Question 1

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 2

The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket.

Accepted Answer

A) True 
 B)False

Question 3

Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year.  Below is a list of all the jobs for the quarter:   Jobs 356, 357, 358, and 359 were completed.  Jobs 356 and 357 were sold at a profit of $500 on each job.
What is the ending balance of Work in Process for Adams Company at the end of the first quarter?

Accepted Answer

A)  $0 
B)  $456 
C)  $3,208 
D)  $2,752 
A)  $0 
B)  $456 
C)  $3,208 
D)  $2,752

Question 4

The current year's advertising costs are normally considered period costs.

Accepted Answer

A) True 
 B)False

Question 5

List the accounts used in the cost flow for: 
(a) a manufacturer 
(b) a service provider.

Accepted Answer

(a) Materials 
Wages Payable

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

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 8

The document that serves as the basis for recording direct labor on a job cost sheet is the clock card.

Accepted Answer

A) True 
 B)False

Question 9

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. Calculate the predetermined overhead rate to apply factory overhead.

Accepted Answer

$1,470,000

Question 10

Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.

Accepted Answer

A) True 
 B)False

Question 11

Job order cost accounting systems can be used only for companies that manufacture a product.

Accepted Answer

A) True 
 B)False

Question 12

If the underapplied factory overhead amount is immaterial, it is transferred to Cost of Goods Sold at the end of the fiscal year.

Accepted Answer

A) True 
 B)False

Question 13

Materials purchased on account during the month amounted to $190,000. Materials requisitioned and placed in production totaled $156,000. The entry to record the transaction for materials requisitioned by the production department is

Accepted Answer

A)  Materials                                156,000      Work in Process                                     156,000 
B)  Work in Process                     190,000      Materials                                                190,000 
C)  Work in Process                     156,000      Materials                                                156,000 
D)  Work in Process                     156,000      Cash                                                       156,000 
A)  Materials                                156,000      Work in Process                                     156,000 
B)  Work in Process                     190,000      Materials                                                190,000 
C)  Work in Process                     156,000      Materials                                                156,000 
D)  Work in Process                     156,000      Cash                                                       156,000

Question 14

The balance of Material Q on May 1 and the receipts and issuances during May are as follows:   
Determine the cost of each of the issuances under a perpetual system, using the FIFO method.

Accepted Answer

May 17 issue: 
(8 ×

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a

Accepted Answer

A)  debit balance and be underapplied 
B)  credit balance and be underapplied 
C)  credit balance and be overapplied 
D)  debit balance and be overapplied 
A)  debit balance and be underapplied 
B)  credit balance and be underapplied 
C)  credit balance and be overapplied 
D)  debit balance and be overapplied

Question 17

Which of the following is a product cost?

Accepted Answer

A)  salary of a sales manager 
B)  advertising for a particular product 
C)  drill bits for a drill press used in the plant assembly area 
D)  salary of the company receptionist 
A)  salary of a sales manager 
B)  advertising for a particular product 
C)  drill bits for a drill press used in the plant assembly area 
D)  salary of the company receptionist

Question 18

The entry to record the flow of direct labor costs into production in a job order cost accounting system is to

Accepted Answer

A)  debit Factory Overhead, credit Work in Process 
B)  debit Finished Goods, credit Wages Payable 
C)  debit Work in Process, credit Wages Payable 
D)  debit Factory Overhead, credit Wages Payable 
A)  debit Factory Overhead, credit Work in Process 
B)  debit Finished Goods, credit Wages Payable 
C)  debit Work in Process, credit Wages Payable 
D)  debit Factory Overhead, credit Wages Payable

Question 19

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 20

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

Accepted Answer

A) True 
 B)False

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

The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket.

The current year's advertising costs are normally considered period costs.

List the accounts used in the cost flow for: (a) a manufacturer (b) a service provider.

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

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

The document that serves as the basis for recording direct labor on a job cost sheet is the clock card.

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. Calculate the predetermined overhead rate to apply factory overhead.

Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.

Job order cost accounting systems can be used only for companies that manufacture a product.

If the underapplied factory overhead amount is immaterial, it is transferred to Cost of Goods Sold at the end of the fiscal year.

Materials purchased on account during the month amounted to $190,000. Materials requisitioned and placed in production totaled $156,000. The entry to record the transaction for materials requisitioned by the production department is

The balance of Material Q on May 1 and the receipts and issuances during May are as follows: Determine the cost of each of the issuances under a perpetual system, using the FIFO method.

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

If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a

Which of the following is a product cost?

The entry to record the flow of direct labor costs into production in a job order cost accounting system is to

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.

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

Introduction to Managerial Accounting

Process Cost Systems

Activity Based Costing

Cost Volume Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters

Exam 2: Job Order Costing

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

The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket.

The current year's advertising costs are normally considered period costs.

List the accounts used in the cost flow for: (a) a manufacturer (b) a service provider.

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

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

The document that serves as the basis for recording direct labor on a job cost sheet is the clock card.

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. Calculate the predetermined overhead rate to apply factory overhead.

Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.

Job order cost accounting systems can be used only for companies that manufacture a product.

If the underapplied factory overhead amount is immaterial, it is transferred to Cost of Goods Sold at the end of the fiscal year.

Materials purchased on account during the month amounted to $190,000. Materials requisitioned and placed in production totaled $156,000. The entry to record the transaction for materials requisitioned by the production department is

The balance of Material Q on May 1 and the receipts and issuances during May are as follows: Determine the cost of each of the issuances under a perpetual system, using the FIFO method.

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

If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a

Which of the following is a product cost?

The entry to record the flow of direct labor costs into production in a job order cost accounting system is to

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.

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

Introduction to Managerial Accounting

Process Cost Systems

Activity Based Costing

Cost Volume Profit Analysis

Variable Costing for Management Analysis

Budgeting

Evaluating Variances From Standard Costs

Evaluating Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Lean Manufacturing and Activity Analysis

Statement of Cash Flows

Financial Statement Analysis

Filters