Explore BrainMass
Share

Explore BrainMass

    Accounting multiple choice questions

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    1. Neil Company uses a job order cost system and has established a predetermined overhead application rate for the current year of 150%, based on budgeted overhead of $900,000 and budgeted direct labor cost of $600,000. Job no. 1 was charged with direct materials of $20,000 and with overhead of $18,000. The total cost of job no. 1:

    a. Is $38,000.
    b. Is $50,000.
    c. Is $65,000.
    d. Cannot be determined without additional information.

    2. ABD Co. uses a job order cost accounting system. At year-end the Work in Process Inventory controlling account showed a debit balance of $65,000. For the two jobs in process at year-end, one showed $8,000 in direct materials and $6,000 in direct labor. The job cost sheet for the second job showed $12,000 in direct materials and $9,000 in direct labor. If the company is using a predetermined overhead application rate based on direct labor cost, the rate is:

    a. 50%.
    b. 100%.
    c. 150%.
    d. 200%.

    3. During August, Department Z started and completed 78,000 units and also finished 12,000 units that were 75% completed on July 31. On August 31, Department Z's ending inventory consisted of 15,000 units that were 40% completed. All manufacturing costs are incurred at a uniform rate throughout Department Z's production process. The number of equivalent full units of production for Department Z during August is:

    a. 87,000.
    b. 78,000.
    c. 93,000.
    d. 96,000.

    © BrainMass Inc. brainmass.com October 9, 2019, 4:35 pm ad1c9bdddf
    https://brainmass.com/business/finance/accounting-multiple-choice-questions-36291

    Solution Preview

    1. Neil Company uses a job order cost system and has established a predetermined overhead application rate for the current year of 150%, based on budgeted overhead of $900,000 and budgeted direct labor cost of $600,000. Job no. 1 was charged with direct materials of $20,000 and with overhead of $18,000. The total cost of job no. 1:

    a. Is $38,000.
    b. Is $50,000.
    c. Is $65,000.
    d. Cannot be determined without additional information.

    Answer: b. Is $50,000.
    Direct materials= $20,000
    Overhead rate= 150%
    Overhead= $18,000
    Therefore direct labor= $12,000 =18000/150%
    Therefore total cost= $50,000 ...

    Solution Summary

    Answers Accounting multiple choice questions dealing with job order cost system, predetermined overhead application rate, equivalent units

    $2.19