Question 1

Direct costs ________.

Accepted Answer

A)  are anything for which a measurement of costs is desired 
B)  are costs related to a particular cost object that can be traced to that cost object in an economically feasible manner 
C)  focus specifically on the costing needs of the CFO 
D)  are costs related to a particular cost object that cannot be traced to that cost object in a cost-effective manner 
A)  are anything for which a measurement of costs is desired 
B)  are costs related to a particular cost object that can be traced to that cost object in an economically feasible manner 
C)  focus specifically on the costing needs of the CFO 
D)  are costs related to a particular cost object that cannot be traced to that cost object in a cost-effective manner

Question 2

In job costing, only direct costs are used to determine the cost of a job.

Accepted Answer

A) True 
 B)False

Question 3

A budgeted indirect-cost rate is computed for each cost pool using budgeted indirect costs and the budgeted quantity of the cost-allocation base.

Accepted Answer

A) True 
 B)False

Question 4

What are the direct costs of a job and in which source documents are they recorded?

Accepted Answer

The direct costs of a job are direct mat

Question 5

Assigning direct costs to a cost object is called ________.

Accepted Answer

A)  cost allocation 
B)  cost assignment 
C)  cost pooling 
D)  cost tracing 
A)  cost allocation 
B)  cost assignment 
C)  cost pooling 
D)  cost tracing

Question 6

Hammond and Jarrett provide tax consulting for estates and trusts. Their job-costing system has a single direct-cost category (professional labor) and a single indirect-cost pool (research support). The indirect-cost pool contains all the costs except direct personnel costs. All budgeted indirect costs are allocated to individual jobs using actual professional labor-hours.
Required:
a.Discuss the reasons a consulting firm might use a normal costing system rather than an actual costing system.
b.What might be some reasons for the firm to change from a one-pool to a multiple-pool allocation concept?

Accepted Answer

a.Budget rates are normally used because

Question 7

Beta Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are:
 
The actual material and labor costs charged to Job #432 were as follows:
 
Beta applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental rates determined at the beginning of the year.
Proportion of manufacturing overhead with respect to the total cost of the job is ________.

Accepted Answer

A)  39.74% 
B)  32.05% 
C)  28.21% 
D)  42.68% 
A)  39.74% 
B)  32.05% 
C)  28.21% 
D)  42.68%

Question 8

River Falls Manufacturing uses a normal cost system and had the following data available for 2018:
 
The journal entry to record the materials placed into production would include a ________.

Accepted Answer

A)  credit to Direct Materials Inventory for $84,000 
B)  debit to Direct Materials Inventory for $150,000 
C)  credit to WIP Inventory for $84,000 
D)  debit to WIP Inventory for $150,000 
A)  credit to Direct Materials Inventory for $84,000 
B)  debit to Direct Materials Inventory for $150,000 
C)  credit to WIP Inventory for $84,000 
D)  debit to WIP Inventory for $150,000

Question 9

Which of the following items is debited to the Work-in-Process account?

Accepted Answer

A)  allocated manufacturing overhead 
B)  completed goods transferred out of the plant 
C)  accumulated depreciation on fixed assets 
D)  accounts receivable 
A)  allocated manufacturing overhead 
B)  completed goods transferred out of the plant 
C)  accumulated depreciation on fixed assets 
D)  accounts receivable

Question 10

Job-cost records for Boucher Company contained the following data:
   
Required:
a.Compute WIP inventory at June 30.
b.Compute finished goods inventory at June 30.
c.Compute cost of goods sold for June.

Accepted Answer

a.$7,000 + $8,000 =

Question 11

What are three possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method.

Accepted Answer

One way to dispose of underallocated or

Question 12

Differentiate between a cost pool and a cost-allocation base.

Accepted Answer

A cost pool is a grouping of individual

Question 13

Each cost pool will have one cost-allocation base.

Accepted Answer

A) True 
 B)False

Question 14

When using a normal costing system, manufacturing overhead is allocated using the ________ manufacturing overhead rate and the ________ quantity of the allocation base.

Accepted Answer

A)  budgeted; actual 
B)  budgeted; budgeted 
C)  actual; budgeted 
D)  actual; actual 
A)  budgeted; actual 
B)  budgeted; budgeted 
C)  actual; budgeted 
D)  actual; actual

Question 15

Lancelot Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost 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 Case High School band jacket job.
 
What is the bid price for the Case High School job if the company uses a 40% markup of total manufacturing costs?

