Question 1

In job-order costing, the journal entry for $1,700 of unpaid direct labour is:
Wages Payable 1,700
Work-in-Process Inventory 1,700

Accepted Answer

A) True 
 B)False

Question 2

Actual overhead is used to arrive at the cost of goods manufactured.

Accepted Answer

A) True 
 B)False

Question 3

Refer to Michelle's. What is the ending balance in Work-in-Process Inventory?

Accepted Answer

A)  $110,383 
B)  $113,083 
C)  $166,383 
D)  $169,083 
A)  $110,383 
B)  $113,083 
C)  $166,383 
D)  $169,083

Question 4

A job-order cost sheet is the source document where direct labour costs are assigned to individual jobs.

Accepted Answer

A) True 
 B)False

Question 5

Which department is responsible for creating products or services that are sold to customers?

Accepted Answer

A)  cost centre 
B)  support department 
C)  producing department 
D)  profit making department 
A)  cost centre 
B)  support department 
C)  producing department 
D)  profit making department

Question 6

Avonlea Construction builds custom houses for individual buyers. On April 1, it had one job started with a beginning Work-in-Process Inventory balance of $76,000. During April, the job was finished and sold. Direct labour for the job in April was $75,000, and direct materials used in April were $67,000. Overhead is computed at a rate of 65% of direct labour. All sales have a markup of 40%. What was the sales price of the house?

Accepted Answer

A)  $82,862.50 
B)  $236,750.00 
C)  $262,087.50 
D)  $373,450.00 
A)  $82,862.50 
B)  $236,750.00 
C)  $262,087.50 
D)  $373,450.00

Question 7

Which statement most accurately describes a job-order costing?

Accepted Answer

A)  Work-in-Process consists of all completed work. 
B)  Many different jobs are listed on a job-order cost sheet. 
C)  Direct labour is allocated to jobs along with manufacturing overhead. 
D)  Time tickets are used to assign the cost of direct labour to individual jobs. 
A)  Work-in-Process consists of all completed work. 
B)  Many different jobs are listed on a job-order cost sheet. 
C)  Direct labour is allocated to jobs along with manufacturing overhead. 
D)  Time tickets are used to assign the cost of direct labour to individual jobs.

Question 8

If actual overhead is greater than applied overhead, the variance is called underapplied overhead.

Accepted Answer

A) True 
 B)False

Question 9

The journal entry for $17,000 materials purchased on account is:
Raw Materials Inventory 17,000
Accounts Payable 17,000

Accepted Answer

A) True 
 B)False

Question 10

The use of a departmental rate has the advantage of being simple and reduces data collection requirements.

Accepted Answer

A) True 
 B)False

Question 11

Blackfoot Softball Glove Company
Blackfoot Softball Glove Company estimated the following yearly data at the beginning of the year: $\begin{array}{lccc}&\text { Assembly }\&\text { Department }&\text { Testing Department }&\text { Total }\
\text { Overhead } & \$ 570,000 & \$ 130,000 & \$ 700,000 \
\text { Direct Labour Hours } & 142,500 & 32,500 & 175,000 \
\text { Machine Hours } & 32,000 & 65,000 & 97,000
\end{array}$ The company uses departmental overhead rates. In the assembly department, direct labour hours are used to apply overhead. Machine hours are used to apply overhead in the testing department.Actual data for August are as follows: $\begin{array}{lccc}
& \text { Assembly } & \text { Testing } & \text { Total } \
 & \text { Department } & \text { Department } & \
\text { Overhead } & \$ 42,000 & \$ 12,000 & \$ 54,000 \
\text { Direct Labour Hours } & 13,500 & 2,430 & 15,930 \
\text { Machine Hours } & 4,020 & 11,000 & 15,020
\end{array}$
-Refer to Blackfoot Softball Glove Company. Suppose Blackfoot decides to continue using departmental overhead rates and a job spends 4 hours in assembly and 3 hours in testing. What is the amount of overhead charged to the job?

Accepted Answer

A)  $20.00 
B)  $22.00 
C)  $28.00 
D)  $50.54 
A)  $20.00 
B)  $22.00 
C)  $28.00 
D)  $50.54

Question 12

What account increases when raw materials are purchased on account?

