Question 1

Which of the following are drawbacks to applying actual overhead to production?

Accepted Answer

A) A delay occurs in assigning costs to jobs or products. 
B) Fluctuations in quantities produced during a period could cause varying per-unit charges for fixed overhead. 
C) Seasonality of overhead costs may cause distortions in job or product costs. 
D) all answers are correct. 
A) A delay occurs in assigning costs to jobs or products. 
B) Fluctuations in quantities produced during a period could cause varying per-unit charges for fixed overhead. 
C) Seasonality of overhead costs may cause distortions in job or product costs. 
D) all answers are correct. D

Question 2

Mayflower Corporation manufactures products on a job-order basis.The job cost sheet for Job #656 shows the following for September:
             Direct material       $5,000               Direct labor (100 hours @ $7.25)       $725               Machine hours incurred       40               Predetermined overhead rate per machine hour       $26      
At the end of September,what total cost appears on the job cost sheet for Job #656?

Accepted Answer

A) $5,725 
B) $5,765 
C) $6,765 
D) $8,325 
A) $5,725 
B) $5,765 
C) $6,765 
D) $8,325 C

Question 3

Peoria Company
Peoria Company has two departments (Processing and Packaging)and uses a job-order costing system.Peoria applies overhead in Processing based on machine hours and on direct labor cost in Packaging.The following information is available for August:
$\begin{array}{llc}
\text { Machine hours } & \frac{\text { Processing }}{3,600} & \frac{\text { Packagin }}{1,500} \
\text { Directlabor cost } & \$ 47,600 & \$ 24,000 \
\text { Applied overhead } & \$ 60,500 & \$ 54,750
\end{array}$

Refer to Peoria Company.What is the overhead application rate per machine hour for Processing?

Accepted Answer

A) $ 0.79 
B) $ 1.27 
C) $13.22 
D) $16.81 
A) $ 0.79 
B) $ 1.27 
C) $13.22 
D) $16.81 D

Question 4

The use of standard material or labor costs in job-order costing

Accepted Answer

A) is similar to the use of predetermined overhead rates in a normal costing system. 
B) will keep actual costs of jobs from fluctuating due to changes in component costs. 
C) is appropriate for any company making units to customer specification. 
D) all answers are correct. 
A) is similar to the use of predetermined overhead rates in a normal costing system. 
B) will keep actual costs of jobs from fluctuating due to changes in component costs. 
C) is appropriate for any company making units to customer specification. 
D) all answers are correct.

Question 5

A company that manufactures sugar will use a ____________________ costing system to track production costs

Accepted Answer

The answer of A company that manufactures sugar will use...

Question 6

Robertson Company.
Robertson Company uses a job-order costing system and the following information is available from its records.The company has three jobs in process: #8,#12,and #15.
Raw matenial used                                                            $130,000
Direct lab or per hour                                                        $\$ 9.50$
Overhead applied bared on direct lab or cost                     $125 \%$ 
Direct material was requisitioned as follows for each job respectively: 25 percent,30 percent,and 30 percent;the balance of the requisitions was considered indirect.Direct labor hours per job are 2,800;3,300;and 4,000;respectively.Indirect labor is $45,000.Other actual overhead costs totaled $50,000.
Refer to Robertson Company.What is the total amount of actual overhead?

Accepted Answer

A) $ 45,000 
B) $ 95,000 
C) $114,500 
D) $119,938 
A) $ 45,000 
B) $ 95,000 
C) $114,500 
D) $119,938

Question 7

What information should be contained in a subsidiary ledger for Work in Process Inventory in a job-order costing system?

Accepted Answer

The Work in Process Inventory subsidiary

Question 8

The source document that records the amount of time an employee worked on a job and his/her pay rate is the

Accepted Answer

A) job-order cost sheet. 
B) employee time sheet. 
C) interoffice memo. 
D) labor requisition form. 
A) job-order cost sheet. 
B) employee time sheet. 
C) interoffice memo. 
D) labor requisition form.

Question 9

Cost flows and physical flows of units are identical.

Accepted Answer

A) True 
 B)False

Question 10

In a normal cost system,a debit to Work in Process Inventory would not be made for

Accepted Answer

A) actual overhead. 
B) applied overhead. 
C) actual direct material. 
D) actual direct labor. 
A) actual overhead. 
B) applied overhead. 
C) actual direct material. 
D) actual direct labor.

Question 11

If a substandard product cannot be reworked,it is known as _________.

Accepted Answer

The answer of If a substandard product cannot be reworked,it...

Question 12

Grant Company.
Grant Company uses a job-order costing system and develops its predetermined overhead rate based on machine hours.The company has two jobs in process at the end of the cycle,Jobs #177 and #179.
 Budgeted overhead                        $ \$ 100,300 $
Budgeted machine hours                  85,000
Raw material                                    $63,000
Labor cost                                       $ \$ 50,000 $ 
Refer to Grant Company.What amount of overhead is charged to Jobs #177 and #179? Machine hours are split between Jobs #177 and #179-65 percent and 35 percent,respectively.Actual machine hours equal budgeted machine hours.

Accepted Answer

OH Applied = MH Cost ´ POHR
Jo

Question 13

Standards can be used in a job-order costing system if the products manufactured are varied in nature.

