Question 1

The document that serves as the basis for recording direct labor on a job cost sheet is the time card.

Accepted Answer

A) True 
 B)False

Question 2

The Winston 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 50,000 hours. The total machine hours for the year was 54,300. The actual factory overhead for the year was $1,375,000. Determine the over or under applied amount for the year.

Accepted Answer

A)  $17,500 overapplied 
B)  $17,500 underapplied 
C)  $118,250 overapplied 
D)  $118,250 underapplied 
A)  $17,500 overapplied 
B)  $17,500 underapplied 
C)  $118,250 overapplied 
D)  $118,250 underapplied

Question 3

Scooby Company has applied $567,988 of overhead into production on Jobs in the Work in Process account. Actual overhead at the end of the year is $575,000. What is the adjustment for over or underapplied overhead?

Accepted Answer

A)  $7012 Overapplied, increase Cost of Goods Sold 
B)  $7012 Underapplied, increase Cost of Goods Sold 
C)  $7012 Overapplied, decrease Cost of Goods Sold 
D)  $7012 Underapplied, decrease Cost of Goods Sold 
A)  $7012 Overapplied, increase Cost of Goods Sold 
B)  $7012 Underapplied, increase Cost of Goods Sold 
C)  $7012 Overapplied, decrease Cost of Goods Sold 
D)  $7012 Underapplied, decrease Cost of Goods Sold

Question 4

The Winston 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 50,000 hours. The total machine hours for the year was 54,300. The actual factory overhead for the year was $1,348,800.

Accepted Answer

a) Determine the total factory overhead

Question 5

At the end of the year, overhead applied was $35,000,000. Actual overhead was $34,300,000. Closing over/under applied overhead into cost of goods sold would cause net income to:

Accepted Answer

A)  Increase by $700,000 
B)  Decrease by $700,000 
C)  Remain constant 
D)  Decrease by $300,000 
A)  Increase by $700,000 
B)  Decrease by $700,000 
C)  Remain constant 
D)  Decrease by $300,000

Question 6

The details concerning the costs incurred on each job order are accumulated in a work in process account, which is supported by a:

Accepted Answer

A)  stock ledger 
B)  materials ledger 
C)  cost ledger 
D)  creditors ledger 
A)  stock ledger 
B)  materials ledger 
C)  cost ledger 
D)  creditors ledger

Question 7

A staff department or unit is one directly involved in the basic objective of the organization.

Accepted Answer

A) True 
 B)False

Question 8

Direct labor cost is an example of a period cost.

Accepted Answer

A) True 
 B)False

Question 9

The process cost system is appropriate where few products are manufactured and each product is made to customers' specifications.

Accepted Answer

A) True 
 B)False

Question 10

A widely used activity base for developing factory overhead rates in highly automated settings is:

Accepted Answer

A)  direct labor hours 
B)  direct labor dollars 
C)  direct materials 
D)  machine hours 
A)  direct labor hours 
B)  direct labor dollars 
C)  direct materials 
D)  machine hours

Question 11

A manufacturer may employ a job order cost system for some of its products and a process cost system for others.

Accepted Answer

A) True 
 B)False

Question 12

The recording of the application of factory overhead costs to jobs would include a credit to:

Accepted Answer

A)  Factory Overhead 
B)  Wages Payable 
C)  Work in Process 
D)  Cost of Goods Sold 
A)  Factory Overhead 
B)  Wages Payable 
C)  Work in Process 
D)  Cost of Goods Sold

Question 13

The following budget data are available for Happy Company:   If factory overhead is to be applied based on direct labor hours as the cost allocation base for the predetermined overhead rate, the amount of overhead applied into production is

Accepted Answer

A)  $180,000 
B)  $181,000 
C)  $172,500 
D)  $184,000 
A)  $180,000 
B)  $181,000 
C)  $172,500 
D)  $184,000

Question 14

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. The machine hours for the month of April for all of the jobs was 4,780. Prepare the journal entry to apply factory overhead.

Accepted Answer

The answer of The Cavy Company estimates that the factory...

Question 15

The document authorizing the issuance of materials from the storeroom is the:

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 16

A summary of the time tickets for August follows:
   Present the journal entries to record (a) the labor cost incurred and (b) the application of factory overhead to production for August. The factory overhead rate is 70% of direct labor cost.

Accepted Answer

The answer of A summary of the time tickets for...

Question 17

Put the following in the order of the flow of manufacturing costs for a company
a. Closing under/over applied factory overhead to cost of goods sold
b. Materials purchased
c. Factory labor used and factory overhead incurred in production
d. Completed jobs moved to finished goods
e. Factory overhead applied to jobs according to the predetermined overhead rate
f. Materials requisitioned to jobs
g. Selling of finished product
h. Preparation of financial statements to determine gross profit

Accepted Answer

b. Materials purchased
f. Materials requ

Question 18

Nonmanufacturing costs are generally classified into two categories: selling and administrative.

Accepted Answer

A) True 
 B)False

Question 19

When a job is completed in a service organization, the job costs are transferred to the

Accepted Answer

A)  work in process account. 
B)  cost of services account. 
C)  finished goods account. 
D)  cost of goods sold account. 
A)  work in process account. 
B)  cost of services account. 
C)  finished goods account. 
D)  cost of goods sold account.

Question 20

A process cost accounting system accumulates costs for each of the departments or processes within the factory.

Accepted Answer

A) True 
 B)False

Exam 19: Job Order Costing

The document that serves as the basis for recording direct labor on a job cost sheet is the time card.

Scooby Company has applied $567,988 of overhead into production on Jobs in the Work in Process account. Actual overhead at the end of the year is $575,000. What is the adjustment for over or underapplied overhead?

At the end of the year, overhead applied was $35,000,000. Actual overhead was $34,300,000. Closing over/under applied overhead into cost of goods sold would cause net income to:

The details concerning the costs incurred on each job order are accumulated in a work in process account, which is supported by a:

A staff department or unit is one directly involved in the basic objective of the organization.

Direct labor cost is an example of a period cost.

The process cost system is appropriate where few products are manufactured and each product is made to customers' specifications.

A widely used activity base for developing factory overhead rates in highly automated settings is:

A manufacturer may employ a job order cost system for some of its products and a process cost system for others.

The recording of the application of factory overhead costs to jobs would include a credit to:

The following budget data are available for Happy Company: If factory overhead is to be applied based on direct labor hours as the cost allocation base for the predetermined overhead rate, the amount of overhead applied into production is

The document authorizing the issuance of materials from the storeroom is the:

A summary of the time tickets for August follows: Present the journal entries to record (a) the labor cost incurred and (b) the application of factory overhead to production for August. The factory overhead rate is 70% of direct labor cost.

Nonmanufacturing costs are generally classified into two categories: selling and administrative.

When a job is completed in a service organization, the job costs are transferred to the

A process cost accounting system accumulates costs for each of the departments or processes within the factory.

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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