Question 1

Companies often use multiple cost-allocation bases to allocate indirect costs because different indirect costs have different cost drivers.

Accepted Answer

A) True 
 B)False

Question 2

Payment of the factory rent would require debits and credits to which accounts?

Accepted Answer

A) Debit: Work-in-Process Control account Credit: Cash 
B) Debit: Manufacturing Overhead Control account Credit: Cash 
C) Debit: Cost of Goods Sold account Credit: Prepaid Rent 
D) Debit: Factory Depreciation account Credit: Accumulated Depreciation Control 
A) Debit: Work-in-Process Control account Credit: Cash 
B) Debit: Manufacturing Overhead Control account Credit: Cash 
C) Debit: Cost of Goods Sold account Credit: Prepaid Rent 
D) Debit: Factory Depreciation account Credit: Accumulated Depreciation Control

Question 3

Lancelot 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 Case High School band jacket job.
 
What are the total manufacturing costs of this job?

Accepted Answer

A) $2,400 
B) $2,805 
C) $2,895 
D) $1,995 
A) $2,400 
B) $2,805 
C) $2,895 
D) $1,995

Question 4

Candle Corp.applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $80 per direct manufacturing labor-hour.A retail outlet has requested a bid on a special order of a necklace.Estimates for this order include: Direct materials of $44,000;300 direct manufacturing labor-hours at $25 per hour;and a 20% markup rate on total manufacturing costs.
The bid price for this special order is ________.

Accepted Answer

A) $60,500 
B) $90,600 
C) $81,600 
D) $61,800 
A) $60,500 
B) $90,600 
C) $81,600 
D) $61,800

Question 5

Moira Company has just finished its first year of operations and must decide which method to use for adjusting cost of goods sold.Because 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).
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

@#IMG-DLM&_TB5540_00_TB5540_00

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 materials-requisition report to record the type and quantity of 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) the bill of materials to ensure the goods are of the prescribed quality 
A) a materials-requisition record to record raw material purchases from suppliers 
B) a materials-requisition report to record the type and quantity of 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) the bill of materials to ensure the goods are of the prescribed quality

Question 7

The Materials Control account is increased when ________.

Accepted Answer

A) direct materials are purchased 
B) indirect materials are sold 
C) materials are requisitioned for production 
D) materials are converted to finished goods 
A) direct materials are purchased 
B) indirect materials are sold 
C) materials are requisitioned for production 
D) materials are converted to finished goods

Question 8

For each item below indicate the source documents that would most likely authorize the journal entry in a job-costing system.
Required:
a.direct materials purchased
b.direct materials used
c.direct manufacturing labor
d.indirect manufacturing labor
e.finished goods control
f.cost of goods sold

Accepted Answer

a.purchase invoice
b.Materials

Question 9

When goods are sold,the Cost of Goods Sold account is debited while the Finished Goods Control account is credited.

Accepted Answer

A) True 
 B)False

Question 10

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 11

A cost object is anything for which a measurement of costs is desired.

Accepted Answer

A) True 
 B)False

Question 12

Explain the procedure how overhead indirect costs become a part of work-in process inventory.

Accepted Answer

The overhead (indirect)costs cannot be e

Question 13

Which of the following is true of the Work-in-Process Control account?

Accepted Answer

A) It tracks all direct material purchases. 
B) Its balance is the sum of amounts from all in-process individual job-cost records. 
C) It is an expense account. 
D) It tracks overhead costs in-process from beginning through completion. 
A) It tracks all direct material purchases. 
B) Its balance is the sum of amounts from all in-process individual job-cost records. 
C) It is an expense account. 
D) It tracks overhead costs in-process from beginning through completion.

Question 14

For 2018,Franklin Manufacturing uses machine-hours as the only overhead cost-allocation base.The estimated manufacturing overhead costs are $340,000 and estimated machine hours are 40,000.The actual manufacturing overhead costs are $450,000 and actual machine hours are 50,000.What is the difference between the budgeted and the actual manufacturing overhead using job costing? (Round interim and the final answer to the nearest cent. )

Accepted Answer

A) $2.75 
B) $2.20 
C) $0.50 
D) $2.25 
A) $2.75 
B) $2.20 
C) $0.50 
D) $2.25

Question 15

Financial Planning Partners Inc. ,employs 12 full-time CPAs 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 2018:
 
When using a normal costing system,year-end accounting records will show that indirect costs are ________.

Accepted Answer

A) perfectly allocated 
B) underallocated 
C) within budget 
D) overallocated 
A) perfectly allocated 
B) underallocated 
C) within budget 
D) overallocated

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

Process costing is used to assign manufacturing costs to unique batches of a product.

Accepted Answer

A) True 
 B)False

Question 18

When calculating indirect cost rates,the longer the time period,the greater the
influence of seasonal patterns on the amount of costs.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following items is debited to the Work-in-Process account?

Accepted Answer

A) allocated manufacturing overhead 
B) completed goods transferred out of the plant 
C) accumulated depreciation on fixed assets 
D) accounts receivable 
A) allocated manufacturing overhead 
B) completed goods transferred out of the plant 
C) accumulated depreciation on fixed assets 
D) accounts receivable

Question 20

Francis and Hartley 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 2018:
 
How much should the client be billed in an actual costing system if 220 professional labor-hours are used?

Accepted Answer

A) $5,940 
B) $7,744 
C) $8,228 
D) $7,040 
A) $5,940 
B) $7,744 
C) $8,228 
D) $7,040

Companies often use multiple cost-allocation bases to allocate indirect costs because different indirect costs have different cost drivers.

Payment of the factory rent would require debits and credits to which accounts?

A job-cost record uses information from ________.

The Materials Control account is increased when ________.

For each item below indicate the source documents that would most likely authorize the journal entry in a job-costing system. Required: a.direct materials purchased b.direct materials used c.direct manufacturing labor d.indirect manufacturing labor e.finished goods control f.cost of goods sold

When goods are sold,the Cost of Goods Sold account is debited while the Finished Goods Control account is credited.

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

A cost object is anything for which a measurement of costs is desired.

Explain the procedure how overhead indirect costs become a part of work-in process inventory.

Which of the following is true of the Work-in-Process Control account?

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

Process costing is used to assign manufacturing costs to unique batches of a product.

When calculating indirect cost rates,the longer the time period,the greater the influence of seasonal patterns on the amount of costs.

Which of the following items is debited to the Work-in-Process account?

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

Filters

Exam 4: Job Costing

Companies often use multiple cost-allocation bases to allocate indirect costs because different indirect costs have different cost drivers.

Payment of the factory rent would require debits and credits to which accounts?

A job-cost record uses information from ________.

The Materials Control account is increased when ________.

For each item below indicate the source documents that would most likely authorize the journal entry in a job-costing system. Required: a.direct materials purchased b.direct materials used c.direct manufacturing labor d.indirect manufacturing labor e.finished goods control f.cost of goods sold

When goods are sold,the Cost of Goods Sold account is debited while the Finished Goods Control account is credited.

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

A cost object is anything for which a measurement of costs is desired.

Explain the procedure how overhead indirect costs become a part of work-in process inventory.

Which of the following is true of the Work-in-Process Control account?

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

Process costing is used to assign manufacturing costs to unique batches of a product.

When calculating indirect cost rates,the longer the time period,the greater the influence of seasonal patterns on the amount of costs.

Which of the following items is debited to the Work-in-Process account?

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

Filters