beginning raw materials inventory$16,000
Purchases of raw materials during May$7,300
Ending raw materials inventory$5,000
Determine the amount of raw materials used in production during May.
