The journal entry to assign $1,500 of direct labor and $200 of indirect labor for the current period involves a debit to what account(s)?

The journal entry to assign $1,500 of direct labor and $200 of indirect labor for the current period involves a debit to what account(s)?

A) manufacturing overhead for $1,700
B) work in process inventory for $1,500 and a credit to manufacturing overhead for $200
C) work in process inventory for $1,500 and a debit to manufacturing overhead for $200
D) work in process inventory for $1,700


Answer: C

How is the predetermined manufacturing overhead rate used to allocate manufacturing overhead calculated?

A) by dividing the total estimated manufacturing overhead costs by the total estimated quantity of allocation base
B) by dividing the total estimated quantity of allocation base by the total estimated manufacturing overhead costs
C) by multiplying the total estimated manufacturing overhead costs by the total estimated quantity of allocation base
D) by dividing the total estimated manufacturing overhead costs by the total actual quantity of the allocation base


Answer: A

Which of the following is the most significant cost for a service company which used job order costing?

A) labor costs
B) indirect costs
C) supplies costs
D) overhead costs


Answer: A

In computing its predetermined overhead rate, Marple Company inadvertently left its indirect labor costs out of the computation

In computing its predetermined overhead rate, Marple Company inadvertently left its indirect labor costs out of the computation. This oversight will cause:

A. Manufacturing Overhead to be overapplied.
B. the Cost of Goods Manufactured to be understated.
C. the debits to the Manufacturing Overhead account to be understated.
D. the ending balance in Work in Process to be overstated.


Answer: B

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

A. Estimated total units in the allocation base divided by estimated total manufacturing overhead costs.
B. Estimated total manufacturing overhead costs divided by estimated total units in the allocation base.
C. Actual total manufacturing overhead costs divided by estimated total units in the allocation base.


Answer: D. Estimated total manufacturing overhead costs divided by actual total units in the allocation base.

Which of the following would probably be the least appropriate allocation base for allocating overhead in a highly automated manufacturer of specialty valves?

A. Machine-hours
B. Power consumption
C. Direct labor-hours
D. Machine setups

Answer: C