Question 1

The amount by which overhead incurred during a period exceeds the overhead applied to jobs is:

Accepted Answer

A)  Underapplied overhead. 
B)  Actual overhead. 
C)  Predetermined overhead. 
D)  Overapplied overhead. 
E)  Balanced overhead. 
A)  Underapplied overhead. 
B)  Actual overhead. 
C)  Predetermined overhead. 
D)  Overapplied overhead. 
E)  Balanced overhead.

Question 2

A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a(n):

Accepted Answer

A)  Materials ledger card. 
B)  Purchase order. 
C)  Materials voucher. 
D)  Materials requisition. 
E)  Purchase ledger. 
A)  Materials ledger card. 
B)  Purchase order. 
C)  Materials voucher. 
D)  Materials requisition. 
E)  Purchase ledger.

Question 3

Describe the flow of labor costs in a job order costing system, and identify the documents used in the system.

Accepted Answer

Labor costs are classified as either dir

Question 4

Describe the flow of the employee labor, both direct and indirect, through the inventory accounts.

Accepted Answer

Direct labor is assigned to jobs using t

Question 5

If actual overhead incurred during a period exceeds applied overhead, the difference will be a debit balance in the Factory Overhead account at the end of the period.

Accepted Answer

A) True 
 B)False

Question 6

When time ticket information is entered into the accounting system, the journal entry is a debit to Factory Wages Payable and a credit to Work in Process Inventory.

Accepted Answer

A) True 
 B)False

Question 7

Job order production systems would be appropriate for companies that produce compact disks or disposable cameras.

Accepted Answer

A) True 
 B)False

Question 8

Prepare journal entries to record the following transactions and events for April using a job order costing system.
(a) Purchased raw materials on credit, $69,000.
(b) Raw materials requisitioned: $26,000 direct and $5,400 indirect.
(c) Factory payroll totaled $46,000, including $9,500 indirect labor.
(d) Paid other actual overhead costs totaling $14,500 cash.
(e) Applied overhead totaling $28,200.
(f) Finished and transferred jobs totaling $77,500.
(g) Jobs costing $58,800 were sold on credit for $103,000.

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 9

Describe how materials flow through a job order costing system, and identify the key documents in the system.

Accepted Answer

When materials are received from supplie

Question 10

A company's predetermined overhead rate is applied at 150% of direct materials cost. How much overhead would be allocated to Job No. 325 if the total direct materials costs was $40,000?

Accepted Answer

$40,000 *

Question 11

Lowden Company has an overhead application rate of 160% and allocates overhead based on direct material cost. During the current period, direct labor cost is $50,000 and direct materials used cost $80,000. Determine the amount of overhead Lowden Company should record in the current period.

Accepted Answer

A)  $128,000. 
B)  $80,000. 
C)  $50,000. 
D)  $31,250. 
E)  $208,000. 
A)  $128,000. 
B)  $80,000. 
C)  $50,000. 
D)  $31,250. 
E)  $208,000.

Question 12

Dallas Company uses a job order costing system. The company's executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period. At the end of the period, the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead rate?

Accepted Answer

A)  $6.00 per direct labor hour. 
B)  $7.08 per direct labor hour. 
C)  $7.50 per direct labor hour. 
D)  $6.67 per direct labor hour. 
E)  $8.33 per direct labor hour. 
A)  $6.00 per direct labor hour. 
B)  $7.08 per direct labor hour. 
C)  $7.50 per direct labor hour. 
D)  $6.67 per direct labor hour. 
E)  $8.33 per direct labor hour.

Question 13

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. 
-  What is the amount of job costs added to Work in Process Inventory during October?

