Question 1

As individual jobs are completed,work-in-process inventory becomes another balance sheet asset,finished goods inventory.

Accepted Answer

A) True 
 B)False  True

Question 2

Managers that study drawings and engineering specifications provided by a company to make decisions about technical details is an example of which step in the five-step decision-making process?

Accepted Answer

A) Step 1: Identify the problems with uncertainties. 
B) Step 2: Obtain information. 
C) Step 3: Make predictions about the future. 
D) Step 4: Make decisions by choosing among alternatives. 
E) Step 5: Implement the decision,evaluate performance,and learn. 
A) Step 1: Identify the problems with uncertainties. 
B) Step 2: Obtain information. 
C) Step 3: Make predictions about the future. 
D) Step 4: Make decisions by choosing among alternatives. 
E) Step 5: Implement the decision,evaluate performance,and learn. B

Question 3

Actual overhead costs incurred throughout the month are ________ to the Manufacturing Overhead Control account.

Accepted Answer

A) added 
B) divided 
C) multiplied 
D) subtracted 
E) cancelled 
A) added 
B) divided 
C) multiplied 
D) subtracted 
E) cancelled A

Question 4

The objective of the proration approach is to only adjust the general ledger to actual manufacturing overhead rates for purposes of financial reporting.

Accepted Answer

A) True 
 B)False

Question 5

How do managers identify the marketing and customer service costs of individual jobs?

Accepted Answer

Managers can trace the direct marketing

Question 6

Managers calculate the actual indirect-cost rate by dividing actual annual indirect costs by the actual annual quantity of the cost-allocation base.

Accepted Answer

A) True 
 B)False

Question 7

Cost pools:

Accepted Answer

A) are single direct costs. 
B) are groups of individual direct cost items. 
C) are groups of multiple direct cost items. 
D) are groups of multiple indirect cost items. 
E) are groups of individual indirect cost items. 
A) are single direct costs. 
B) are groups of individual direct cost items. 
C) are groups of multiple direct cost items. 
D) are groups of multiple indirect cost items. 
E) are groups of individual indirect cost items.

Question 8

The record of the actual costs in all the individual overhead categories is known as:

Accepted Answer

A) accounts payable record. 
B) accounts receivable record. 
C) manufacturing overhead control. 
D) manufacturing overhead allocated. 
E) manufacturing overhead allocated cost. 
A) accounts payable record. 
B) accounts receivable record. 
C) manufacturing overhead control. 
D) manufacturing overhead allocated. 
E) manufacturing overhead allocated cost.

Question 9

The approach that restates all overhead entries in the general ledger and job-cost records to represent actual cost rates rather than budgeted cost rates is known as:

Accepted Answer

A) overhead adjusted. 
B) controlling overhead. 
C) manufacturing overhead. 
D) adjusted-accounting rate. 
E) adjusted-allocation rate. 
A) overhead adjusted. 
B) controlling overhead. 
C) manufacturing overhead. 
D) adjusted-accounting rate. 
E) adjusted-allocation rate.

Question 10

Which of the following is not a benefit of the normal-costing system?

Accepted Answer

A) Managers take corrective actions sooner. 
B) Manufacturing costs of jobs are reported later. 
C) Manufacturing costs of jobs are reported earlier. 
D) Job pricing data is available soon after jobs are completed. 
E) Sales managers evaluate profitability and efficiency of jobs faster. 
A) Managers take corrective actions sooner. 
B) Manufacturing costs of jobs are reported later. 
C) Manufacturing costs of jobs are reported earlier. 
D) Job pricing data is available soon after jobs are completed. 
E) Sales managers evaluate profitability and efficiency of jobs faster.

Question 11

What are the differences associated with the cost pool and the cost-allocation base?

Accepted Answer

A cost pool is defined as a grouping of

Question 12

Managers compute the budgeted indirect cost rate as:

Accepted Answer

A) budgeted variable labor hours / budgeted direct-labor. 
B) budgeted variable-labor costs / budgeted variable-labor hours. 
C) budgeted actual direct-labor costs / budgeted total direct-labor hours. 
D) budgeted total direct-labor costs / budgeted total indirect-labor costs. 
E) budgeted total cost in indirect cost pool / budgeted total direct-labor hours. 
A) budgeted variable labor hours / budgeted direct-labor. 
B) budgeted variable-labor costs / budgeted variable-labor hours. 
C) budgeted actual direct-labor costs / budgeted total direct-labor hours. 
D) budgeted total direct-labor costs / budgeted total indirect-labor costs. 
E) budgeted total cost in indirect cost pool / budgeted total direct-labor hours.

Question 13

In the service sector,an example of the job-costing method is movies produced by Universal Studios.

Accepted Answer

A) True 
 B)False

Question 14

McCormick's Ship Repair service is bidding on a project for a potential customer.The manager revealed that the total budgeted direct-labor costs for the firm are $700,000.The total budgeted indirect costs are $650,000.The manager estimates that there are a total of 8,000 billable hours.
Required:
a.What is the budgeted direct-labor cost rate in this new project?
b.What is the budgeted indirect-cost rate assuming direct-labor cost is the allocation base?
c.What should the manager bid on the project if the direct labor hours are estimated at 250 hours?

Accepted Answer

a.$700,000/8,000 = $87.50 per direct lab

Question 15

At the end of the year,the direct costs traced to jobs using budgeted rates will always equal actual direct costs.

Accepted Answer

A) True 
 B)False

Question 16

An advantage of the actual-costing system is that at the end of the year,actual costs incurred equal the allocated costs in normal-costing systems.

