Question 1

In a job order costing system,a manufacturing firm typically uses a cost driver rate to estimate the ________ used for a job.

Accepted Answer

A) direct materials 
B) direct labor 
C) variable overhead 
D) total costs 
A) direct materials 
B) direct labor 
C) variable overhead 
D) total costs

Question 2

Job order costing would be appropriate for the construction of a cruise liner.

Accepted Answer

A) True 
 B)False

Question 3

List at least three factors taken into consideration when determining the markup rate.

Accepted Answer

Markup rate is the percentage addition t

Question 4

For the activity cost driver rate,overhead costs ________ should be used in the calculation.

Accepted Answer

A) actually consumed 
B) made available 
C) based on a seasonal average 
D) None of the above is correct. 
A) actually consumed 
B) made available 
C) based on a seasonal average 
D) None of the above is correct.

Question 5

Explain why more than one cost pool usually results in more realistic overhead cost estimates.

Accepted Answer

In today's industrial environment, the p

Question 6

Which one of the following statements is FALSE?

Accepted Answer

A) In a job order costing system, individual jobs use different quantities of production resources. 
B) In a process-costing system, each unit uses approximately the same amount of resources. 
C) An organization that manufactures several types of cereal would use a job order costing system. 
D) A corporation whose sole business activity is processing the customer deposits of several banks would use a process-costing system. 
A) In a job order costing system, individual jobs use different quantities of production resources. 
B) In a process-costing system, each unit uses approximately the same amount of resources. 
C) An organization that manufactures several types of cereal would use a job order costing system. 
D) A corporation whose sole business activity is processing the customer deposits of several banks would use a process-costing system.

Question 7

An example of a direct cost in a car repair shop would include:

Accepted Answer

A) parts used in repair. 
B) supervisory labor. 
C) depreciation on tools. 
D) property taxes on car repair shop. 
A) parts used in repair. 
B) supervisory labor. 
C) depreciation on tools. 
D) property taxes on car repair shop.

Question 8

Wood Manufacturing is a small textile manufacturer using machine-hours as the single, plant-wide predetermined cost driver rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Winfield High School band jacket job:  
-What is the bid price for the Winfield High School Job if the company uses a 40% markup of total manufacturing costs?

Accepted Answer

A) $2,310 
B) $588 
C) $1,680 
D) $2,058 
A) $2,310 
B) $588 
C) $1,680 
D) $2,058

Question 9

An example of a direct cost for a service provided by an accounting firm,such as a tax return,would be:

Accepted Answer

A) depreciation on computer system. 
B) labor of staff accountant who prepared the return. 
C) labor of file clerk who filed copies of return. 
D) rent on the office. 
A) depreciation on computer system. 
B) labor of staff accountant who prepared the return. 
C) labor of file clerk who filed copies of return. 
D) rent on the office.

Question 10

Process costing systems are used when products manufactured are relatively homogeneous and there are few and relatively small differences in the production requirements for different products.

Accepted Answer

A) True 
 B)False

Question 11

Process costing should be used to assign costs to products when:

Accepted Answer

A) the units produced are similar. 
B) the units produced are dissimilar. 
C) the calculation of unit costs requires the averaging of all manufacturing costs over all units produced. 
D) Either A or C are present. 
A) the units produced are similar. 
B) the units produced are dissimilar. 
C) the calculation of unit costs requires the averaging of all manufacturing costs over all units produced. 
D) Either A or C are present.

Question 12

Job order costing is an approach to costing that estimates costs for specific customer orders because the orders vary from customer to customer.

Accepted Answer

A) True 
 B)False

Question 13

LCR Company manufactures paint and applies manufacturing overhead costs to production at a predetermined rate of $20 per direct labor hour. The following data are obtained from the accounting records for October 2011:  
-The amount of manufacturing overhead costs applied to all jobs during October 2011 total:

Accepted Answer

A) $ 102,000. 
B) $400,000. 
C) $620,000. 
D) $1,240,000. 
A) $ 102,000. 
B) $400,000. 
C) $620,000. 
D) $1,240,000.

Question 14

Wisconsin Electronics has received an order for 1,000 specially designed TV/VCR combinations.  The following standards were compiled for this order:  
-The estimated direct labor cost for this order is:

Accepted Answer

A) $30,000. 
B) $40,000. 
C) $80,000. 
D) $115,000. 
A) $30,000. 
B) $40,000. 
C) $80,000. 
D) $115,000.

Question 15

For 2011, Steve's Plastics Manufacturing uses a normal job order costing system. The accounting records contain the following information:   The only cost driver is machine hours.
-Using normal job order costing,the 2011 predetermined manufacturing overhead cost driver rate is:

Accepted Answer

A) $4.00 per machine hour. 
B) $4.80 per machine hour. 
C) $5.00 per machine hour. 
D) $6.00 per machine hour. 
A) $4.00 per machine hour. 
B) $4.80 per machine hour. 
C) $5.00 per machine hour. 
D) $6.00 per machine hour.

Question 16

Long Island Manufacturing Company developed the following information for its service departments, S1 and S2, and its production departments, P1 and P2:  
-Using the direct method of service department cost allocation,how much is to be allocated from S2 to P2 if calculations are rounded to the nearest dollar?

