Question 1

If there is a debit balance in overhead control, that implies

Accepted Answer

A)  actual overhead costs exceed overhead applied. 
B)  applied overhead exceeds actual overhead. 
C)  actual overhead has not been closed to cost of goods sold. 
D)  none of these. 
A)  actual overhead costs exceed overhead applied. 
B)  applied overhead exceeds actual overhead. 
C)  actual overhead has not been closed to cost of goods sold. 
D)  none of these. A

Question 2

An actual overhead rate can be calculated

Accepted Answer

A)  at the beginning of the year. 
B)  at the end of each month. 
C)  at the beginning of each month. 
D)  either at the beginning of the year or at the beginning of the month. 
A)  at the beginning of the year. 
B)  at the end of each month. 
C)  at the beginning of each month. 
D)  either at the beginning of the year or at the beginning of the month. B

Question 3

Figure 5-9 Alpha Company manufactures customized motors on a job-order basis.Job 492 is an order for 100 units.It requires the following:
Direct materials $3,000
Direct labor ($10/hr) 1,000
Overhead (150% DL$) 1,500
After inspection, 2 units required rework which required 8 additional direct labor hours and $60 of materials.
-
Refer to Figure 5-9.If the rework is considered normal spoilage, what is the journal entry for overhead control?

Accepted Answer

A)  overhead control $ 140 materials $60
Payroll $80 
B)  materials $ 60 payroll $80
Overhead control $140 
C)  no journal entry is needed 
D)  none of these 
A)  overhead control $ 140 materials $60
Payroll $80 
B)  materials $ 60 payroll $80
Overhead control $140 
C)  no journal entry is needed 
D)  none of these A

Question 4

Figure 5-7 The following information is available pertaining to the Production Division:
  
-Refer to Figure 5-7.Based on departmental overhead rates, what is the cost of Job 4X5? Departmental overhead notes for the Mixing Department are based on direct labor hours, while departmental overhead rates for the Finishing Department are based on machine hours.

Accepted Answer

A)  $31,250 
B)  $8,750 
C)  $2,000 
D)  $1,250 
A)  $31,250 
B)  $8,750 
C)  $2,000 
D)  $1,250

Question 5

_______________ is the maximum output that can be realized if everything operates efficiently.

Accepted Answer

A)  Expected activity level 
B)  Normal activity level 
C)  Theoretical activity level 
D)  Practical activity level 
A)  Expected activity level 
B)  Normal activity level 
C)  Theoretical activity level 
D)  Practical activity level

Question 6

The principal difficulty with normal costing is that

Accepted Answer

A)  the unit cost information is not received on a timely basis. 
B)  it can result in fluctuating per-unit overhead costs. 
C)  estimated overhead and estimated activity are likely to differ from actual overhead and actual costs, resulting in underapplied or overapplied overhead. 
D)  there is no difficulty associated with using normal costing. 
A)  the unit cost information is not received on a timely basis. 
B)  it can result in fluctuating per-unit overhead costs. 
C)  estimated overhead and estimated activity are likely to differ from actual overhead and actual costs, resulting in underapplied or overapplied overhead. 
D)  there is no difficulty associated with using normal costing.

Question 7

Figure 5 - 8 Griswold Corporation is a job order costing company that uses activity-based costing to apply overhead to jobs.The following overhead activities were budgeted for the year.
  The following information about the jobs was given for September.
  By September 30, Jobs 102 and 103 were completed and sold.The remaining jobs were still in process.
-
Refer to Figure 5-8.What is the cost of job 102?

Accepted Answer

A)  $ 86,440 
B)  $ 127,210 
C)  $ 117,170 
D)  none of these 
A)  $ 86,440 
B)  $ 127,210 
C)  $ 117,170 
D)  none of these

Question 8

Figure 5-5 Wright Corporation had the following information available for December 2011:
  Factory overhead rate is 150 percent of direct labor costs.
Job cost sheets had the following balances:
  Jobs Z3 and Z4 were not completed at the end of December.
-
Refer to Figure 5-5.What is the cost of goods finished during December for Wright Corporation?

Accepted Answer

A)  $85,000 
B)  $87,500 
C)  $56,250 
D)  $53,750 
A)  $85,000 
B)  $87,500 
C)  $56,250 
D)  $53,750

Question 9

What is the most important factor that causes service firms to generally rank lower in customer satisfaction than manufacturing firms?

Accepted Answer

Employees are key to customer services.S

Question 10

_______________ is the association of production costs with the units produced.

Accepted Answer

A)  Cost accumulation 
B)  Cost measurement 
C)  Cost assignment 
D)  Job-order costing 
A)  Cost accumulation 
B)  Cost measurement 
C)  Cost assignment 
D)  Job-order costing

Question 11

The _______________ serves as the document that identifies each job and accumulates its manufacturing costs.

Accepted Answer

A)  job-order cost sheet 
B)  control account 
C)  production order 
D)  bill of materials 
A)  job-order cost sheet 
B)  control account 
C)  production order 
D)  bill of materials

Question 12

Figure 5 - 2 The Kraig Corporation manufactures custom-made purses.The following data pertains to Job XY5:
  Factory overhead is applied using a plant-wide rate based on direct labor hours.Factory overhead was budgeted at $60,000 for the year and the direct labor hours were estimated to be 15,000.Job XY5 consists of 50 units.
-
Refer to Figure 5-2.What is the labor cost per unit for Job XY5?

