Question 1

The Raw Materials Inventory account is

Accepted Answer

A)  a subsidiary account. 
B)  debited for invoice costs and freight costs chargeable to the purchaser. 
C)  debited for purchase discounts taken. 
D)  debited for purchase returns and allowances. 
A)  a subsidiary account. 
B)  debited for invoice costs and freight costs chargeable to the purchaser. 
C)  debited for purchase discounts taken. 
D)  debited for purchase returns and allowances.

Question 2

The following information is available for completed Job No. 402: Direct materials, $80,000; direct labor, $120,000; manufacturing overhead applied, $60,000; units produced, 5,000 units; units sold, 4,000 units. The cost of the finished goods on hand from this job is

Accepted Answer

A)  $40,000. 
B)  $260,000. 
C)  $52,000. 
D)  $208,000. 
A)  $40,000. 
B)  $260,000. 
C)  $52,000. 
D)  $208,000.

Question 3

Gulick Company developed the following data for the current year:   Gulick Company's ending work in process inventory is

Accepted Answer

A)  $348,000. 
B)  $240,000. 
C)  $228,000. 
D)  $108,000. 
A)  $348,000. 
B)  $240,000. 
C)  $228,000. 
D)  $108,000.

Question 4

The predetermined overhead rate is

Accepted Answer

A)  determined on a moving average basis throughout the year. 
B)  not calculated until actual overhead costs are incurred. 
C)  determined at the beginning of the year. 
D)  determined at the end of the current year. 
A)  determined on a moving average basis throughout the year. 
B)  not calculated until actual overhead costs are incurred. 
C)  determined at the beginning of the year. 
D)  determined at the end of the current year.

Question 5

The cost of raw materials purchased is credited to Raw Materials Inventory when materials are received.

Accepted Answer

A) True 
 B)False

Question 6

When the company assigns factory labor costs to jobs, the direct labor cost is debited to

Accepted Answer

A)  Direct Labor. 
B)  Factory Labor. 
C)  Manufacturing Overhead. 
D)  Work in Process Inventory. 
A)  Direct Labor. 
B)  Factory Labor. 
C)  Manufacturing Overhead. 
D)  Work in Process Inventory.

Question 7

Which of the following is not viewed as part of accumulating manufacturing costs in a job order cost system?

Accepted Answer

A)  Cost of goods sold is recognized 
B)  Raw materials are purchased 
C)  Factory labor is incurred 
D)  Manufacturing overhead is incurred 
A)  Cost of goods sold is recognized 
B)  Raw materials are purchased 
C)  Factory labor is incurred 
D)  Manufacturing overhead is incurred

Question 8

A good system of internal control requires that the job order cost sheet be destroyed as soon as the job is complete.

Accepted Answer

A) True 
 B)False

Question 9

Simmons Inc. applies overhead to production at a predetermined rate of 90% based on direct labor cost. Job No. 250, the only job still in process at the end of August, has been charged with manufacturing overhead of $3,600. What was the amount of direct materials charged to Job 250 assuming the balance in Work in Process inventory is $15,000?

Accepted Answer

A)  $3,750. 
B)  $4,000. 
C)  $7,400. 
D)  $15,000. 
A)  $3,750. 
B)  $4,000. 
C)  $7,400. 
D)  $15,000.

Question 10

The formula for the predetermined overhead rate is estimated annual overhead costs divided by an expected annual operating activity.

Accepted Answer

A) True 
 B)False

Question 11

Which one of the following best describes a job cost sheet?

Accepted Answer

A)  It is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job. 
B)  It is used to track manufacturing overhead costs to specific jobs. 
C)  It is used by management to understand how direct costs affect profitability. 
D)  It is a daily form that management uses for tracking worker productivity on which employee raises are based. 
A)  It is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job. 
B)  It is used to track manufacturing overhead costs to specific jobs. 
C)  It is used by management to understand how direct costs affect profitability. 
D)  It is a daily form that management uses for tracking worker productivity on which employee raises are based.

Question 12

The Manufacturing Overhead account shows debits of $30,000, $24,000, and $28,000 and one credit for $86,000. Based on this information, manufacturing overhead

Accepted Answer

A)  has been overapplied. 
B)  has been underapplied. 
C)  has not been applied. 
D)  shows a zero balance. 
A)  has been overapplied. 
B)  has been underapplied. 
C)  has not been applied. 
D)  shows a zero balance.

Question 13

Manufacturing overhead is applied to each job

Accepted Answer

A)  at the time when the overhead cost is incurred. 
B)  by means of a predetermined overhead rate. 
C)  at the end of the year when actual costs are known. 
D)  only if the overhead costs can be directly traced to that job. 
A)  at the time when the overhead cost is incurred. 
B)  by means of a predetermined overhead rate. 
C)  at the end of the year when actual costs are known. 
D)  only if the overhead costs can be directly traced to that job.