Accepted Answer

A) $5,720 
B) $6,480 
C) $8,640 
D) $4,430 
A) $5,720 
B) $6,480 
C) $8,640 
D) $4,430

Question 17

The markup rate on a job bid sheet includes amounts for certain items.Discuss these items.

Accepted Answer

The markup rate on a job bid sheet inclu

Question 18

Tangipahoa Manufacturing uses departmental cost driver rates to apply manufacturing overhead costs to products.Manufacturing overhead costs are applied on the basis of machine hours in the Machining Department and on the basis of direct labor dollars in the Assembly Department.At the beginning of 2007,the following estimates were provided for the coming year:
 
The accounting records of the company show the following data for Product #A273:
 
Required:
a.Compute the predetermined manufacturing overhead cost driver rate for each department.
b.Compute the total cost of Product #A273.
c.Provide possible reasons why Tangipahoa Manufacturing uses two different cost drivers.

Accepted Answer

a. Machining Department cost driver rate

Question 19

Wood Manufacturing is a small textile manufacturer using machine-hours as the single, plant-wide predetermined cost driver rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Winfield High School band jacket job:  
-For Wood Manufacturing,what is the annual manufacturing overhead cost driver rate?

Accepted Answer

A) $0.50 per machine hour 
B) $0.80 per machine hour 
C) $0.30 per machine hour 
D) $33.33 per machine hour 
A) $0.50 per machine hour 
B) $0.80 per machine hour 
C) $0.30 per machine hour 
D) $33.33 per machine hour

Question 20

Ocean Technical Services applies manufacturing overhead costs to products at a predetermined rate of $70 per direct labor hour. One customer has requested a bid on a special order of a product. Estimates for this order include:  direct materials $50,000; direct labor 900 direct labor hours @ $30 per hour; and a markup rate of 25%.
-The bid price for this special order is:

Accepted Answer

A) $77,000. 
B) $97,000. 
C) $121,250. 
D) $175,000. 
A) $77,000. 
B) $97,000. 
C) $121,250. 
D) $175,000.

In a job order costing system,a manufacturing firm typically uses a cost driver rate to estimate the ________ used for a job.

Job order costing would be appropriate for the construction of a cruise liner.

List at least three factors taken into consideration when determining the markup rate.

For the activity cost driver rate,overhead costs ________ should be used in the calculation.

Explain why more than one cost pool usually results in more realistic overhead cost estimates.

Which one of the following statements is FALSE?

An example of a direct cost in a car repair shop would include:

An example of a direct cost for a service provided by an accounting firm,such as a tax return,would be:

Process costing systems are used when products manufactured are relatively homogeneous and there are few and relatively small differences in the production requirements for different products.

Process costing should be used to assign costs to products when:

Job order costing is an approach to costing that estimates costs for specific customer orders because the orders vary from customer to customer.

Wisconsin Electronics has received an order for 1,000 specially designed TV/VCR combinations. The following standards were compiled for this order: -The estimated direct labor cost for this order is:

For 2011, Steve's Plastics Manufacturing uses a normal job order costing system. The accounting records contain the following information: The only cost driver is machine hours. -Using normal job order costing,the 2011 predetermined manufacturing overhead cost driver rate is:

The markup rate on a job bid sheet includes amounts for certain items.Discuss these items.

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Activity-Based Cost Systems

Measuring and Managing Customer Relationships

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

Filters

Exam 4: Accumulating and Assigning Costs to Products

In a job order costing system,a manufacturing firm typically uses a cost driver rate to estimate the ________ used for a job.

Job order costing would be appropriate for the construction of a cruise liner.

List at least three factors taken into consideration when determining the markup rate.

For the activity cost driver rate,overhead costs ________ should be used in the calculation.

Explain why more than one cost pool usually results in more realistic overhead cost estimates.

Which one of the following statements is FALSE?

An example of a direct cost in a car repair shop would include:

An example of a direct cost for a service provided by an accounting firm,such as a tax return,would be:

Process costing systems are used when products manufactured are relatively homogeneous and there are few and relatively small differences in the production requirements for different products.

Process costing should be used to assign costs to products when:

Job order costing is an approach to costing that estimates costs for specific customer orders because the orders vary from customer to customer.

Wisconsin Electronics has received an order for 1,000 specially designed TV/VCR combinations. The following standards were compiled for this order: -The estimated direct labor cost for this order is:

For 2011, Steve's Plastics Manufacturing uses a normal job order costing system. The accounting records contain the following information: The only cost driver is machine hours. -Using normal job order costing,the 2011 predetermined manufacturing overhead cost driver rate is:

The markup rate on a job bid sheet includes amounts for certain items.Discuss these items.

How Management Accounting Information Supports Decision Making

The Balanced Scorecard and Strategy Map

Using Costs in Decision Making

Activity-Based Cost Systems

Measuring and Managing Customer Relationships

Measuring and Managing Process Performance

Measuring and Managing Life-Cycle Costs

Behavioral and Organizational Issues in Management Accounting and Control Systems

Using Budgets for Planning and Coordination

Financial Control

Filters