Question 1

Service organizations use unit costs of services to determine inventory balances.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following products would probably use a job order costing system?

Accepted Answer

A) Pens 
B) Instant coffee 
C) Computer monitors 
D) Advertisements 
A) Pens 
B) Instant coffee 
C) Computer monitors 
D) Advertisements

Question 3

Which of the following is true of performance evaluation reports?

Accepted Answer

A) Performance evaluation reports help service organizations determine inventory balances. 
B) Both external and internal users use performance evaluation reports. 
C) They are prepared before establishing the selling price of a product. 
D) Their modification will increase product sales. 
A) Performance evaluation reports help service organizations determine inventory balances. 
B) Both external and internal users use performance evaluation reports. 
C) They are prepared before establishing the selling price of a product. 
D) Their modification will increase product sales.

Question 4

The total of the dollar amounts on the job order cost cards that have not been completed would be equal to the

Accepted Answer

A) cost of goods completed. 
B) balance in the Finished Goods Inventory account. 
C) cost of goods sold. 
D) balance in the Work in Process Inventory account. 
A) cost of goods completed. 
B) balance in the Finished Goods Inventory account. 
C) cost of goods sold. 
D) balance in the Work in Process Inventory account.

Question 5

When a job has been completed,all of the costs assigned to that job are moved to the Cost of Goods Sold account.

Accepted Answer

A) True 
 B)False

Question 6

Unit costs for each job are computed by dividing

Accepted Answer

A) estimated total costs by planned units to be produced. 
B) actual costs by actual units sold. 
C) cost of direct materials,direct labor,and overhead by number of units produced. 
D) estimated total costs by actual units sold. 
A) estimated total costs by planned units to be produced. 
B) actual costs by actual units sold. 
C) cost of direct materials,direct labor,and overhead by number of units produced. 
D) estimated total costs by actual units sold.

Question 7

Morgan & Morgan is a small firm that assists clients in the preparation of their tax returns.The firm has five accountants and five researchers,and it uses job order costing to determine the cost of each client's return.The firm is divided into two departments: (1)Preparation and (2)Research & Planning.Each department has its own overhead application rate.The Preparation Department's rate is based on accountant labor costs and Research & Planning is based on the number of research hours.The following is the company's estimates for the current year's operations.
 
Client No.2006-713 was completed during April of the current year and incurred the following costs and hours:
 
a.Compute the overhead rates to be used by both departments.
b.Determine the cost of Client No.2006-713,by department and in total.

Accepted Answer

a.Preparation Department overh

Question 8

Ad-on International is an advertising company.It estimated the overhead costs for March,2014,to be $950,000 and direct labor hours to be 5,000 hours.In March,it incurred overhead costs of $1,150,000 and 5,100 labor hours. What is the predetermined overhead rate for March,2014?

Accepted Answer

A) $186 per direct labor hour 
B) $190 per direct labor hour 
C) $225 per direct labor hour 
D) $230 per direct labor hour 
A) $186 per direct labor hour 
B) $190 per direct labor hour 
C) $225 per direct labor hour 
D) $230 per direct labor hour

Question 9

Which of the following is a manager likely to do while preparing internal performance evaluation reports?

Accepted Answer

A) Review possible one-time order opportunities 
B) Record adjusting journal entries 
C) Determine human resource needs for the following period 
D) Compare actual costs with targeted costs 
A) Review possible one-time order opportunities 
B) Record adjusting journal entries 
C) Determine human resource needs for the following period 
D) Compare actual costs with targeted costs

Question 10

In cost-plus contracts,a predetermined amount of profit is added to the cost of the contract.

Accepted Answer

A) True 
 B)False

Question 11

Ad-on International is an advertising company.It estimated the overhead costs for March,2014,to be $950,000 and direct labor hours to be 5,000 hours.In March,it incurred overhead costs of $1,150,000 and 5,100 labor hours. 
-The amount of overhead costs applied by the company in March,2014,is:

Accepted Answer

A) $969,000. 
B) $1,150,000. 
C) $950,000. 
D) $1,173,000. 
A) $969,000. 
B) $1,150,000. 
C) $950,000. 
D) $1,173,000.

Question 12

The following information is available at the end of May:   If $72,400 of materials were charged to Job 88's job cost card,how much overhead was applied to Job 88?

Accepted Answer

A) $35,100 
B) $70,000 
C) $72,400 
D) $120,000 
A) $35,100 
B) $70,000 
C) $72,400 
D) $120,000

Question 13

Which of the following entities would probably use a process costing system?

