Question 1

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 2

The actual indirect-cost rate is calculated by ________.

Accepted Answer

A) dividing actual total indirect costs by the actual total quantity of the cost-allocation base 
B) multiplying actual total indirect costs by the actual total quantity of the cost-allocation base 
C) dividing the actual total quantity of the cost allocation base by actual total indirect costs 
D) multiplying the actual total quantity of the cost allocation base by actual total indirect costs 
A) dividing actual total indirect costs by the actual total quantity of the cost-allocation base 
B) multiplying actual total indirect costs by the actual total quantity of the cost-allocation base 
C) dividing the actual total quantity of the cost allocation base by actual total indirect costs 
D) multiplying the actual total quantity of the cost allocation base by actual total indirect costs

Question 3

Differentiate between a cost pool and a cost-allocation base.

Accepted Answer

A cost pool is a grouping of individual

Question 4

A cost is considered direct if it can be traced to a particular cost object in a cost effective way which means it can be

Accepted Answer

A) traced easily with the aid of technology 
B) traced in a manner that is accurate 
C) traced in an economically feasible way 
D) possibly traced accurately with an investment in hardware and software 
A) traced easily with the aid of technology 
B) traced in a manner that is accurate 
C) traced in an economically feasible way 
D) possibly traced accurately with an investment in hardware and software

Question 5

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 6

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 7

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

Accepted Answer

A) $500 
B) $1,250 
C) $450 
D) $650 
A) $500 
B) $1,250 
C) $450 
D) $650

Question 8

In each period,job costing divides the total cost of producing an identical or similar product produced in batches by the total number of units produced to obtain a per-unit cost.

Accepted Answer

A) True 
 B)False

Question 9

Allocating indirect costs to departments based on the relative revenue earned by those departments is done based on which of the following criterion?

Accepted Answer

A) direct hours utilized 
B) benefits received 
C) material resources used 
D) cause-and-effect relationships 
A) direct hours utilized 
B) benefits received 
C) material resources used 
D) cause-and-effect relationships

Question 10

Rally Company manufactures garage storage systems for homeowners.It uses a normal costing system with two direct cost categories - direct materials and direct labor - an one indirect-cost pool,manufacturing overhead costs.
For 2018:
Budgeted manufacturing overhead costs $1,000,000
Budgeted manufacturing labor-hours 20,000 hours
Actual manufacturing overhead costs $1,100,000
Actual direct manufacturing labor-hours 22,000
Actual direct material costs $10,000
Actual direct manufacturing labor hours 200
Actual direct manufacturing labor rate $20 per hour
Required:
Calculate the total manufacturing costs using normal costing.

Accepted Answer

$24,000 =

Question 11

When using a normal costing system,manufacturing overhead is allocated using the ________ manufacturing overhead rate and the ________ quantity of the allocation base.

Accepted Answer

A) budgeted;actual 
B) budgeted;budgeted 
C) actual;budgeted 
D) actual;actual 
A) budgeted;actual 
B) budgeted;budgeted 
C) actual;budgeted 
D) actual;actual

Question 12

Each cost pool will have one cost-allocation base.

Accepted Answer

A) True 
 B)False

Question 13

ABC Manufacturing Inc.ends the month with two jobs still in progress.Job 5 has $10,000 of materials,$2,000 of direct labor and $8,000 of manufacturing overhead allocated.Job 6 has $30,000 of materials,$2,000 of direct labor and $12,000 of manufacturing overhead allocated.The cost of goods sold for the month was $40,000 and there was no finished goods in stock as the month ended.If the manufacturing overhead was underallocated by $10,000,which of the following choices would be the correct way to prorate it based on ending balances before proration?

Accepted Answer

A) The entire $10,000 of underallocated manufacturing overhead should be allocated to cost of goods sold 
B) $4,000 of the underallocated manufacturing overhead should be split between Job 6 and cost of goods sold 
C) $2,000 of the overallocation should be allocated to Job 5 
D) The entire $10,000 of underallocated manufacturing overhead should be added to operating expenses for the month 
A) The entire $10,000 of underallocated manufacturing overhead should be allocated to cost of goods sold 
B) $4,000 of the underallocated manufacturing overhead should be split between Job 6 and cost of goods sold 
C) $2,000 of the overallocation should be allocated to Job 5 
D) The entire $10,000 of underallocated manufacturing overhead should be added to operating expenses for the month

Question 14

The budgeted direct-labor cost rate includes ________.

