Question 1

________ costing is used by a business to price unique products for different jobs.

Accepted Answer

A) Actual 
B) Job 
C) Process 
D) Traditional 
A) Actual 
B) Job 
C) Process 
D) Traditional

Question 2

A job that shows low profitability may be the result of:

Accepted Answer

A) wasting direct materials 
B) inefficient direct manufacturing labor 
C) underpricing the job 
D) All of these answers are correct. 
A) wasting direct materials 
B) inefficient direct manufacturing labor 
C) underpricing the job 
D) All of these answers are correct.

Question 3

Answer the following questions using the information below:
Roiann and Dennett Law Office employs 12 full-time attorneys and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 20X3:
  
-How much should a client be billed in a normal costing system when 1,000 professional labor-hours are used?

Accepted Answer

A) $32,000 
B) $29,800 
C) $35,200 
D) $27,000 
A) $32,000 
B) $29,800 
C) $35,200 
D) $27,000

Question 4

Answer the following questions using the information below:
Roiann and Dennett Law Office employs 12 full-time attorneys and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 20X3:
  
-When a normal costing system is used, clients using proportionately more attorney time than paraprofessional time will:

Accepted Answer

A) be overbilled for actual resources used 
B) be underbilled for actual resources used 
C) be billed accurately for actual resources used 
D) result in an underallocation of direct costs 
A) be overbilled for actual resources used 
B) be underbilled for actual resources used 
C) be billed accurately for actual resources used 
D) result in an underallocation of direct costs

Question 5

For external reporting purposes, it is acceptable to allocate marketing costs to individual jobs.

Accepted Answer

A) True 
 B)False

Question 6

Stewart Company's actual manufacturing overhead is $2,800,000. Overhead is allocated on the basis of direct labor hours. The direct labor hours were 50,000 for the period. What is the manufacturing overhead rate?

Accepted Answer

A) $47.00 
B) $56.00 
C) $75.00 
D) None of the above are correct. 
A) $47.00 
B) $56.00 
C) $75.00 
D) None of the above are correct.

Question 7

Answer the following questions using the information below:
Roiann and Dennett Law Office employs 12 full-time attorneys and 10 paraprofessionals. Direct and indirect costs are applied on a professional labor-hour basis that includes both attorney and paraprofessional hours. Following is information for 20X3:
  
-When using a normal costing system, year-end accounting records will show that indirect costs are:

Accepted Answer

A) applied improperly 
B) underallocated 
C) overbudgeted 
D) overallocated 
A) applied improperly 
B) underallocated 
C) overbudgeted 
D) overallocated

Question 8

Answer the following questions using the information below:
Gibson Manufacturing is a small textile manufacturer using machine-hours as the single indirect-cost rate to allocate manufacturing overhead costs to the various jobs contracted during the year. The following estimates are provided for the coming year for the company and for the Winfield High School band jacket job.
  
-What are the total manufacturing costs of this job?

Accepted Answer

A) $1,200 
B) $1,470 
C) $1,650 
D) $1,920 
A) $1,200 
B) $1,470 
C) $1,650 
D) $1,920

Question 9

Answer the following questions using the information below:
For 2010, Jake's Dog Supply Manufacturing uses machine-hours as the only overhead cost-allocation base. The accounting records contain the following information:
  
-Using job costing, the 2010 actual indirect-cost rate is:

Accepted Answer

A) $4.00 per machine-hour 
B) $4.80 per machine-hour 
C) $5.00 per machine-hour 
D) $6.00 per machine-hour 
A) $4.00 per machine-hour 
B) $4.80 per machine-hour 
C) $5.00 per machine-hour 
D) $6.00 per machine-hour

Question 10

All of the following are true of the Work-in-Process Control account EXCEPT that:

Accepted Answer

A) it tracks all direct material purchases 
B) the balance equals the sum of amounts from all in-process individual job-cost records 
C) it is an asset account 
D) it tracks job costs from beginning through completion 
A) it tracks all direct material purchases 
B) the balance equals the sum of amounts from all in-process individual job-cost records 
C) it is an asset account 
D) it tracks job costs from beginning through completion

Question 11

Answer the following questions using the information below:
Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing overhead costs are allocated 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 20X3, the following estimates were provided for the coming year:
   The accounting records of the company show the following data for Job #316:
  
-What are the total manufacturing costs of Job #316?

Accepted Answer

A) $715 
B) $880 
C) $1,595 
D) $1,000 
A) $715 
B) $880 
C) $1,595 
D) $1,000

Question 12

The method that restates all overhead entries in the general ledger and subsidiary ledgers using actual cost rates rather than budgeted cost rates 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 13

Answer the following questions using the information below:
Bauer Manufacturing uses departmental cost driver rates to allocate manufacturing overhead costs to products. Manufacturing overhead costs are allocated 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 20X3, the following estimates were provided for the coming year:
   The accounting records of the company show the following data for Job #316:
  
-For Bauer Manufacturing, what is the annual manufacturing overhead cost-allocation rate for the Machining Department?

