Question 1

The entries to record cost and sale of a finished good on account is:

Accepted Answer

A)  debit Cost of Goods Sold, credit Finished Goods 
B)  debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales 
C)  debit Sales Expense, credit Finished Goods, credit Cash, credit Accounts Receivable 
D)  debit Work in Process, credit Finished Goods, debit Accounts Receivable, credit Sales 
A)  debit Cost of Goods Sold, credit Finished Goods 
B)  debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales 
C)  debit Sales Expense, credit Finished Goods, credit Cash, credit Accounts Receivable 
D)  debit Work in Process, credit Finished Goods, debit Accounts Receivable, credit Sales

Question 2

Using the job order cost system, service organizations are able to bill customers on a weekly or monthly basis, even when the job has not been completed.

Accepted Answer

A) True 
 B)False

Question 3

A manufacturing company applies factory overhead based on direct labor hours. At the beginning of the year, it estimated that factory overhead costs would be $360,000 and direct labor hours would be 30,000. Actual manufacturing overhead costs incurred were $377,200, and actual direct labor hours were 36,000. What is the predetermined overhead rate per direct labor hour?

Accepted Answer

A)  $12.00 
B)  $10.00 
C)  $12.57 
D)  $10.48 
A)  $12.00 
B)  $10.00 
C)  $12.57 
D)  $10.48

Question 4

The Cavy Company accumulated 560 hours of direct labor on Job 345 and 800 hours on Job 777. The direct labor was incurred at a rate of $20 per direct labor hour for Job 345 and $21 per direct labor for Job 777. Journalize the entry to record the flow of labor costs into production.

Accepted Answer

@#IMG-DLM&_TB2013_00

Question 5

Bar code scanners are now being used to track incoming materials and to electronically transmit this data. Scanners have replaced which of the following:

Accepted Answer

A)  receiving report 
B)  materials requisition 
C)  materials ledger 
D)  job cost sheet 
A)  receiving report 
B)  materials requisition 
C)  materials ledger 
D)  job cost sheet

Question 6

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

Question 7

The job order costing system is not used by service organizations.

Accepted Answer

A) True 
 B)False

Question 8

A process cost accounting system is best used by manufacturers of like units of product that are not distinguishable from each other during a continuous production process.

Accepted Answer

A) True 
 B)False

Question 9

During the period, labor costs incurred on account amounted to $275,000 including $200,000 for production orders and $75,000 for general factory use. In addition, factory overhead applied to production was $32,000. From the following, select the entry to record the factory overhead applied to production.

Accepted Answer

The answer of During the period, labor costs incurred on...

Question 10

The Cavy Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. The machine hours for the month of April for all of the jobs was 4,780. If the actual factory overhead totaled $141,800, determine the over or under applied amount for the month.

Accepted Answer

$141,800 -

Question 11

Discuss how job order cost information is used in decision making. What are some possible reasons that actual cost of materials would exceed expected costs for a job?

Accepted Answer

Since a job order cost system provides p

Question 12

A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

Accepted Answer

A) True 
 B)False

Question 13

Materials are transferred from the storeroom to the factory in response to materials requisitions.

Accepted Answer

A) True 
 B)False

Question 14

At the end of the fiscal year, the balance in Factory Overhead is small. This balance 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 15

Cavy Company estimates that total factory overhead costs will be $660,000 for the year. Direct labor hours are estimated to be 100,000. Determine (a) the predetermined factory overhead rate, (b) the amount of factory overhead applied to Job 345 if the amount of direct labor hours is 560 and Job 777 if the amount of direct labor hours is 800, and (c) prepare the journal entry to apply factory overhead in April according to the predetermined overhead rate.

Accepted Answer

(a) $660,000 / 100,000 = $6.60

Question 16

The materials requisition serves as the source document for debiting the accounts in the materials ledger.

Accepted Answer

A) True 
 B)False

Question 17

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. Calculate the predetermined overhead rate to apply factory overhead.

Accepted Answer

$1,470,000

Question 18

The following budget data are available for Happy Company:   If factory overhead is to be applied based on direct labor dollars, the predetermined overhead rate is

Accepted Answer

A)  199% 
B)  196% 
C)  $14.92 
D)  $15.65 
A)  199% 
B)  196% 
C)  $14.92 
D)  $15.65

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, 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 20

A manufacturing business reports just two types of inventory on its balance sheet: work in process inventory and finished goods inventory.

Accepted Answer

A) True 
 B)False

Exam 19: Job Order Costing

The entries to record cost and sale of a finished good on account is:

Using the job order cost system, service organizations are able to bill customers on a weekly or monthly basis, even when the job has not been completed.

The Cavy Company accumulated 560 hours of direct labor on Job 345 and 800 hours on Job 777. The direct labor was incurred at a rate of $20 per direct labor hour for Job 345 and $21 per direct labor for Job 777. Journalize the entry to record the flow of labor costs into production.

Bar code scanners are now being used to track incoming materials and to electronically transmit this data. Scanners have replaced which of the following:

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

The job order costing system is not used by service organizations.

A process cost accounting system is best used by manufacturers of like units of product that are not distinguishable from each other during a continuous production process.

Discuss how job order cost information is used in decision making. What are some possible reasons that actual cost of materials would exceed expected costs for a job?

A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.

Materials are transferred from the storeroom to the factory in response to materials requisitions.

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

The materials requisition serves as the source document for debiting the accounts in the materials ledger.

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. Calculate the predetermined overhead rate to apply factory overhead.

The following budget data are available for Happy Company: If factory overhead is to be applied based on direct labor dollars, the predetermined overhead rate is

A manufacturing business reports just two types of inventory on its balance sheet: work in process inventory and finished goods inventory.

Introduction to Accounting and Business

Analyzing Transactions

The Adjusting Process

Completing the Accounting Cycle

Accounting Systems

Accounting for Merchandising Businesses

Inventories

Sarbanes-Oxley, Internal Control, and Cash

Receivables

Fixed Assets and Intangible Assets

Current Liabilities and Payroll

Accounting for Partnerships and Limited Liability Companies

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

Budgeting

Performance Evaluation Using Variances From Standard Costs

Performance Evaluation for Decentralized Operations

Differential Analysis and Product Pricing

Capital Investment Analysis

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