Question 1

Job order costing and process costing are

Accepted Answer

A)  pricing systems. 
B)  cost accounting systems. 
C)  cost flow systems. 
D)  inventory tracking systems. 
A)  pricing systems. 
B)  cost accounting systems. 
C)  cost flow systems. 
D)  inventory tracking systems.

Question 2

Which of the following costs are NOT included in finished goods inventory?

Accepted Answer

A)  Direct labor 
B)  Factory overhead 
C)  Company president's salary 
D)  Direct materials 
A)  Direct labor 
B)  Factory overhead 
C)  Company president's salary 
D)  Direct materials

Question 3

Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.

Accepted Answer

A) True 
 B)False

Question 4

Technics Inc., a manufacturing company, utilizes job order costing. Each division establishes its own estimates regarding overhead which are as follows:
   Required:
If Division A allocates overhead on the basis of machine hours, and Division B allocates overhead as a percentage of direct labor costs, what would the predetermined overhead rate be for each division?

Accepted Answer

$128,000 / 16,000 =

Question 5

A receiving report is prepared when purchased materials are first received by the manufacturing department.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following products probably would be manufactured using a job order costing system?

Accepted Answer

A)  Number 2 pencils 
B)  Computer monitors. 
C)  Wedding invitations. 
D)  Paper. 
A)  Number 2 pencils 
B)  Computer monitors. 
C)  Wedding invitations. 
D)  Paper.

Question 7

Which of the following is the correct flow of manufacturing costs?

Accepted Answer

A)  Raw materials, work in process, finished goods, cost of goods sold 
B)  Raw materials, finished goods, cost of goods sold, work in process. 
C)  Work in process, finished goods, raw materials, cost of goods sold 
D)  Cost of goods sold, raw materials, work in process, finished goods. 
A)  Raw materials, work in process, finished goods, cost of goods sold 
B)  Raw materials, finished goods, cost of goods sold, work in process. 
C)  Work in process, finished goods, raw materials, cost of goods sold 
D)  Cost of goods sold, raw materials, work in process, finished goods.

Question 8

The Thomlin Company forecasts that total overhead for the current year will be $15,000,000 and that total machine hours will be 300,000 hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. If the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, as of this point in time (year to date) the overhead is over/under applied by

Accepted Answer

A)  $1,000,000 overapplied 
B)  $1,000,000 underapplied 
C)  $500,000 overapplied 
D)  $500,000 underapplied 
A)  $1,000,000 overapplied 
B)  $1,000,000 underapplied 
C)  $500,000 overapplied 
D)  $500,000 underapplied

Question 9

The details concerning the costs incurred on each job order are accumulated in a work in process account, which is supported by a:

Accepted Answer

A)  stock ledger 
B)  materials ledger 
C)  cost ledger 
D)  creditors ledger 
A)  stock ledger 
B)  materials ledger 
C)  cost ledger 
D)  creditors ledger

Question 10

The recording of the application of factory overhead costs to jobs would include a credit to:

Accepted Answer

A)  Factory Overhead 
B)  Wages Payable 
C)  Work in Process 
D)  Cost of Goods Sold 
A)  Factory Overhead 
B)  Wages Payable 
C)  Work in Process 
D)  Cost of Goods Sold

Question 11

When job 711 was completed, direct materials totaled $4,000; direct labor, $5,600; and factory overhead, $2,400 respectively. Units produced totaled 1,000. Unit costs are:

Accepted Answer

A)  $12,000 
B)  $1,200 
C)  $120 
D)  $12 
A)  $12,000 
B)  $1,200 
C)  $120 
D)  $12

Question 12

A service organization will not use the job order costing method because it has no direct materials.

Accepted Answer

A) True 
 B)False

Question 13

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the controlling account in the general ledger to the controlling accounts for:

Accepted Answer

A)  work in process and cost of goods sold 
B)  work in process and factory overhead 
C)  finished goods and cost of goods sold 
D)  work in process and finished goods 
A)  work in process and cost of goods sold 
B)  work in process and factory overhead 
C)  finished goods and cost of goods sold 
D)  work in process and finished goods

Question 14

Which of the following would probably not be found in the accounting system of a service provider?

Accepted Answer

A)  Cost ledger 
B)  Finished jobs ledger 
C)  Deferred revenue account 
D)  Job cost sheets 
A)  Cost ledger 
B)  Finished jobs ledger 
C)  Deferred revenue account 
D)  Job cost sheets

Question 15

Nonmanufacturing costs are generally classified into two categories: selling and administrative.

Accepted Answer

A) True 
 B)False

Question 16

Zeke Company is a manufacturing company that has worked on several production jobs during the 1st quarter of the year. Below is a list of all the jobs for the quarter:

Job 356, 357, 358 & 359 were completed.

Jobs 356 & 357 were sold at a profit of $500 on each job.
What is the ending balance of Finished Goods for Zeke Company as of the end of the 1st quarter?

Accepted Answer

A)  $456 
B)  $1,067 
C)  $1,685 
D)  $2,752 
A)  $456 
B)  $1,067 
C)  $1,685 
D)  $2,752

Question 17

In the job order system, the finished goods account is the controlling account for the factory overhead ledger.

Accepted Answer

A) True 
 B)False

Question 18

The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit.

Accepted Answer

A) True 
 B)False

Question 19

The Thomlin Company forecasts that total overhead for the current year will be $15,000,000 and that total machine hours will be 300,000 hours. Year to date, the actual overhead is $16,000,000 and the actual machine hours are 330,000 hours. If the Thomlin Company uses a predetermined overhead rate based on machine hours for applying overhead, what is that overhead rate?

Accepted Answer

A)  $48 per machine hour 
B)  $53 per machine hour 
C)  $45 per machine hour 
D)  $50 per machine hour 
A)  $48 per machine hour 
B)  $53 per machine hour 
C)  $45 per machine hour 
D)  $50 per machine hour

Question 20

The source of the data for debiting Work-in-Process for direct materials is the:

Accepted Answer

A)  purchase order 
B)  purchase requisition 
C)  materials requisition 
D)  receiving report 
A)  purchase order 
B)  purchase requisition 
C)  materials requisition 
D)  receiving report

Exam 17: Job Order Costing

Job order costing and process costing are

Which of the following costs are NOT included in finished goods inventory?

Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.

A receiving report is prepared when purchased materials are first received by the manufacturing department.

Which of the following products probably would be manufactured using a job order costing system?

Which of the following is the correct flow of manufacturing costs?

The details concerning the costs incurred on each job order are accumulated in a work in process account, which is supported by a:

The recording of the application of factory overhead costs to jobs would include a credit to:

When job 711 was completed, direct materials totaled $4,000; direct labor, $5,600; and factory overhead, $2,400 respectively. Units produced totaled 1,000. Unit costs are:

A service organization will not use the job order costing method because it has no direct materials.

A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the controlling account in the general ledger to the controlling accounts for:

Which of the following would probably not be found in the accounting system of a service provider?

Nonmanufacturing costs are generally classified into two categories: selling and administrative.

In the job order system, the finished goods account is the controlling account for the factory overhead ledger.

The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit.

The source of the data for debiting Work-in-Process for direct materials is the:

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Corporations: Organization, Stock Transactions, and Dividends

Long-Term Liabilities: Bonds and Notes

Investments and Fair Value Accounting

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting Concepts and Principles

Process Cost Systems

Cost Behavior and Cost-Volume-Profit Analysis

Variable Costing for Management Analysis

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

Cost Allocation and Activity-Based Costing

Cost Management for Just-In-Time Environments

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