ACC 12 multiple choice questions

32. Strong Company applies overhead based on machine hours. At the beginning of 20x1,
the company estimated that manufacturing overhead would be $500,000, and machine
hours would total 20,000. By 20x1 year-end, actual overhead totaled $525,000, and
actual machine hours were 25,000. On the basis of this information, the 20x1
predetermined overhead rate was:
A. $0.04 per machine hour.
B. $0.05 per machine hour.
C. $20 per machine hour.
D. $21 per machine hour.
E. $25 per machine hour.

33. Dixie Company, which applies overhead at the rate of 190% of direct material cost,
began work on job no. 101 during June. The job was completed in July and sold during
August, having accumulated direct material and labor charges of $27,000 and $15,000,
respectively. On the basis of this information, the total overhead applied to job no. 101
amounted to:
A. $0.
B. $28,500.
C. $51,300.
D. $70,500.
E. $79,800.

34. Huxtable charges manufacturing overhead to products by using a predetermined
application rate, computed on the basis of machine hours. The following data pertain to
the current year:
Budgeted manufacturing overhead: $480,000
Actual manufacturing overhead: $440,000
Budgeted machine hours: 20,000
Actual machine hours: 16,000
Overhead applied to production totaled:
A. $352,000.
B. $384,000.
C. $550,000.
D. $600,000.
E. some other amount.

35. Simone uses a predetermined overhead application rate of $8 per direct labor hour. A
review of the company's accounting records for the year just ended discovered the
following:
Underapplied manufacturing overhead: $7,200
Actual manufacturing overhead: $392,000
Budgeted labor hours: 50,000
Simone's actual labor hours worked totaled:
A. 48,100.
B. 49,100.
C. 49,900.
D. 50,900.
E. cannot be determined based on the information presented.

36. Trenton worked on four jobs during its first year of operation: nos. 401, 402, 403, and
404. A review of job no. 403's cost record revealed direct material charges of $40,000 and
total manufacturing costs of $50,000. If Trenton applies overhead at 150% of direct labor
cost, the overhead applied to job no. 403 must have been:
A. $0.
B. $6,000.
C. $4,000.
D. $3,333.
E. $5,000.
41. Job no. C12 was completed in November at a cost of $28,500, subdivided as follows:
direct material, $13,500; direct labor, $6,000; and manufacturing overhead, $9,000. The
journal entry to record the completion of the job is:
A.
B.

C.
D.
E.

45. Blarney Company applies manufacturing overhead by using a predetermined rate of
50% of direct labor cost. The data that follow pertain to job no. 764:

If Blarney adds a 40% markup on total cost to generate a profit, which of the following
choices depicts a portion of the accounting needed to record the sale of job no. 764?

A. Choice A
B. Choice B
C. Choice C
D. Choice D
E. Choice E
46. Armada Company applies manufacturing overhead by using a predetermined rate of
150% of direct labor cost. The data that follow pertain to job no. 831:

If Armada adds a 30% markup on total cost to generate a profit, which of the following
choices depicts a portion of the accounting needed to record the credit sale of job no.
831?

A. Choice A
B. Choice B
C. Choice C
D. Choice D
E. Choice E

47. Media, Inc., an advertising agency, applies overhead to jobs on the basis of direct
professional labor hours. Overhead was estimated to be $150,000, direct professional
labor hours were estimated to be 15,000, and direct professional labor cost was projected
to be $225,000. During the year, Media incurred actual overhead costs of $146,000,
actual direct professional labor hours of 14,500, and actual direct labor cost of $222,000.
By year-end, the firm's overhead was:
A. $1,000 underapplied.
B. $1,000 overapplied.
C. $4,000 underapplied.
D. $4,000 overapplied.
E. $5,000 underapplied.

48. Mahler, Inc., applies manufacturing overhead at the rate of $40 per machine hour.
Budgeted machine hours for the current period were anticipated to be 120,000; however,
a lengthy strike resulted in actual machine hours being worked of only 90,000. Budgeted
and actual manufacturing overhead figures for the year were $4,800,000 and $4,180,000,
respectively. On the basis of this information, the company's year-end overhead was:
A. overapplied by $580,000.
B. underapplied by $580,000.
C. overapplied by $1,200,000.
D. underapplied by $1,200,000.
E. underapplied by $900,000.

49. Tiffany charges manufacturing overhead to products by using a predetermined
application rate, computed on the basis of labor hours. The following data pertain to the
current year:

Which of the following choices is the correct status of manufacturing overhead at yearend?
A. Overapplied by $10,000.
B. Underapplied by $10,000.
C. Overapplied by $35,000.
D. Underapplied by $35,000.
E. Overapplied by $45,000.
56. Fletcher, Inc. disposes of under- or overapplied overhead at year-end as an adjustment
to cost of goods sold. Prior to disposal, the firm reported cost of goods sold of $590,000
in a year when manufacturing overhead was underapplied by $15,000. If sales revenue
totaled $1,400,000, determine (1) Fletcher's adjusted cost of goods sold and (2) gross
margin.

A. Choice A
B. Choice B
C. Choice C
D. Choice D
E. Choice E