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CHAPTER _2 Quiz Solutions - Fall 2009

# CHAPTER _2 Quiz Solutions - Fall 2009 - ACC 208 Managerial...

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Unformatted text preview: ACC 208: Managerial Accounting for Decision Making Chapter #2 Quiz - Solutions Name: ________________________________ Table: Questions 1 thru 4 Process Costing vs. Job-Order Costing Question No. Description Process Costing Job-Order Costing 1 Prince Custom Homes X 2 Shell oil refinery X 3 Scott Paper Mill X 4 Law offices of Larry H. Parker X Multiple Choice: _____C___ 5. In a job order costing system, the basic document for accumulating cost for a specific job is: (a) the production cost report; (b) the materials requisition form; (c) the job cost sheet; (d) the labor time ticket. Answer is C – The job cost sheet is the control sheet used to track all production costs assigned to a particular job. The first costs assigned to a job cost sheet are usually the raw materials which are listed on the materials requisition form. Direct labor is allocated to a particular job using the labor time tickets. Manufacturing overhead is allocated to the job cost sheet using a predetermined overhead rate based upon direct labor hours, machine hours, etc.. _____B___ 6. Pepsi Company uses direct labor hours as it allocation bases its predetermined overhead rate. At the beginning of the year, the company estimated its manufacturing overhead for the year would be \$400,000, its estimated direct labor hours would be 20,000 and the estimated total machine hours would be 10,000. What is Pepsi’s predetermined overhead rate? (a) \$10.00; (b) \$20.00; (c) \$30.00; (d) \$40.00. Answer is B - Predetermined overhead rate is based upon direct labor hours and not machine hours. The predetermined overhead rate is predetermined usually prior to the beginning of the year and is based entirely upon estimated data. The rate is computed for an entire year to eliminate the affect of seasonal fluctuations. Typical formula is: Estimated total manufacturing Predetermined = overhead cost ....
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CHAPTER _2 Quiz Solutions - Fall 2009 - ACC 208 Managerial...

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