Accepted Answer

A)  $4 
B)  $15 
C)  $0.80 
D)  $40 
A)  $4 
B)  $15 
C)  $0.80 
D)  $40

Question 13

A work-in-process inventory file is

Accepted Answer

A)  a file of electronic job-order cost sheets. 
B)  a file cabinet where work tickets are stored. 
C)  a file of electronic materials requisitions. 
D)  none of these. 
A)  a file of electronic job-order cost sheets. 
B)  a file cabinet where work tickets are stored. 
C)  a file of electronic materials requisitions. 
D)  none of these.

Question 14

Explain why actual costing systems are rarely used in practice.
Actual costing systems are rarely used in practice because they do not provide accurate unit cost information on a timely basis.Actual per-unit overhead costs can vary dramatically from period to period because (1) actual costs vary from period to period and/or (2) the number of units produced may vary from period to period.Thus, when actual costing is used, a unit produced during a low-volume month may be assigned a higher cost than a unit produced during a high-volume month, even though the units are identical.

Accepted Answer

To avoid fluctuations in per-unit costs

Question 15

Figure 5 - 6 In the Mains Company, the following Job cards were totaled at the end of the month:
Job 243 $5,750
Job 244 $4,980
Job 245 $3,675
Job 246 $4,250
Job 247 $5,100
Job 248 $3,800
Jobs 243 and 244 were in Finished Goods Inventory at the beginning of the month.Jobs 245 and 246 were in Work-in-process at the beginning of the month.Jobs 247 and 248 were started during the month.At the end of the month, Jobs 243 and 247 were sent to customers; jobs 245, 247, and 248 were completed and sent to finished goods.
-
Refer to Figure 5-6.What is the cost of goods manufactured for the month?

Accepted Answer

A)  $10,730 
B)  $10,850 
C)  $12,575 
D)  none of these 
A)  $10,730 
B)  $10,850 
C)  $12,575 
D)  none of these

Question 16

Figure 5 - 8 Griswold Corporation is a job order costing company that uses activity-based costing to apply overhead to jobs.The following overhead activities were budgeted for the year.
  The following information about the jobs was given for September.
  By September 30, Jobs 102 and 103 were completed and sold.The remaining jobs were still in process.
-
Refer to Figure 5-8.The cost of goods sold would consist of the costs of what jobs?

Accepted Answer

A)  Job 102 + Job 103 
B)  Job 101 + Job 104 
C)  Job 101 + Job 102 + Job 103 + Job 104 
D)  Job 101 + Job 102 + Job 103 
A)  Job 102 + Job 103 
B)  Job 101 + Job 104 
C)  Job 101 + Job 102 + Job 103 + Job 104 
D)  Job 101 + Job 102 + Job 103

Question 17

A pure service organization has

Accepted Answer

A)  no raw materials, no inventories, and a definite separation between the plant and the customer. 
B)  raw materials, tangible items, and no separation between the plant and the customer. 
C)  no raw materials, no tangible items, and no separation between the plant and the customer. 
D)  none of these. 
A)  no raw materials, no inventories, and a definite separation between the plant and the customer. 
B)  raw materials, tangible items, and no separation between the plant and the customer. 
C)  no raw materials, no tangible items, and no separation between the plant and the customer. 
D)  none of these.

Question 18

Figure 5-9 Alpha Company manufactures customized motors on a job-order basis.Job 492 is an order for 100 units.It requires the following:
Direct materials $3,000
Direct labor ($10/hr) 1,000
Overhead (150% DL$) 1,500
After inspection, 2 units required rework which required 8 additional direct labor hours and $60 of materials.
-
Refer to Figure 5-9.If the rework is considered abnormal spoilage, what is the cost of job 492?

Accepted Answer

A)  $5,500 
B)  $6,740 
C)  $3,140 
D)  $5,640 
A)  $5,500 
B)  $6,740 
C)  $3,140 
D)  $5,640

Question 19

Unit costs are critical for

Accepted Answer

A)  valuing inventory. 
B)  determining net income. 
C)  decisions to enter a new product line. 
D)  all of these. 
A)  valuing inventory. 
B)  determining net income. 
C)  decisions to enter a new product line. 
D)  all of these.

Question 20

Which of the following costs is usually NOT easily traceable to finished units of product?

Accepted Answer

A)  direct labor 
B)  manufacturing overhead 
C)  direct materials 
D)  all of these 
A)  direct labor 
B)  manufacturing overhead 
C)  direct materials 
D)  all of these

If there is a debit balance in overhead control, that implies

An actual overhead rate can be calculated

_______________ is the maximum output that can be realized if everything operates efficiently.

The principal difficulty with normal costing is that

What is the most important factor that causes service firms to generally rank lower in customer satisfaction than manufacturing firms?

_______________ is the association of production costs with the units produced.

The _______________ serves as the document that identifies each job and accumulates its manufacturing costs.

A work-in-process inventory file is

A pure service organization has

Unit costs are critical for

Which of the following costs is usually NOT easily traceable to finished units of product?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 5: Product and Service Costing: Job-Order System

If there is a debit balance in overhead control, that implies

An actual overhead rate can be calculated

_______________ is the maximum output that can be realized if everything operates efficiently.

The principal difficulty with normal costing is that

What is the most important factor that causes service firms to generally rank lower in customer satisfaction than manufacturing firms?

_______________ is the association of production costs with the units produced.

The _______________ serves as the document that identifies each job and accumulates its manufacturing costs.

A work-in-process inventory file is

A pure service organization has

Unit costs are critical for

Which of the following costs is usually NOT easily traceable to finished units of product?

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters