Question 1

Which one of the following would most likely use a process cost system?

Accepted Answer

A)  The company that makes soup
B)  A company that creates advertisement campaigns
C)  A company which makes custom designed sailboats
D)  A company that paints houses

Question 2

A company incurred more manufacturing overhead than the amount it applied to its jobs during the year.What entry must be made at the end of the year to allocate the remaining overhead if not material in amount?

Accepted Answer

A)  Debit Cost of Goods Sold and credit Manufacturing Overhead
B)  Credit Work in Process Inventory and debit Cost of Goods Sold
C)  Debit Manufacturing Overhead and credit Work in Process Inventory
D)  Debit Work in Process Inventory and credit Manufacturing Overhead

Question 3

What does cost accounting measure, record, and report?

Accepted Answer

A)  Product costs
B)  Future costs
C)  Manufacturing processes
D)  Managerial accounting decisions

Question 4

Which one of the following is used in assigning manufacturing costs to work in process inventory?

Accepted Answer

A)  Materials purchased invoices
B)  Finished goods inventory costs
C)  Actual manufacturing overhead
D)  Estimated manufacturing overhead

Question 5

When a janitor in the production facility incurs labour costs, what occurs?

Accepted Answer

A)  The work in process account increases.
B)  Additional manufacturing overhead costs are applied.
C)  Direct labour is added to work-in-process.
D)  Actual manufacturing overhead increases.

Question 6

Use the following information to answer questions 
A company expected its annual overhead costs to be $750,000 and machine hours to equal 100,000 hours.Actual overhead was $745,000, and actual machine hours totaled 97,000 hours.
-How much overhead was applied?

Accepted Answer

A)  $722,650
B)  $727,500
C)  $749,810
D)  $768,000

Question 7

Actual manufacturing overhead costs should be added as a cost to the specific jobs as the costs are incurred.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following pairs are control accounts?

Accepted Answer

A)  Work in Process and Manufacturing Overhead
B)  Raw Materials Inventory and Wages Payable
C)  Factory Labour and Wages Payable
D)  Work in Process and Job Revenue

Question 9

Which of the following will you find on a labour time ticket?

Accepted Answer

A)  Total labour cost to be charged to job for the respective time ticket
B)  Cost of materials requisitioned for the job
C)  Estimated labour cost total for a job
D)  Total labour cost incurred to date for a job

Question 10

A job order cost system is most appropriate when products that are produced have their own distinguishing characteristics.

Accepted Answer

A) True 
 B)False

Question 11

Tan Company over-applied manufacturing overhead during 2012.Which one of the following is part of the year end entry to adjust the over-applied amount assuming the amount is material?

Accepted Answer

A)  A debit to Work in Process Inventory
B)  A debit to Cost of Goods Sold
C)  A debit to Manufacturing Overhead
D)  A credit to Unearned Revenue

Question 12

Which one of the following is an example of an activity associated with job order cost flow?

Accepted Answer

A)  Having a supervisor responsible for specific inventory functions within the manufacturing process
B)  Using a job cost accountant to verify accounting records
C)  Assigning costs to cost of goods sold
D)  Using inventory item descriptions to track inventory costs

Question 13

A company incurred more manufacturing overhead costs than the amount of overhead allocated to these jobs during the year.Which statement is true?

Accepted Answer

A)  The company spent more money on overhead costs during the year than it should have.
B)  The company should defer some of the overhead costs to the next accounting period.
C)  Overhead is under-applied.
D)  Overhead is over-applied.

Question 14

A job order cost system identifies costs with a particular activity within the production process, such as mixing, or cutting.

Accepted Answer

A) True 
 B)False

Question 15

Costs of jobs are recorded in the period in which the costs are paid.

Accepted Answer

A) True 
 B)False

Question 16

Which one of the following is an important feature of a job order cost system?

Accepted Answer

A)  Each must be completed before a new product order is accepted.
B)  Each consists of features which distinguish it from the next.
C)  Each job uses similar processes to produce.
D)  Each job has characteristics similar to the next.

