Question 1

The file of job cost sheets for completed but undelivered jobs equals the balance in the Goods in Process Inventory account.

Accepted Answer

A) True 
 B)False

Question 2

Austin Company uses a job order cost accounting system. The company's executives estimated that direct labor would be $2,000,000 (200,000 hours at $10/hour) and that factory overhead would be $1,500,000 for the current period. At the end of the period, the records show that there had been 180,000 hours of direct labor and $1,200,000 of actual overhead costs. Using direct labor hours as a base, what was the predetermined overhead allocation rate?

Accepted Answer

A)  $6.00 per direct labor hour. 
B)  $7.50 per direct labor hour. 
C)  $6.67 per direct labor hour. 
D)  $8.33 per direct labor hour. 
E)  $7.08 per direct labor hour. 
A)  $6.00 per direct labor hour. 
B)  $7.50 per direct labor hour. 
C)  $6.67 per direct labor hour. 
D)  $8.33 per direct labor hour. 
E)  $7.08 per direct labor hour.

Question 3

Describe the purpose of a job cost sheet, and explain what information is found on the job cost sheet.

Accepted Answer

A job cost sheet is a separate record th

Question 4

A source document that an employee uses to record the number of hours at work and that is used to determine the total labor cost for each pay period is a:

Accepted Answer

A)  Job cost sheet. 
B)  Hours-of-production sheet. 
C)  Time ticket. 
D)  Job order ticket. 
E)  Clock card. 
A)  Job cost sheet. 
B)  Hours-of-production sheet. 
C)  Time ticket. 
D)  Job order ticket. 
E)  Clock card.

Question 5

A job order production system would be appropriate for a company that produces which one of the following items?

Accepted Answer

A)  A landscaping design for a new hospital. 
B)  Seedlings for sale in a nursery. 
C)  Sacks of yard fertilizer. 
D)  Packets of flower seeds. 
E)  Small gardening tools, including rakes, shovels, and hoes. 
A)  A landscaping design for a new hospital. 
B)  Seedlings for sale in a nursery. 
C)  Sacks of yard fertilizer. 
D)  Packets of flower seeds. 
E)  Small gardening tools, including rakes, shovels, and hoes.

Question 6

Job order production is also known as:

Accepted Answer

A)  Mass production. 
B)  Process production. 
C)  Unit production. 
D)  Customized production. 
E)  Standard costing. 
A)  Mass production. 
B)  Process production. 
C)  Unit production. 
D)  Customized production. 
E)  Standard costing.

Question 7

Underapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead allocation rate exceeds the overhead incurred during a period.

Accepted Answer

A) True 
 B)False

Question 8

Docksider Boats uses a job order cost accounting system. During one month Docksider purchased $153,000 of raw materials on credit; issued materials to production of $164,000 of which $24,000 were indirect. Docksider incurred a factory payroll of $95,000, paid in cash, of which $25,000 is classified as indirect labor. Docksider uses a predetermined overhead application rate of 170% of direct labor cost. The journal entry to record the application of factory overhead to production is:

Accepted Answer

A)  Debit Goods in Process Inventory $55,800; credit Factory Overhead $55,800. 
B)  Debit Goods in Process Inventory $161,500; credit Factory Overhead $161,500. 
C)  Debit Goods in Process Inventory $119,000; credit Factory Overhead $119,000. 
D)  Debit Factory Overhead $119,000; credit Goods in Process Inventory $119,000. 
E)  Debit Goods in Process Inventory $95,000; credit Factory Payroll $95,000. 
A)  Debit Goods in Process Inventory $55,800; credit Factory Overhead $55,800. 
B)  Debit Goods in Process Inventory $161,500; credit Factory Overhead $161,500. 
C)  Debit Goods in Process Inventory $119,000; credit Factory Overhead $119,000. 
D)  Debit Factory Overhead $119,000; credit Goods in Process Inventory $119,000. 
E)  Debit Goods in Process Inventory $95,000; credit Factory Payroll $95,000.

Question 9

A company that uses a cost accounting system normally has only two inventory accounts: Finished Goods Inventory and Goods in Process Inventory.

Accepted Answer

A) True 
 B)False

Question 10

Deltan Corp. allocates overhead to production on the basis of direct labor costs. Deltan's total estimated overhead is $450,000 and estimated direct labor is $180,000. Determine the amount of overhead to be allocated to finished goods inventory if there is $20,000 of total direct labor cost in the jobs in the finished goods inventory.

Accepted Answer

A)  $8,000. 
B)  $20,000. 
C)  $70,000. 
D)  $50,000. 
E)  $90,000. 
A)  $8,000. 
B)  $20,000. 
C)  $70,000. 
D)  $50,000. 
E)  $90,000.

Question 11

In comparison to a general accounting system for a manufacturing company, a cost accounting system places an emphasis on:

Accepted Answer

A)  Periodic inventory counts. 
B)  Total costs. 
C)  Continually updating costs of materials, goods in process, and finished goods inventories. 
D)  Products and average costs. 
E)  Large volume operations involving standardized products. 
A)  Periodic inventory counts. 
B)  Total costs. 
C)  Continually updating costs of materials, goods in process, and finished goods inventories. 
D)  Products and average costs. 
E)  Large volume operations involving standardized products.

