Question 1

Which of the following credits would normally NOT accompany a journal entry debiting work in process?

Accepted Answer

A) a credit to materials inventory 
B) a credit to finished goods 
C) a credit to overhead control 
D) a credit to wages payable 
A) a credit to materials inventory 
B) a credit to finished goods 
C) a credit to overhead control 
D) a credit to wages payable B

Question 2

What does heterogeneity refer to?

Accepted Answer

A) the nonphysical nature of services as opposed to products 
B) the fact that production and consumption are inseparable for services 
C) greater chances for variation in the performance of services than in the production of products 
D) the fact that services cannot be inventoried but must be consumed when performed 
A) the nonphysical nature of services as opposed to products 
B) the fact that production and consumption are inseparable for services 
C) greater chances for variation in the performance of services than in the production of products 
D) the fact that services cannot be inventoried but must be consumed when performed C

Question 3

What is done with factory overhead in normal costing?

Accepted Answer

A) The balance in factory overhead at the end of the accounting period is closed. 
B) Different overhead rates are used for different quantities of predicted activity. 
C) The balance in factory overhead at the end of the accounting period is kept open. 
D) The immaterial balance in factory overhead at the end of the accounting period is allocated to the cost of goods sold and inventory accounts. 
A) The balance in factory overhead at the end of the accounting period is closed. 
B) Different overhead rates are used for different quantities of predicted activity. 
C) The balance in factory overhead at the end of the accounting period is kept open. 
D) The immaterial balance in factory overhead at the end of the accounting period is allocated to the cost of goods sold and inventory accounts. A

Question 4

Olson Corporation constructs new homes. Assume that Olson uses a job-order costing system. During May, the following transactions occurred:
1.   Olson purchased $4,500 of lumber on account. 
2.   Olson used $3,750 of lumber in production and incurred 50 hours of direct labour hours at $15 per hour.
3.   Depreciation of $1,500 on equipment used to build new houses was recorded.
4.   A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash.

-Refer to the figure.What debit or credit would be used to record the requisition of lumber for Olson include?

Accepted Answer

A) a credit to work in process of $4,500 
B) a debit to materials inventory of $4,500 
C) a credit to finished goods of $3,750 
D) a debit to work in process of $3,750 
A) a credit to work in process of $4,500 
B) a debit to materials inventory of $4,500 
C) a credit to finished goods of $3,750 
D) a debit to work in process of $3,750

Question 5

When normal costing is used,where are actual overhead costs recorded?

Accepted Answer

A) in the work-in-process account 
B) in the overhead control account 
C) in the finished goods account 
D) In the cost of goods sold account 
A) in the work-in-process account 
B) in the overhead control account 
C) in the finished goods account 
D) In the cost of goods sold account

Question 6

What is the term for the production level the firm expects to attain for the coming year?

Accepted Answer

A) expected activity level 
B) normal activity level 
C) theoretical activity level 
D) practical activity level 
A) expected activity level 
B) normal activity level 
C) theoretical activity level 
D) practical activity level

Question 7

What is the definition of homogeneous products?

Accepted Answer

A) products similar in nature 
B) the nonphysical nature of services and opposed to products 
C) great variation in the nature products 
D) products that can be inventoried 
A) products similar in nature 
B) the nonphysical nature of services and opposed to products 
C) great variation in the nature products 
D) products that can be inventoried

Question 8

Smith Company has the following selected debit balance accounts at the end of the current year: work in process,$25,000; finished goods,$12,500; cost of goods sold,$37,500; and factory overhead,$6,000.What will be the pro-rated amount charged to cost of goods sold for factory overhead?

Accepted Answer

A) $3,000 
B) $6,000 
C) $25,000 
D) $37,500 
A) $3,000 
B) $6,000 
C) $25,000 
D) $37,500

Question 9

Which of the following systems assigns costs by the job?

Accepted Answer

A) the process costing system 
B) the job-order costing system 
C) the project costing system 
D) the batch costing system 
A) the process costing system 
B) the job-order costing system 
C) the project costing system 
D) the batch costing system

Question 10

Griswold Corporation is a job-order costing company that uses activity-based costing to apply overhead to jobs. The following overhead activities were budgeted for the year.
$\begin{array}{|l|l|l|c|}
\hline \text { Activity } & \text { Cost } & \text { Driver } & \text { Amount of driver } \
\hline \text { Setups } & \$ 240,000 & \text { number of setups } & 6,000 \
\hline \text { Purchasing } & 160,000 & \text { number of parts } & 20,000 \
\hline \text { Other overhead } & 300,000 & \text { direct labour hours } & 80,000 \
\hline
\end{array}$
The following information about the jobs was given for September. $\begin{array}{|l|r|r|r|r|}
\hline & \text { Job 101 } & \text { Job 102 } & \text { Job 103 } & \text { Job 104 } \
\hline \text { Balance 9/1 } & \$ 64,900 & \$ 40,770 & \$ 30,500 & 0 \
\hline \text { Direct materials } & 54,000 & 37,900 & 25,000 & 11,000 \
\hline \text { Direct labour } & 80,000 & 38,500 & 43,000 & 21,000 \
\hline \text { Number of setups } & 40 & 10 & 30 & 200 \
\hline \text { Number of parts } & 300 & 80 & 400 & 500 \
\hline \text { Direct labour hours } & 5,000 & 2,400 & 5,200 & 1,200 \
\hline
\end{array}$
By September 30, Jobs 102 and 103 were completed and sold. The remaining jobs were still in process.
-Refer to the figure.What is the activity rate for purchasing?

