Question 1

What is the term for the average activity that a firm experiences in the long term (more than one 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 2

Alpha Company manufactures customized motors on a job-order basis. Job 492 is an order for 100 units. It requires the following:
$\begin{array}{lr}
\text { Direct materials } & \$ 3,000 \
\text { Direct labour }(\$ 10 / \mathrm{hr}) & 1,000 \
\text { Overhead }(150 \% \text { DL } \$) & 1,500
\end{array}$
After inspection, 2 units required rework, comprising 8 additional direct labour hours and $60 of materials.
-Refer to the figure.If the rework is considered abnormal spoilage,what is the journal entry for overhead control?

Accepted Answer

A) $\begin{array}{l}
\text { Overhead control }&\$ 140\
\text { Materials } && \$ 60 \
\text { Payroll } && \$ 80
\end{array}$ 
B) $\begin{array}{lr}
\text { Materials } & \$ 60 \
\text { Payroll } & \$ 80\\text { Overhead control }&&\$140
\end{array}$ 
C) No journal entry is needed 
D) Overhead control$\quad\$ 60$
Work-in-process$\quad\quad\quad\quad\$ 60$ 
A) $\begin{array}{l}
\text { Overhead control }&\$ 140\
\text { Materials } && \$ 60 \
\text { Payroll } && \$ 80
\end{array}$ 
B) $\begin{array}{lr}
\text { Materials } & \$ 60 \
\text { Payroll } & \$ 80\\text { Overhead control }&&\$140
\end{array}$ 
C) No journal entry is needed 
D) Overhead control$\quad\$ 60$
Work-in-process$\quad\quad\quad\quad\$ 60$

Question 3

What is the principal difficulty with normal costing?

Accepted Answer

A) The unit cost information is not received on a timely basis. 
B) It can result in fluctuating per-unit overhead costs. 
C) It often results in underapplied or overapplied overhead. 
D) The tracing of the direct materials is complex. 
A) The unit cost information is not received on a timely basis. 
B) It can result in fluctuating per-unit overhead costs. 
C) It often results in underapplied or overapplied overhead. 
D) The tracing of the direct materials is complex.

Question 4

Why are firms reluctant to use actual costing? How does normal costing solve the problems?

Accepted Answer

Actual costing systems do not provide ac

Question 5

In regard to services,what is the definition of perishability?

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

Question 6

Wolf Company had the following selected account balances at the end of 2011:
 $\begin{array}{lr}
\text { Work in Process } & \$ 120,000 \
\text { Finished Goods } & 150,000 \
\text { Cost of Goods Sold } & 180,000 \
\text { Factory Overhead (overapplied) } & 63,000
\end{array}$ 
a.Prepare the journal entry to dispose of the factory overhead balance assuming it is written off to Cost of Goods Sold.
b.Prepare the journal entry to dispose of the factory overhead balance assuming it is allocated among Work in Process,Finished Goods,and Cost of Goods Sold based on ending balances.
c.Which method of disposing of under- or overapplied factory overhead cost is more accurate? Explain.

Accepted Answer

a.@#IMG-DLM&
b.@#IMG-DLM&
c.When the amount of overapplied o

Question 7

Walter Company uses a job-order costing system to account for product costs. The following information pertains to the current year:
$\begin{array}{lr}
\text { Materials placed into production } & \$ 140,000 \
\text { Indirect labour } & 40,000 \
\text { Direct labour (10,000 hours) } & 160,000 \
\text { Depreciation of factory building } & 60,000 \
\text { Other factory overhead } & 100,000 \
\text { Increase in work-in-process inventory } & 30,000
\end{array}$ 
Factory overhead rate is $18 per direct labour hour.
-Refer to the figure.What is the total amount credited to materials inventory for Walter?

Accepted Answer

A) $110,000 
B) $140,000 
C) $170,000 
D) $480,000 
A) $110,000 
B) $140,000 
C) $170,000 
D) $480,000

Question 8

Compare and contrast perishability and intangibility in an automobile oil lubrication shop and architectural design firms.

Accepted Answer

Intangibility refers to the nonphysical

Question 9

Selected account balances of Howard Company for 2012 are as follows:
$\begin{array}{lr}
\text { Work in Process } & \$ 35,000 \text { Debit } \
\text { Finished Goods } & \$ 65,000 \text { Debit } \
\text { Cost of Goods Sold } & \$ 100,000 \text { Debit } \
\text { Factory Overhead } & \$ 22,000 \text { Debit }
\end{array}$  
a.Were factory overhead costs underapplied or overapplied in 2012? Explain. 
b.Prepare the journal entry to dispose of the factory overhead balance assuming the amount is immaterial.
c.Prepare the journal entry to dispose of the factory overhead balance using the allocation method.

Accepted Answer

The answer of Selected account balances of Howard Company for...

Question 10

What are the source documents used in a job-order costing system? How do the source documents relate to the job cost sheet? How do these documents inform work in process?

Accepted Answer

The materials requisition form and job t

Question 11

In regard to services,what does intangibility 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

Question 12

Alpha Company manufactures customized motors on a job-order basis. Job 492 is an order for 100 units. It requires the following:
$\begin{array}{lr}
\text { Direct materials } & \$ 3,000 \
\text { Direct labour }(\$ 10 / \mathrm{hr}) & 1,000 \
\text { Overhead }(150 \% \text { DL } \$) & 1,500
\end{array}$
After inspection, 2 units required rework, comprising 8 additional direct labour hours and $60 of materials.
-Refer to the figure.If the spoilage was considered normal,what is the cost of job 492?

