ch02 Student: 1. The use of predetermined overhead rates in a job-order cost system makes it possible to estimate the total cost of a given job as soon as production is completed. True False A job cost sheet is used to accumulate costs charged to a job. True False The following journal entry would be made to apply overhead cost to jobs in a job-order costing system: 2. 3. True False Under a job-order cost system the Work in Process account is debited with the cost of materials purchased. True False The process of assigning overhead cost to jobs is known as overhead application. True False The cost of a completed job in a job-order costing system typically consists of the actual direct materials cost of the job, the actual direct labor cost of the job, and the actual manufacturing overhead cost of the job. True False A debit balance in the Manufacturing Overhead account at the end of the year means that manufacturing overhead is overapplied. True False Period costs are expensed as incurred, rather than going into the Work in Process account. True False Advertising costs should be charged to the Manufacturing Overhead account. True False When a job has been completed, the goods are transferred from the production department to the finished goods warehouse and the journal entry would include a credit to Work in Process. True False Underapplied or overapplied manufacturing overhead represents the difference between actual overhead costs and applied overhead costs. True False Top management salaries should not go into the Manufacturing Overhead account. True False If manufacturing overhead applied exceeds the actual manufacturing overhead costs of the period, then manufacturing overhead is overapplied. True False 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.
14. 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. 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. 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
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