Question 1

Which account is credited if direct materials of $20,000 and indirect materials of $3,000 are sent to the manufacturing plant floor?

Accepted Answer

A)  Manufacturing Overhead Control for $23,000 
B)  Work-in-Process Control for $23,000 
C)  Accounts Payable Control for $17,000 
D)  Materials Control for $23,000 
A)  Manufacturing Overhead Control for $23,000 
B)  Work-in-Process Control for $23,000 
C)  Accounts Payable Control for $17,000 
D)  Materials Control for $23,000

Question 2

The basic source document for direct manufacturing labor is the ________.

Accepted Answer

A)  job-cost record 
B)  materials-requisition record 
C)  labor-time record 
D)  labor-requisition record 
A)  job-cost record 
B)  materials-requisition record 
C)  labor-time record 
D)  labor-requisition record

Question 3

For a given job the direct costs associated with the job are ________.

Accepted Answer

A)  actual overhead 
B)  raw materials 
C)  sunk costs 
D)  fixed costs 
A)  actual overhead 
B)  raw materials 
C)  sunk costs 
D)  fixed costs

Question 4

All costs other than direct materials and direct manufacturing labor are classified as indirect costs.

Accepted Answer

A) True 
 B)False

Question 5

Cost objects may be jobs,products,or customers.

Accepted Answer

A) True 
 B)False

Question 6

Each indirect-cost pool of a manufacturing firm ________.

Accepted Answer

A)  utilizes a separate cost-allocation rate 
B)  is a subset of total direct costs 
C)  relates to multiple cost centres 
D)  utilizes the same cost-allocation rate for all costs incurred 
A)  utilizes a separate cost-allocation rate 
B)  is a subset of total direct costs 
C)  relates to multiple cost centres 
D)  utilizes the same cost-allocation rate for all costs incurred

Question 7

Normal costing is a method of job costing that allocates an indirect cost based on the actual indirect-cost rate times the actual quantity of the cost-allocation base.

Accepted Answer

A) True 
 B)False

Question 8

In the service sector,to achieve timely reporting on the profitability of an engagement,a company will use ________.

Accepted Answer

A)  budgeted rates for all direct costs 
B)  budgeted rates for indirect costs 
C)  actual costing 
D)  budgeted rates for some direct costs and indirect costs 
A)  budgeted rates for all direct costs 
B)  budgeted rates for indirect costs 
C)  actual costing 
D)  budgeted rates for some direct costs and indirect costs

Question 9

When a normal costing system is used,clients using proportionately more full-time employees than trainees 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 10

Job-costing is likely to be used by________.

Accepted Answer

A)  oil refining companies 
B)  advertising agencies 
C)  postal service companies 
D)  beverage production companies 
A)  oil refining companies 
B)  advertising agencies 
C)  postal service companies 
D)  beverage production companies

Question 11

During an accounting period,job costs are computed on an ongoing basis by the use of ________.

Accepted Answer

A)  actual allocation rates 
B)  budgeted indirect-cost rates 
C)  overallocated indirect-cost rates 
D)  underallocated indirect-cost rates 
A)  actual allocation rates 
B)  budgeted indirect-cost rates 
C)  overallocated indirect-cost rates 
D)  underallocated indirect-cost rates

Question 12

The cost-allocation base is a systematic way to link an indirect cost or group of indirect costs to cost objects.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Answer the following questions using the information below:
For 2014, Thomas Manufacturing uses machine-hours as the only overhead cost-allocation base. The estimated manufacturing overhead costs are $300,000 and estimated machine hours are 50,000. The actual manufacturing overhead costs are $420,000 and actual machine hours are 70,000.
-What is the difference between the budgeted and the actual manufacturing overhead using job costing?