Accepted Answer

A) $3,000 
B) $5,500 
C) $5,640 
D) $5,760 
A) $3,000 
B) $5,500 
C) $5,640 
D) $5,760

Question 13

What is a work-in-process inventory file?

Accepted Answer

A) a file of electronic job-order cost sheets 
B) a file cabinet where work tickets are stored 
C) a file of electronic materials requisitions 
D) a file cabinet where material tickets are stored 
A) a file of electronic job-order cost sheets 
B) a file cabinet where work tickets are stored 
C) a file of electronic materials requisitions 
D) a file cabinet where material tickets are stored

Question 14

What does a debit to materials inventory indicate?

Accepted Answer

A) Materials were purchased. 
B) Materials were requisitioned. 
C) Materials were put into production. 
D) Materials were ordered. 
A) Materials were purchased. 
B) Materials were requisitioned. 
C) Materials were put into production. 
D) Materials were ordered.

Question 15

Russell Company has the following data pertaining the current year: $\begin{array}{lr}
\text { Beginning materials inventory } & \$ 50,000 \
\text { Beginning work-in-process inventory } &0 \
\text { Beginning finished goods inventory } & 0 \
\text { Materials placed into production } &125,000  \
\text { Materials purchased on account } &137,500 \
\text { Direct labour incurred (10,000 hours) } & 62,500 \
\text { Cost of goods completed (Job BB8) } & 25,000
\end{array}$
 Factory overhead rate is 125 percent of direct labour costs.
What is the ending materials inventory balance for Russell?

Accepted Answer

A) $12,500 
B) $37,500 
C) $50,000 
D) $62,500 
A) $12,500 
B) $37,500 
C) $50,000 
D) $62,500

Question 16

What document indicates the type and quantity of each component issued to the factory?

Accepted Answer

A) control account 
B) materials requisition form 
C) production list 
D) work ticket 
A) control account 
B) materials requisition form 
C) production list 
D) work ticket

Question 17

For which of the following products would one NOT use job-order costing?

Accepted Answer

A) houses 
B) chemicals 
C) ships 
D) custom-built furniture 
A) houses 
B) chemicals 
C) ships 
D) custom-built furniture

Question 18

In the long run,for any product to be viable,its price must cover which type of costs?

Accepted Answer

A) full cost 
B) variable cost 
C) fixed cost 
D) mixed costs 
A) full cost 
B) variable cost 
C) fixed cost 
D) mixed costs

Question 19

In what type of production is a single product produced on a continuous basis?

Accepted Answer

A) process production 
B) job production 
C) job-order production 
D) operating production 
A) process production 
B) job production 
C) job-order production 
D) operating production

Question 20

Which of the following costs are included on a job-order cost sheet?

Accepted Answer

A) direct material costs,direct labour costs,and applied factory overhead costs 
B) budgeted direct material costs,direct labour costs,and applied factory overhead costs 
C) direct material costs,budgeted direct labour costs,and applied factory overhead costs 
D) direct material costs,direct labour costs,and actual factory overhead costs 
A) direct material costs,direct labour costs,and applied factory overhead costs 
B) budgeted direct material costs,direct labour costs,and applied factory overhead costs 
C) direct material costs,budgeted direct labour costs,and applied factory overhead costs 
D) direct material costs,direct labour costs,and actual factory overhead costs

What is the term for the average activity that a firm experiences in the long term (more than one year)?

What is the principal difficulty with normal costing?

Why are firms reluctant to use actual costing? How does normal costing solve the problems?

In regard to services,what is the definition of perishability?

Compare and contrast perishability and intangibility in an automobile oil lubrication shop and architectural design firms.

What are the source documents used in a job-order costing system? How do the source documents relate to the job cost sheet? How do these documents inform work in process?

In regard to services,what does intangibility refer to?

What is a work-in-process inventory file?

What does a debit to materials inventory indicate?

What document indicates the type and quantity of each component issued to the factory?

For which of the following products would one NOT use job-order costing?

In the long run,for any product to be viable,its price must cover which type of costs?

In what type of production is a single product produced on a continuous basis?

Which of the following costs are included on a job-order cost sheet?

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

What is the term for the average activity that a firm experiences in the long term (more than one year)?

What is the principal difficulty with normal costing?

Why are firms reluctant to use actual costing? How does normal costing solve the problems?

In regard to services,what is the definition of perishability?

Compare and contrast perishability and intangibility in an automobile oil lubrication shop and architectural design firms.

What are the source documents used in a job-order costing system? How do the source documents relate to the job cost sheet? How do these documents inform work in process?

In regard to services,what does intangibility refer to?

What is a work-in-process inventory file?

What does a debit to materials inventory indicate?

What document indicates the type and quantity of each component issued to the factory?

For which of the following products would one NOT use job-order costing?

In the long run,for any product to be viable,its price must cover which type of costs?

In what type of production is a single product produced on a continuous basis?

Which of the following costs are included on a job-order cost sheet?

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