Hw 1 Acct

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Multiple Choice (12 marks)
Choose the best answer for each of the following 8 multiple choice questions. Circle your answer directly on the quiz booklet. Only one answer will be accepted for each multiple choice question. There is no penalty for guessing. Question No. 1 (2 marks)

Bobcat Company uses a job-order costing system. During April, the following costs appeared in the Work in Process Inventory account: Beginning balance
$ 24,000
Direct material used
70,000
Direct labor incurred
60,000
Applied overhead
48,000
Cost of goods manufactured
185,000
Bobcat Company applies overhead on the basis of direct labor cost. There was only one job left in Work in Process at the end of April which contained $5,600 of overhead. What amount of direct material was included in this job? a.

$4,400
b.
$4,480
c.
$6,920
d.
$8,000
Answer: (a)
Total Costs Incurred
202,000
Less: Cost of Goods Manufactured
185,000
Costs remaining in WIP
17,000
Overhead
5,600
Direct Labor (5,600/.80)
7,000
(12,600)
Direct Materials
4,400
Question No. 2 (1 mark)
The net cost of normal spoilage in a job-order costing system in which spoilage is common to all jobs should be: a.
assigned directly to the jobs that caused the spoilage.
b.
charged to manufacturing overhead during the period of the spoilage. c.
charged to a loss account during the period of the spoilage. d.
allocated only to jobs that are completed during the period. Answer: (b)
Question No. 3 (1 mark)
Which of the following journal entries records the accrual of the cost of indirect labor used in production? a.
debit Work in Process Inventory, credit Wages Payable
b.
debit Work in Process Inventory, credit Manufacturing Overhead c.
debit Manufacturing Overhead, credit Work in Process Inventory d.
debit Manufacturing Overhead, credit Wages Payable
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