Question 1

A zero balance in Work in Process Inventory at the start of the period means all previously completed products have been shipped.

Accepted Answer

A) True 
 B)False  False

Question 2

The ending balance of Work in Process account is compared with the total costs shown on the job order cost cards to ensure correctness.

Accepted Answer

A) True 
 B)False  True

Question 3

Overhead applied is calculated by multiplying predetermined activity rate and actual cost driver activity.

Accepted Answer

A) True 
 B)False  True

Question 4

Which of the following is true of activity-based costing?

Accepted Answer

A) It is also called single-plantwide overhead costing. 
B) It is helpful when companies manufacture one product. 
C) It categorizes all indirect costs by activity. 
D) The total overhead costs accumulate in one cost pool. 
A) It is also called single-plantwide overhead costing. 
B) It is helpful when companies manufacture one product. 
C) It categorizes all indirect costs by activity. 
D) The total overhead costs accumulate in one cost pool.

Question 5

To prepare financial statements at the end of the accounting period,the actual overhead cost for the period and the estimated overhead that was applied during the period must be reconciled in a job order costing system.

Accepted Answer

A) True 
 B)False

Question 6

In a job order costing system,when indirect materials are used,the Overhead account is increased.

Accepted Answer

A) True 
 B)False

Question 7

A job order costing system measures product costs

Accepted Answer

A) using process cost reports. 
B) in several Work in Process Inventory account. 
C) with regard to the process that created the cost. 
D) for each completed unit. 
A) using process cost reports. 
B) in several Work in Process Inventory account. 
C) with regard to the process that created the cost. 
D) for each completed unit.

Question 8

Which of the following activities is a manager likely to carry out everyday?

Accepted Answer

A) Establishing selling prices for products 
B) Ensuring quality of products produced 
C) Estimating overhead costs to be incurred 
D) Preparing financial statements for a period 
A) Establishing selling prices for products 
B) Ensuring quality of products produced 
C) Estimating overhead costs to be incurred 
D) Preparing financial statements for a period

Question 9

Johnson Technology specializes in graphic design and video production.In October 2014,the company incurred the following costs for providing services to one of its clients.   Johnson Technology's contract with the client discloses 20% profit margin on the cost incurred.
-Determine the total amount to be received by the company from its client.

Accepted Answer

A) $3,500 
B) $3,860 
C) $4,200 
D) $2,800 
A) $3,500 
B) $3,860 
C) $4,200 
D) $2,800

Question 10

Applied overhead is less than actual overhead incurred during the year.Which of the following journal entries is made to close the Overhead account if this difference is immaterial?

Accepted Answer

A)   
B)   
C)   
D)   
A)   
B)   
C)   
D)

Question 11

Disposing under- or overapplied overhead into the Cost of Goods Sold account is related to _____ in the management process.

Accepted Answer

A) performing 
B) planning 
C) evaluating 
D) communicating 
A) performing 
B) planning 
C) evaluating 
D) communicating

Question 12

The costs of completed jobs in a service organization is transferred to the

Accepted Answer

A) Work in Process Inventory account. 
B) Finished Goods Inventory account. 
C) Cost of Goods Sold account. 
D) Cost of Services account. 
A) Work in Process Inventory account. 
B) Finished Goods Inventory account. 
C) Cost of Goods Sold account. 
D) Cost of Services account.

Question 13

During the first month of the current accounting period,Southern California Company experienced a devastating loss due to a fire.Many of the accounting records were lost and the company is now trying to recreate the lost information.Fragments of data found include the following:
1.A portion of the budget indicates that the overhead rate was $10 per direct labor hour.
2.Job 74 was in process and had incurred $9,600 of direct materials and $14,000 of direct labor (1,000 hours).The company has a single hourly wage rate.
3.During the month,4,500 direct labor hours were worked.
4.Actual overhead costs were $48,000.No indirect materials were used.
5.The Materials Inventory account had a beginning balance of $28,000 and an ending balance of $18,000.
6.The Finished Goods Inventory account had a beginning balance of $12,000 and an ending balance of $26,000.
7.The Work in Process Inventory account had a beginning balance of $17,000.
8.The Cost of Goods Sold is $171,000.
Calculate the following amounts:
a.Ending work in process inventory account balance,Job No.74
b.Cost of goods completed
c.Amount of overhead under- or overapplied.
d.Direct materials used
e.Direct materials purchased

Accepted Answer

The answer of During the first month of the current...

Question 14

In a job order costing system,the purchase of materials on account should be recorded as follows:

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 15

Job order cost cards for incomplete jobs make up the ending balance of the Finished Goods Inventory account.

Accepted Answer

A) True 
 B)False

Question 16

If the actual overhead costs are more than applied overhead costs,the difference represents overapplied overhead costs.

Accepted Answer

A) True 
 B)False

Question 17

In a process costing system,product costs are traced to work cells.

Accepted Answer

A) True 
 B)False

Question 18

Identical products are produced in a continuous flow production process.

Accepted Answer

A) True 
 B)False

Question 19

The traditional approach to applying overhead costs to a product or service is to use a(n)

Accepted Answer

A) actual overhead rate. 
B) activity-based overhead rate. 
C) departmental overhead rate. 
D) single-plantwide overhead rate. 
A) actual overhead rate. 
B) activity-based overhead rate. 
C) departmental overhead rate. 
D) single-plantwide overhead rate.

Question 20

Financial statements referred by external stakeholders compare actual unit costs with targeted unit costs.

Accepted Answer

A) True 
 B)False

Exam 16: Costing Systems: Job Order Costing

A zero balance in Work in Process Inventory at the start of the period means all previously completed products have been shipped.

The ending balance of Work in Process account is compared with the total costs shown on the job order cost cards to ensure correctness.

Overhead applied is calculated by multiplying predetermined activity rate and actual cost driver activity.

Which of the following is true of activity-based costing?

To prepare financial statements at the end of the accounting period,the actual overhead cost for the period and the estimated overhead that was applied during the period must be reconciled in a job order costing system.

In a job order costing system,when indirect materials are used,the Overhead account is increased.

A job order costing system measures product costs

Which of the following activities is a manager likely to carry out everyday?

Applied overhead is less than actual overhead incurred during the year.Which of the following journal entries is made to close the Overhead account if this difference is immaterial?

Disposing under- or overapplied overhead into the Cost of Goods Sold account is related to _____ in the management process.

The costs of completed jobs in a service organization is transferred to the

In a job order costing system,the purchase of materials on account should be recorded as follows:

Job order cost cards for incomplete jobs make up the ending balance of the Finished Goods Inventory account.

If the actual overhead costs are more than applied overhead costs,the difference represents overapplied overhead costs.

In a process costing system,product costs are traced to work cells.

Identical products are produced in a continuous flow production process.

The traditional approach to applying overhead costs to a product or service is to use a(n)

Financial statements referred by external stakeholders compare actual unit costs with targeted unit costs.

Uses of Accounting Information and the Financial Statements

Measurement Concepts: Recording Business Transactions

Measuring Business Income: Adjusting the Accounts

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long-Term Assets

Current Liabilities and Fair Value Accounting

Long-Term Liabilities

Stockholders Equity

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems: Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis

Capital Investment Analysis

Pricing Decisions, including Target Costing and Transfer Pricing

Quality Management and Measurement

Accounting for Unincorporated Businesses

Accounting for Investments

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