Question 1

Actual costing traces direct costs to a cost object by multiplying the budgeted direct cost rate and the actual quantity.

Accepted Answer

A) True 
 B)False

Question 2

In a job cost system,the cost object is a unit or multiple units of a distinct product or service called a job.

Accepted Answer

A) True 
 B)False

Question 3

The first step in job costing is to

Accepted Answer

A) identify the cost object. 
B) identify the direct costs. 
C) select the cost allocation base. 
D) identify the indirect costs. 
E) compute the rate per unit. 
A) identify the cost object. 
B) identify the direct costs. 
C) select the cost allocation base. 
D) identify the indirect costs. 
E) compute the rate per unit.

Question 4

To allocate or spread the under/overallocated overhead between ending Inventory,Cost of Goods Sold,and the Work-in-Process control accounts is called the

Accepted Answer

A) adjusted allocation-rate approach. 
B) proration approach. 
C) flexible budget approach. 
D) allocation variance approach. 
E) inventory adjustment approach. 
A) adjusted allocation-rate approach. 
B) proration approach. 
C) flexible budget approach. 
D) allocation variance approach. 
E) inventory adjustment approach.

Question 5

Assigning direct costs to a cost object is called

Accepted Answer

A) cost allocation. 
B) job costing. 
C) cost pooling. 
D) process costing. 
E) cost tracing. 
A) cost allocation. 
B) job costing. 
C) cost pooling. 
D) process costing. 
E) cost tracing.

Question 6

Use the information below to answer the following question(s).
A Hospital uses a job cost system for all surgery patients.In February,the pre-operating room (PRE-OP)and operating room (OR)had budgeted allocation bases of 1,000 nursing hours and 500 nursing hours,respectively,and budgeted nursing overhead charges were $28,000 and $22,000,respectively.The hospital ward rooms for surgery patients had budgeted overhead costs of $200,000 and 2,500 nursing hours for the month.PRE-OP,OR and the hospital ward have separate indirect cost pools.The hospital uses a budgeted overhead rate for applying overhead to patient stays.
For patient Jones,actual hours incurred were six and eight hours,respectively,in the PRE-OP and OR rooms.He was in the hospital for 5 days (120 hours).Other costs related to Jones were:
  
-What was the total PRE-OP cost for patient Jones?

Accepted Answer

A) $1,400 
B) $1,568 
C) $1,624 
D) $1,664 
E) $1,752 
A) $1,400 
B) $1,568 
C) $1,624 
D) $1,664 
E) $1,752

Question 7

Use the information below to answer the following question(s).
Jim's Computer Products manufactures keyboards for computers.In June,the two production departments had budgeted allocation bases of 10,000 machine hours in Department 1 and 5,000 direct manufacturing labour hours in Department 2.The budgeted manufacturing overheads for the month were $34,500 and $37,500,respectively.For Job 501,the actual costs incurred in the two departments were as follows:
   Job 501 incurred 1,000 machine hours in Department 1 and 300 manufacturing labour hours in Department 2.The company uses a budgeted departmental overhead rate for applying overhead to production.
-What is the total cost assigned to Job 501 based on normal costing?

Accepted Answer

A) $27,600 
B) $91,200 
C) $96,900 
D) $123,900 
E) $126,500 
A) $27,600 
B) $91,200 
C) $96,900 
D) $123,900 
E) $126,500

Question 8

Use the information below to answer the following question(s).
A dental office is in the process of changing their costing system.Their system currently uses a single direct cost pool (professional labour)and a single indirect cost pool (staff support).The direct categories in the new,refined costing system include:
1.Professional partner labour.Average total annual compensation of the two partners is $100,000;and,each partner has 2,000 hours of budgeted billable time.
2.Dental assistant labour.Average total annual compensation of the four assistants is $22,500 each,and each assistant has 2,000 hours of budgeted billable time.
3.Office staff.Average total annual compensation of the two staff members is $15,000 each,and each has 2,000 hours of budgeted billable time.
The indirect category in the new refined costing system includes professional liability insurance.The budgeted indirect amount is $200,000,and the allocation base is budgeted professional labour hours.The dentist and dental assistants are considered professional labour hours.
-What is the budgeted direct cost rate per hour for professional partner labour?

Accepted Answer

A) $25.00 per hour 
B) $50.00 per hour 
C) $44.50 per hour 
D) $38.00 per hour 
E) $46.00 per hour 
A) $25.00 per hour 
B) $50.00 per hour 
C) $44.50 per hour 
D) $38.00 per hour 
E) $46.00 per hour

Question 9

Moira Company has just finished its first year of operations and must decide which method to use for adjusting cost of goods sold.The company used a budgeted indirect-cost rate for its manufacturing operations.The amount that was allocated ($435,000)to cost of goods sold was different from the actual amount incurred ($425,000).These were the respective ending balances in the Manufacturing Overhead Allocated and Manufacturing Overhead control accounts.
Ending balances in the relevant accounts were:
   
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 Moira Company has just finished its first...

Question 10

A local attorney employs ten full-time professionals.The budgeted compensation per employee is $80,000.The maximum billable hours for each client are 400.Clients always receive their full amount of time.All professional labour costs are included in a single direct cost category and are traced to jobs on a per-hour basis.Any other costs are included in a single indirect cost pool,allocated according to professional labour-hours.Budgeted indirect costs for the year are $400,000 and the firm had 20 clients.
Required:
a.What is the direct labour budgeted cost rate per hour?
b.What is the indirect cost pool budgeted cost rate per hour?

Accepted Answer

a.
 @#IMG-DLM& b.Indirect cost

Question 11

Explain how a budgeted indirect cost allocation rate is determined.

