Question 1

A job order cost accounting system would best fit the needs of a company that makes:

Accepted Answer

A)  Shoes and apparel. 
B)  Paint. 
C)  Cement. 
D)  Custom machinery. 
E)  Pencils and erasers. 
A)  Shoes and apparel. 
B)  Paint. 
C)  Cement. 
D)  Custom machinery. 
E)  Pencils and erasers.

Question 2

Factory overhead is often collected and summarized in a subsidiary factory overhead ledger.

Accepted Answer

A) True 
 B)False

Question 3

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 4

Bard Manufacturing uses a job order cost accounting system. During one month Bard purchased $198,000 of raw materials on credit; issued materials to production of $195,000 of which $30,000 were indirect. Bard incurred a factory payroll of $150,000, paid in cash, of which $40,000 is classified as indirect labor. Bard uses a predetermined overhead application rate of 150% of direct labor cost. Bard's beginning and ending Goods in Process Inventory are $15,500 and $27,000 respectively. Compute the cost of product transferred to Finished Goods Inventory:

Accepted Answer

A)  $558,500. 
B)  $440,000. 
C)  $413,000. 
D)  $428,500. 
E)  $415,000. 
A)  $558,500. 
B)  $440,000. 
C)  $413,000. 
D)  $428,500. 
E)  $415,000.

Question 5

A job order cost accounting system would be appropriate for a manufacturer of automobile tires.

Accepted Answer

A) True 
 B)False

Question 6

Time tickets for factory employees during the month of August are summarized as follows:
Make the necessary journal entries to record factory payroll.

Accepted Answer

The answer of Time tickets for factory employees during the...

Question 7

A pricing method where the customer pays the manufacturer for costs incurred on the job plus a negotiated amount or rate of profit is known as a _________________________ basis.

Accepted Answer

The answer of A pricing method where the customer pays...

Question 8

If it is a material amount, overapplied or underapplied overhead should be disposed of by allocating it to:

Accepted Answer

A)  Cost of goods sold and finished goods inventory. 
B)  Finished goods inventory and goods in process inventory. 
C)  Goods in process inventory, finished goods inventory, and cost of goods sold. 
D)  Goods in process inventory. 
E)  Raw materials inventory, goods in process inventory, and finished goods inventory. 
A)  Cost of goods sold and finished goods inventory. 
B)  Finished goods inventory and goods in process inventory. 
C)  Goods in process inventory, finished goods inventory, and cost of goods sold. 
D)  Goods in process inventory. 
E)  Raw materials inventory, goods in process inventory, and finished goods inventory.

Question 9

A ______________________ is a separate record maintained for each job.

Accepted Answer

The answer of A ______________________ is a separate record maintained...

Question 10

The cost of all materials issued to production are debited to Goods in Process Inventory.

Accepted Answer

A) True 
 B)False

Question 11

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 issuance of materials to production is:

Accepted Answer

A)  Debit Raw Materials Inventory $153,000; credit Accounts Payable $153,000. 
B)  Debit Goods in Process Inventory $140,000; debit Factory Overhead $24,000; credit Raw Materials Inventory $164,000. 
C)  Debit Raw Materials Inventory $195,000; credit Goods in Process Inventory $195,000. 
D)  Debit Goods in Process Inventory $140,000; debit Raw Materials Inventory $24,000; credit Materials Inventory $164,000. 
E)  Debit Finished Goods Inventory $140,000; credit Raw Materials Inventory $140,000. 
A)  Debit Raw Materials Inventory $153,000; credit Accounts Payable $153,000. 
B)  Debit Goods in Process Inventory $140,000; debit Factory Overhead $24,000; credit Raw Materials Inventory $164,000. 
C)  Debit Raw Materials Inventory $195,000; credit Goods in Process Inventory $195,000. 
D)  Debit Goods in Process Inventory $140,000; debit Raw Materials Inventory $24,000; credit Materials Inventory $164,000. 
E)  Debit Finished Goods Inventory $140,000; credit Raw Materials Inventory $140,000.

Question 12

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 13

What is a cost accounting system? What are the two basic types of cost accounting systems?

Accepted Answer

A cost accounting system is an accountin

Question 14

If one unit of Product X used $2.50 of direct materials and $3.00 of direct labor, sold for $8.00, and was assigned overhead at the rate of 30% of direct labor costs, how much gross profit was realized from this sale?

Accepted Answer

A)  $8.00. 
B)  $5.50. 
C)  $2.50. 
D)  $1.60. 
E)  $0.90. 
A)  $8.00. 
B)  $5.50. 
C)  $2.50. 
D)  $1.60. 
E)  $0.90.

Question 15

Selwyn's Service applied overhead on the basis of direct labor costs during the current year. Overhead applied was $16,500. Actual overhead incurred was $17,200.
(a) Prepare a journal entry to remove this difference assuming that it is not material.
(b) Instead, assume actual overhead incurred was only $24,000. Describe (without computations) the alternative procedure that Selwyn might use to record this material difference.

Accepted Answer

(b) Since the $7,500 differenc

Question 16

A document in a job order cost accounting system that is used to record the costs of producing a job is a(n):

Accepted Answer

A)  Job cost sheet. 
B)  Job lot. 
C)  Finished goods summary. 
D)  Process cost system. 
E)  Units-of-production sheet. 
A)  Job cost sheet. 
B)  Job lot. 
C)  Finished goods summary. 
D)  Process cost system. 
E)  Units-of-production sheet.

Question 17

Overapplied 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 18

There are two basic types of cost accounting systems: job order costing and periodic costing.

Accepted Answer

A) True 
 B)False

Question 19

Job order production systems would be appropriate for companies that produce training films for a specific customer or custom-made furniture to be used in a new five-star resort hotel.

Accepted Answer

A) True 
 B)False

Question 20

Dell Builders manufactures each house to customer specifications. It most likely would use:

Accepted Answer

A)  Process costing. 
B)  A periodic inventory system. 
C)  Unique costing. 
D)  Job order costing. 
E)  Activity-based costing. 
A)  Process costing. 
B)  A periodic inventory system. 
C)  Unique costing. 
D)  Job order costing. 
E)  Activity-based costing.

Exam 19: Job Order Cost Accounting

A job order cost accounting system would best fit the needs of a company that makes:

Factory overhead is often collected and summarized in a subsidiary factory overhead ledger.

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.

A job order cost accounting system would be appropriate for a manufacturer of automobile tires.

Time tickets for factory employees during the month of August are summarized as follows: Make the necessary journal entries to record factory payroll.

A pricing method where the customer pays the manufacturer for costs incurred on the job plus a negotiated amount or rate of profit is known as a _________________________ basis.

If it is a material amount, overapplied or underapplied overhead should be disposed of by allocating it to:

A ______________________ is a separate record maintained for each job.

The cost of all materials issued to production are debited to Goods in Process 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:

What is a cost accounting system? What are the two basic types of cost accounting systems?

If one unit of Product X used $2.50 of direct materials and $3.00 of direct labor, sold for $8.00, and was assigned overhead at the rate of 30% of direct labor costs, how much gross profit was realized from this sale?

A document in a job order cost accounting system that is used to record the costs of producing a job is a(n):

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

There are two basic types of cost accounting systems: job order costing and periodic costing.

Job order production systems would be appropriate for companies that produce training films for a specific customer or custom-made furniture to be used in a new five-star resort hotel.

Dell Builders manufactures each house to customer specifications. It most likely would use:

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

Long-Term Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Accounting for Corporations

Long-Term Liabilities

Investments and International Operations

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

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