Question 1

Recording jobs shipped and customers billed would include a debit to

Accepted Answer

A)  Accounts Payable 
B)  Cash 
C)  Finished Goods 
D)  Cost of Goods Sold 
A)  Accounts Payable 
B)  Cash 
C)  Finished Goods 
D)  Cost of Goods Sold

Question 2

Crain Company budgeted 35,000 direct labor hours and incurred 40,000 direct labor hours. It incurred $780,000 of overhead and estimated overhead was $735,000. 
What is Crain's predetermined overhead rate? Was overhead overapplied or underapplied for the year? By how much?

Accepted Answer

Predetermined overhead rate:  $735,000/3

Question 3

Discuss how job order cost information is used in decision making.  What are some possible reasons that actual cost of materials would exceed expected costs for a job?

Accepted Answer

Since a job order cost system provides p

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

Which of the following would record the labor costs to an individual job?

Accepted Answer

A)  clock cards 
B)  in-and-out cards 
C)  time tickets 
D)  a payroll register 
A)  clock cards 
B)  in-and-out cards 
C)  time tickets 
D)  a payroll register

Question 6

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

Question 7

A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

Accepted Answer

A) True 
 B)False

Question 8

Period costs are

Accepted Answer

A)  found on the balance sheet 
B)  not involved in the production process 
C)  classified as direct labor, direct material, or factory overhead 
D)  found on the job order cost sheets 
A)  found on the balance sheet 
B)  not involved in the production process 
C)  classified as direct labor, direct material, or factory overhead 
D)  found on the job order cost sheets

Question 9

At the end of July, the first month of the current fiscal year, the factory overhead account had a debit balance. Which of the following describes the nature of this balance and how it would be reported on the interim balance sheet?

Accepted Answer

A)  overapplied, deferred credit 
B)  underapplied, deferred debit 
C)  underapplied, deferred credit 
D)  overapplied, deferred debit 
A)  overapplied, deferred credit 
B)  underapplied, deferred debit 
C)  underapplied, deferred credit 
D)  overapplied, deferred debit

Question 10

A manufacturing business reports just two types of inventory on its balance sheet: work in process inventory and finished goods inventory.

Accepted Answer

A) True 
 B)False

Question 11

Recording jobs completed would include a credit to

Accepted Answer

A)  Factory Overhead 
B)  Finished Goods 
C)  Work in Process 
D)  Cost of Goods Sold 
A)  Factory Overhead 
B)  Finished Goods 
C)  Work in Process 
D)  Cost of Goods Sold

Question 12

Which of the following is a period cost?

Accepted Answer

A)  depreciation on factory lunchroom furniture 
B)  salary of telephone receptionist in the sales office 
C)  salary of a security guard for the factory parking lot 
D)  computer chips used by a computer manufacturer 
A)  depreciation on factory lunchroom furniture 
B)  salary of telephone receptionist in the sales office 
C)  salary of a security guard for the factory parking lot 
D)  computer chips used by a computer manufacturer

Question 13

A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual factory overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the amount of overapplied or underapplied manufacturing overhead at the end of the year?

Accepted Answer

A)  $6,000 overapplied 
B)  $6,000 underapplied 
C)  $54,800 overapplied 
D)  $54,800 underapplied 
A)  $6,000 overapplied 
B)  $6,000 underapplied 
C)  $54,800 overapplied 
D)  $54,800 underapplied

Question 14

As product costs are incurred in the manufacturing process, they are accounted for as assets and reported on the balance sheet as inventory.

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

Question 16

A receiving report is prepared when purchased materials are first received by the manufacturing department.

Accepted Answer

A) True 
 B)False

Question 17

In a job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

Accepted Answer

A)  materials 
B)  direct labor 
C)  rent 
D)  supplies 
A)  materials 
B)  direct labor 
C)  rent 
D)  supplies

Question 18

The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. The machine hours for the month of April for all of the jobs were 4,780. If the actual factory overhead totaled $141,800, determine the over- or underapplied amount for the month.

Accepted Answer

A)  $7,575 underapplied 
B)  $35,220 underapplied 
C)  $7,575 overapplied 
D)  $35,220 overapplied 
A)  $7,575 underapplied 
B)  $35,220 underapplied 
C)  $7,575 overapplied 
D)  $35,220 overapplied

Question 19

The journal entry to record the purchase of $45,000 of raw materials is

Accepted Answer

A)  Materials                                              45,000         Accounts Receivable                                  45,000 
B)  Materials                                               45,000         Accounts Payable                                       45,000 
C)  Inventory                                             45,000         Accounts Receivable                                   30,000 
D)  Inventory                                             45,000         Cash                                                          45,000 
A)  Materials                                              45,000         Accounts Receivable                                  45,000 
B)  Materials                                               45,000         Accounts Payable                                       45,000 
C)  Inventory                                             45,000         Accounts Receivable                                   30,000 
D)  Inventory                                             45,000         Cash                                                          45,000

Question 20

A manufacturer may employ a job order cost system for some of its products and a process cost system for others.

Accepted Answer

A) True 
 B)False

Recording jobs shipped and customers billed would include a debit to

Crain Company budgeted 35,000 direct labor hours and incurred 40,000 direct labor hours. It incurred $780,000 of overhead and estimated overhead was $735,000. What is Crain's predetermined overhead rate? Was overhead overapplied or underapplied for the year? By how much?

Discuss how job order cost information is used in decision making. What are some possible reasons that actual cost of materials would exceed expected costs for a job?

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

Which of the following would record the labor costs to an individual job?

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

A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

Period costs are

At the end of July, the first month of the current fiscal year, the factory overhead account had a debit balance. Which of the following describes the nature of this balance and how it would be reported on the interim balance sheet?

A manufacturing business reports just two types of inventory on its balance sheet: work in process inventory and finished goods inventory.

Recording jobs completed would include a credit to

Which of the following is a period cost?

As product costs are incurred in the manufacturing process, they are accounted for as assets and reported on the balance sheet as inventory.

Period costs are classified as either

A receiving report is prepared when purchased materials are first received by the manufacturing department.

In a job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

The journal entry to record the purchase of $45,000 of raw materials is

A manufacturer may employ a job order cost system for some of its products and a process cost system for others.

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

Recording jobs shipped and customers billed would include a debit to

Crain Company budgeted 35,000 direct labor hours and incurred 40,000 direct labor hours. It incurred $780,000 of overhead and estimated overhead was $735,000. What is Crain's predetermined overhead rate? Was overhead overapplied or underapplied for the year? By how much?

Discuss how job order cost information is used in decision making. What are some possible reasons that actual cost of materials would exceed expected costs for a job?

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

Which of the following would record the labor costs to an individual job?

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

A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

Period costs are

At the end of July, the first month of the current fiscal year, the factory overhead account had a debit balance. Which of the following describes the nature of this balance and how it would be reported on the interim balance sheet?

A manufacturing business reports just two types of inventory on its balance sheet: work in process inventory and finished goods inventory.

Recording jobs completed would include a credit to

Which of the following is a period cost?

As product costs are incurred in the manufacturing process, they are accounted for as assets and reported on the balance sheet as inventory.

Period costs are classified as either

A receiving report is prepared when purchased materials are first received by the manufacturing department.

In a job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

The journal entry to record the purchase of $45,000 of raw materials is

A manufacturer may employ a job order cost system for some of its products and a process cost system for others.

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