Question 1

Job order costing applies to manufacturing firms only and not to service firms.

Accepted Answer

A) True 
 B)False

Question 2

Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August,of which $212,000 was direct and $73,000 was indirect supervisory costs.The correct journal entry to record the direct labor for the month is:

Accepted Answer

A) Debit Payroll Expense $212,000; credit Cash $212,000. 
B) Debit Factory Wages Payable $285,000; credit Work in Process Inventory $212,000. 
C) Debit Work in Process Inventory $212,000; credit Cash $285,000. 
D) Debit Work in Process Inventory $285,000; credit Factory Wages Payable $285,000. 
E) Debit Work in Process Inventory $212,000; credit Factory Wages Payable $212,000. 
A) Debit Payroll Expense $212,000; credit Cash $212,000. 
B) Debit Factory Wages Payable $285,000; credit Work in Process Inventory $212,000. 
C) Debit Work in Process Inventory $212,000; credit Cash $285,000. 
D) Debit Work in Process Inventory $285,000; credit Factory Wages Payable $285,000. 
E) Debit Work in Process Inventory $212,000; credit Factory Wages Payable $212,000.

Question 3

Minstrel Manufacturing uses a job order costing system.During one month Minstrel purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect.Minstrel incurred a factory payroll of $150,000,of which $40,000 was indirect labor.Minstrel uses a predetermined overhead rate of 150% of direct labor cost.
-The journal entry to record the application of factory overhead to production is:

Accepted Answer

A) Debit Work in Process Inventory $225,000; credit Factory Overhead $225,000. 
B) Debit Work in Process Inventory $165,000; credit Factory Overhead $165,000. 
C) Debit Factory Payroll $150,000; credit Work in Process Inventory $150,000. 
D) Debit Factory Overhead $165,000; credit Work in Process Inventory $165,000. 
E) Debit Work in Process Inventory $165,000; credit Factory Payroll $165,000. 
A) Debit Work in Process Inventory $225,000; credit Factory Overhead $225,000. 
B) Debit Work in Process Inventory $165,000; credit Factory Overhead $165,000. 
C) Debit Factory Payroll $150,000; credit Work in Process Inventory $150,000. 
D) Debit Factory Overhead $165,000; credit Work in Process Inventory $165,000. 
E) Debit Work in Process Inventory $165,000; credit Factory Payroll $165,000.

Question 4

________,or customized production,produces products in response to customer orders.

Accepted Answer

Job order

Question 5

Requisitions of indirect materials are not recorded on job cost sheets.

Accepted Answer

A) True 
 B)False

Question 6

Portside Watercraft uses a job order costing system.During one month Portside purchased $173,000 of raw materials on credit; issued materials to production of $164,000,of which $24,000 were indirect.Portside incurred a factory payroll cost of $95,000,of which $25,000 was indirect labor.Portside uses a predetermined overhead rate of 170% of direct labor cost.
-The journal entry to record the allocation of factory wages to production is:

Accepted Answer

A) Debit Work in Process Inventory $95,000; credit Factory Wages Payable $95,000. 
B) Debit Work in Process Inventory $95,000; credit Cash $95,000. 
C) Debit Factory Wages Payable $95,000; credit Cash $95,000. 
D) Debit Work in Process Inventory $70,000; debit Factory Overhead $25,000; credit Factory Wages Payable $95,000. 
E) Debit Work in Process Inventory $70,000; debit Factory Overhead $25,000; credit Cash $95,000. 
A) Debit Work in Process Inventory $95,000; credit Factory Wages Payable $95,000. 
B) Debit Work in Process Inventory $95,000; credit Cash $95,000. 
C) Debit Factory Wages Payable $95,000; credit Cash $95,000. 
D) Debit Work in Process Inventory $70,000; debit Factory Overhead $25,000; credit Factory Wages Payable $95,000. 
E) Debit Work in Process Inventory $70,000; debit Factory Overhead $25,000; credit Cash $95,000.

Question 7

Predetermined overhead rates are calculated at the end of the accounting period once the actual amount of factory overhead is known.

Accepted Answer

A) True 
 B)False

Question 8

Predetermined overhead rates are necessary because cost accountants use periodic inventory systems.

Accepted Answer

A) True 
 B)False

Question 9

Time tickets for factory employees during the month of August are summarized as follows:
 Prepare the necessary journal entries to record factory payroll for direct and indirect labor.

Accepted Answer

The answer of Time tickets for factory employees during the...

Question 10

The total costs on job cost sheets for jobs that are not yet completed equals the balance in the Work in Process Inventory account.

Accepted Answer

A) True 
 B)False

Question 11

The journal entry to record direct materials used includes a debit to Work in Process Inventory.

Accepted Answer

A) True 
 B)False

Question 12

A company that produces a large number of standardized units would normally use a job order costing system.