Accepted Answer

A) An oil refinery 
B) A yacht builder 
C) A custom furniture company 
D) A custom jewelry manufacturer 
A) An oil refinery 
B) A yacht builder 
C) A custom furniture company 
D) A custom jewelry manufacturer

Question 14

A job order costing system is used by companies that manufacture large amounts of similar products.

Accepted Answer

A) True 
 B)False

Question 15

Lotus Company's actual overhead is greater than the applied overhead.This difference is deemed immaterial.The company records this by debiting Overhead account and crediting Cost of Goods Sold account.Which of the following is true of Lotus Company?

Accepted Answer

A) The company has correctly recorded the difference. 
B) The company's assets are overstated. 
C) The company should have credited Work in Process account for the difference. 
D) The company's Cost of Goods Sold account is understated. 
A) The company has correctly recorded the difference. 
B) The company's assets are overstated. 
C) The company should have credited Work in Process account for the difference. 
D) The company's Cost of Goods Sold account is understated.

Question 16

Managers prepare financial statements to communicate the company's performance to its external users.

Accepted Answer

A) True 
 B)False

Question 17

In a service organization using a job order costing system,actual overhead will be the same as applied overhead.

Accepted Answer

A) True 
 B)False

Question 18

The ending balance in the Work in Process Inventory account equals the ending Overhead balance.

Accepted Answer

A) True 
 B)False

Question 19

The balances on the job cost sheets of uncompleted jobs will be equal to the balance in the

Accepted Answer

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

Question 20

Quickwork Company uses a job order costing system.On March 1,Quickwork Company's Work in Process Inventory account shows a beginning balance of $170,000.Production activity for March was as follows: Materials costing $85,000,along with operating supplies of $20,000,were requisitioned into production.Quickwork Company's total payroll was $350,000,of which $75,000 was indirect labor.Overhead is applied at a rate of 125 percent of direct labor cost.Quickwork's Cost of Goods Sold for the month of May was $692,000.Finished Goods Inventory was $71,500 on March 1 and $84,000 on March 31.(Quickwork does not close out overhead accounts until year-end. )
a.Calculate Quickwork's cost of goods completed for March.
b.Calculate Quickwork's work in process ending inventory (March 31).
c.One of the jobs that was started in March,Job 208,was completed in April.Job 208 was 250 special-order decorative lamps.The following costs had been applied to Job 208 as of April 1: direct materials,$1,500;direct labor,$2,000;overhead,$2,500.In April,$580 in direct materials cost and $900 of direct labor cost were added to complete Job 208.What was the cost per unit for Job 208? (Show your computations. )

Accepted Answer

The answer of Quickwork Company uses a job order costing...

Exam 16: Costing Systems: Job Order Costing

Service organizations use unit costs of services to determine inventory balances.

Which of the following products would probably use a job order costing system?

Which of the following is true of performance evaluation reports?

The total of the dollar amounts on the job order cost cards that have not been completed would be equal to the

When a job has been completed,all of the costs assigned to that job are moved to the Cost of Goods Sold account.

Unit costs for each job are computed by dividing

Ad-on International is an advertising company.It estimated the overhead costs for March,2014,to be $950,000 and direct labor hours to be 5,000 hours.In March,it incurred overhead costs of $1,150,000 and 5,100 labor hours. What is the predetermined overhead rate for March,2014?

Which of the following is a manager likely to do while preparing internal performance evaluation reports?

In cost-plus contracts,a predetermined amount of profit is added to the cost of the contract.

Ad-on International is an advertising company.It estimated the overhead costs for March,2014,to be $950,000 and direct labor hours to be 5,000 hours.In March,it incurred overhead costs of $1,150,000 and 5,100 labor hours. -The amount of overhead costs applied by the company in March,2014,is:

The following information is available at the end of May: If $72,400 of materials were charged to Job 88's job cost card,how much overhead was applied to Job 88?

Which of the following entities would probably use a process costing system?

A job order costing system is used by companies that manufacture large amounts of similar products.

Lotus Company's actual overhead is greater than the applied overhead.This difference is deemed immaterial.The company records this by debiting Overhead account and crediting Cost of Goods Sold account.Which of the following is true of Lotus Company?

Managers prepare financial statements to communicate the company's performance to its external users.

In a service organization using a job order costing system,actual overhead will be the same as applied overhead.

The ending balance in the Work in Process Inventory account equals the ending Overhead balance.

The balances on the job cost sheets of uncompleted jobs will be equal to the balance in the

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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