Cost Measurement Paper 2

1

Under Pick Co.’s job order costing system manufacturing overhead is applied to work in process using a predetermined annual overhead rate. During January 2012, Pick’s transactions included the following:
Direct materials issued to production $ 90,000
Indirect materials issued to production 8,000
Manufacturing overhead incurred 125,000
Manufacturing overhead applied 113,000
Direct labor costs 107,000
Pick had neither beginning nor ending work in process inventory. What was the cost of jobs completed in January 2012?






2

A direct manufacturing labor overtime premium should be charged to a specific job when the overtime is caused by the






3

A company services office equipment. Some customers bring their equipment to the company’s service shop; other customers prefer to have the company’s service personnel come to their offices to repair their equipment. The most appropriate costing method for the company is






4

A job order cost system uses a predetermined fixed factory overhead rate based on normal activity and expected fixed cost. At the end of the year, underapplied fixed overhead might be explained by which of the following situations?
Actual volume . . . Actual fixed costs






5

Worley Company has underapplied variable overhead of $45,000 for the year ended December 31, 2012. Before disposition of the underapplied overhead, selected December 31, 2012 balances from Worley’s accounting records are as follows:
Sales $1,200,000
Cost of goods sold 720,000
Inventories:
Direct materials 36,000
Work in process 54,000
Finished goods 90,000
Under Worley’s cost accounting system, over- or underapplied variable overhead is allocated to appropriate inventories and cost of goods sold based on year-end balances. There are no amounts of under or overapplied fixed overhead. In its 2012 income statement, Worley should report cost of goods sold of






6

Kerner Manufacturing uses a process cost system to manufacture laptop computers. The following information summarizes operations relating to laptop computer model #KJK20 during the quarter ending March 31:
Units Direct Materials
Work in process inventory, January 1 100 $70,000
Started during the quarter 500
Completed during the quarter 400
Work-in-process inventory, March 31 200
Costs added during the quarter $750,000
Beginning work in process inventory was 50% complete for direct materials. Ending work in process inventory was 75% complete for direct materials. What were the equivalent units of production with regard to materials for March using the FIFO unit cost, inventory valuation method?






7

Kerner Manufacturing uses a process cost system to manufacture laptop computers. The following information summarizes operations relating to laptop computer model #KJK20 during the quarter ending March 31:
Units Direct Materials
Work in process inventory, January 1 100 $70,000
Started during the quarter 500
Completed during the quarter 400
Work-in-process inventory, March 31 200
Costs added during the quarter $750,000
Beginning work in process inventory was 50% complete for direct materials. Ending work in process inventory was 75% complete for direct materials. What is the total value of material costs in ending work in process inventory using the FIFO unit cost, inventory valuation method?






8

In a process cost system, the application of factory overhead usually would be recorded as an increase in






9

In computing the current period’s manufacturing cost per equivalent unit, the FIFO method of process costing considers current period costs






10

In process 2, material G is added when a batch is 60% complete. Ending work in process units, which are 50% complete, would be included in the computation of equivalent units for
Conversion costs . . . Material G






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