Accepted Answer

A) $4.00 
B) $4.20 
C) $4.67 
D) $5.25 
A) $4.00 
B) $4.20 
C) $4.67 
D) $5.25

Question 14

For normal costing, even though the budgeted indirect-cost rate is based on estimates, indirect costs are allocated to products based on actual levels of the cost-allocation base.

Accepted Answer

A) True 
 B)False

Question 15

Pumpkin Plastic Products Company manufactures pipes and applies manufacturing costs to production at a budgeted indirect-cost rate of $9 per direct labor-hour. The following data are obtained from the accounting records for June 2010:
   Required:
a. What actual amount of manufacturing overhead costs was incurred during June 2010?
b. What amount of manufacturing overhead was allocated to all jobs during June 2010?
c. For June 2010, was manufacturing overhead underallocated or overallocated? Explain.

Accepted Answer

a. $20,000 + $100,000 + $40,00

Question 16

All of the following are true of plant utility costs EXCEPT:

Accepted Answer

A) the source document is the utility bill 
B) the cost increases the Manufacturing Overhead Control account 
C) the cost increases the Work-in-Process Control account 
D) it is an indirect cost 
A) the source document is the utility bill 
B) the cost increases the Manufacturing Overhead Control account 
C) the cost increases the Work-in-Process Control account 
D) it is an indirect cost

Question 17

Actual costing systems are NOT commonly found in practice because actual costs CANNOT be computed in a timely manner.

Accepted Answer

A) True 
 B)False

Question 18

Process costing:

Accepted Answer

A) allocates all product costs, including materials and labor 
B) results in different costs for different units produced 
C) is commonly used by general contractors who construct custom-built homes 
D) is used exclusively in manufacturing 
A) allocates all product costs, including materials and labor 
B) results in different costs for different units produced 
C) is commonly used by general contractors who construct custom-built homes 
D) is used exclusively in manufacturing

Question 19

The Finished Goods Control account consists of actual manufacturing overhead costs rather than allocated manufacturing overhead costs.

Accepted Answer

A) True 
 B)False

Question 20

Answer the following questions using the information below:
Apple Valley Corporation uses a job cost system and has two production departments, A and B. Budgeted manufacturing costs for the year are:
   The actual material and labor costs charged to Job #432 were as follows:
   Apple Valley applies manufacturing overhead costs to jobs on the basis of direct manufacturing labor cost using departmental rates determined at the beginning of the year.
-Manufacturing overhead costs allocated to Job #432 total:

Accepted Answer

A) $30,000 
B) $12,000 
C) $24,000 
D) $36,000 
A) $30,000 
B) $12,000 
C) $24,000 
D) $36,000

________ costing is used by a business to price unique products for different jobs.

A job that shows low profitability may be the result of:

For external reporting purposes, it is acceptable to allocate marketing costs to individual jobs.

Stewart Company's actual manufacturing overhead is $2,800,000. Overhead is allocated on the basis of direct labor hours. The direct labor hours were 50,000 for the period. What is the manufacturing overhead rate?

Answer the following questions using the information below: For 2010, Jake's Dog Supply Manufacturing uses machine-hours as the only overhead cost-allocation base. The accounting records contain the following information: -Using job costing, the 2010 actual indirect-cost rate is:

All of the following are true of the Work-in-Process Control account EXCEPT that:

The method that restates all overhead entries in the general ledger and subsidiary ledgers using actual cost rates rather than budgeted cost rates is called

For normal costing, even though the budgeted indirect-cost rate is based on estimates, indirect costs are allocated to products based on actual levels of the cost-allocation base.

All of the following are true of plant utility costs EXCEPT:

Actual costing systems are NOT commonly found in practice because actual costs CANNOT be computed in a timely manner.

Process costing:

The Finished Goods Control account consists of actual manufacturing overhead costs rather than allocated manufacturing overhead costs.

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

________ costing is used by a business to price unique products for different jobs.

A job that shows low profitability may be the result of:

For external reporting purposes, it is acceptable to allocate marketing costs to individual jobs.

Stewart Company's actual manufacturing overhead is $2,800,000. Overhead is allocated on the basis of direct labor hours. The direct labor hours were 50,000 for the period. What is the manufacturing overhead rate?

Answer the following questions using the information below: For 2010, Jake's Dog Supply Manufacturing uses machine-hours as the only overhead cost-allocation base. The accounting records contain the following information: -Using job costing, the 2010 actual indirect-cost rate is:

All of the following are true of the Work-in-Process Control account EXCEPT that:

The method that restates all overhead entries in the general ledger and subsidiary ledgers using actual cost rates rather than budgeted cost rates is called

For normal costing, even though the budgeted indirect-cost rate is based on estimates, indirect costs are allocated to products based on actual levels of the cost-allocation base.

All of the following are true of plant utility costs EXCEPT:

Actual costing systems are NOT commonly found in practice because actual costs CANNOT be computed in a timely manner.

Process costing:

The Finished Goods Control account consists of actual manufacturing overhead costs rather than allocated manufacturing overhead costs.

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