Question 1

Activity-based costing tracks cost to the activities that consume resources.

Accepted Answer

A) True 
 B)False  True

Question 2

The amount of direct materials cost charged to completed jobs during March was:

Accepted Answer

A)  $20,000. 
B)  $50,000. 
C)  $30,000. 
D)  Some other amount. 
A)  $20,000. 
B)  $50,000. 
C)  $30,000. 
D)  Some other amount. C

Question 3

What are the total manufacturing overhead costs allocated to the Baby Swings for the current month?

Accepted Answer

A)  $69,837. 
B)  $102,873. 
C)  $37,290. 
D)  $210,000. 
A)  $69,837. 
B)  $102,873. 
C)  $37,290. 
D)  $210,000. C

Question 4

Job order costing is appropriate for businesses that produce mass quantities of identical units using the same amount of direct materials, direct labor, and manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 5

When a job is completed:

Accepted Answer

A)  Cost of goods sold is debited. 
B)  Work-in-process inventory is debited. 
C)  Finished goods inventory is credited. 
D)  None of the above. 
A)  Cost of goods sold is debited. 
B)  Work-in-process inventory is debited. 
C)  Finished goods inventory is credited. 
D)  None of the above.

Question 6

An overhead application rate is computed by dividing the estimated overhead costs by the expected amount of units in the activity base.

Accepted Answer

A) True 
 B)False

Question 7

What is the work in process inventory at October 31? $___________

Accepted Answer

The answer of What is the work in process inventory...

Question 8

A predetermined overhead application rate:

Accepted Answer

A)  Is used in a job order cost system but cannot be used in a process cost system. 
B)  Can be determined by dividing budgeted direct labor cost by the budgeted factory overhead costs. 
C)  Is not generally accepted for financial reporting purposes. 
D)  Tends to avoid wide variations in per-unit overhead costs because of short-run changes in volume. 
A)  Is used in a job order cost system but cannot be used in a process cost system. 
B)  Can be determined by dividing budgeted direct labor cost by the budgeted factory overhead costs. 
C)  Is not generally accepted for financial reporting purposes. 
D)  Tends to avoid wide variations in per-unit overhead costs because of short-run changes in volume.

Question 9

In an activity-based costing system, manufacturing overhead costs are divided into separate:

Accepted Answer

A)  Cost drivers. 
B)  Activity cost pools. 
C)  Activity bases. 
D)  Indirect cost centers. 
A)  Cost drivers. 
B)  Activity cost pools. 
C)  Activity bases. 
D)  Indirect cost centers.

Question 10

A job cost sheet usually contains a record of each of the following except:

Accepted Answer

A)  The cost of direct materials charged to a particular job. 
B)  The overhead costs actually incurred on a particular job. 
C)  The cost of direct labor charged to a particular job. 
D)  The overhead cost applied to a particular job. 
A)  The cost of direct materials charged to a particular job. 
B)  The overhead costs actually incurred on a particular job. 
C)  The cost of direct labor charged to a particular job. 
D)  The overhead cost applied to a particular job.

Question 11

Which of the following statements is true about activity-based costing?

Accepted Answer

A)  Only one activity should be used for a company. 
B)  Many different activity bases are used in applying overhead. 
C)  There can only be one cost driver. 
D)  Direct materials and direct labor are applied to work-in-process based upon cost drivers. 
A)  Only one activity should be used for a company. 
B)  Many different activity bases are used in applying overhead. 
C)  There can only be one cost driver. 
D)  Direct materials and direct labor are applied to work-in-process based upon cost drivers.

Question 12

A job cost sheet should:

Accepted Answer

A)  Contain information that summarizes all jobs finished. 
B)  Contain information on each individual job in process. 
C)  Contain only the direct costs of a particular job. 
D)  Only be used for jobs that have been completed. 
A)  Contain information that summarizes all jobs finished. 
B)  Contain information on each individual job in process. 
C)  Contain only the direct costs of a particular job. 
D)  Only be used for jobs that have been completed.

Question 13

Metalworks employs 3 assembly workers that, on average, each work 40 hours per week and earn $9 per hour. During the current accounting period, Job #543 consumed 77 hours of direct labor totaling $693.
77 direct labor hours x $9 = $693.

Accepted Answer

A) True 
 B)False

Question 14

The use of activity-based costing is most appropriate for:

Accepted Answer

A)  Firms that manufacture multiple product lines. 
B)  Firms that have very low manufacturing overhead costs relative to other costs of production. 
C)  Firms with high levels of production activity. 
D)  Firms that account separately for product and period costs. 
A)  Firms that manufacture multiple product lines. 
B)  Firms that have very low manufacturing overhead costs relative to other costs of production. 
C)  Firms with high levels of production activity. 
D)  Firms that account separately for product and period costs.

