Saturday, October 19, 2019

Which of the following is correct with respect to closing out overapplied manufacturing overhead to Cost of Goods Sold versus

Which of the following is correct with respect to closing out overapplied manufacturing overhead to Cost of Goods Sold versus closing it out to Cost of Goods Sold and Finished Goods and Work in Process inventories?



A. The balance in the Work in Process account after allocation will be higher if the overapplied manufacturing overhead is closed out by allocating it to all appropriate accounts.
B. The balance in the Work in Process account after allocation will be the same under either method.
C. Net operating income will be higher if all of the overapplied manufacturing overhead is closed out to Cost of Goods Sold.
D. Cost of Goods Sold will be lower if the overapplied manufacturing overhead is closed out by allocating it to the inventory accounts as well as to Cost of Goods Sold.



Answer: C

The document used to accumulate the costs of a job is called the:



A) manufacturing overhead document.
B) job cost record.
C) labor time ticket.
D) materials inventory requisition form.


Answer: B

Overapplied manufacturing overhead occurs when:



A. applied overhead exceeds actual overhead.
B. applied overhead exceeds estimated overhead.
C. actual overhead exceeds estimated overhead.
D. budgeted overhead exceeds actual overhead.


Answer: A

Which costing system would better account for a unique individual product?

Which costing system would better account for a unique individual product?



A) job costing system
B) product costing system
C) process costing system
D) overhead costing system


Answer: A

What are the two basic types of costing systems? 



A) product costing and materials inventory costing
B) job costing and process costing
C) periodic costing and process costing
D) periodic costing and perpetual costing


Answer: B

The balance in the Work in Process account equals:



A. the balance in the Finished Goods inventory account.
B. the balance in the Cost of Goods Sold account.
C. the balances on the job cost sheets of uncompleted jobs.
D. the balance in the Manufacturing Overhead account.


Answer: C

Martinez Aerospace Company uses a job-order costing system. The direct materials for Job #045391 were purchased in July

Martinez Aerospace Company uses a job-order costing system. The direct materials for Job #045391 were purchased in July and put into production in August. The job was not completed by the end of August. At the end of August, in what account would the direct material cost assigned to Job #045391 be located?



A. Raw materials inventory
B. Work in process inventory
C. Finished goods inventory
D. Cost of goods manufactured


Answer: B

In a job-order costing system, indirect materials that have been previously purchased and that are used in production are recorded as a debit to:



A. Work in Process inventory.
B. Manufacturing Overhead.
C. Finished Goods inventory.
D. Raw Materials inventory


Answer: B

Which terms will make the following statement true? When manufacturing overhead is overapplied, the Manufacturing Overhead account has a balance and applied manufacturing overhead is greater than manufacturing overhead.



A. debit, actual
B. credit, actual
C. debit, estimated
D. credit, estimated


Answer: B

In a job-order costing system, direct labor cost is ordinarily debited to:

In a job-order costing system, direct labor cost is ordinarily debited to:



A. Manufacturing Overhead.
B. Cost of Goods Sold.
C. Finished Goods.
D. Work in Process.


Answer: D

In a job-order costing system, the use of direct materials that have been previously purchased is recorded as a debit to:



A. Raw Materials inventory.
B. Work in Process inventory.
C. Finished Goods inventory.
D. Manufacturing Overhead.


Answer: B

Which of the following accounts is debited when direct labor is recorded?



A. Work in process
B. Salaries and wages expense
C. Salaries and wages payable
D. Manufacturing overhead


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

If the auditors encounter a significant scope limitation in evaluating a public company`s internal control over financial reporting

If the auditors encounter a significant scope limitation in evaluating a public company`s internal control over financial reporting, which of the following types of opinions on the effectiveness of the company`s internal control over financial reporting would be appropriate?


a. qualified opinion or adverse opinion
b. unqualified opinion or adverse
c. unqualified opinion or disclaimer of opinion
d. disclaimer of opinion


Answer: d. disclaimer of opinion

What document is used to determine the actual amount of direct labor to record on a job cost sheet?



A. Time ticket
B. Payroll register
C. Production order
D. Wages payable account


Answer: A

Which of the following statements is not true with respect to the auditor's report on internal control over financial reporting?


a. the report may be presented with the report on the entity's financial statements as a combined report
b. the auditor will issue an adverse opinion if one or more material weaknesses exist
c. the report will be dated as of the date of the financial statements
d. the report will express an opinion on the effectiveness of internal control over financial reporting


Answer: c. the report will be dated as of the date of the financial statements

Which of the following information would be included in the introductory paragraph of the auditor's report on internal control over financial reporting

Which of the following information would be included in the introductory paragraph of the auditor's report on internal control over financial reporting if the report is presented separately from the auditor's report on the entity's financial statements?


a. the fact that the auditors conducted an audit of the entity's financial statements
b. statements identifying the responsibility of the auditors and management for internal control over financial reporting
c. a reference to the auditors` report and opinion on the entity's financial statements
d. the definition of material weakness in internal control over financial reporting


Answer: b. statements identifying the responsibility of the auditors and management for internal control over financial reporting


When completing the audit of internal controls for an issuer, the PCAOB requires auditors of public companies to audit internal controls over


a. all of the answers are correct
b. compliance with regulations
c. financial reporting
d. operations

Answer: c. financial reporting


When completing the audit of internal controls for an issuer, AS5 requires auditors of public companies to report on


a. management's report on internal control- no; an audit of internal control- no
b. management's report on internal control- yes; an audit of internal control- yes
c. management's report on internal control- no; an audit of internal control- yes
d. management's report on internal control- yes; an audit of internal control- no


Answer: c. management's report on internal control- no; an audit of internal control- yes



Bull Gator Industries is considering a new assembly line costing $6,000,000. The assembly line will be fully depreciated

Bull Gator Industries is considering a new assembly line costing $6,000,000. The assembly line will be fully depreciated by the simplified s...