21. The net operating income for the year (in thousands of dollars) was: A) $180 B) $170 C) $390 D).

21.

The
net operating income for the year (in thousands of dollars) was:

A)

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$180

B)

$170

C)

$390

D)

$190

22.

Emco
Company uses direct labor cost as a basis for computing its predetermined
overhead rate. In computing the predetermined overhead rate for last year,
the company misclassified a portion of direct labor cost as indirect labor.
The effect of this misclassification will be to:

A)

understate
the predetermined overhead rate.

B)

overstate
the predetermined overhead rate.

C)

have
no effect on the predetermined overhead rate.

D)

cannot
be determined from the information given.

23.

Which
of the following entries would record correctly the application of overhead
cost?

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A)

Item A

B)

Item B

C)

Item C

D)

Item D

24.

The
operations of Kalispell Company resulted in overapplied overhead for the
month just completed. Which of the following journal entries can be correct
if Kalispell allocates under- or overapplied overhead among accounts?

.0/msohtmlclip1/01/clip_image004.png”>

A)

Item A

B)

Item B

C)

Item C

D)

Item D

25.

Which
of the following entries would record correctly the monthly salaries earned
by the top management of a manufacturing company?

.0/msohtmlclip1/01/clip_image006.png”>

A)

Item A

B)

Item B

C)

Item C

D)

Item D

26.

The
journal entry to record applying overhead during the production process is:

.0/msohtmlclip1/01/clip_image008.png”>

A)

Item A

B)

Item B

C)

Item C

D)

Item D

27.

When
manufacturing overhead is applied to production, it is added to:

A)

the
Cost of Goods Sold account.

B)

the
Raw Materials account.

C)

the
Work in Process account.

D)

the
Finished Goods inventory account.

28.

Under
a job-order costing system, the dollar amount transferred from Work in
Process to Finished Goods is the sum of the costs charged to all jobs:

A)

started
in process during the period.

B)

in
process during the period.

C)

completed
and sold during the period.

D)

completed
during the period.

29.

Blackwood
Co. uses a predetermined overhead rate based on direct labor cost to apply manufacturing
overhead to jobs. The predetermined overhead rates for the year are 200% for
Department A and 50% for Department B. Job 123, started and completed during
the year, was charged with the following costs:

.0/msohtmlclip1/01/clip_image010.png”>

The
total manufacturing costs associated with Job 123 should be:

A)

$135,000

B)

$180,000

C)

$195,000

D)

$240,000
Source:
CPA, adapted

30.

At the
beginning of the year, manufacturing overhead for the year was estimated to
be $477,590. At the end of the year, actual direct labor-hours for the year
were 29,000 hours, the actual manufacturing overhead for the year was
$472,590, and manufacturing overhead for the year was overapplied by $110. If
the predetermined overhead rate is based on direct labor-hours, then the
estimated direct labor-hours at the beginning of the year used in the
predetermined overhead rate must have been:

A)

29,300
direct labor-hours

B)

28,987
direct labor-hours

C)

28,993
direct labor-hours

D)

29,000
direct labor-hours

 

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