Accepted Answer

A)  equity 
B)  revenue 
C)  expenses 
D)  liabilities 
A)  equity 
B)  revenue 
C)  expenses 
D)  liabilities

Question 13

In a process costing environment, equivalent unit costs are computed by dividing the process costs for the given period by the output of the period.

Accepted Answer

A) True 
 B)False

Question 14

Blackfoot Softball Glove Company
Blackfoot Softball Glove Company estimated the following yearly data at the beginning of the year: $\begin{array}{lccc}&\text { Assembly }\&\text { Department }&\text { Testing Department }&\text { Total }\
\text { Overhead } & \$ 570,000 & \$ 130,000 & \$ 700,000 \
\text { Direct Labour Hours } & 142,500 & 32,500 & 175,000 \
\text { Machine Hours } & 32,000 & 65,000 & 97,000
\end{array}$ The company uses departmental overhead rates. In the assembly department, direct labour hours are used to apply overhead. Machine hours are used to apply overhead in the testing department.Actual data for August are as follows: $\begin{array}{lccc}
& \text { Assembly } & \text { Testing } & \text { Total } \
 & \text { Department } & \text { Department } & \
\text { Overhead } & \$ 42,000 & \$ 12,000 & \$ 54,000 \
\text { Direct Labour Hours } & 13,500 & 2,430 & 15,930 \
\text { Machine Hours } & 4,020 & 11,000 & 15,020
\end{array}$
-Refer to Blackfoot Softball Glove Company. Which statement best represents the departmental overhead rates?

Accepted Answer

A)  Applied overhead for the testing department is $4,860. 
B)  Overhead for the assembly department is underapplied. 
C)  Applied overhead for the assembly department is $54,000. 
D)  Applied overhead for both departments combined is $63,720. 
A)  Applied overhead for the testing department is $4,860. 
B)  Overhead for the assembly department is underapplied. 
C)  Applied overhead for the assembly department is $54,000. 
D)  Applied overhead for both departments combined is $63,720.

Question 15

What are the components of manufacturing overhead?

Accepted Answer

A)  all costs other than direct materials 
B)  all manufacturing costs other than direct materials 
C)  all costs other than direct materials and direct labour 
D)  all manufacturing costs other than direct materials and direct labour 
A)  all costs other than direct materials 
B)  all manufacturing costs other than direct materials 
C)  all costs other than direct materials and direct labour 
D)  all manufacturing costs other than direct materials and direct labour

Question 16

Bob's Powerwasher Company
Bob's Powerwasher Company makes custom powerwashers for individual customers. On April 1, one job was in process, Job 900, which had a cost of $45,650. Jobs 901, 902, and 903 were started during the month of July. Data on costs added during the month are as follows: $\begin{array}{lllll}&\text { Job } 900&\text { Job } 901&\text { Job } 902&\text { Job } 903\
\text { Direct Materials } & \overline{\$ 12,500} & \$ 6,740 & \$ 2,520 & \$ 7,870 \
\text { Direct Labour } & \$ 5,880 & \$ 10,280 & \$ 3,760 & \$ 11,360
\end{array}$ Overhead is applied to production at the rate of 85% of direct labour cost. Job 903 was completed on April 26, and the client was billed at cost plus 45%. All other jobs remained in process.
-Refer to Bob's Powerwasher Company. Suppose selling and administrative expenses for the month of July equal $6,000. What is operating income for the month of July?

Accepted Answer

A)  $6,998.70 
B)  $12,998.70 
C)  $28,886.00 
D)  $41,884.70 
A)  $6,998.70 
B)  $12,998.70 
C)  $28,886.00 
D)  $41,884.70

Question 17

The Work-in-Process Inventory account consists of all the job-order costs sheets for the unfinished jobs.

Accepted Answer

A) True 
 B)False

Question 18

Match each following terms with their correct description from the items listed below.* Each term may be used more than once, and it is possible that one or more of the classifications may not be used at all.
-Form prepared every time a new job is started

Accepted Answer

A) Job-order cost sheet 
B) Time ticket 
C) Materials requisition form 
A) Job-order cost sheet 
B) Time ticket 
C) Materials requisition form

Question 19

Refer to Michelle's. What is the ending balance of Finished Goods Inventory?