Accepted Answer

Manufacturing overhead cost allocation r

Question 12

The Work-in-Process Control account tracks job costs from the time jobs are started until they are completed.

Accepted Answer

A) True 
 B)False

Question 13

What are three possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method.

Accepted Answer

One way to dispose of underallocated or

Question 14

The Manufacturing Overhead Control account is debited for

Accepted Answer

A) the actual costs in all the individual overhead categories ( such as indirect materials and electric power). 
B) the amount of the under applied overhead. 
C) the budgeted costs in all the individual overhead categories ( such as indirect materials and electric power). 
D) the budgeted amount of indirect manufacturing overhead costs. 
E) the overhead allocated to Work-in-Process inventory. 
A) the actual costs in all the individual overhead categories ( such as indirect materials and electric power). 
B) the amount of the under applied overhead. 
C) the budgeted costs in all the individual overhead categories ( such as indirect materials and electric power). 
D) the budgeted amount of indirect manufacturing overhead costs. 
E) the overhead allocated to Work-in-Process inventory.

Question 15

What is the purpose of subsidiary ledgers? How does a subsidiary ledger relate to the control account in the general ledger?

Accepted Answer

The purpose of subsidiary ledgers is to

Question 16

Raw materials that can be traced to a cost object are an example of an indirect cost.

Accepted Answer

A) True 
 B)False

Question 17

Actual costing can also be a method of job costing.

Accepted Answer

A) True 
 B)False

Question 18

Use the information below to answer the following question(s).
A dental office is in the process of changing their costing system.Their system currently uses a single direct cost pool (professional labour)and a single indirect cost pool (staff support).The direct categories in the new,refined costing system include:
1.Professional partner labour.Average total annual compensation of the two partners is $100,000;and,each partner has 2,000 hours of budgeted billable time.
2.Dental assistant labour.Average total annual compensation of the four assistants is $22,500 each,and each assistant has 2,000 hours of budgeted billable time.
3.Office staff.Average total annual compensation of the two staff members is $15,000 each,and each has 2,000 hours of budgeted billable time.
The indirect category in the new refined costing system includes professional liability insurance.The budgeted indirect amount is $200,000,and the allocation base is budgeted professional labour hours.The dentist and dental assistants are considered professional labour hours.
-What would be the percentage change in the budgeted direct cost rate if they consider hiring one more employee,as part of the office staff?

Accepted Answer

A) 3.0% 
B) 2.0% 
C) 1.0% 
D) 0.5% 
E) 0% 
A) 3.0% 
B) 2.0% 
C) 1.0% 
D) 0.5% 
E) 0%

Question 19

Managers and accountants gather the information that goes into their cost systems through source documents,which are the original records that support journal entries in an accounting system.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Actual costing traces direct costs to a cost object by multiplying the budgeted direct cost rate and the actual quantity.

In a job cost system,the cost object is a unit or multiple units of a distinct product or service called a job.

The first step in job costing is to

To allocate or spread the under/overallocated overhead between ending Inventory,Cost of Goods Sold,and the Work-in-Process control accounts is called the

Assigning direct costs to a cost object is called

Explain how a budgeted indirect cost allocation rate is determined.

The Work-in-Process Control account tracks job costs from the time jobs are started until they are completed.

What are three possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method.

The Manufacturing Overhead Control account is debited for

What is the purpose of subsidiary ledgers? How does a subsidiary ledger relate to the control account in the general ledger?

Raw materials that can be traced to a cost object are an example of an indirect cost.

Actual costing can also be a method of job costing.

Managers and accountants gather the information that goes into their cost systems through source documents,which are the original records that support journal entries in an accounting system.

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

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters

Exam 4: Job Costing

Actual costing traces direct costs to a cost object by multiplying the budgeted direct cost rate and the actual quantity.

In a job cost system,the cost object is a unit or multiple units of a distinct product or service called a job.

The first step in job costing is to

To allocate or spread the under/overallocated overhead between ending Inventory,Cost of Goods Sold,and the Work-in-Process control accounts is called the

Assigning direct costs to a cost object is called

Explain how a budgeted indirect cost allocation rate is determined.

The Work-in-Process Control account tracks job costs from the time jobs are started until they are completed.

What are three possible ways to dispose of underallocated or overallocated overhead costs at the end of a fiscal year? Briefly comment on the theoretical correctness or incorrectness of each method.

The Manufacturing Overhead Control account is debited for

What is the purpose of subsidiary ledgers? How does a subsidiary ledger relate to the control account in the general ledger?

Raw materials that can be traced to a cost object are an example of an indirect cost.

Actual costing can also be a method of job costing.

Managers and accountants gather the information that goes into their cost systems through source documents,which are the original records that support journal entries in an accounting system.

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

The Accountants Vital Role in Decision Making

An Introduction to Cost Terms and Purposes

Cost-Volume-Profit Analysis

Activity-Based Costing and Management

Master Budget and Responsibility Accounting

Flexible Budgets,variances,and Management Control: I

Flexible Budgets,variances,and Management Control: II

Income Effects of Denominator Level on Inventory Valuation

Analysis of Cost Behaviour

Decision Making and Relevant Information

Pricing Decisions, product Profitability Decisions, and Cost Management

Strategy,balanced Scorecard,and Profitability Analysis

Period Cost Allocation

Cost Allocation: Joint Products and Byproducts

Revenue and Customer Profitability Analysis

Process Costing

Spoilage, rework, and Scrap

Inventory Cost Management Strategies

Capital Budgeting: Methods of Investment Analysis

Transfer Pricing and Multinational Management Control Systems

Multinational Performance Measurement and Compensation

Filters