Accepted Answer

A) $1.25 
B) $3.75 
C) $8.00 
D) $40.00 
A) $1.25 
B) $3.75 
C) $8.00 
D) $40.00

Question 11

$\text { In the Mains Company, the following job cards were totalled at the end of the month: }$
$\begin{array}{ll}
\text { Job 243 } & \$ 5,750 \
\text { Job 244 } & \$ 4,980 \
\text { Job 245 } & \$ 3,675 \
\text { Job 246 } & \$ 4,250 \
\text { Job 247 } & \$ 5,100 \
\text { Job 248 } & \$ 3,800
\end{array}$

Jobs 243 and 244 were in finished goods inventory at the beginning of the month. Jobs 245 and 246 were in work in process at the beginning of the month. Jobs 247 and 248 were started during the month. At the end of the month, Jobs 243 and 247 were sent to customers; jobs 245, 247, and 248 were completed and sent to finished goods.
-Refer to the figure.What is the cost of goods sold for the month?

Accepted Answer

A) $10,730 
B) $10,850 
C) $12,575 
D) $15,100 
A) $10,730 
B) $10,850 
C) $12,575 
D) $15,100

Question 12

The Kraig Corporation manufactures custom-made purses. The following data pertains to Job XY5:
Factory overhead is applied using a plant-wide rate based on direct labour hours. 
$$\begin{array} { l l } 
\text { Direct materials placed into production } & \$ 4,000 \
\text { Direct labour hours worked } & 50 \text { hours } \
\text { Direct labour rate per hour } & \$ 15 \
\text { Machine hours worked } & 100 \text { hours }
\end{array}$$
Factory overhead was budgeted at $60,000 for the year and the direct labour hours were estimated to be 15,000. Job XY5 consists of 50 units.
-Refer to the figure.What is overhead cost assigned to Job XY5?

Accepted Answer

A) $200 
B) $400 
C) $750 
D) $1,500 
A) $200 
B) $400 
C) $750 
D) $1,500

Question 13

Jocarro Company has a job costing system.The following items appeared in the work-in-process account during February:
 $\begin{array}{|l|l|}
\hline \text { February 1, balance } & \$ 20,000 \
\hline \text { Materials placed into production } & ? \
\hline \text { Direct labour (4,000 hours) } & \$ 120,000 \
\hline \text { Factory overhead applied } & \$ 96,000 \
\hline \text { Cost of goods manufactured } & \$ 400,000 \
\hline \text { February 28, balance } & \$ 16,000 \
\hline
\end{array}$ Jocarro applies overhead to production on the basis of direct labour hours.Job XX,the only job in process on February 28,has been charged $10,600 materials cost and has 100 labour hours of direct labour time assigned to it. 
a.Determine the predetermined factory overhead rate for Jocarro Company.
b.Determine the amounts of materials,direct labour,and factory overhead included in the February 28,work in process.
c.Determine the amount of materials placed into production during February.

Accepted Answer

a.Factory overhead rate = $96,

Question 14

What is the definition of a pure service organization?

Accepted Answer

A) an organization that does not have raw materials or inventories,and has a definite separation between the plant and the customer 
B) an organization that has raw materials and tangible items,and does not have a separation between the plant and the customer 
C) an organization that does not have raw materials or tangible items,and does not have a separation between the plant and the customer 
D) an organization that has raw materials and inventories,and does not have a separation between the plant and the customer 
A) an organization that does not have raw materials or inventories,and has a definite separation between the plant and the customer 
B) an organization that has raw materials and tangible items,and does not have a separation between the plant and the customer 
C) an organization that does not have raw materials or tangible items,and does not have a separation between the plant and the customer 
D) an organization that has raw materials and inventories,and does not have a separation between the plant and the customer

Question 15

When is the cost of spoilage added to a job?