Question 15

Manufacturing overhead is not:

Accepted Answer

A)  A product cost. 
B)  An indirect cost. 
C)  A manufacturing cost. 
D)  A period cost. 
A)  A product cost. 
B)  An indirect cost. 
C)  A manufacturing cost. 
D)  A period cost.

Question 16

A debit balance in the Manufacturing Overhead account at the end of the period indicates that overhead has been under-applied to jobs.

Accepted Answer

A) True 
 B)False

Question 17

The year-end balance in the Materials Inventory controlling account is equal to:

Accepted Answer

A)  The total of the various materials subsidiary ledger accounts (the materials on hand at the end of the period.) 
B)  The total amount of materials requisitioned during the period. 
C)  The total amount of materials purchased during the period. 
D)  The amount of materials debited to the Work-in-Process Inventory account during the period. 
A)  The total of the various materials subsidiary ledger accounts (the materials on hand at the end of the period.) 
B)  The total amount of materials requisitioned during the period. 
C)  The total amount of materials purchased during the period. 
D)  The amount of materials debited to the Work-in-Process Inventory account during the period.

Question 18

Job order cost system-journal entries
Shown below is a partial list of accounts for Miles Mfg. Co., followed by a list of transactions. Indicate the accounts that would be debited and credited in recording each transaction by placing the appropriate account numbers in the space provided. The company uses a job order cost accounting system.
 $$\begin{array} { | l | l | l | } 
\hline \text { (1) Cash } & \text { (6) } & \text { Cost of Goods Sold } \
\hline \text { (2) Materials Inventory } & \text { (7) } & \text { Direct Labor } \
\hline \text { (3) Work-in-Process Inventory } & \text { (8) } & \text { Manufacturing Overhead } \
\hline \text { (4) Finished Goods Inventory } & & \text { (controlling account) } \
\hline \text { (5) Sales } & & \
\hline
\end{array}$$

Accepted Answer

The answer of Job order cost system-journal entries
Shown below is...

Question 19

The account Finished Goods:

Accepted Answer

A)  Consists of completed goods that have not yet been sold. 
B)  Consists of goods being manufactured that are incomplete. 
C)  Consists of materials to be used in the production process. 
D)  Consists of the cost of new materials used, labor but not overhead. 
A)  Consists of completed goods that have not yet been sold. 
B)  Consists of goods being manufactured that are incomplete. 
C)  Consists of materials to be used in the production process. 
D)  Consists of the cost of new materials used, labor but not overhead.

Question 20

Refer to the above data. If Riverview applies overhead using a predetermined rate based on machine-hours, what amount of overhead will be assigned to a unit of output which requires 0.5 machine hours and 0.25 labor hours to complete?

Accepted Answer

A)  $12.00. 
B)  $16.00. 
C)  $20.00. 
D)  Some other amount. 
A)  $12.00. 
B)  $16.00. 
C)  $20.00. 
D)  Some other amount.

Exam 17: Job Order Cost Systems and Overhead Allocations

Activity-based costing tracks cost to the activities that consume resources.

The amount of direct materials cost charged to completed jobs during March was:

What are the total manufacturing overhead costs allocated to the Baby Swings for the current month?

Job order costing is appropriate for businesses that produce mass quantities of identical units using the same amount of direct materials, direct labor, and manufacturing overhead.

When a job is completed:

An overhead application rate is computed by dividing the estimated overhead costs by the expected amount of units in the activity base.

What is the work in process inventory at October 31? $___________

A predetermined overhead application rate:

In an activity-based costing system, manufacturing overhead costs are divided into separate:

A job cost sheet usually contains a record of each of the following except:

Which of the following statements is true about activity-based costing?

A job cost sheet should:

Metalworks employs 3 assembly workers that, on average, each work 40 hours per week and earn $9 per hour. During the current accounting period, Job #543 consumed 77 hours of direct labor totaling $693. 77 direct labor hours x $9 = $693.

The use of activity-based costing is most appropriate for:

Manufacturing overhead is not:

A debit balance in the Manufacturing Overhead account at the end of the period indicates that overhead has been under-applied to jobs.

The year-end balance in the Materials Inventory controlling account is equal to:

The account Finished Goods:

Refer to the above data. If Riverview applies overhead using a predetermined rate based on machine-hours, what amount of overhead will be assigned to a unit of output which requires 0.5 machine hours and 0.25 labor hours to complete?

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values Answer Key

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