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Exam 6: Fundamentals of Product and Service Costing

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Question 41

True/False

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The predetermined overhead rate is calculated by dividing the prior period's overhead cost by the prior period's allocation base (i.e. ,activity level).The formula uses the current period or a future period for both overhead and activity level.Absent this,historic relationship can be used.

A) True
B) False

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Question 42

Multiple Choice

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The cost per unit of the allocation base used to charge overhead to products is the:

A) job cost.
B) predetermined overhead rate.
C) operational cost.
D) process cost.

E) All of the above
F) A) and B)

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Question 43

Multiple Choice

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Acme,Inc.had overhead of $310,000 during the year when $260,000 in labor costs were incurred.Estimates at the start of the year for overhead and labor costs were $300,000 for overhead and $250,000 for labor costs.The predetermined overhead rate would be:

The term "product" often refers to an organization's output and includes both tangible items (e.g. ,chair,desk,etc. )and intangible items (e.g. ,services provided).This is a definition of product.

The basic cost flow model is:

Mansfield Corporation estimates its manufacturing overhead costs to be $160,000 and its direct labor costs to be $320,000 for 2012.The actual manufacturing labor costs were $80,000 for job 1,$120,000 for job 2 and $160,000 for job 3 during 2012.Manufacturing overhead is applied to jobs on the basis of direct labor costs using a predetermined overhead rate.The actual manufacturing overhead cost for the year was $172,000.The amount of overhead assigned to Job 3 during 2012 was:

A hybrid costing system that is often used when manufacturing goods that have some common characteristics plus some individual characteristics is called:

For Case (C) above,what is the Beginning Balance (BB) ?

Lo-crete produces quick setting concrete mix.Production of 200,000 tons was started in April,190,000 tons were completed.Material costs were $3,152,000 for the month while conversion costs were $591,000.There was no beginning work-in-process;the ending work-in-process was 70% complete.What is the cost of the product that was completed and transferred to finished goods?

The basic cost flow model is:

The following information has been gathered for Roswell Machining for its fiscal year ending December 31: What is the predetermined factory overhead rate per labor hour?

Fab Co.manufactures textiles.Among Fab's 2012 manufacturing costs were the following salaries and wages: What was the amount of Fab's 2012 indirect labor? (CPA adapted)

Which of the following is the correct formula to compute the predetermined overhead rate?

For Case (A) above,what is the Beginning Balance (BB) ?

The basic cost flow model is:

The following direct labor information pertains to the manufacture of product Frez: What is the standard direct labor cost per unit of product Frez? (CPA adapted)

For which of the following businesses would the job order cost system be appropriate?

The following information has been gathered for the GHI Manufacturing Company for its fiscal year ending December 31: What is the predetermined manufacturing overhead rate,assuming direct labor cost is used as the activity base?

For Case (A) above,what is the Ending Balance (EB) ?

Operation costing is a hybrid system used in manufacturing goods that have some common characteristics and some individual characteristics.This is a definition of operations costing.