Question 1

Which of the following costs are not included in finished goods inventory?

Accepted Answer

A)  direct labor 
B)  factory overhead 
C)  chief financial officer's salary 
D)  direct materials 
A)  direct labor 
B)  factory overhead 
C)  chief financial officer's salary 
D)  direct materials

Question 2

The direct labor and overhead costs of providing services to clients are accumulated in

Accepted Answer

A)  finished services expense 
B)  work in process 
C)  administrative salaries expense 
D)  overhead 
A)  finished services expense 
B)  work in process 
C)  administrative salaries expense 
D)  overhead

Question 3

Job cost sheets can provide information to managers on unit cost trends, the cost impact of continuous improvement in the manufacturing process, the cost impact of materials changes, and the cost impact of direct materials price or direct labor rate changes over time.

Accepted Answer

A) True 
 B)False

Question 4

The materials requisition serves as the source document for debiting the accounts in the materials ledger.

Accepted Answer

A) True 
 B)False

Question 5

The process cost system is appropriate where few products are manufactured and each product is made to customers' specifications.

Accepted Answer

A) True 
 B)False

Question 6

Match each of the following phrases with the term a-g) that it most closely describes.
-applied overhead is less than actual overhead incurred

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 7

A separate account for each material is found in a

Accepted Answer

A)  general ledger 
B)  materials ledger 
C)  receiving report 
D)  job cost sheet 
A)  general ledger 
B)  materials ledger 
C)  receiving report 
D)  job cost sheet

Question 8

Sanders Inc. has applied $567,988 of overhead to jobs in the cost ledger. Actual overhead at the end of the year is $575,000. The adjustment for over or under applied overhead is

Accepted Answer

A)  $7,012 over applied, increase Cost of Goods Sold 
B)  $7,012 under applied, increase Cost of Goods Sold 
C)  $7,012 over applied, decrease Cost of Goods Sold 
D)  $7,012 under applied, decrease Cost of Goods Sold 
A)  $7,012 over applied, increase Cost of Goods Sold 
B)  $7,012 under applied, increase Cost of Goods Sold 
C)  $7,012 over applied, decrease Cost of Goods Sold 
D)  $7,012 under applied, decrease Cost of Goods Sold

Question 9

For a manufacturing business, products that are in the process of being manufactured are referred to as

Accepted Answer

A)  supplies inventory 
B)  work in process inventory 
C)  finished goods inventory 
D)  direct materials inventory 
A)  supplies inventory 
B)  work in process inventory 
C)  finished goods inventory 
D)  direct materials inventory

Question 10

When a job is completed in a service organization, the job costs are transferred to the

Accepted Answer

A)  work in process account 
B)  cost of services account 
C)  finished goods account 
D)  cost of goods sold account 
A)  work in process account 
B)  cost of services account 
C)  finished goods account 
D)  cost of goods sold account

Question 11

Nonmanufacturing costs are generally classified into two categories: selling and administrative.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is not a reason a service firm would use a job order costing system?

Accepted Answer

A)  to help control costs 
B)  to determine client billing 
C)  to determine department costs within the firm 
D)  to determine profit 
A)  to help control costs 
B)  to determine client billing 
C)  to determine department costs within the firm 
D)  to determine profit

Question 13

Match the costs that follow to the type of product cost a-c) or designate as not a product cost d).
-factory supervisor's salary

Accepted Answer

A) direct labor 
B) direct materials 
C) factory overhead 
D) not a product cost 
A) direct labor 
B) direct materials 
C) factory overhead 
D) not a product cost

Question 14

Match the costs that follow to the type of product cost a-c) or designate as not a product cost d).
-machine operator

Accepted Answer

A) direct labor 
B) direct materials 
C) factory overhead 
D) not a product cost 
A) direct labor 
B) direct materials 
C) factory overhead 
D) not a product cost

Question 15

A job order cost system would be appropriate for a crude oil refining business.

Accepted Answer

A) True 
 B)False

Question 16

The recording of the factory labor incurred for general factory use would include a debit to

Accepted Answer

A)  Factory Overhead 
B)  Wages Payable 
C)  Wages Expense 
D)  Cost of Goods Sold 
A)  Factory Overhead 
B)  Wages Payable 
C)  Wages Expense 
D)  Cost of Goods Sold

Question 17

Put the following in the order of the flow of manufacturing costs for a company.
a. Closing under/over applied factory overhead to Cost of Goods Sold
b. Materials purchased
c. Factory labor used and factory overhead incurred in production
d. Completed jobs moved to finished goods
e. Factory overhead applied to jobs according to the predetermined overhead rate
f. Materials requisitioned to jobs
g. Selling of finished product
h. Preparation of financial statements to determine gross profit

Accepted Answer

b. Materials purchased
f. Materials requ

Question 18

Costs that are treated as assets until the product is sold are

Accepted Answer

A)  product costs 
B)  period costs 
C)  conversion costs 
D)  selling expenses 
A)  product costs 
B)  period costs 
C)  conversion costs 
D)  selling expenses

Question 19

Classify each of the preceding costs as product costs or period costs. For those costs classified as product costs, indicate whether the product cost is a direct materials cost, direct labor cost, or factory overhead cost. For those costs classified as period costs, indicate whether the period cost is a selling expense or an administrative expense. Use the following tabular headings for preparing your answer. Place an X in the appropriate column.   ANSWER:  
-Discuss the use of job order costing for professional services businesses. What are the similarities and differences between service and manufacturing business job order costing?

Accepted Answer

Professional service providers-attorneys

Question 20

The amount of time spent by an employee in the factory is usually recorded on

Accepted Answer

A)  time tickets 
B)  job order cost sheets 
C)  employees' earnings records 
D)  statement of owners' equity 
A)  time tickets 
B)  job order cost sheets 
C)  employees' earnings records 
D)  statement of owners' equity

Exam 17: Job Order Costing

Which of the following costs are not included in finished goods inventory?

The direct labor and overhead costs of providing services to clients are accumulated in

Job cost sheets can provide information to managers on unit cost trends, the cost impact of continuous improvement in the manufacturing process, the cost impact of materials changes, and the cost impact of direct materials price or direct labor rate changes over time.

The materials requisition serves as the source document for debiting the accounts in the materials ledger.

The process cost system is appropriate where few products are manufactured and each product is made to customers' specifications.

Match each of the following phrases with the term a-g) that it most closely describes. -applied overhead is less than actual overhead incurred

A separate account for each material is found in a

Sanders Inc. has applied $567,988 of overhead to jobs in the cost ledger. Actual overhead at the end of the year is $575,000. The adjustment for over or under applied overhead is

For a manufacturing business, products that are in the process of being manufactured are referred to as

When a job is completed in a service organization, the job costs are transferred to the

Nonmanufacturing costs are generally classified into two categories: selling and administrative.

Which of the following is not a reason a service firm would use a job order costing system?

Match the costs that follow to the type of product cost a-c) or designate as not a product cost d). -factory supervisor's salary

Match the costs that follow to the type of product cost a-c) or designate as not a product cost d). -machine operator

A job order cost system would be appropriate for a crude oil refining business.

The recording of the factory labor incurred for general factory use would include a debit to

Costs that are treated as assets until the product is sold are

The amount of time spent by an employee in the factory is usually recorded on

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

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