Accepted Answer

A) True 
 B)False

Question 17

The Meredith Company reported the following information:
 
Required: Compute the Total Allocation Rate per Direct Professional Labor-Hour.

Accepted Answer

A) $3.52;$8.88 
B) -$35.29;$88.88 
C) $352.90;888.88 
D) $3,529.90;$8,888.88 
E) $35,299.90;$88,888.88 
A) $3.52;$8.88 
B) -$35.29;$88.88 
C) $352.90;888.88 
D) $3,529.90;$8,888.88 
E) $35,299.90;$88,888.88

Question 18

Which approach is known for spreading the underallocated overhead or overallocated overhead among ending work-in-process inventory,finished goods inventory,and cost of goods sold?

Accepted Answer

A) Proration. 
B) Adjusted allocation-rate. 
C) Numerator reason. 
D) Denominator reason. 
E) Write-off to cost of goods sold. 
A) Proration. 
B) Adjusted allocation-rate. 
C) Numerator reason. 
D) Denominator reason. 
E) Write-off to cost of goods sold.

Question 19

A summary of the job-cost record is typically found in a subsidiary ledger.

Accepted Answer

A) True 
 B)False

Question 20

Managers compute the budgeted direct-labor cost rate as:

Accepted Answer

A) budgeted variable-labor hours / budgeted direct-labor. 
B) budgeted variable-labor costs / budgeted variable-labor hours. 
C) budgeted actual direct-labor costs / budgeted actual direct-labor hours. 
D) budgeted total direct-labor costs / budgeted total direct-labor hours. 
E) budgeted indirect-labor costs / budgeted total indirect-labor costs. 
A) budgeted variable-labor hours / budgeted direct-labor. 
B) budgeted variable-labor costs / budgeted variable-labor hours. 
C) budgeted actual direct-labor costs / budgeted actual direct-labor hours. 
D) budgeted total direct-labor costs / budgeted total direct-labor hours. 
E) budgeted indirect-labor costs / budgeted total indirect-labor costs.

As individual jobs are completed,work-in-process inventory becomes another balance sheet asset,finished goods inventory.

Managers that study drawings and engineering specifications provided by a company to make decisions about technical details is an example of which step in the five-step decision-making process?

Actual overhead costs incurred throughout the month are ________ to the Manufacturing Overhead Control account.

The objective of the proration approach is to only adjust the general ledger to actual manufacturing overhead rates for purposes of financial reporting.

How do managers identify the marketing and customer service costs of individual jobs?

Managers calculate the actual indirect-cost rate by dividing actual annual indirect costs by the actual annual quantity of the cost-allocation base.

Cost pools:

The record of the actual costs in all the individual overhead categories is known as:

The approach that restates all overhead entries in the general ledger and job-cost records to represent actual cost rates rather than budgeted cost rates is known as:

Which of the following is not a benefit of the normal-costing system?

What are the differences associated with the cost pool and the cost-allocation base?

Managers compute the budgeted indirect cost rate as:

In the service sector,an example of the job-costing method is movies produced by Universal Studios.

At the end of the year,the direct costs traced to jobs using budgeted rates will always equal actual direct costs.

An advantage of the actual-costing system is that at the end of the year,actual costs incurred equal the allocated costs in normal-costing systems.

The Meredith Company reported the following information: Required: Compute the Total Allocation Rate per Direct Professional Labor-Hour.

Which approach is known for spreading the underallocated overhead or overallocated overhead among ending work-in-process inventory,finished goods inventory,and cost of goods sold?

A summary of the job-cost record is typically found in a subsidiary ledger.

Managers compute the budgeted direct-labor cost rate as:

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters

Exam 4: Job Costing

As individual jobs are completed,work-in-process inventory becomes another balance sheet asset,finished goods inventory.

Managers that study drawings and engineering specifications provided by a company to make decisions about technical details is an example of which step in the five-step decision-making process?

Actual overhead costs incurred throughout the month are ________ to the Manufacturing Overhead Control account.

The objective of the proration approach is to only adjust the general ledger to actual manufacturing overhead rates for purposes of financial reporting.

How do managers identify the marketing and customer service costs of individual jobs?

Managers calculate the actual indirect-cost rate by dividing actual annual indirect costs by the actual annual quantity of the cost-allocation base.

Cost pools:

The record of the actual costs in all the individual overhead categories is known as:

The approach that restates all overhead entries in the general ledger and job-cost records to represent actual cost rates rather than budgeted cost rates is known as:

Which of the following is not a benefit of the normal-costing system?

What are the differences associated with the cost pool and the cost-allocation base?

Managers compute the budgeted indirect cost rate as:

In the service sector,an example of the job-costing method is movies produced by Universal Studios.

At the end of the year,the direct costs traced to jobs using budgeted rates will always equal actual direct costs.

An advantage of the actual-costing system is that at the end of the year,actual costs incurred equal the allocated costs in normal-costing systems.

The Meredith Company reported the following information: Required: Compute the Total Allocation Rate per Direct Professional Labor-Hour.

Which approach is known for spreading the underallocated overhead or overallocated overhead among ending work-in-process inventory,finished goods inventory,and cost of goods sold?

A summary of the job-cost record is typically found in a subsidiary ledger.

Managers compute the budgeted direct-labor cost rate as:

The Manager and Management Accounting

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Process Costing and Cost Allocation

Activity-Based Costing and Activity-Based Management

Pricing Decisions, customer Profitability, and Cost Management

Determining How Costs Behave

Decision Making and Relevant Information

Quality, inventory Management, and Time

Capital Investments

Master Budget and Responsibility Accounting

Flexible Budgets, cost Variances, and Management Control

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Transfer Pricing

Performance Measurement and Compensation

Filters