Question 1

Which of the following businesses is most likely to use a job order costing system?

Accepted Answer

A)  A paper mill 
B)  A swimming pool installer 
C)  A company that manufactures chlorine for swimming pools 
D)  An oil refinery 
A)  A paper mill 
B)  A swimming pool installer 
C)  A company that manufactures chlorine for swimming pools 
D)  An oil refinery B

Question 2

Factory overhead is applied to production using a predetermined overhead rate.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following statements is true of financial accounting?

Accepted Answer

A)  Under financial accounting, reports are prepared using generally accepted accounting principles. 
B)  Financial accounting focuses on providing information primarily for internal use. 
C)  Financial accounting includes more subjective data like possibility of competitors' reactions to a company's new sales prices. 
D)  Information reported by financial accounting is not shared with those outside the company. 
A)  Under financial accounting, reports are prepared using generally accepted accounting principles. 
B)  Financial accounting focuses on providing information primarily for internal use. 
C)  Financial accounting includes more subjective data like possibility of competitors' reactions to a company's new sales prices. 
D)  Information reported by financial accounting is not shared with those outside the company. A

Question 4

Each account in the subsidiary ledger for work in process is called a:

Accepted Answer

A)  finished goods sheet. 
B)  stock record. 
C)  materials requisition. 
D)  job cost sheet. 
A)  finished goods sheet. 
B)  stock record. 
C)  materials requisition. 
D)  job cost sheet.

Question 5

The amount of time spent by each employee and the labor costs incurred for each individual job or for factory overhead are recorded on the:

Accepted Answer

A)  employees' earnings records. 
B)  in-and-out board. 
C)  time tickets. 
D)  receiving order 
A)  employees' earnings records. 
B)  in-and-out board. 
C)  time tickets. 
D)  receiving order

Question 6

After the goods are completed, their costs are transferred from Work in Process to Finished Goods.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not true about why a service firm will use the job order costing system?

Accepted Answer

A)  To help control cost. 
B)  To determine client billing. 
C)  To determine department costs within the firm. 
D)  To determine profit. 
A)  To help control cost. 
B)  To determine client billing. 
C)  To determine department costs within the firm. 
D)  To determine profit.

Question 8

The cost of materials entering directly into the manufacturing process is classified as:

Accepted Answer

A)  direct labor cost. 
B)  factory overhead cost. 
C)  burden cost. 
D)  direct materials cost. 
A)  direct labor cost. 
B)  factory overhead cost. 
C)  burden cost. 
D)  direct materials cost.

Question 9

Activity-based costing is a method of accumulating and allocating costs by department.

Accepted Answer

A) True 
 B)False

Question 10

Period costs are costs that are incurred for the production requirements of a certain period.

Accepted Answer

A) True 
 B)False

Question 11

Matt, Inc., a toy manufacturing company uses job order cost system. The time tickets from September jobs are summarized below.
 $\begin{array}{ll}
\$ 3,500 & \text { Job } 100 \
1,800 & \text { Job } 101 \
1,200 & \text { Job } 102 \
2,800 & \text { Job } 103 \
1,700 & \text { Factory supervision }
\end{array}$ Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $25 per direct labor hour. The direct labor rate is $30 per hour.
a. Determine the total factory labor costs transferred to Work in Process and Factory Overhead for September.
b. Determine the amount of factory overhead applied to production for September.

Accepted Answer

a. Costs transferred to Work in Process

Question 12

Which of the following items would not be classified as a part of factory overhead?

Accepted Answer

A)  Machine operators' wages 
B)  Amortization of manufacturing patents 
C)  Production supervisors' salaries 
D)  Factory supplies used 
A)  Machine operators' wages 
B)  Amortization of manufacturing patents 
C)  Production supervisors' salaries 
D)  Factory supplies used

Question 13

Managerial accounting reports information primarily for stakeholders that are external to the company.

Accepted Answer

A) True 
 B)False

Question 14

The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 15

Manufacturers implement the philosophy of just-in-time processing to produce products with high quality, low cost, and instant availability.

Accepted Answer

A) True 
 B)False

Question 16

Heedy Winery accumulates the costs incurred in the labeling process in an activity cost pool. Costs for the labeling process are estimated to be $320,000, and the winery expects to generate 640,000 labels for the coming year. Production for its top-selling wine is estimated at 160,000 bottles. How much overhead from the labeling process will be allocated to this particular variety of wine?