Question 12

Selected information from the budget of the Khalid Corp. at the beginning of the year follows:

Accepted Answer

@#IMG-DLM& Calculate the predetermined o

Question 13

The collection of job cost sheets for all jobs in process makes up the subsidiary ledger controlled by the _____________________ inventory.

Accepted Answer

The answer of The collection of job cost sheets for...

Question 14

The Dina Corp. has applied overhead to jobs during the period as follows:   The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account, and this amount is not material. The entry to dispose of this remaining factory overhead balance is:

Accepted Answer

A)  Debit Cost of Goods Sold $5,600; credit Factory Overhead $5,600. 
B)  Debit Factory Overhead $5,600; credit Cost of Goods Sold $5,600. 
C)  Debit Factory Overhead $5,600; credit Goods in Process Inventory $5,600. 
D)  Debit Goods in Process Inventory $5,600; credit Factory Overhead $5,600. 
E)  No entry is needed. 
A)  Debit Cost of Goods Sold $5,600; credit Factory Overhead $5,600. 
B)  Debit Factory Overhead $5,600; credit Cost of Goods Sold $5,600. 
C)  Debit Factory Overhead $5,600; credit Goods in Process Inventory $5,600. 
D)  Debit Goods in Process Inventory $5,600; credit Factory Overhead $5,600. 
E)  No entry is needed.

Question 15

The predetermined overhead allocation rate based on direct labor cost is the ratio of estimated overhead cost for the period to estimated direct labor cost for the period.

Accepted Answer

A) True 
 B)False

Question 16

Describe how materials flow through a job order cost accounting system, and identify the key documents in the system.

Accepted Answer

When materials are received from supplie

Question 17

Using the following accounts and an overhead rate of 90% of direct labor cost, determine the amount of applied overhead.

Accepted Answer

A)  $79,200. 
B)  $167,200. 
C)  $34,320. 
D)  $88,000. 
E)  $35,376. 
A)  $79,200. 
B)  $167,200. 
C)  $34,320. 
D)  $88,000. 
E)  $35,376.

Question 18

When materials are used as indirect materials, their cost is debited to the Factory Overhead account.

Accepted Answer

A) True 
 B)False

Question 19

A company's job order cost accounting system applies overhead based on direct labor cost. The company's estimated production costs for were: direct labor, $57,600; direct materials, $76,800; and factory overhead, $9,600. Calculate the company's overhead allocation rate.

Accepted Answer

The answer of A company's job order cost accounting system...

Question 20

Any material amount of under- or overapplied factory overhead must always be closed to Cost of Goods Sold at the end of an accounting period.

Accepted Answer

A) True 
 B)False

Exam 19: Job Order Cost Accounting

The file of job cost sheets for completed but undelivered jobs equals the balance in the Goods in Process Inventory account.

Describe the purpose of a job cost sheet, and explain what information is found on the job cost sheet.

A source document that an employee uses to record the number of hours at work and that is used to determine the total labor cost for each pay period is a:

A job order production system would be appropriate for a company that produces which one of the following items?

Job order production is also known as:

Underapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead allocation rate exceeds the overhead incurred during a period.

A company that uses a cost accounting system normally has only two inventory accounts: Finished Goods Inventory and Goods in Process Inventory.

In comparison to a general accounting system for a manufacturing company, a cost accounting system places an emphasis on:

Selected information from the budget of the Khalid Corp. at the beginning of the year follows:

The collection of job cost sheets for all jobs in process makes up the subsidiary ledger controlled by the _____________________ inventory.

The Dina Corp. has applied overhead to jobs during the period as follows: The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account, and this amount is not material. The entry to dispose of this remaining factory overhead balance is:

The predetermined overhead allocation rate based on direct labor cost is the ratio of estimated overhead cost for the period to estimated direct labor cost for the period.

Describe how materials flow through a job order cost accounting system, and identify the key documents in the system.

Using the following accounts and an overhead rate of 90% of direct labor cost, determine the amount of applied overhead.

When materials are used as indirect materials, their cost is debited to the Factory Overhead account.

A company's job order cost accounting system applies overhead based on direct labor cost. The company's estimated production costs for were: direct labor, $57,600; direct materials, $76,800; and factory overhead, $9,600. Calculate the company's overhead allocation rate.

Any material amount of under- or overapplied factory overhead must always be closed to Cost of Goods Sold at the end of an accounting period.

Accounting in Business

Analyzing and Recording Transactions

Adjusting Accounts and Preparing Financial Statements

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories and Cost of Sales

Accounting Information Systems

Cash and Internal Controls

Accounting for Receivables

Plant Assets, Natural Resources, and Intangibles

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

Reporting the Statement of Cash Flows

Analysis of Financial Statements

Managerial Accounting Concepts and Principles

Process Cost Accounting

Cost Allocation and Performance Measurement

Cost-Volume-Profit Analysis

Master Budgets and Planning

Flexible Budgets and Standard Costs

Capital Budgeting and Managerial Decisions

Time Value of Money

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