Accepted Answer

A)  $16,000 
B)  $37,000 
C)  $22,500 
D)  $32,000 
E)  $26,500 
A)  $16,000 
B)  $37,000 
C)  $22,500 
D)  $32,000 
E)  $26,500

Question 14

The Luna Manufacturing Company has the following job cost sheets on file. They represent jobs that have been worked on during September of the current year. This table summarizes information provided on each sheet:
 $$\begin{array} { | l | l | l | } 
\hline \text { Number } & \text { Total Cost Incurred } & \text { Status of Job } \
\hline 951 & \$ 4,200 & \text { Finithed and delivered } \
\hline 952 & \$ 7,700 & \text { Unfini shed } \
\hline 953 & \$ 9,300 & \text { Finished and unsold } \
\hline 954 & \$ 11,100 & \text { Finished and delivered } \
\hline 955 & \$ 3,000 & \text { Finished and unsold } \
\hline 956 & \$ 5,500 & \text { Finished and delivered } \
\hline 957 & \$ 35,000 & \text { Unfini shed } \
\hline 958 & \$ 3,200 & \text { Finished and delivered } \
\hline 959 & \$ 500 & \text { Unfini shed } \
\hline 960 & \$ 22,110 & \text { Unfini shed } \
\hline 961 & \$ 7,200 & \text { Finished and delivered } \
\hline 962 & \$ 8,500 & \text { Unfini shed } \
\hline 963 & \$ 11,200 & \text { Finithed and unsold }
\end{array}$$ (a) What is the cost of the Work in Process inventory on September 30?
(b) What is the cost of the finished goods inventory on September 30?
(c) What is the cost of goods sold for the month of September?

Accepted Answer

(a) Cost of the Work in Process invent

Question 15

A source document that an employee uses to report how much time was spent working on a job or on overhead activities and that is used to determine the amount of direct labor to charge to the job or to determine the amount of indirect labor to charge to factory overhead is called a:

Accepted Answer

A)  Factory Overhead Ledger. 
B)  Payroll Register. 
C)  Time ticket. 
D)  General Ledger. 
E)  Factory payroll record. 
A)  Factory Overhead Ledger. 
B)  Payroll Register. 
C)  Time ticket. 
D)  General Ledger. 
E)  Factory payroll record.

Question 16

A job cost sheet is useful for developing financial accounting numbers but does not contain information that is useful for managing the production process.

Accepted Answer

A) True 
 B)False

Question 17

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 18

Explain how a service firm, such as an advertising agency, might use job order costing.

Accepted Answer

Since most jobs in a service firm such a

Question 19

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

Question 20

Direct materials and direct labor are examples of costs that are debited to the Factory Overhead account in a job costing system.

Accepted Answer

A) True 
 B)False

Exam 19: Job Order Costing

The amount by which overhead incurred during a period exceeds the overhead applied to jobs is:

A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a(n):

Describe the flow of labor costs in a job order costing system, and identify the documents used in the system.

Describe the flow of the employee labor, both direct and indirect, through the inventory accounts.

If actual overhead incurred during a period exceeds applied overhead, the difference will be a debit balance in the Factory Overhead account at the end of the period.

When time ticket information is entered into the accounting system, the journal entry is a debit to Factory Wages Payable and a credit to Work in Process Inventory.

Job order production systems would be appropriate for companies that produce compact disks or disposable cameras.

Describe how materials flow through a job order costing system, and identify the key documents in the system.

A company's predetermined overhead rate is applied at 150% of direct materials cost. How much overhead would be allocated to Job No. 325 if the total direct materials costs was $40,000?

Lowden Company has an overhead application rate of 160% and allocates overhead based on direct material cost. During the current period, direct labor cost is $50,000 and direct materials used cost $80,000. Determine the amount of overhead Lowden Company should record in the current period.

A source document that an employee uses to report how much time was spent working on a job or on overhead activities and that is used to determine the amount of direct labor to charge to the job or to determine the amount of indirect labor to charge to factory overhead is called a:

A job cost sheet is useful for developing financial accounting numbers but does not contain information that is useful for managing the production process.

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

Explain how a service firm, such as an advertising agency, might use job order costing.

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:

Direct materials and direct labor are examples of costs that are debited to the Factory Overhead account in a job costing system.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets Natural Resoures and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Process Costing

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Performance Measurement and Responsibility Accounting

Capital Budgeting and Managerial Decisions

Present and Future Values in Accounting

Activity-Based Costing

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