Accepted Answer

A)  $40,000 
B)  $80,000 
C)  $160,000 
D)  $320,000 
A)  $40,000 
B)  $80,000 
C)  $160,000 
D)  $320,000

Question 17

The sale of a finished good on account would:

Accepted Answer

A)  decrease Cost of Goods Sold and increase Finished Goods. 
B)  increase Cost of Goods Sold and decrease Finished Goods; increase Accounts Receivable and increase Sales. 
C)  increase Sales Expense and decrease Finished Goods; decrease Cash and decrease Accounts Receivable. 
D)  increase Work-in-Process and decrease Finished Goods; increase Accounts Receivable and increase Sales. 
A)  decrease Cost of Goods Sold and increase Finished Goods. 
B)  increase Cost of Goods Sold and decrease Finished Goods; increase Accounts Receivable and increase Sales. 
C)  increase Sales Expense and decrease Finished Goods; decrease Cash and decrease Accounts Receivable. 
D)  increase Work-in-Process and decrease Finished Goods; increase Accounts Receivable and increase Sales.

Question 18

For a manufacturing business, inventory that is still in the process of being manufactured is referred to as:

Accepted Answer

A)  supplies inventory. 
B)  work-in-process inventory. 
C)  finished goods inventory. 
D)  direct materials inventory. 
A)  supplies inventory. 
B)  work-in-process inventory. 
C)  finished goods inventory. 
D)  direct materials inventory.

Question 19

In job order cost accounting system, perpetual inventory records are maintained in controlling accounts and subsidiary ledgers for materials, work in process, and finished goods.

Accepted Answer

A) True 
 B)False

Question 20

The following information is available for the first month of operations for Crawford, Inc.: $\begin{array}{|l|l|}
\hline \$ 570,000 & \text { Sales } \
\hline 210,000 & \text { Gross profit } \
\hline 20,000 & \text { Indirect labor } \
\hline 9,000 & \text { Indirect materials } \
\hline 7,500 & \text { Other factory overhead } \
\hline 250,000 & \text { Materials purchased } \
\hline 420,000 & \text { Total manufacturing costs } \
\hline 10,000 & \text { Materials irventory, end of period } \
\hline
\end{array}$
 Refer to the information provided for Crawford Inc. What is the cost of goods sold?

Accepted Answer

A)  $420,000 
B)  $370,000 
C)  $360,000 
D)  $276,500 
A)  $420,000 
B)  $370,000 
C)  $360,000 
D)  $276,500

Which of the following businesses is most likely to use a job order costing system?

Factory overhead is applied to production using a predetermined overhead rate.

Which of the following statements is true of financial accounting?

Each account in the subsidiary ledger for work in process is called a:

The amount of time spent by each employee and the labor costs incurred for each individual job or for factory overhead are recorded on the:

After the goods are completed, their costs are transferred from Work in Process to Finished Goods.

Which of the following is not true about why a service firm will use the job order costing system?

The cost of materials entering directly into the manufacturing process is classified as:

Activity-based costing is a method of accumulating and allocating costs by department.

Period costs are costs that are incurred for the production requirements of a certain period.

Which of the following items would not be classified as a part of factory overhead?

Managerial accounting reports information primarily for stakeholders that are external to the company.

The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

Manufacturers implement the philosophy of just-in-time processing to produce products with high quality, low cost, and instant availability.

The sale of a finished good on account would:

For a manufacturing business, inventory that is still in the process of being manufactured is referred to as:

In job order cost accounting system, perpetual inventory records are maintained in controlling accounts and subsidiary ledgers for materials, work in process, and finished goods.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters

Exam 10: Accounting Systems for Manufacturing Businesses

Which of the following businesses is most likely to use a job order costing system?

Factory overhead is applied to production using a predetermined overhead rate.

Which of the following statements is true of financial accounting?

Each account in the subsidiary ledger for work in process is called a:

The amount of time spent by each employee and the labor costs incurred for each individual job or for factory overhead are recorded on the:

After the goods are completed, their costs are transferred from Work in Process to Finished Goods.

Which of the following is not true about why a service firm will use the job order costing system?

The cost of materials entering directly into the manufacturing process is classified as:

Activity-based costing is a method of accumulating and allocating costs by department.

Period costs are costs that are incurred for the production requirements of a certain period.

Which of the following items would not be classified as a part of factory overhead?

Managerial accounting reports information primarily for stakeholders that are external to the company.

The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

Manufacturers implement the philosophy of just-in-time processing to produce products with high quality, low cost, and instant availability.

The sale of a finished good on account would:

For a manufacturing business, inventory that is still in the process of being manufactured is referred to as:

In job order cost accounting system, perpetual inventory records are maintained in controlling accounts and subsidiary ledgers for materials, work in process, and finished goods.

The Role of Accounting in Business

Basic Accounting Concepts

Accrual Accounting Concepts

Accounting for Merchandising Businesses

Sarbanes-Oxley, Internal Control, and Cash

Receivables and Inventories

Fixed Assets and Intangible Assets

Liabilities and Stockholders Equity

Financial Statement Analysis

Cost Behavior and Cost-Volume-Profit Analysis

Differential Analysis and Product Pricing

Budgeting and Standard Cost Systems

Performance Evaluation for Decentralized Operations

Capital Investment Analysis

Filters