Accepted Answer

A) True 
 B)False

Question 13

When actual overhead cost exceeds the overhead applied,overhead is said to be overapplied.

Accepted Answer

A) True 
 B)False

Question 14

Job cost sheets are used to track all of the costs assigned to a job,including direct materials,direct labor,overhead,and all selling and administrative costs.

Accepted Answer

A) True 
 B)False

Question 15

Underapplied overhead is the amount by which overhead applied to jobs exceeds the actual overhead incurred during a period.

Accepted Answer

A) True 
 B)False

Question 16

Copy Center pays an average wage of $12 per hour to employees for printing and copying jobs,and allocates $18 of overhead for each employee hour worked.Direct materials are assigned to each job according to actual cost.Jobs are marked up 20% above total manufacturing cost to determine the selling price.If Job M-47 used $350 of direct materials and took 20 direct hours of labor to complete,what is the selling price of the job?

Accepted Answer

A) $852 
B) $1,140 
C) $456 
D) $720 
E) $708 
A) $852 
B) $1,140 
C) $456 
D) $720 
E) $708

Question 17

If a company applies overhead to production with a predetermined overhead rate,a credit balance in the Factory Overhead account at the end of the period means that:

Accepted Answer

A) The bookkeeper has made an error because the debits don't equal the credits. 
B) The balance will be carried forward to the next period as an overhead cost. 
C) Actual overhead incurred was less than the overhead amount applied to production. 
D) The overhead was underapplied for the period. 
E) Actual overhead was greater than the overhead amount applied to production. 
A) The bookkeeper has made an error because the debits don't equal the credits. 
B) The balance will be carried forward to the next period as an overhead cost. 
C) Actual overhead incurred was less than the overhead amount applied to production. 
D) The overhead was underapplied for the period. 
E) Actual overhead was greater than the overhead amount applied to production.

Question 18

Overapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead rate exceeds the actual overhead incurred during a period.

Accepted Answer

A) True 
 B)False

Question 19

The two basic types of cost accounting systems are:

Accepted Answer

A) Job order costing and perpetual costing. 
B) Job order costing and customized product costing. 
C) Job order costing and customized service costing. 
D) Job order costing and process costing. 
E) Job order costing and periodic costing. 
A) Job order costing and perpetual costing. 
B) Job order costing and customized product costing. 
C) Job order costing and customized service costing. 
D) Job order costing and process costing. 
E) Job order costing and periodic costing.

Question 20

The predetermined overhead rate is used to apply estimated overhead cost to jobs.

Accepted Answer

A) True 
 B)False

Exam 15: Job Order Costing and Analysis

Job order costing applies to manufacturing firms only and not to service firms.

Juarez Builders incurred $285,000 of labor costs for construction jobs completed during the month of August,of which $212,000 was direct and $73,000 was indirect supervisory costs.The correct journal entry to record the direct labor for the month is:

________,or customized production,produces products in response to customer orders.

Requisitions of indirect materials are not recorded on job cost sheets.

Predetermined overhead rates are calculated at the end of the accounting period once the actual amount of factory overhead is known.

Predetermined overhead rates are necessary because cost accountants use periodic inventory systems.

Time tickets for factory employees during the month of August are summarized as follows: Prepare the necessary journal entries to record factory payroll for direct and indirect labor.

The total costs on job cost sheets for jobs that are not yet completed equals the balance in the Work in Process Inventory account.

The journal entry to record direct materials used includes a debit to Work in Process Inventory.

A company that produces a large number of standardized units would normally use a job order costing system.

When actual overhead cost exceeds the overhead applied,overhead is said to be overapplied.

Job cost sheets are used to track all of the costs assigned to a job,including direct materials,direct labor,overhead,and all selling and administrative costs.

Underapplied overhead is the amount by which overhead applied to jobs exceeds the actual overhead incurred during a period.

If a company applies overhead to production with a predetermined overhead rate,a credit balance in the Factory Overhead account at the end of the period means that:

Overapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead rate exceeds the actual overhead incurred during a period.

The two basic types of cost accounting systems are:

The predetermined overhead rate is used to apply estimated overhead cost to jobs.

Accounting in Business

Accounting for Business Transactions

Adjusting Accounts for Financial Statements

Accounting for Merchandising Operations

Inventories and Cost of Sales

Cash,fraud,and Internal Controls

Accounting for Receivables

Accounting for Long-Term Assets

Accounting for Current Liabilities

Accounting for Long-Term Liabilities

Corporate Reporting and Analysis

Reporting Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Process Costing and Analysis

Activity-Based Costing and Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing and Analysis

Master Budgets and Performance Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Relevant Costing for Managerial Decisions

Capital Budgeting and Investment Analysis

Time Value of Money

Investments

Lean Principles and Accounting

Filters