Question 1

A job order cost system provides for a separate record of the costs for each particular quantity of product that is manufactured.

Accepted Answer

A) True 
 B)False

Question 2

Sales commission is an example of factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 3

Indirect labor is included in factory overhead.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following is considered a part of factory overhead cost?

Accepted Answer

A)  Sales commissions 
B)  Depreciation of factory buildings 
C)  Depreciation of office equipment 
D)  Direct materials used 
A)  Sales commissions 
B)  Depreciation of factory buildings 
C)  Depreciation of office equipment 
D)  Direct materials used

Question 5

Which of the following is an example of direct materials cost for an automobile manufacturer?

Accepted Answer

A)  Cost of oil lubricants for factory machinery 
B)  Cost of wages of assembly worker 
C)  Varnish for coating 
D)  Cost of interior upholstery 
A)  Cost of oil lubricants for factory machinery 
B)  Cost of wages of assembly worker 
C)  Varnish for coating 
D)  Cost of interior upholstery

Question 6

The direct labor and overhead costs of providing services to clients are accumulated in a Work-in-Process account.

Accepted Answer

A) True 
 B)False

Question 7

If the actual overhead incurred is less than the applied factory overhead, it is called overapplied factory overhead.

Accepted Answer

A) True 
 B)False

Question 8

Depreciation expense on factory equipment is part of factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 9

At the end of the fiscal year, if the balance in Factory Overhead is small, it would normally be:

Accepted Answer

A)  transferred to Work-in-Process. 
B)  transferred to Cost of Goods Sold. 
C)  transferred to Finished Goods. 
D)  allocated between Work-in-Process and Finished Goods. 
A)  transferred to Work-in-Process. 
B)  transferred to Cost of Goods Sold. 
C)  transferred to Finished Goods. 
D)  allocated between Work-in-Process and Finished Goods.

Question 10

Hudson, Inc. has estimated total factory overhead costs of $400,000 and 20,000 direct labor hours for the current fiscal year. If direct labor hours for the year totals 18,000 and actual factory overhead totals $350,000, what is the amount of overapplied or underapplied overhead for the year?

Accepted Answer

A)  $10,000 overapplied 
B)  $10,000 underapplied 
C)  $50,000 underapplied 
D)  $50,000 overapplied 
A)  $10,000 overapplied 
B)  $10,000 underapplied 
C)  $50,000 underapplied 
D)  $50,000 overapplied

Question 11

Materials inventory consists of the costs of direct and indirect materials that have not yet entered the manufacturing process.

Accepted Answer

A) True 
 B)False

Question 12

Service companies can effectively use activity-based costing to compute product (service) costs.

Accepted Answer

A) True 
 B)False

Question 13

The document authorizing the issuance of materials from the storeroom for use in manufacturing is called:

Accepted Answer

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

Question 14

Which of the following costs is not included in the finished goods inventory?

Accepted Answer

A)  Hourly wages of an assembly worker 
B)  Depreciation on factory plant and equipment 
C)  Company president's salary 
D)  Electronic components of a computer 
A)  Hourly wages of an assembly worker 
B)  Depreciation on factory plant and equipment 
C)  Company president's salary 
D)  Electronic components of a computer

Question 15

The basis for recording direct and indirect labor costs incurred is a summary of the period's:

Accepted Answer

A)  job order cost sheets. 
B)  time tickets. 
C)  employees' earnings records. 
D)  clock cards. 
A)  job order cost sheets. 
B)  time tickets. 
C)  employees' earnings records. 
D)  clock cards.

Question 16

In job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

Accepted Answer

A)  Materials 
B)  Direct labor 
C)  Rent 
D)  Supplies 
A)  Materials 
B)  Direct labor 
C)  Rent 
D)  Supplies

Question 17

Which of the following is not a period cost?

