Question 1

Which of the following are reasons for using longer periods, such as a year, to calculate indirect cost rates.

Accepted Answer

A) Numerator reason 
B) Denominator reason 
C) Both A and B 
D) Neither A nor B 
A) Numerator reason 
B) Denominator reason 
C) Both A and B 
D) Neither A nor B

Question 2

A company may use job costing to assign costs to different product lines and then use process costing to calculate unit costs within each product line.

Accepted Answer

A) True 
 B)False

Question 3

If indirect-cost rates were based on actual short-term usage, periods of lower demand would result in lower costs per unit.

Accepted Answer

A) True 
 B)False

Question 4

What is the difference between an actual cost system and a normal cost system?

Accepted Answer

An actual cost system is one that traces

Question 5

Answer the following questions using the information below:
Because the Abernathy Company used a budgeted indirect-cost rate for its manufacturing operations, the amount allocated ($200,000)was different from the actual amount incurred ($225,000).
  
-What is the journal entry used to write off the difference between allocated and actual overhead using the proration approach?

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 6

Product costing information is used by managers:

Accepted Answer

A) to make decisions and strategy 
B) for planning and control 
C) for cost management 
D) All of these answers are correct. 
A) to make decisions and strategy 
B) for planning and control 
C) for cost management 
D) All of these answers are correct.

Question 7

Which of the following companies is most likely to use a process costing system.

Accepted Answer

A) a manufacturer of breakfast cereal 
B) a manufacturer of large commercial aircraft 
C) a custom jewelry manufacturer 
D) a law firm 
A) a manufacturer of breakfast cereal 
B) a manufacturer of large commercial aircraft 
C) a custom jewelry manufacturer 
D) a law firm

Question 8

The budgeted indirect cost rate is the budgeted indirect costs divided by budgeted quantity of the cost allocation base.

Accepted Answer

A) True 
 B)False

Question 9

If ten clients are lost and the workforce stays at 20 employees, then the direct labor cost rate per hour:

Accepted Answer

A) will remain the same as before 
B) will increase 
C) will decrease 
D) is indeterminable 
A) will remain the same as before 
B) will increase 
C) will decrease 
D) is indeterminable

Question 10

The spreading of underallocated or overallocated overhead among ending work-in-process, finished goods, and cost of goods sold is called:

Accepted Answer

A) the adjusted allocation rate approach 
B) the proration approach 
C) the write-off of cost of goods sold approach 
D) None of these answers are correct. 
A) the adjusted allocation rate approach 
B) the proration approach 
C) the write-off of cost of goods sold approach 
D) None of these answers are correct.

Question 11

Answer the following questions using the information below:
Wayland Manufacturing uses a normal cost system and had the following data available for 2010:
      
-The journal entry to record the materials placed into production would include a:

Accepted Answer

A) credit to Direct Materials Inventory for $82,000 
B) debit to Direct Materials Inventory for $148,000 
C) credit to WIP Inventory for $82,000 
D) debit to WIP Inventory for $148,000 
A) credit to Direct Materials Inventory for $82,000 
B) debit to Direct Materials Inventory for $148,000 
C) credit to WIP Inventory for $82,000 
D) debit to WIP Inventory for $148,000

Question 12

The adjusted allocation approach yields the benefits of:

Accepted Answer

A) timeliness and convenience of normal costing 
B) allocation of of actual manufacturing overhead costs at the end of the year 
C) Both a and b are correct. 
D) Neither a nor b are correct. 
A) timeliness and convenience of normal costing 
B) allocation of of actual manufacturing overhead costs at the end of the year 
C) Both a and b are correct. 
D) Neither a nor b are correct.

Question 13

Purchases of materials are credited to materials control.

Accepted Answer

A) True 
 B)False

Question 14

Jacobs Company manufactures refrigerators. The company uses a budgeted indirect-cost rate for its manufacturing operations and during 20X5 allocated $1,000,000 to work-in-process inventory. Actual overhead incurred was $1,100,000.
Ending balances in the following accounts are:
   Required:
a. Prepare a journal entry to write off the difference between allocated and actual overhead directly to Cost of Goods Sold. Be sure your journal entry closes the related overhead accounts.
b. Prepare a journal entry that prorates the write-off of the difference between allocated and actual overhead using ending account balances. Be sure your journal entry closes the related overhead accounts.

Accepted Answer

The answer of Jacobs Company manufactures refrigerators. The company uses...

Question 15

What is the appropriate journal entry if $100,000 of materials were purchased on account for the month of August?

Accepted Answer

A)    
B)    
C)    
D)    
A)    
B)    
C)    
D)

Question 16

Job-costing may only be used by:

Accepted Answer

A) service companies 
B) merchandising companies 
C) manufacturing companies 
D) All of these may use job-costing. 
A) service companies 
B) merchandising companies 
C) manufacturing companies 
D) All of these may use job-costing.

