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Questions and Answers
What is the labor turnover rate using the replacement method if 90 employees left and there were 1,560 employees at the end of the month?
What is the labor turnover rate using the replacement method if 90 employees left and there were 1,560 employees at the end of the month?
The direct method of cost allocation considers the services provided by other service departments.
The direct method of cost allocation considers the services provided by other service departments.
False
How much is department Y's cost allocated using the direct method if department A has direct costs of ₱150 and provides 40% of services?
How much is department Y's cost allocated using the direct method if department A has direct costs of ₱150 and provides 40% of services?
₱60.00
Jhoanna is paid ₱14 per hour for regular time and time and a half for all work in excess of ______ hours per week.
Jhoanna is paid ₱14 per hour for regular time and time and a half for all work in excess of ______ hours per week.
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Using the step-down method starting with Department A, what is the service department cost allocated to department Y?
Using the step-down method starting with Department A, what is the service department cost allocated to department Y?
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Match the following cost allocation methods to their characteristics:
Match the following cost allocation methods to their characteristics:
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How much will Jhoanna earn if he works 45 hours in a week?
How much will Jhoanna earn if he works 45 hours in a week?
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If Aiah Company uses the direct method of allocating service department costs, how much is allocated to department X?
If Aiah Company uses the direct method of allocating service department costs, how much is allocated to department X?
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Which of the following is considered a cause of labor turnover?
Which of the following is considered a cause of labor turnover?
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Service departments are also known as indeterminate cost centers.
Service departments are also known as indeterminate cost centers.
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What is the purpose of allocating costs from service departments?
What is the purpose of allocating costs from service departments?
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Under the step-method of cost allocation, the final allocation amount is influenced by the order of allocation from the __________.
Under the step-method of cost allocation, the final allocation amount is influenced by the order of allocation from the __________.
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A direct labor overtime premium should be charged to a specific job when the overtime is caused by:
A direct labor overtime premium should be charged to a specific job when the overtime is caused by:
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Match the terms with their correct definitions:
Match the terms with their correct definitions:
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The predetermined overhead rate is calculated by dividing the total overhead for the past period by the total overhead allocation base for the coming period.
The predetermined overhead rate is calculated by dividing the total overhead for the past period by the total overhead allocation base for the coming period.
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What is the effect of ignoring inter-service department activities in cost allocation?
What is the effect of ignoring inter-service department activities in cost allocation?
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What is labor turnover?
What is labor turnover?
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Actual overhead costs are always lower than applied overhead when using a predetermined overhead rate.
Actual overhead costs are always lower than applied overhead when using a predetermined overhead rate.
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Which basis of applying manufacturing overhead is most appropriate for a highly automated manufacturing plant?
Which basis of applying manufacturing overhead is most appropriate for a highly automated manufacturing plant?
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Overapplied overhead occurs when overhead incurred is less than overhead ______.
Overapplied overhead occurs when overhead incurred is less than overhead ______.
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Match the costing methods with their characteristics:
Match the costing methods with their characteristics:
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What entry is made to record the application of factory overhead to jobs?
What entry is made to record the application of factory overhead to jobs?
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Budgeted factory overhead is used in both the numerator and denominator to develop a predetermined overhead application rate.
Budgeted factory overhead is used in both the numerator and denominator to develop a predetermined overhead application rate.
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What happens to overhead when production is greater than defined capacity?
What happens to overhead when production is greater than defined capacity?
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Study Notes
Cost Accounting and Control Part 1 - Quiz 2
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Instructions: Follow specific instructions, use permanent ink, avoid erasures, and no cheating.
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True or False (Part I):
- Variable costs remain constant in total throughout wide ranges of activity.
- Variable cost per unit doesn't change with activity level changes.
- Fixed costs expressed per unit vary inversely with activity.
- Labor fringe benefits can be charged to direct labor or manufacturing overhead; overtime premiums are usually part of manufacturing overhead.
- Idle time costs should be charged to the job in process during the breakdown.
- Internal failure costs come from identifying defects during appraisal (scrap, rework, etc.).
- Each payroll check should be delivered to the employee.
- Income taxes withheld from pay are an employer expense.
- Manual labor is usually called salaries.
- Debit Accrued Payroll and credit Cash for payroll checks.
- One person should be in charge of timekeeping, payroll records.
- Avoid congestion at time clocks by having one employee punch in/out for others.
- Service departments are indeterminate cost centers, and production is the final cost center.
- Service department cost allocation is for valuing inventory externally.
- In the step method of allocation, the allocation order affects production department allocation amounts.
- Plantwide rates use a single rate for all departments.
- Inter-service department activities are ignored in both direct and step methods.
- Predetermined overhead rate is calculated by dividing total overhead for last period by the total allocation base for the next period.
- Spending variance plus volume variance equals total manufacturing overhead variance.
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Multiple Choice Theories (Part II):
- Avoidable labor turnover causes include disability, job dissatisfaction, and low wages/benefits.
- Indirect labor costs in job order systems are charged to factory overhead control.
- Direct labor overtime premium is charged to a specific job if overtime is caused by the customer.
- Labor turnover is the change in the labor force.
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Multiple Choice Problems (Part III):
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Problem 41-42:
- Labor premiums (10%, 20%, 50% of 1st shift pay) are charged to overhead.
- Total payroll involves regular and overtime premiums.
- Total labor cost for the period P87.50 or P560,000 (depending on the problem parameters).
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Problem 43: Labor turnover rate using replacement method is calculated using employees at the start/end of the month and those recruited/left.
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Problem 44-46: Service department costs are allocated to operating departments using direct, step-down methods.
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Problem 47: Jhoanna's wages are allocated to direct labor and factory overhead based on worked hours and overtime.
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Problem 48-50: Calculations involving overhead rates (budgeted vs. actual, over/under applied). Predetermined overhead rate & labor hour calculations to apply factory overhead.
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Additional Information:
- Factory overhead includes all costs other than direct materials and direct labor.
- Mixed costs have variable and fixed components.
- Factory overhead application rates are computed by dividing budgeted overhead by an appropriate measure (e.g., direct labor hours). Several different costing methods are mentioned.
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Description
Test your knowledge on Cost Accounting concepts with this True or False quiz. This quiz covers various topics, including variable and fixed costs, labor expenses, and internal failure costs. Ensure you understand these critical principles for effective cost management and control.
