Question 1

When the goods are sold, their costs are transferred from Work in Process to Finished Goods.

Accepted Answer

A) True 
 B)False

Question 2

The inventory accounts generally maintained by a manufacturing firm are only finished goods and materials.

Accepted Answer

A) True 
 B)False

Question 3

In a job order cost accounting system for a service business, materials costs are normally included as part of overhead.

Accepted Answer

A) True 
 B)False

Question 4

Selected accounts with some debits and credits omitted are presented as follows:     If the balance of Work in Process at August 31 is $220,000, what was the amount debited to Work in Process for factory overhead in August, assuming a factory overhead rate of 30% of direct labor costs?

Accepted Answer

A)  $135,000 
B)  $10,000 
C)  $120,000 
D)  $70,000 
A)  $135,000 
B)  $10,000 
C)  $120,000 
D)  $70,000

Question 5

Generally, period costs are classified as either

Accepted Answer

A)  selling expenses or production expenses. 
B)  administrative expense or production expenses. 
C)  selling expenses or administrative expenses. 
D)  general expenses or selling expenses. 
A)  selling expenses or production expenses. 
B)  administrative expense or production expenses. 
C)  selling expenses or administrative expenses. 
D)  general expenses or selling expenses.

Question 6

Match each of the following terms with the phrase that most closely describes it. Each answer may be used only once.

Accepted Answer

The answer of Match each of the following terms with...

Question 7

Perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work in process, and finished goods in cost accounting systems.

Accepted Answer

A) True 
 B)False

Question 8

The materials requisition is used to

Accepted Answer

A)  release materials from the storeroom to the factory 
B)  release finished goods to the shipping department 
C)  record the acquisition of materials from a vendor 
D)  record and electronically transmit materials data in place of a receiving report 
A)  release materials from the storeroom to the factory 
B)  release finished goods to the shipping department 
C)  record the acquisition of materials from a vendor 
D)  record and electronically transmit materials data in place of a receiving report

Question 9

Information about costs developed through a job order cost system can not be used to evaluate an organization's cost performance.

Accepted Answer

A) True 
 B)False

Question 10

A difference in quantity of materials used on two comparable jobs may be caused by:

Accepted Answer

A)  inadequately trained employees 
B)  poor quality materials 
C)  employee carelessness 
D)  all of the above 
A)  inadequately trained employees 
B)  poor quality materials 
C)  employee carelessness 
D)  all of the above

Question 11

Zeke Company is a manufacturing company that has worked on several production jobs during the 1st quarter of the year. Below is a list of all the jobs for the quarter:   Job 356, 357, 358 & 359 were completed. Jobs 356 & 357 were sold at a profit of $500 on each job.
What is Gross Margin for Zeke Company as of the end of the 1st quarter?

Accepted Answer

A)  $1,685 
B)  $2,685 
C)  $1,000 
D)  $685 
A)  $1,685 
B)  $2,685 
C)  $1,000 
D)  $685

Question 12

Which of the following is the correct flow of manufacturing costs?

Accepted Answer

A)  Raw materials, work in process, finished goods, cost of goods sold 
B)  Raw materials, finished goods, cost of goods sold, work in process. 
C)  Work in process, finished goods, raw materials, cost of goods sold 
D)  Cost of goods sold, raw materials, work in process, finished goods. 
A)  Raw materials, work in process, finished goods, cost of goods sold 
B)  Raw materials, finished goods, cost of goods sold, work in process. 
C)  Work in process, finished goods, raw materials, cost of goods sold 
D)  Cost of goods sold, raw materials, work in process, finished goods.

Question 13

Interim financial statements for a manufacturing business would report overapplied factory overhead as a deferred item on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not a characteristic of a job order costing system?

Accepted Answer

A)  It accumulates cost for each department within the factory. 
B)  It provides a separate record for the cost of each quantity of product that passes through the factory. 
C)  It is best suited for industries that manufactures custom goods. 
D)  Uses only one work in process account. 
A)  It accumulates cost for each department within the factory. 
B)  It provides a separate record for the cost of each quantity of product that passes through the factory. 
C)  It is best suited for industries that manufactures custom goods. 
D)  Uses only one work in process account.

Question 15

As product costs are incurred in the manufacturing process, they are accounted for as assets and reported on the balance sheet as inventory.

Accepted Answer

A) True 
 B)False

Question 16

The period costs of a textbook publisher would include:

Accepted Answer

A)  wages of a press operator 
B)  factory utility costs 
C)  advertising expenses 
D)  paper costs 
A)  wages of a press operator 
B)  factory utility costs 
C)  advertising expenses 
D)  paper costs

Question 17

A service organization will not use the job order costing method because it has no direct materials.

Accepted Answer

A) True 
 B)False

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

A process 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 20

Costs that are treated as assets until the product is sold are called:

Accepted Answer

A)  product costs 
B)  period costs 
C)  conversion costs 
D)  selling expenses 
A)  product costs 
B)  period costs 
C)  conversion costs 
D)  selling expenses

Exam 19: Job Order Costing

When the goods are sold, their costs are transferred from Work in Process to Finished Goods.

The inventory accounts generally maintained by a manufacturing firm are only finished goods and materials.

In a job order cost accounting system for a service business, materials costs are normally included as part of overhead.

Selected accounts with some debits and credits omitted are presented as follows: If the balance of Work in Process at August 31 is $220,000, what was the amount debited to Work in Process for factory overhead in August, assuming a factory overhead rate of 30% of direct labor costs?

Generally, period costs are classified as either

Match each of the following terms with the phrase that most closely describes it. Each answer may be used only once.

Perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work in process, and finished goods in cost accounting systems.

The materials requisition is used to

Information about costs developed through a job order cost system can not be used to evaluate an organization's cost performance.

A difference in quantity of materials used on two comparable jobs may be caused by:

Which of the following is the correct flow of manufacturing costs?

Interim financial statements for a manufacturing business would report overapplied factory overhead as a deferred item on the balance sheet.

Which of the following is not a characteristic of a job order costing system?

As product costs are incurred in the manufacturing process, they are accounted for as assets and reported on the balance sheet as inventory.

The period costs of a textbook publisher would include:

A service organization will not use the job order costing method because it has no direct materials.

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

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

Costs that are treated as assets until the product is sold are called:

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

Filters