Question 1

A typical operations costing system for a manufacturer incorporates parts of both job order costing and process costing.

Accepted Answer

A) True 
 B)False

Question 2

Managers' knowledge on unit cost helps in setting reasonable selling prices for products.

Accepted Answer

A) True 
 B)False

Question 3

Job estimates must be compared with actuals for evaluating performance.

Accepted Answer

A) True 
 B)False

Question 4

Cardsheet Company The following partially completed T accounts summarize the transactions of Cardsheet Company for last year:
 
-The applied overhead is

Accepted Answer

A) $31,000. 
B) $30,000. 
C) $18,000. 
D) $62,300. 
A) $31,000. 
B) $30,000. 
C) $18,000. 
D) $62,300.

Question 5

Dyana Julian,president of Julian Juices,Inc. ,has approached you with the following questions: "Why must we use the process costing method to compute product unit costs for three lines of fruit juices? Why can't we consider using a job order costing approach?"
Prepare a written response to Ms.Julian.

Accepted Answer

The process costing method is suitable f

Question 6

Which of the following tasks succeeds the disposing under- or overapplied overhead?

Accepted Answer

A) Preparation of financial statements 
B) Comparison of actual and allocated overhead amounts 
C) Estimation of overhead costs 
D) Establishment of predetermined overhead rate 
A) Preparation of financial statements 
B) Comparison of actual and allocated overhead amounts 
C) Estimation of overhead costs 
D) Establishment of predetermined overhead rate

Question 7

In a job order costing system,indirect labor costs are recorded by increasing the Payroll Payable account and increasing the Overhead account.

Accepted Answer

A) True 
 B)False

Question 8

Job order costing is used by companies that make unique or special-order products.

Accepted Answer

A) True 
 B)False

Question 9

Regardless of the cost accounting system used,when the products are completed,they are transferred from work in process inventory to finished goods inventory.

Accepted Answer

A) True 
 B)False

Question 10

The Work in Process Inventory account for Clinton Company for the month ended September 30 appears below.
 Overhead is applied based on direct labor dollars.Direct material costs for the one job remaining in work in process on September 30 was $12,300.
a.What was the overhead rate used to apply overhead to jobs?
b.Determine the amount of direct labor charged to the one remaining job.Round you answers to nearest dollars.

Accepted Answer

The answer of The Work in Process Inventory account for...

Question 11

Which of the following is the entry to record indirect labor costs incurred?

Accepted Answer

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

Question 12

If applied overhead exceeds actual overhead,cost of goods sold must be increased by the amount of the overapplied overhead in a job order costing system.

Accepted Answer

A) True 
 B)False

Question 13

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 overapplied or underapplied overhead for Ad-on International for March,2014?

Accepted Answer

A) $181,000 underapplied 
B) $181,000 overapplied 
C) $19,000 underapplied 
D) $19,000 overapplied 
A) $181,000 underapplied 
B) $181,000 overapplied 
C) $19,000 underapplied 
D) $19,000 overapplied

Question 14

The basic document for keeping track of all costs in a job order costing system is a

Accepted Answer

A) job order cost card. 
B) labor time card. 
C) process cost report. 
D) materials requisition form. 
A) job order cost card. 
B) labor time card. 
C) process cost report. 
D) materials requisition form.

Question 15

An allocation base used in the process cost allocation is known as

Accepted Answer

A) cost processor. 
B) cost object. 
C) cost driver. 
D) cost pooler. 
A) cost processor. 
B) cost object. 
C) cost driver. 
D) cost pooler.

Question 16

Explain the similarities and differences between job order costing and process costing.Focus on the characteristics of each system.

Accepted Answer

The main similarity between a job order

Question 17

The _________ provides the most direct means of calculating unit costs for a job.

Accepted Answer

A) job order cost card 
B) Finished Goods Inventory account 
C) general ledger 
D) Materials Inventory account 
A) job order cost card 
B) Finished Goods Inventory account 
C) general ledger 
D) Materials Inventory account

Question 18

When direct materials are issued from inventory to production under a job order costing system,an increase is recorded in the

Accepted Answer

A) Overhead account. 
B) Work in Process Inventory account. 
C) Materials Inventory account. 
D) Finished Goods Inventory account. 
A) Overhead account. 
B) Work in Process Inventory account. 
C) Materials Inventory account. 
D) Finished Goods Inventory account.

Question 19

Pearl Inc.incurred overhead costs of $65,000 in May,2014.The overhead applied on the basis of direct labor hours for May was $90,000.The company worked for 500 hours in the month.What is the predetermined overhead rate per direct labor hour?

Accepted Answer

A) $130 per direct labor hour 
B) $180 per direct labor hour 
C) $1.38 per direct labor hour 
D) $500 per direct labor hour 
A) $130 per direct labor hour 
B) $180 per direct labor hour 
C) $1.38 per direct labor hour 
D) $500 per direct labor hour

Question 20

In which of the following situations should a company use process costing rather than job order costing?

Accepted Answer

A) If the product cost is accumulated in a single Work in Process Inventory account 
B) If the product is produced based on individual customer specifications 
C) If the product is composed of mass-produced homogeneous units 
D) If the product goes through a single stage of production 
A) If the product cost is accumulated in a single Work in Process Inventory account 
B) If the product is produced based on individual customer specifications 
C) If the product is composed of mass-produced homogeneous units 
D) If the product goes through a single stage of production

Exam 16: Costing Systems: Job Order Costing

A typical operations costing system for a manufacturer incorporates parts of both job order costing and process costing.

Managers' knowledge on unit cost helps in setting reasonable selling prices for products.

Job estimates must be compared with actuals for evaluating performance.

Cardsheet Company The following partially completed T accounts summarize the transactions of Cardsheet Company for last year: -The applied overhead is

Which of the following tasks succeeds the disposing under- or overapplied overhead?

In a job order costing system,indirect labor costs are recorded by increasing the Payroll Payable account and increasing the Overhead account.

Job order costing is used by companies that make unique or special-order products.

Regardless of the cost accounting system used,when the products are completed,they are transferred from work in process inventory to finished goods inventory.

Which of the following is the entry to record indirect labor costs incurred?

If applied overhead exceeds actual overhead,cost of goods sold must be increased by the amount of the overapplied overhead in a job order costing system.

The basic document for keeping track of all costs in a job order costing system is a

An allocation base used in the process cost allocation is known as

Explain the similarities and differences between job order costing and process costing.Focus on the characteristics of each system.

The _________ provides the most direct means of calculating unit costs for a job.

When direct materials are issued from inventory to production under a job order costing system,an increase is recorded in the

Pearl Inc.incurred overhead costs of $65,000 in May,2014.The overhead applied on the basis of direct labor hours for May was $90,000.The company worked for 500 hours in the month.What is the predetermined overhead rate per direct labor hour?

In which of the following situations should a company use process costing rather than job order costing?

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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