Accepted Answer

A)  $0.20 
B)  $0.50 
C)  $1.00 
D)  $1.20 
A)  $0.20 
B)  $0.50 
C)  $1.00 
D)  $1.20

Question 15

Answer the following questions using the information below:
Comfort 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 Winton High School band jacket job.
 $\begin{array}{llc}&\text { Company }&\text { Winton High School Job }\
\text { Direct materials } & \$ 40,000 & \$ 2,000 \
\text { Direct labor } & \$ 10,000 & \$ 400 \
\text { Manufacturing overhead costs } & \$ 45,000 & \
\text { Machine-hours } & 100,000 \mathrm{mh} & 900 \mathrm{mh}
\end{array}$
-For Comfort Manufacturing,what is the annual manufacturing overhead cost-allocation rate?

Accepted Answer

A)  $0.50 
B)  $0.80 
C)  $0.45 
D)  $33.33 
A)  $0.50 
B)  $0.80 
C)  $0.45 
D)  $33.33

Question 16

Managers and accountants collect most of the cost information that goes into their systems through ________.

Accepted Answer

A)  an information databank 
B)  computer programs 
C)  source documents 
D)  time surveys 
A)  an information databank 
B)  computer programs 
C)  source documents 
D)  time surveys

Question 17

Proration is the spreading of underallocated or overallocated overhead among ending work in process,finished goods,and costs of goods sold.

Accepted Answer

A) True 
 B)False

Question 18

The manufacturing overhead control accounts are closed or become zero at the end of each year.

Accepted Answer

A) True 
 B)False

Question 19

Direct costs ________.

Accepted Answer

A)  are anything for which a measurement of costs is desired 
B)  are costs related to a particular cost object that can be traced to that cost object in a cost-effective manner 
C)  focus specifically on the costing needs of the CFO 
D)  are costs related to a particular cost object that cannot be traced to that cost object in a cost-effective manner 
A)  are anything for which a measurement of costs is desired 
B)  are costs related to a particular cost object that can be traced to that cost object in a cost-effective manner 
C)  focus specifically on the costing needs of the CFO 
D)  are costs related to a particular cost object that cannot be traced to that cost object in a cost-effective manner

Question 20

Bernard Company's budgeted manufacturing overhead is $3,300,000.Overhead is allocated on the basis of direct labor hours.The budgeted direct labor hours for the period are 60,000.What is the manufacturing overhead rate?

Accepted Answer

A)  $47.00 
B)  $56.00 
C)  $75.00 
D)  $55.00 
A)  $47.00 
B)  $56.00 
C)  $75.00 
D)  $55.00

Exam 4: Job Costing

Which account is credited if direct materials of $20,000 and indirect materials of $3,000 are sent to the manufacturing plant floor?

The basic source document for direct manufacturing labor is the ________.

For a given job the direct costs associated with the job are ________.

All costs other than direct materials and direct manufacturing labor are classified as indirect costs.

Cost objects may be jobs,products,or customers.

Each indirect-cost pool of a manufacturing firm ________.

Normal costing is a method of job costing that allocates an indirect cost based on the actual indirect-cost rate times the actual quantity of the cost-allocation base.

In the service sector,to achieve timely reporting on the profitability of an engagement,a company will use ________.

When a normal costing system is used,clients using proportionately more full-time employees than trainees will ________.

Job-costing is likely to be used by________.

During an accounting period,job costs are computed on an ongoing basis by the use of ________.

The cost-allocation base is a systematic way to link an indirect cost or group of indirect costs to cost objects.

One reason indirect costs may be overapplied is because ________.

Managers and accountants collect most of the cost information that goes into their systems through ________.

Proration is the spreading of underallocated or overallocated overhead among ending work in process,finished goods,and costs of goods sold.

The manufacturing overhead control accounts are closed or become zero at the end of each year.

Direct costs ________.

Bernard Company's budgeted manufacturing overhead is $3,300,000.Overhead is allocated on the basis of direct labor hours.The budgeted direct labor hours for the period are 60,000.What is the manufacturing overhead rate?

The Manager and Management Accounting

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

Strategy, balanced Scorecard, and Strategic Profitability Analysis

Pricing Decisions and Cost Management

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 and Time

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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