Question 1

In a job-cost system, each indirect-cost pool has its own account in the general ledger.

Accepted Answer

A) True 
 B)False

Question 2

The cost driver of an indirect cost is often used as the cost-allocation base.

Accepted Answer

A) True 
 B)False

Question 3

The cost allocation base

Accepted Answer

A) is a grouping of individual indirect cost items. 
B) are costs related to a particular cost object that cannot be traced to that cost object in an economically feasible way. 
C) is anything for which a measurement of costs is desired. 
D) is a systematic way to link an indirect cost or group of indirect costs to cost objects. 
A) is a grouping of individual indirect cost items. 
B) are costs related to a particular cost object that cannot be traced to that cost object in an economically feasible way. 
C) is anything for which a measurement of costs is desired. 
D) is a systematic way to link an indirect cost or group of indirect costs to cost objects.

Question 4

Answer the following questions using the information below:
Rhett Company has two departments, Machining and Assembly. The following estimates are for the coming year:
  
-A single indirect-cost rate based on direct manufacturing labor-hours for the entire plant is:

Accepted Answer

A) $ 8 per direct labor-hour 
B) $10 per direct labor-hour 
C) $20 per direct labor-hour 
D) None of these answers is correct. 
A) $ 8 per direct labor-hour 
B) $10 per direct labor-hour 
C) $20 per direct labor-hour 
D) None of these answers is correct.

Question 5

When direct materials are requisitioned the ________ account is increased.

Accepted Answer

A) Manufacturing Overhead Control 
B) Work-in-Process Control 
C) Materials Control 
D) Accounts Payable Control 
A) Manufacturing Overhead Control 
B) Work-in-Process Control 
C) Materials Control 
D) Accounts Payable Control

Question 6

A job-cost record uses information from:

Accepted Answer

A) a materials requisition record to record raw material purchases from suppliers 
B) a receiving report that indicates the type and quantity of each item received in an order from a supplier 
C) a labor-time card to record an employee's wage rate and hours spent on a particular job 
D) All of these answers are correct. 
A) a materials requisition record to record raw material purchases from suppliers 
B) a receiving report that indicates the type and quantity of each item received in an order from a supplier 
C) a labor-time card to record an employee's wage rate and hours spent on a particular job 
D) All of these answers are correct.

Question 7

In some variations of normal costing, organizations use budgeted rates to assign direct costs as well as indirect costs to jobs.

Accepted Answer

A) True 
 B)False

Question 8

One reason indirect costs may be overapplied is because:

Accepted Answer

A) the actual allocation base quantity exceeds the budgeted quantity 
B) budgeted indirect costs exceed actual indirect costs 
C) requisitioned direct materials exceed budgeted material costs 
D) Both A and B are correct. 
A) the actual allocation base quantity exceeds the budgeted quantity 
B) budgeted indirect costs exceed actual indirect costs 
C) requisitioned direct materials exceed budgeted material costs 
D) Both A and B are correct.

Question 9

One reason for using longer time periods to calculate indirect-cost rates is seasonal cost fluctuations.

Accepted Answer

A) True 
 B)False

Question 10

One reason indirect costs may be underapplied is if actual indirect costs are less than budgeted indirect costs.

Accepted Answer

A) True 
 B)False

Question 11

Answer the following questions using the information below:
Rhett Company has two departments, Machining and Assembly. The following estimates are for the coming year:
  
-The budgeted indirect-cost driver rate for the Machining Department based on the number of machine-hours in that department is:

Accepted Answer

A) $5 per machine-hour 
B) $10 per machine-hour 
C) $20 per machine-hour 
D) None of these answers is correct. 
A) $5 per machine-hour 
B) $10 per machine-hour 
C) $20 per machine-hour 
D) None of these answers is correct.

Question 12

Which of the following includes both traced direct costs and allocated indirect costs?

Accepted Answer

A) cost tracing 
B) cost pools 
C) cost assignments 
D) cost allocations 
A) cost tracing 
B) cost pools 
C) cost assignments 
D) cost allocations

Question 13

Cost objects may be jobs, products, or customers.

Accepted Answer

A) True 
 B)False

Question 14

It is inappropriate for service organizations such as public accounting firms to use job costing.

Accepted Answer

A) True 
 B)False

Question 15

A job-cost record is a source document, but individual items of the job-cost record may also have source documents.

Accepted Answer

A) True 
 B)False

Question 16

Direct costs are traced the same way for actual costing and normal costing.

Accepted Answer

A) True 
 B)False

Question 17

Job-cost records for Boucher Company contained the following data:
   Required:
a. Compute WIP inventory at June 30.
b. Compute finished goods inventory at June 30.
c. Compute cost of goods sold for June.

Accepted Answer

a. $7,000 + $8,000 =

Question 18

For externally reported inventory costs, the Work-in-Process Control account is increased (debited)by:

Accepted Answer

A) marketing costs 
B) allocated plant utility costs 
C) the purchase costs of direct and indirect materials 
D) customer-service costs 
A) marketing costs 
B) allocated plant utility costs 
C) the purchase costs of direct and indirect materials 
D) customer-service costs

Question 19

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 amount of manufacturing overhead costs will be allocated to this job?

Accepted Answer

A) $270 
B) $720 
C) $450 
D) $30,000 
A) $270 
B) $720 
C) $450 
D) $30,000

Question 20

Answer the following questions using the information below:
Wayland Manufacturing uses a normal cost system and had the following data available for 2010:
      
-The ending balance of finished goods inventory is:

Accepted Answer

A) $58,000 
B) $36,000 
C) $94,000 
D) $292,000 
A) $58,000 
B) $36,000 
C) $94,000 
D) $292,000

Exam 4: Job Costing

In a job-cost system, each indirect-cost pool has its own account in the general ledger.

The cost driver of an indirect cost is often used as the cost-allocation base.

The cost allocation base

Answer the following questions using the information below: Rhett Company has two departments, Machining and Assembly. The following estimates are for the coming year: -A single indirect-cost rate based on direct manufacturing labor-hours for the entire plant is:

When direct materials are requisitioned the ________ account is increased.

A job-cost record uses information from:

In some variations of normal costing, organizations use budgeted rates to assign direct costs as well as indirect costs to jobs.

One reason indirect costs may be overapplied is because:

One reason for using longer time periods to calculate indirect-cost rates is seasonal cost fluctuations.

One reason indirect costs may be underapplied is if actual indirect costs are less than budgeted indirect costs.

Answer the following questions using the information below: Rhett Company has two departments, Machining and Assembly. The following estimates are for the coming year: -The budgeted indirect-cost driver rate for the Machining Department based on the number of machine-hours in that department is:

Which of the following includes both traced direct costs and allocated indirect costs?

Cost objects may be jobs, products, or customers.

It is inappropriate for service organizations such as public accounting firms to use job costing.

A job-cost record is a source document, but individual items of the job-cost record may also have source documents.

Direct costs are traced the same way for actual costing and normal costing.

Job-cost records for Boucher Company contained the following data: Required: a. Compute WIP inventory at June 30. b. Compute finished goods inventory at June 30. c. Compute cost of goods sold for June.

For externally reported inventory costs, the Work-in-Process Control account is increased (debited)by:

Answer the following questions using the information below: Wayland Manufacturing uses a normal cost system and had the following data available for 2010: -The ending balance of finished goods inventory is:

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

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