3-0

Quick Check
Job WR53 at NW Fab, Inc. required $200 of direct
materials and 10 direct labor hours at $15 per hour.
Estimated total overhead for the year was $760,000
and estimated direct labor hours were 20,000. What
would be recorded as the cost of job WR53?
a. $200.
b. $350.
c. $380.
d. $730.

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Quick Check
Job WR53 at NW Fab, Inc. required $200 of direct
materials and 10 direct labor hours at $15 per hour.
Estimated total overhead for the year was $760,000
and estimated direct labor hours were 20,000. What
would be recorded as the cost of job WR53?
a. $200.
b. $350.
c. $380.
d. $730.

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Quick Check
Beginning raw materials inventory was $32,000.
During the month, $276,000 of raw material
was purchased. A count at the end of the
month revealed that $28,000 of raw material
was still present. What is the cost of direct
material used?
a. $276,000
b. $272,000
c. $280,000
d. $ 2,000

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Quick Check
Beginning raw materials inventory was $32,000.
During the month, $276,000 of raw material
was purchased. A count at the end of the month
revealed that $28,000 of raw material was still
present. What is the cost of direct material
used?
a. $276,000
b. $272,000
c. $280,000
d. $ 2,000

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Quick Check
Direct materials used in production totaled
$280,000. Direct labor was $375,000, and
$180,000 of manufacturing overhead was added
to production for the month. What were total
manufacturing costs incurred for the month?
a. $555,000
b. $835,000
c. $655,000
d. Cannot be determined.

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Quick Check
Direct materials used in production totaled
$280,000. Direct labor was $375,000, and
$180,000 of manufacturing overhead was added
to production for the month. What were total
manufacturing costs incurred for the month?
a. $555,000
b. $835,000
c. $655,000
d. Cannot be determined.

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Quick Check
Beginning work in process was $125,000.
Manufacturing costs added to production for the
month were $835,000. There were $200,000 of
partially finished goods remaining in work in
process inventory at the end of the month. What
was the cost of goods manufactured during the
month?
a. $1,160,000
b. $ 910,000
c. $ 760,000
d. Cannot be determined.

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Quick Check
Beginning work in process was $125,000.
Manufacturing costs added to production for
the month were $835,000. There were
$200,000 of partially finished goods remaining
in work in process inventory at the end of the
month. What was the cost of goods
manufactured during the month?
a. $1,160,000
b. $ 910,000
c. $ 760,000
d. Cannot be determined.

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Quick Check
Beginning finished goods inventory was $130,000.
The cost of goods manufactured for the month
was $760,000. And the ending finished goods
inventory was $150,000. What was the cost of
goods sold for the month?
a. $ 20,000
b. $740,000
c. $780,000
d. $760,000

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Quick Check
Beginning finished goods inventory was $130,000.
The cost of goods manufactured for the month was
$760,000. And the ending finished goods
inventory was $150,000. What was the cost of
goods sold for the month?
a. $ 20,000 $130,000 + $760,000 =
b. $740,000 $890,000
c. $780,000 $890,000 - $150,000 =
d. $760,000 $740,000

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Quick Check
Tiger, Inc. had actual manufacturing overhead
costs of $1,210,000 and a predetermined
overhead rate of $4.00 per machine hour. Tiger,
Inc. worked 290,000 machine hours during the
period. Tiger’s manufacturing overhead is:
a. $50,000 overapplied.
b. $50,000 underapplied.
c. $60,000 overapplied.
d. $60,000 underapplied.

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Quick Check
Tiger, Inc. had actual manufacturing overhead
costs of $1,210,000 and a predetermined
overhead rate of $4.00 per machine hour. Tiger,
Inc. worked 290,000 machine hours during the
period. Tiger’s manufacturing overhead is:
a. $50,000 overapplied.
b. $50,000 underapplied.
Overhead Applied
c. $60,000 overapplied. $4.00 per hour × 290,000
hours
d. $60,000 underapplied.= $1,160,000
Underapplied Overhead
$1,210,000 - $1,160,000
= $50,000

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Quick Check
When estimated activity is used in the
denominator of the predetermined rate, what
happens to the predetermined overhead rate as
estimated activity decreases?
a. The predetermined overhead rate goes up
when activity goes down.
b. The predetermined overhead rate stays the
same because it is not affected by changes in
activity.
c. The predetermined overhead rate goes down
when activity goes down.

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Quick Check
Crest Winery in Woodinville leases an
automatic corking machine for $100,000 per
year. At full capacity, it can cork 50,000 cases of
wine per year. The company estimates 40,000
cases of wine will be produced and sold next
year. What is the predetermined overhead rate
based on the estimated number of cases of
wine?
a. $2.00 per case.
b. $2.50 per case.
c. $4.00 per case.

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Quick Check
Crest Winery in Woodinville leases an automatic
corking machine for $100,000 per year. At full
capacity, it can cork 50,000 cases of wine per
year. The company estimates 40,000 cases of
wine will be produced and sold next year. What
is the predetermined overhead rate based on the
estimated number of cases of wine?
a. $2.00 per case.
b. $2.50 per case.
c. $4.00 per case.

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Quick Check
Crest Winery in Woodinville leases an
automatic corking machine for $100,000 per
year. At full capacity, it can cork 50,000 cases of
wine per year. The company estimates 40,000
cases of wine will be produced and sold next
year. What is the predetermined overhead rate
based on the number of cases of wine at
capacity?
a. $2.00 per case.
b. $2.50 per case.
c. $4.00 per case.

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Quick Check
Crest Winery in Woodinville leases an automatic
corking machine for $100,000 per year. At full
capacity, it can cork 50,000 cases of wine per
year. The company estimates 40,000 cases of
wine will be produced and sold next year. What
is the predetermined overhead rate based on the
number of cases of wine at capacity?
a. $2.00 per case.
b. $2.50 per case.
c. $4.00 per case.

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Quick Check
When capacity is used in the denominator of the
predetermined rate, what happens to the
predetermined overhead rate as estimated activity
decreases?
The predetermined overhead rate goes up when
activity goes down.
The predetermined overhead rate stays the same
because it is not affected by changes in activity.
The predetermined overhead rate goes down when
activity goes down.

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Page 84 of 95
 3-0

Quick Check
When capacity is used in the denominator of the
predetermined rate, what happens to the
predetermined overhead rate as estimated activity
decreases?
The predetermined overhead rate goes up when
activity goes down.
The predetermined overhead rate stays the same
because it is not affected by changes in activity.
The predetermined overhead rate goes down when
activity goes down.

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Page 85 of 95
 3-0

Quick Check
When estimated activity is used in the
denominator of the predetermined rate, what
happens to the predetermined overhead rate as
estimated activity decreases?
a. The predetermined overhead rate goes up
when activity goes down.
b. The predetermined overhead rate stays the
same because it is not affected by changes in
activity.
c. The predetermined overhead rate goes down
when activity goes down.

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Quick Check

What effect will the overapplied overhead

have on PearCo’s net operating income?
a. Net operating income will increase.
b. Net operating income will be unaffected.
c. Net operating income will decrease.

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Quick Check

What effect will the overapplied

overhead have on PearCo’s net operating
income?
a. Net operating income will increase.
b. Net operating income will be unaffected.
c. Net operating income will decrease.

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