Accepted Answer

A)  $0 
B)  $15,000 
C)  $23,321 
D)  $64,321 
A)  $0 
B)  $15,000 
C)  $23,321 
D)  $64,321

Question 20

Match each following terms with their correct description from the items listed below.
-The difference between actual overhead and applied overhead

Accepted Answer

A) Predetermined overhead rate 
B) Plantwide overhead rate 
C) Departmental overhead rate 
D) Overhead variance 
E) Overapplied overhead
F)Underapplied overhead
G)Applied overhead
H)Normal Cost of Goods Sold 
A) Predetermined overhead rate 
B) Plantwide overhead rate 
C) Departmental overhead rate 
D) Overhead variance 
E) Overapplied overhead
F)Underapplied overhead
G)Applied overhead
H)Normal Cost of Goods Sold

In job-order costing, the journal entry for $1,700 of unpaid direct labour is: Wages Payable 1,700 Work-in-Process Inventory 1,700

Actual overhead is used to arrive at the cost of goods manufactured.

Refer to Michelle's. What is the ending balance in Work-in-Process Inventory?

A job-order cost sheet is the source document where direct labour costs are assigned to individual jobs.

Which department is responsible for creating products or services that are sold to customers?

Which statement most accurately describes a job-order costing?

If actual overhead is greater than applied overhead, the variance is called underapplied overhead.

The journal entry for $17,000 materials purchased on account is: Raw Materials Inventory 17,000 Accounts Payable 17,000

The use of a departmental rate has the advantage of being simple and reduces data collection requirements.

What account increases when raw materials are purchased on account?

In a process costing environment, equivalent unit costs are computed by dividing the process costs for the given period by the output of the period.

What are the components of manufacturing overhead?

The Work-in-Process Inventory account consists of all the job-order costs sheets for the unfinished jobs.

Match each following terms with their correct description from the items listed below.* Each term may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Form prepared every time a new job is started

Refer to Michelle's. What is the ending balance of Finished Goods Inventory?

Match each following terms with their correct description from the items listed below. -The difference between actual overhead and applied overhead

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, Production, Cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters

Exam 5: Job-Order Costing

In job-order costing, the journal entry for $1,700 of unpaid direct labour is: Wages Payable 1,700 Work-in-Process Inventory 1,700

Actual overhead is used to arrive at the cost of goods manufactured.

Refer to Michelle's. What is the ending balance in Work-in-Process Inventory?

A job-order cost sheet is the source document where direct labour costs are assigned to individual jobs.

Which department is responsible for creating products or services that are sold to customers?

Which statement most accurately describes a job-order costing?

If actual overhead is greater than applied overhead, the variance is called underapplied overhead.

The journal entry for $17,000 materials purchased on account is: Raw Materials Inventory 17,000 Accounts Payable 17,000

The use of a departmental rate has the advantage of being simple and reduces data collection requirements.

What account increases when raw materials are purchased on account?

In a process costing environment, equivalent unit costs are computed by dividing the process costs for the given period by the output of the period.

What are the components of manufacturing overhead?

The Work-in-Process Inventory account consists of all the job-order costs sheets for the unfinished jobs.

Match each following terms with their correct description from the items listed below.* Each term may be used more than once, and it is possible that one or more of the classifications may not be used at all. -Form prepared every time a new job is started

Refer to Michelle's. What is the ending balance of Finished Goods Inventory?

Match each following terms with their correct description from the items listed below. -The difference between actual overhead and applied overhead

Introduction to Managerial Accounting

Basic Managerial Accounting Concepts

Cost Behaviour

Cost-Volume-Profit Analysis: a Managerial Planning Tool

Process Costing

Activity-Based Costing and Management

Absorption and Variable Costing, and Inventory Management

Budgeting, Production, Cash, and Master Budget

Standard Costing: a Managerial Control Tool

Flexible Budgets and Overhead Analysis

Performance Evaluation and Decentralization

Short-Run Decision Making: Relevant Costing

Capital Investment Decisions

Filters