Question 17

Which one of the following should be equal to the balance of the work in process inventory account at the end of the period?

Accepted Answer

A)  The total of manufacturing overhead applied to work in process for the period
B)  The total manufacturing costs for the period
C)  The total of the amounts transferred from raw materials for the current period
D)  The sum of the costs shown on the job cost sheets of unfinished jobs

Question 18

Which of the following statements is correct?

Accepted Answer

A)  Both actual costing and normal costing systems trace direct costs to a cost object by using actual cost data.
B)  An actual costing system is timelier than a normal costing system.
C)  An actual costing system is less accurate than a normal costing system.
D)  Both actual costing and normal costing systems will result in the same total cost of production per unit at all points in the production process.

Question 19

Halitosis Company completed job 45 at a cost of $43,765 and later sold it for $90,000 cash.Which one of the following is one effect of selling the job?

Accepted Answer

A)  Debit Finished Goods Inventory $90,000
B)  Credit Finished Goods Inventory $43,765
C)  Credit Finished Goods Inventory $90,000
D)  Debit Finished Goods Inventory $43,750

Question 20

When determining costs of jobs, how does a company account for indirect material?

Accepted Answer

A)  It is transferred out of raw materials into manufacturing overhead when used.
B)  It is transferred out of raw materials into work in process as used.
C)  It is added to work in process as used.
D)  It remains part of raw materials inventory.

Exam 3: Job Order Costing

Use the following information to answer questions A company expected its annual overhead costs to be $750,000 and machine hours to equal 100,000 hours.Actual overhead was $745,000, and actual machine hours totaled 97,000 hours. -How much overhead was applied?

Correct AnswerverifiedShow Answer

When determining costs of jobs, how does a company account for indirect material?

Correct AnswerverifiedShow Answer

A job order cost system is most appropriate when products that are produced have their own distinguishing characteristics.

Correct AnswerverifiedShow Answer

Which of the following pairs are control accounts?

Correct AnswerverifiedShow Answer

Which of the following will you find on a labour time ticket?

Correct AnswerverifiedShow Answer

A company incurred more manufacturing overhead than the amount it applied to its jobs during the year.What entry must be made at the end of the year to allocate the remaining overhead if not material in amount?

Correct AnswerverifiedShow Answer

Halitosis Company completed job 45 at a cost of $43,765 and later sold it for $90,000 cash.Which one of the following is one effect of selling the job?

Correct AnswerverifiedShow Answer

A job order cost system identifies costs with a particular activity within the production process, such as mixing, or cutting.

Correct AnswerverifiedShow Answer

Which one of the following is an example of an activity associated with job order cost flow?

Correct AnswerverifiedShow Answer

Which one of the following should be equal to the balance of the work in process inventory account at the end of the period?

Correct AnswerverifiedShow Answer

When a janitor in the production facility incurs labour costs, what occurs?

Correct AnswerverifiedShow Answer

Actual manufacturing overhead costs should be added as a cost to the specific jobs as the costs are incurred.

Correct AnswerverifiedShow Answer

Which one of the following is an important feature of a job order cost system?

Correct AnswerverifiedShow Answer

Which one of the following would most likely use a process cost system?

Correct AnswerverifiedShow Answer

Which of the following statements is correct?

Correct AnswerverifiedShow Answer

What does cost accounting measure, record, and report?

Correct AnswerverifiedShow Answer

A company incurred more manufacturing overhead costs than the amount of overhead allocated to these jobs during the year.Which statement is true?

Correct AnswerverifiedShow Answer

Which one of the following is used in assigning manufacturing costs to work in process inventory?

Correct AnswerverifiedShow Answer

Costs of jobs are recorded in the period in which the costs are paid.

Correct AnswerverifiedShow Answer

Tan Company over-applied manufacturing overhead during 2012.Which one of the following is part of the year end entry to adjust the over-applied amount assuming the amount is material?

Correct AnswerverifiedShow Answer

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