Question 17

Place the following steps in the order suggested by the seven steps used to assign costs to individual jobs:

Accepted Answer

A) ACDB 
B) CADB 
C) BACD 
D) DCAB 
A) ACDB 
B) CADB 
C) BACD 
D) DCAB

Question 18

Hill Manufacturing uses departmental cost driver rates to apply manufacturing overhead costs to products. Manufacturing overhead costs are applied on the basis of machine-hours in the Machining Department and on the basis of direct labor-hours in the Assembly Department. At the beginning of 20X5, the following estimates were provided for the coming year:
   The accounting records of the company show the following data for Job #846:
   Required:
a. Compute the manufacturing overhead allocation rate for each department.
b. Compute the total cost of Job #846.
c. Provide possible reasons why Hill Manufacturing uses two different cost allocation rates.

Accepted Answer

a. Machining Department cost-allocation

Question 19

Describe job-costing and process-costing systems. Explain when it would be appropriate to use each.

Accepted Answer

Job costing accumulates costs for differ

Question 20

The ending balance in the Work-in-Process Control account represents the costs of all jobs that:

Accepted Answer

A) have not been completed 
B) have been completed but not sold 
C) have been completed and sold to customers 
D) are reported on the income statement 
A) have not been completed 
B) have been completed but not sold 
C) have been completed and sold to customers 
D) are reported on the income statement

Which of the following are reasons for using longer periods, such as a year, to calculate indirect cost rates.

A company may use job costing to assign costs to different product lines and then use process costing to calculate unit costs within each product line.

If indirect-cost rates were based on actual short-term usage, periods of lower demand would result in lower costs per unit.

What is the difference between an actual cost system and a normal cost system?

Product costing information is used by managers:

Which of the following companies is most likely to use a process costing system.

The budgeted indirect cost rate is the budgeted indirect costs divided by budgeted quantity of the cost allocation base.

If ten clients are lost and the workforce stays at 20 employees, then the direct labor cost rate per hour:

The spreading of underallocated or overallocated overhead among ending work-in-process, finished goods, and cost of goods sold is called:

Answer the following questions using the information below: Wayland Manufacturing uses a normal cost system and had the following data available for 2010: -The journal entry to record the materials placed into production would include a:

The adjusted allocation approach yields the benefits of:

Purchases of materials are credited to materials control.

What is the appropriate journal entry if $100,000 of materials were purchased on account for the month of August?

Job-costing may only be used by:

Place the following steps in the order suggested by the seven steps used to assign costs to individual jobs:

Describe job-costing and process-costing systems. Explain when it would be appropriate to use each.

The ending balance in the Work-in-Process Control account represents the costs of all jobs that:

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters

Exam 4: Job Costing

Which of the following are reasons for using longer periods, such as a year, to calculate indirect cost rates.

A company may use job costing to assign costs to different product lines and then use process costing to calculate unit costs within each product line.

If indirect-cost rates were based on actual short-term usage, periods of lower demand would result in lower costs per unit.

What is the difference between an actual cost system and a normal cost system?

Product costing information is used by managers:

Which of the following companies is most likely to use a process costing system.

The budgeted indirect cost rate is the budgeted indirect costs divided by budgeted quantity of the cost allocation base.

If ten clients are lost and the workforce stays at 20 employees, then the direct labor cost rate per hour:

The spreading of underallocated or overallocated overhead among ending work-in-process, finished goods, and cost of goods sold is called:

Answer the following questions using the information below: Wayland Manufacturing uses a normal cost system and had the following data available for 2010: -The journal entry to record the materials placed into production would include a:

The adjusted allocation approach yields the benefits of:

Purchases of materials are credited to materials control.

What is the appropriate journal entry if $100,000 of materials were purchased on account for the month of August?

Job-costing may only be used by:

Place the following steps in the order suggested by the seven steps used to assign costs to individual jobs:

Describe job-costing and process-costing systems. Explain when it would be appropriate to use each.

The ending balance in the Work-in-Process Control account represents the costs of all jobs that:

The Accountants Role in the Organization

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Activity-Based Costing and Activity-Based Management

Master Budget and Responsibility Accounting

Flexible Budgets, Direct-Cost Variances, and Management Control

Flexible Budgets, Overhead Cost Variances, and Management Control

Inventory Costing and Capacity Analysis

Determining How Costs Behave

Decision Making and Relevant Information

Pricing Decisions and Cost Management

Strategy, Balanced Scorecard, and Strategic Profitability Analysis

Cost Allocation, Customer-Profitability Analysis, and Sales-Variance Analysis

Allocation of Support-Department Costs, Common Costs, and Revenues

Cost Allocation: Joint Products and Byproducts

Process Costing

Spoilage, Rework, and Scrap

Balanced Scorecard: Quality, Time, and the Theory of Constraints

Inventory Management, Just-In-Time, and Simplified Costing Methods

Capital Budgeting and Cost Analysis

Management Control Systems, Transfer Pricing, and Multinational Considerations

Performance Measurement, Compensation, and Multinational Considerations

Filters