Question 1

A service organization will not use the job order costing method because it has no direct materials.

Accepted Answer

A) True 
 B)False

Question 2

Cavy Company estimates that total factory overhead costs will be $660,000 for the year. Direct labor hours are estimated to be 100,000.
Determine a) the predetermined factory overhead rate; b) the amount of factory overhead applied to Job 345 if the amount of direct labor hours is 560 and Job 777 if the amount of direct labor hours is 800; and c) prepare the journal entry to apply factory overhead for April according to the predetermined overhead rate.

Accepted Answer

a) $660,000/100,000 = $6.60
b)

Question 3

The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The company has determined that the basis for applying factory overhead will be machine hours, which is estimated to be 40,000 hours. There are 4,780 machine hours for all of the jobs in the month of April. What is the amount that will be applied to all of the jobs for the month of April?

Accepted Answer

$1,250,000/40,000 ho

Question 4

The following budget data are available for Sharp Company: $$\begin{array} { l r } 
\text { Estimated direct labor hours } & 12,000 \
\text { Estimated direct labor doll ars } & \$ 90,000 \
\text { Estimated factory overhead costs } & \$ 179,000 \
\text { Actual direct lab or hours } & 11,500 \
\text { Actual direct labor dollars } & \$ 92,000 \
\text { Actual factory overhead costs } & \$ 180,000
\end{array}$$ If factory overhead is to be applied based on direct labor dollars, the predetermined overhead rate is

Accepted Answer

A)  199% 
B)  196% 
C)  $14.92 
D)  $15.65 
A)  199% 
B)  196% 
C)  $14.92 
D)  $15.65

Question 5

The document authorizing the issuance of materials from the storeroom is a

Accepted Answer

A)  materials requisition 
B)  purchase requisition 
C)  receiving report 
D)  purchase order 
A)  materials requisition 
B)  purchase requisition 
C)  receiving report 
D)  purchase order

Question 6

Match each of the following phrases with the term a-e) that it most closely describes it. Each term will be used only once.
-serves as the basis for recording direct labor on a job cost sheet

Accepted Answer

A) job cost sheets 
B) materials requisitions 
C) receiving report 
D) time tickets 
E) cost allocation 
A) job cost sheets 
B) materials requisitions 
C) receiving report 
D) time tickets 
E) cost allocation

Question 7

In a job order cost accounting system for a service business, materials costs are normally included as part of overhead.

Accepted Answer

A) True 
 B)False

Question 8

Interim financial statements for a manufacturing business would report over applied factory overhead as a deferred item on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 9

Match each of the following phrases with the term a-g) that it most closely describes.
-a system that uses a different overhead rate for each activity

Accepted Answer

A) job order cost system 
B) process cost system 
C) activity-based costing 
D) under applied overhead 
E) over applied overhead
F)finished goods ledger
G)materials ledger 
A) job order cost system 
B) process cost system 
C) activity-based costing 
D) under applied overhead 
E) over applied overhead
F)finished goods ledger
G)materials ledger

Question 10

Cavy Company completed 26,000 units during the year at a cost of $2,139,800. The beginning finished goods inventory was 5,000 units valued at $405,000. Assuming a FIFO cost flow, determine the cost of goods sold for 20,000 units.

Accepted Answer

$405,000 +

Question 11

A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.

Accepted Answer

A) True 
 B)False

Question 12

The entries to record cost and sale of a finished good on account is

Accepted Answer

A)  debit Cost of Goods Sold, credit Finished Goods 
B)  debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales 
C)  debit Sales Expense, credit Finished Goods, credit Cash, credit Accounts Receivable 
D)  debit Work in Process, credit Finished Goods, debit Accounts Receivable, credit Sales 
A)  debit Cost of Goods Sold, credit Finished Goods 
B)  debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales 
C)  debit Sales Expense, credit Finished Goods, credit Cash, credit Accounts Receivable 
D)  debit Work in Process, credit Finished Goods, debit Accounts Receivable, credit Sales

Question 13

Depreciation expense on factory equipment is part of factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 14

Materials are transferred from the storeroom to the factory in response to materials requisitions.

Accepted Answer

A) True 
 B)False

Question 15

Period costs are classified as either

Accepted Answer

A)  selling expenses or production expenses 
B)  administrative expense or production expenses 
C)  selling expenses or administrative expenses 
D)  general expenses or selling expenses 
A)  selling expenses or production expenses 
B)  administrative expense or production expenses 
C)  selling expenses or administrative expenses 
D)  general expenses or selling expenses

A service organization will not use the job order costing method because it has no direct materials.

The document authorizing the issuance of materials from the storeroom is a

Match each of the following phrases with the term a-e) that it most closely describes it. Each term will be used only once. -serves as the basis for recording direct labor on a job cost sheet

In a job order cost accounting system for a service business, materials costs are normally included as part of overhead.

Interim financial statements for a manufacturing business would report over applied factory overhead as a deferred item on the balance sheet.

Match each of the following phrases with the term a-g) that it most closely describes. -a system that uses a different overhead rate for each activity

Cavy Company completed 26,000 units during the year at a cost of $2,139,800. The beginning finished goods inventory was 5,000 units valued at $405,000. Assuming a FIFO cost flow, determine the cost of goods sold for 20,000 units.

A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.

The entries to record cost and sale of a finished good on account is

Depreciation expense on factory equipment is part of factory overhead cost.

Materials are transferred from the storeroom to the factory in response to materials requisitions.

Period costs are classified as either

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Filters

Exam 17: Job Order Costing

A service organization will not use the job order costing method because it has no direct materials.

The document authorizing the issuance of materials from the storeroom is a

Match each of the following phrases with the term a-e) that it most closely describes it. Each term will be used only once. -serves as the basis for recording direct labor on a job cost sheet

In a job order cost accounting system for a service business, materials costs are normally included as part of overhead.

Interim financial statements for a manufacturing business would report over applied factory overhead as a deferred item on the balance sheet.

Match each of the following phrases with the term a-g) that it most closely describes. -a system that uses a different overhead rate for each activity

Cavy Company completed 26,000 units during the year at a cost of $2,139,800. The beginning finished goods inventory was 5,000 units valued at $405,000. Assuming a FIFO cost flow, determine the cost of goods sold for 20,000 units.

A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.

The entries to record cost and sale of a finished good on account is

Depreciation expense on factory equipment is part of factory overhead cost.

Materials are transferred from the storeroom to the factory in response to materials requisitions.

Period costs are classified as either

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis, Product Pricing, and Activity-Based Costing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Lean Principles, Lean Accounting, and Activity Analysis

Filters