Accepted Answer

A) True 
 B)False

Question 14

Charleston Company
Charleston Company has two departments (Processing and Packaging)and uses a job-order costing system.Charleston applies overhead in Processing based on machine hours and on direct labor cost in Packaging.The following information is available for July:
$\begin{array}{llc}
\text { Machine hours } & \frac{\text { Processing }}{2,500} & \frac{\text { Packagin }}{1,000} \
\text { Directlabor cost } & \$ 44,500 & \$ 23,000 \
\text { Applied overhead } & \$ 55,000 & \$ 51,750
\end{array}$

Refer to Charleston Company What is the overhead application rate for Packaging?

Accepted Answer

A) $ 0.44 
B) $ 2.25 
C) $23.00 
D) $51.75 
A) $ 0.44 
B) $ 2.25 
C) $23.00 
D) $51.75

Question 15

In a standard job-order costing system,factory overhead is applied using _______ rates times _________ input.

Accepted Answer

predetermi

Question 16

The cost sheets for incomplete jobs at the end of the period comprise the subsidiary ledger for

Accepted Answer

A) Finished Goods Inventory. 
B) Raw Material Inventory. 
C) Work in Process Inventory. 
D) Supplies Inventory. 
A) Finished Goods Inventory. 
B) Raw Material Inventory. 
C) Work in Process Inventory. 
D) Supplies Inventory.

Question 17

When raw materials are placed into production,the materials inventory account is debited.

Accepted Answer

A) True 
 B)False

Question 18

Grant Company.
Grant Company uses a job-order costing system and develops its predetermined overhead rate based on machine hours.The company has two jobs in process at the end of the cycle,Jobs #177 and #179.
 Budgeted overhead                        $ \$ 100,300 $
Budgeted machine hours                  85,000
Raw material                                    $63,000
Labor cost                                       $ \$ 50,000 $ 
Refer to Grant Company.Labor cost was split 25 percent and 70 percent,respectively,between Jobs #177 and #179 for direct labor.The remainder was indirect labor cost.What are the total costs of Jobs #177 and #179?

Accepted Answer

None

Question 19

A credit to Work in Process Inventory represents

Accepted Answer

A) work still in process. 
B) raw material put into production. 
C) the application of overhead to production. 
D) the transfer of completed items to Finished Goods Inventory. 
A) work still in process. 
B) raw material put into production. 
C) the application of overhead to production. 
D) the transfer of completed items to Finished Goods Inventory.

Question 20

Jacksonville Company uses a job-order costing system.During May,the following costs appeared in the Work in Process Inventory account:
Eepincing belance                            $30,000
Directmeterial used                        90,000
Directlab or inchred                        52,500
Applied overhead                            52,500
Cost of goods manufactured.        225,000
Jacksonville Company applies overhead on the basis of direct labor cost.There was only one job left in Work in Process at the end of May which contained $6,300 of overhead.What amount of direct material was included in this job?

Accepted Answer

A) $ 7,200 
B) $ 9,000 
C) $11,160 
D) $11,790 
A) $ 7,200 
B) $ 9,000 
C) $11,160 
D) $11,790

Which of the following are drawbacks to applying actual overhead to production?

The use of standard material or labor costs in job-order costing

A company that manufactures sugar will use a ____________________ costing system to track production costs

What information should be contained in a subsidiary ledger for Work in Process Inventory in a job-order costing system?

The source document that records the amount of time an employee worked on a job and his/her pay rate is the

Cost flows and physical flows of units are identical.

In a normal cost system,a debit to Work in Process Inventory would not be made for

If a substandard product cannot be reworked,it is known as _________.

Standards can be used in a job-order costing system if the products manufactured are varied in nature.

In a standard job-order costing system,factory overhead is applied using _ rates times ___ input.

The cost sheets for incomplete jobs at the end of the period comprise the subsidiary ledger for

When raw materials are placed into production,the materials inventory account is debited.

A credit to Work in Process Inventory represents

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

Direct material	$5,000
Direct labor (100 hours @ $7.25)	$725
Machine hours incurred	40
Predetermined overhead rate per machine hour	$26

Exam 5: Job Order Costing

Which of the following are drawbacks to applying actual overhead to production?

The use of standard material or labor costs in job-order costing

A company that manufactures sugar will use a ____________________ costing system to track production costs

What information should be contained in a subsidiary ledger for Work in Process Inventory in a job-order costing system?

The source document that records the amount of time an employee worked on a job and his/her pay rate is the

Cost flows and physical flows of units are identical.

In a normal cost system,a debit to Work in Process Inventory would not be made for

If a substandard product cannot be reworked,it is known as _________.

Standards can be used in a job-order costing system if the products manufactured are varied in nature.

In a standard job-order costing system,factory overhead is applied using _______ rates times _________ input.

The cost sheets for incomplete jobs at the end of the period comprise the subsidiary ledger for

When raw materials are placed into production,the materials inventory account is debited.

A credit to Work in Process Inventory represents

Introduction to Cost Accounting

Cost Terminology and Cost Behaviors

Predetermined Overhead Rates, Flexible Budgets, and Absorptionvariable Costing

Activity-Based Management and Activity-Based Costing

Process Costing

Standard Costing and Variance Analysis

The Master Budget

Break-Even Point and Cost-Volume-Profit Analysis

Relevant Information for Decision Making

Allocation of Joint Costs and Accounting for By-Products

Introduction to Cost Management Systems

Responsibility Accounting,support Department Allocations,and Transfer Pricing

Performance Measurement, balanced Scorecards, and Performance Rewards

Capital Budgeting

Managing Costs and Uncertainty

Implementing Quality Concepts

Inventory and Production Management

Emerging Management Practices

Filters

In a standard job-order costing system,factory overhead is applied using _ rates times ___ input.