Accepted Answer

A)  CEO salary 
B)  Depreciation on office equipment 
C)  Sales commissions 
D)  Wages of an assembly worker 
A)  CEO salary 
B)  Depreciation on office equipment 
C)  Sales commissions 
D)  Wages of an assembly worker

Question 18

Which of the following statements is true of managerial accounting?

Accepted Answer

A)  Reporting under managerial accounting is constrained by rules such as generally accepted accounting principles. 
B)  Managerial accounting is required to be reported annually, also may be reported monthly or quarterly. 
C)  Managerial accounting provides information to the external stakeholders of the company. 
D)  Managerial accounting is primarily concerned with generating information for use by managers. 
A)  Reporting under managerial accounting is constrained by rules such as generally accepted accounting principles. 
B)  Managerial accounting is required to be reported annually, also may be reported monthly or quarterly. 
C)  Managerial accounting provides information to the external stakeholders of the company. 
D)  Managerial accounting is primarily concerned with generating information for use by managers.

Question 19

Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).

Accepted Answer

A) True 
 B)False

Question 20

Product cost consists of factory overhead.

Accepted Answer

A) True 
 B)False

A job order cost system provides for a separate record of the costs for each particular quantity of product that is manufactured.

Sales commission is an example of factory overhead cost.

Indirect labor is included in factory overhead.

Which of the following is considered a part of factory overhead cost?

Which of the following is an example of direct materials cost for an automobile manufacturer?

The direct labor and overhead costs of providing services to clients are accumulated in a Work-in-Process account.

If the actual overhead incurred is less than the applied factory overhead, it is called overapplied factory overhead.

Depreciation expense on factory equipment is part of factory overhead cost.

At the end of the fiscal year, if the balance in Factory Overhead is small, it would normally be:

Hudson, Inc. has estimated total factory overhead costs of $400,000 and 20,000 direct labor hours for the current fiscal year. If direct labor hours for the year totals 18,000 and actual factory overhead totals $350,000, what is the amount of overapplied or underapplied overhead for the year?

Materials inventory consists of the costs of direct and indirect materials that have not yet entered the manufacturing process.

Service companies can effectively use activity-based costing to compute product (service) costs.

The document authorizing the issuance of materials from the storeroom for use in manufacturing is called:

Which of the following costs is not included in the finished goods inventory?

The basis for recording direct and indirect labor costs incurred is a summary of the period's:

In job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

Which of the following is not a period cost?

Which of the following statements is true of managerial accounting?

Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).

Product cost consists of factory overhead.

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

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Exam 10: Accounting Systems for Manufacturing Businesses

A job order cost system provides for a separate record of the costs for each particular quantity of product that is manufactured.

Sales commission is an example of factory overhead cost.

Indirect labor is included in factory overhead.

Which of the following is considered a part of factory overhead cost?

Which of the following is an example of direct materials cost for an automobile manufacturer?

The direct labor and overhead costs of providing services to clients are accumulated in a Work-in-Process account.

If the actual overhead incurred is less than the applied factory overhead, it is called overapplied factory overhead.

Depreciation expense on factory equipment is part of factory overhead cost.

At the end of the fiscal year, if the balance in Factory Overhead is small, it would normally be:

Hudson, Inc. has estimated total factory overhead costs of $400,000 and 20,000 direct labor hours for the current fiscal year. If direct labor hours for the year totals 18,000 and actual factory overhead totals $350,000, what is the amount of overapplied or underapplied overhead for the year?

Materials inventory consists of the costs of direct and indirect materials that have not yet entered the manufacturing process.

Service companies can effectively use activity-based costing to compute product (service) costs.

The document authorizing the issuance of materials from the storeroom for use in manufacturing is called:

Which of the following costs is not included in the finished goods inventory?

The basis for recording direct and indirect labor costs incurred is a summary of the period's:

In job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

Which of the following is not a period cost?

Which of the following statements is true of managerial accounting?

Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).

Product cost consists of factory overhead.

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