Accepted Answer

A) when it is considered to be a result of the process,no matter what job is being worked on 
B) when it is considered to be a normal consequence of working on that job 
C) when it is considered to be abnormal 
D) when it is considered to be a cost of doing business 
A) when it is considered to be a result of the process,no matter what job is being worked on 
B) when it is considered to be a normal consequence of working on that job 
C) when it is considered to be abnormal 
D) when it is considered to be a cost of doing business

Question 16

The following information is available pertaining to the Production Division:
$\begin{array}{lrrr}&\text { Mixing Dept. }&\text { Finishing Dept. }&\text { Total }\
\text { Overhead costs } & \$ 7,500 & \$ 22,500 & \$ 30,000 \
\text { Direct labour hours } & 7,500 & 2,500 & 10,000 \
\text { Machine hours } & 2,500 & 7,500 & 10,000
\end{array}$

$\text { Production information pertaining to Job } 4 \text { X5: }$
$\begin{array}{lrrr}&\text { Mixing Dept. }&\text { Finishing Dept. }&\text { Total }\
\text { Prime costs } & \$ 1,250 & \$ 0 & \$ 1,250 \
\text { Direct labour hours } & 250 & 0 & 250 \
\text { Machine hours } & 1 & 0 & 1 \
\text { Units produced } & 500 & 0 & 500
\end{array}$
-Refer to the figure.What are the total overhead costs assigned to Job 4X5,assuming the Mixing and Finishing departments use direct labour hours and machine hours,respectively,for their bases?

Accepted Answer

A) $62.50 
B) $250.00 
C) $750.00 
D) $1,500.00 
A) $62.50 
B) $250.00 
C) $750.00 
D) $1,500.00

Question 17

In developing unit costs,overhead costs should be assigned using activity drivers.Which of the following would be the likely activity driver for a production process using a lathe?

Accepted Answer

A) units produced 
B) direct labour hours 
C) machine hours 
D) direct materials cost 
A) units produced 
B) direct labour hours 
C) machine hours 
D) direct materials cost

Question 18

Why are unit costs important? Why do full-cost unit costs change from accounting period to accounting period.

Accepted Answer

Unit costs are important for valuing inv

Question 19

A normal costing system records which costs in work in process?

Accepted Answer

A) actual direct materials,actual direct labour,actual manufacturing overhead 
B) applied direct materials,applied direct labour,applied manufacturing overhead 
C) applied materials and labour and actual manufacturing overhead 
D) actual materials and labour and applied overhead 
A) actual direct materials,actual direct labour,actual manufacturing overhead 
B) applied direct materials,applied direct labour,applied manufacturing overhead 
C) applied materials and labour and actual manufacturing overhead 
D) actual materials and labour and applied overhead

Question 20

What is the term for the association of production costs with the units produced?

Accepted Answer

A) cost accumulation 
B) cost measurement 
C) cost assignment 
D) job-order costing 
A) cost accumulation 
B) cost measurement 
C) cost assignment 
D) job-order costing

Which of the following credits would normally NOT accompany a journal entry debiting work in process?

What does heterogeneity refer to?

What is done with factory overhead in normal costing?

When normal costing is used,where are actual overhead costs recorded?

What is the term for the production level the firm expects to attain for the coming year?

What is the definition of homogeneous products?

Smith Company has the following selected debit balance accounts at the end of the current year: work in process,$25,000; finished goods,$12,500; cost of goods sold,$37,500; and factory overhead,$6,000.What will be the pro-rated amount charged to cost of goods sold for factory overhead?

Which of the following systems assigns costs by the job?

What is the definition of a pure service organization?

When is the cost of spoilage added to a job?

In developing unit costs,overhead costs should be assigned using activity drivers.Which of the following would be the likely activity driver for a production process using a lathe?

Why are unit costs important? Why do full-cost unit costs change from accounting period to accounting period.

A normal costing system records which costs in work in process?

What is the term for the association of production costs with the units produced?

A: Basic Cost Management Concepts

B: Basic Cost Management Concepts

Cost Behaviour

Cost-Volume-Profit Analysis

Process Costing

Activity-Based Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Responsibility Accounting,performance Evaluation,and Transfer Pricing

Tactical Decision Making

Pricing and Profitability Analysis

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

Filters

Exam 4: Job-Order Costing Systems

Which of the following credits would normally NOT accompany a journal entry debiting work in process?

What does heterogeneity refer to?

What is done with factory overhead in normal costing?

When normal costing is used,where are actual overhead costs recorded?

What is the term for the production level the firm expects to attain for the coming year?

What is the definition of homogeneous products?

Smith Company has the following selected debit balance accounts at the end of the current year: work in process,$25,000; finished goods,$12,500; cost of goods sold,$37,500; and factory overhead,$6,000.What will be the pro-rated amount charged to cost of goods sold for factory overhead?

Which of the following systems assigns costs by the job?

What is the definition of a pure service organization?

When is the cost of spoilage added to a job?

In developing unit costs,overhead costs should be assigned using activity drivers.Which of the following would be the likely activity driver for a production process using a lathe?

Why are unit costs important? Why do full-cost unit costs change from accounting period to accounting period.

A normal costing system records which costs in work in process?

What is the term for the association of production costs with the units produced?

A: Basic Cost Management Concepts

B: Basic Cost Management Concepts

Cost Behaviour

Cost-Volume-Profit Analysis

Process Costing

Activity-Based Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Responsibility Accounting,performance Evaluation,and Transfer Pricing

Tactical Decision Making

Pricing and Profitability Analysis

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Inventory Management: Economic Order Quantity,jit,and the Theory of Constraints

Filters