Question 14

Kline Manufacturing has the following labor costs:   The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor for

Accepted Answer

A)  $440,000. 
B)  $390,000. 
C)  $370,000. 
D)  $340,000. 
A)  $440,000. 
B)  $390,000. 
C)  $370,000. 
D)  $340,000.

Question 15

Job cost sheets for Howard Manufacturing are as follows:   
Instructions
(a) Answer the following questions.
1. What was the balance in Work in Process Inventory on July 1 if these were the only unfinished jobs?
2. What was the predetermined overhead rate in June if overhead was applied on the basis of direct labor cost?
3. If July is the start of a new fiscal year and the overhead rate is 20% higher than in the preceding year, how much overhead should be applied to Job 210 in July?
4. Assuming Job 210 is complete, what is the total and unit cost of the job?
5. Assuming Job 211 is the only unfinished job at July 31, what is the balance in Work in Process Inventory on this date?
(b) Journalize the summary entries to record the assignment of costs to the jobs in July. (Note: Make one entry in total for each manufacturing cost element.)

Accepted Answer

The answer of Job cost sheets for Howard Manufacturing are...

Question 16

Kimble Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period:

Accepted Answer

A)  $1,140,000 applied and $15,000 overapplied 
B)  $1,200,000 applied and $15,000 overapplied 
C)  $1,140,000 applied and $15,000 underapplied 
D)  $1,145,000 applied and neither under- nor overapplied 
A)  $1,140,000 applied and $15,000 overapplied 
B)  $1,200,000 applied and $15,000 overapplied 
C)  $1,140,000 applied and $15,000 underapplied 
D)  $1,145,000 applied and neither under- nor overapplied

Question 17

In a manufacturing company, the cost of factory labor consists of all of the following except

Accepted Answer

A)  employer payroll taxes. 
B)  fringe benefits incurred by the employer. 
C)  net earnings of factory workers. 
D)  gross earnings of factory workers. 
A)  employer payroll taxes. 
B)  fringe benefits incurred by the employer. 
C)  net earnings of factory workers. 
D)  gross earnings of factory workers.

Question 18

If the Manufacturing Overhead account has a debit balance at the end of a period, it means that

Accepted Answer

A)  actual overhead costs were less than overhead costs applied to jobs. 
B)  actual overhead costs were greater than overhead costs applied to jobs. 
C)  actual overhead costs were equal to overhead costs applied to jobs. 
D)  no jobs have been completed. 
A)  actual overhead costs were less than overhead costs applied to jobs. 
B)  actual overhead costs were greater than overhead costs applied to jobs. 
C)  actual overhead costs were equal to overhead costs applied to jobs. 
D)  no jobs have been completed.

Question 19

There should be a separate job cost sheet for each job.

Accepted Answer

A) True 
 B)False

Question 20

In calculating a predetermined overhead rate, a recent trend in automated manufacturing operations is to choose an activity base related to

Accepted Answer

A)  direct labor hours. 
B)  indirect labor dollars. 
C)  machine hours. 
D)  raw materials dollars. 
A)  direct labor hours. 
B)  indirect labor dollars. 
C)  machine hours. 
D)  raw materials dollars.

Exam 20: Job Order Costing

The Raw Materials Inventory account is

The following information is available for completed Job No. 402: Direct materials, $80,000; direct labor, $120,000; manufacturing overhead applied, $60,000; units produced, 5,000 units; units sold, 4,000 units. The cost of the finished goods on hand from this job is

Gulick Company developed the following data for the current year: Gulick Company's ending work in process inventory is

The predetermined overhead rate is

The cost of raw materials purchased is credited to Raw Materials Inventory when materials are received.

When the company assigns factory labor costs to jobs, the direct labor cost is debited to

Which of the following is not viewed as part of accumulating manufacturing costs in a job order cost system?

A good system of internal control requires that the job order cost sheet be destroyed as soon as the job is complete.

The formula for the predetermined overhead rate is estimated annual overhead costs divided by an expected annual operating activity.

Which one of the following best describes a job cost sheet?

The Manufacturing Overhead account shows debits of $30,000, $24,000, and $28,000 and one credit for $86,000. Based on this information, manufacturing overhead

Manufacturing overhead is applied to each job

Kline Manufacturing has the following labor costs: The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor for

Kimble Company applies overhead on the basis of machine hours. Given the following data, compute overhead applied and the under- or overapplication of overhead for the period:

In a manufacturing company, the cost of factory labor consists of all of the following except

If the Manufacturing Overhead account has a debit balance at the end of a period, it means that

There should be a separate job cost sheet for each job.

In calculating a predetermined overhead rate, a recent trend in automated manufacturing operations is to choose an activity base related to

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Fraud, Internal Control, and Cash

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Analysis: the Big Picture

Managerial Accounting

Process Costing

Cost-Volume-Profit

Incremental Analysis

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

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