Accepted Answer

A) budgeted total costs in indirect cost pool 
B) budgeted total direct-labor costs in the denominator 
C) budgeted total direct-labor costs in the numerator 
D) budgeted total direct-labor hours in the numerator 
A) budgeted total costs in indirect cost pool 
B) budgeted total direct-labor costs in the denominator 
C) budgeted total direct-labor costs in the numerator 
D) budgeted total direct-labor hours in the numerator

Question 15

Which of the following is true of plant utility costs?

Accepted Answer

A) It increases the Materials Control account. 
B) It increases the Manufacturing Overhead Control account. 
C) It increases the Work-in-Process Control account. 
D) It is a direct cost. 
A) It increases the Materials Control account. 
B) It increases the Manufacturing Overhead Control account. 
C) It increases the Work-in-Process Control account. 
D) It is a direct cost.

Question 16

Grounds-maintenance costs incurred during the summer months will distort indirect-cost rates that are computed monthly.

Accepted Answer

A) True 
 B)False

Question 17

The Cost of Goods Sold account tracks job costs from the time jobs are started until they are completed.

Accepted Answer

A) True 
 B)False

Question 18

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 19

A materials-requisition record is an example of a source document.

Accepted Answer

A) True 
 B)False

Question 20

Crandle Corp.applies manufacturing overhead costs to products at a budgeted indirect-cost rate of $60 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 $40,000;400 direct manufacturing labor-hours at $15 per hour;and a 50% markup rate on total manufacturing costs.
Estimated total product costs for this special order equal ________.

Accepted Answer

A) $105,000 
B) $64,000 
C) $46,000 
D) $70,000 
A) $105,000 
B) $64,000 
C) $46,000 
D) $70,000

The cost allocation base ________.

The actual indirect-cost rate is calculated by ________.

Differentiate between a cost pool and a cost-allocation base.

A cost is considered direct if it can be traced to a particular cost object in a cost effective way which means it can be

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

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

In each period,job costing divides the total cost of producing an identical or similar product produced in batches by the total number of units produced to obtain a per-unit cost.

Allocating indirect costs to departments based on the relative revenue earned by those departments is done based on which of the following criterion?

When using a normal costing system,manufacturing overhead is allocated using the manufacturing overhead rate and the quantity of the allocation base.

Each cost pool will have one cost-allocation base.

The budgeted direct-labor cost rate includes ________.

Which of the following is true of plant utility costs?

Grounds-maintenance costs incurred during the summer months will distort indirect-cost rates that are computed monthly.

The Cost of Goods Sold account tracks job costs from the time jobs are started until they are completed.

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

A materials-requisition record is an example of a source document.

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

The cost allocation base ________.

The actual indirect-cost rate is calculated by ________.

Differentiate between a cost pool and a cost-allocation base.

A cost is considered direct if it can be traced to a particular cost object in a cost effective way which means it can be

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

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

In each period,job costing divides the total cost of producing an identical or similar product produced in batches by the total number of units produced to obtain a per-unit cost.

Allocating indirect costs to departments based on the relative revenue earned by those departments is done based on which of the following criterion?

When using a normal costing system,manufacturing overhead is allocated using the ________ manufacturing overhead rate and the ________ quantity of the allocation base.

Each cost pool will have one cost-allocation base.

The budgeted direct-labor cost rate includes ________.

Which of the following is true of plant utility costs?

Grounds-maintenance costs incurred during the summer months will distort indirect-cost rates that are computed monthly.

The Cost of Goods Sold account tracks job costs from the time jobs are started until they are completed.

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

A materials-requisition record is an example of a source document.

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

When using a normal costing system,manufacturing overhead is allocated using the manufacturing overhead rate and the quantity of the allocation base.