Accepted Answer

A)  $3,360 
B)  $1,122 
C)  $960 
D)  $3,927 
A)  $3,360 
B)  $1,122 
C)  $960 
D)  $3,927

Question 16

A cost is considered direct if it can be traced to a particular cost object in a cost effective way which means it can be

Accepted Answer

A)  traced easily with the aid of technology 
B)  traced in a manner that is accurate 
C)  traced in an economically feasible way 
D)  possibly traced accurately with an investment in hardware and software 
A)  traced easily with the aid of technology 
B)  traced in a manner that is accurate 
C)  traced in an economically feasible way 
D)  possibly traced accurately with an investment in hardware and software

Question 17

Manton Manufacturing applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $60 per direct manufacturing labor-hour. A retail outlet has requested a bid on a special order of the Toy Bear product. Estimates for this order include: Direct materials of $79,000; 680 direct manufacturing labor-hours at $25 per hour; and a 25% markup rate on total manufacturing costs. Manufacturing overhead cost estimates for this special-order total ________.

Accepted Answer

A)  $60,550 
B)  $57,800 
C)  $40,800 
D)  $59,250 
A)  $60,550 
B)  $57,800 
C)  $40,800 
D)  $59,250

Question 18

The ending balance in the Work-in-Process Control account represents the costs of all jobs that ________.

Accepted Answer

A)  have not been completed 
B)  have been completed but not sold 
C)  have been completed and sold to customers 
D)  are reported on the income statement 
A)  have not been completed 
B)  have been completed but not sold 
C)  have been completed and sold to customers 
D)  are reported on the income statement

Question 19

Direct costs are traced the same way for actual costing and normal costing.

Accepted Answer

A) True 
 B)False

Question 20

Elite Stationary employs 20 full-time employees and 10 trainees. Direct and indirect costs are applied on a professional labor-hour basis that includes both employee and trainee hours. Following is information for 2018:
 
When a normal costing system is used, clients using proportionately more full-time employees than trainees will ________.

Accepted Answer

A)  be over billed for actual resources used 
B)  be under billed for actual resources used 
C)  be billed accurately for actual resources used 
D)  result in an under allocation of direct costs 
A)  be over billed for actual resources used 
B)  be under billed for actual resources used 
C)  be billed accurately for actual resources used 
D)  result in an under allocation of direct costs

Direct costs ________.

In job costing, only direct costs are used to determine the cost of a job.

A budgeted indirect-cost rate is computed for each cost pool using budgeted indirect costs and the budgeted quantity of the cost-allocation base.

What are the direct costs of a job and in which source documents are they recorded?

Assigning direct costs to a cost object is called ________.

River Falls Manufacturing uses a normal cost system and had the following data available for 2018: The journal entry to record the materials placed into production would include a ________.

Which of the following items is debited to the Work-in-Process account?

Job-cost records for Boucher Company contained the following data: Required: a.Compute WIP inventory at June 30. b.Compute finished goods inventory at June 30. c.Compute cost of goods sold for June.

What are three possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method.

Differentiate between a cost pool and a cost-allocation base.

Each cost pool will have one cost-allocation base.

When using a normal costing system, manufacturing overhead is allocated using the manufacturing overhead rate and the quantity of the allocation base.

A cost is considered direct if it can be traced to a particular cost object in a cost effective way which means it can be

The ending balance in the Work-in-Process Control account represents the costs of all jobs that ________.

Direct costs are traced the same way for actual costing and normal costing.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, Just-in-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 4: Job Costing

Direct costs ________.

In job costing, only direct costs are used to determine the cost of a job.

A budgeted indirect-cost rate is computed for each cost pool using budgeted indirect costs and the budgeted quantity of the cost-allocation base.

What are the direct costs of a job and in which source documents are they recorded?

Assigning direct costs to a cost object is called ________.

River Falls Manufacturing uses a normal cost system and had the following data available for 2018: The journal entry to record the materials placed into production would include a ________.

Which of the following items is debited to the Work-in-Process account?

Job-cost records for Boucher Company contained the following data: Required: a.Compute WIP inventory at June 30. b.Compute finished goods inventory at June 30. c.Compute cost of goods sold for June.

What are three possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method.

Differentiate between a cost pool and a cost-allocation base.

Each cost pool will have one cost-allocation base.

When using a normal costing system, manufacturing overhead is allocated using the ________ manufacturing overhead rate and the ________ quantity of the allocation base.

A cost is considered direct if it can be traced to a particular cost object in a cost effective way which means it can be

The ending balance in the Work-in-Process Control account represents the costs of all jobs that ________.

Direct costs are traced the same way for actual costing and normal costing.

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality and Time

Inventory Management, Just-in-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

When using a normal costing system, manufacturing overhead is allocated using the manufacturing overhead rate and the quantity of the allocation base.