Question 1

A system of accounting for production operations that produces timely information about inventories and manufacturing costs per unit of product is a:

Accepted Answer

A)  Finished goods accounting system. 
B)  General accounting system. 
C)  Manufacturing accounting system. 
D)  Cost accounting system. 
E)  Production accounting system. 
A)  Finished goods accounting system. 
B)  General accounting system. 
C)  Manufacturing accounting system. 
D)  Cost accounting system. 
E)  Production accounting system.

Question 2

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. The journal entry to record the allocation of the factory payroll to production is:

Accepted Answer

A)  Debit Goods in Process Inventory $150,000; credit Factory Payroll $150,000. 
B)  Debit Goods in Process Inventory $150,000; credit Cash $150,000. 
C)  Debit Factory Payroll $150,000; credit Cash $150,000. 
D)  Debit Goods in Process Inventory $110,000; debit Factory Overhead $40,000; credit Factory Payroll $150,000. 
E)  Debit Goods in Process Inventory $110,000; debit Factory Overhead $40,000; credit Cash $150,000. 
A)  Debit Goods in Process Inventory $150,000; credit Factory Payroll $150,000. 
B)  Debit Goods in Process Inventory $150,000; credit Cash $150,000. 
C)  Debit Factory Payroll $150,000; credit Cash $150,000. 
D)  Debit Goods in Process Inventory $110,000; debit Factory Overhead $40,000; credit Factory Payroll $150,000. 
E)  Debit Goods in Process Inventory $110,000; debit Factory Overhead $40,000; credit Cash $150,000.

Question 3

Penn Company uses a job order cost accounting system. In the last month, the system accumulated labor time tickets totaling $24,600 for direct labor and $4,300 for indirect labor. These costs were accumulated in Factory Payroll as they were paid. Which entry should Penn make to assign the Factory Payroll?

Accepted Answer

A)  Debit Payroll Expense $28,900; credit Cash $28,900. 
B)  Debit Payroll Expense $24,600; debit Factory Overhead $4,300; credit Factory Payroll $28,900. 
C)  Debit Goods in Process Inventory $24,600; debit Factory Overhead $4,300; credit Factory Payroll $28,900. 
D)  Debit Goods in Process Inventory $24,600; debit Factory Overhead $4,300; credit Wages Payable $28,900. 
E)  Debit Goods in Process Inventory $28,900; credit Factory Payroll $28,900. 
A)  Debit Payroll Expense $28,900; credit Cash $28,900. 
B)  Debit Payroll Expense $24,600; debit Factory Overhead $4,300; credit Factory Payroll $28,900. 
C)  Debit Goods in Process Inventory $24,600; debit Factory Overhead $4,300; credit Factory Payroll $28,900. 
D)  Debit Goods in Process Inventory $24,600; debit Factory Overhead $4,300; credit Wages Payable $28,900. 
E)  Debit Goods in Process Inventory $28,900; credit Factory Payroll $28,900.

Question 4

Cost accounting systems used by manufacturing companies are based on the:

Accepted Answer

A)  Periodic inventory system. 
B)  Perpetual inventory system. 
C)  Finished goods inventories. 
D)  Weighted average inventories. 
E)  LIFO inventory system. 
A)  Periodic inventory system. 
B)  Perpetual inventory system. 
C)  Finished goods inventories. 
D)  Weighted average inventories. 
E)  LIFO inventory system.

Question 5

A type of production that yields customized products or services for each customer is called:

Accepted Answer

A)  Customer orientation production. 
B)  Job order production. 
C)  Just-in-time production. 
D)  Job lot production. 
E)  Process production. 
A)  Customer orientation production. 
B)  Job order production. 
C)  Just-in-time production. 
D)  Job lot production. 
E)  Process production.

Question 6

A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a(n):

Accepted Answer

A)  Materials ledger card. 
B)  Materials requisition. 
C)  Purchase order. 
D)  Materials voucher. 
E)  Purchase ledger. 
A)  Materials ledger card. 
B)  Materials requisition. 
C)  Purchase order. 
D)  Materials voucher. 
E)  Purchase ledger.

Question 7

A company that produces a large number of standardized units would normally use a job order cost accounting system.

Accepted Answer

A) True 
 B)False

Question 8

Predetermined overhead rates are necessary because cost accountants use periodic inventory systems.

Accepted Answer

A) True 
 B)False

Question 9

Labor costs in production can be:

Accepted Answer

A)  Direct or indirect. 
B)  Indirect or sunk. 
C)  Direct or payroll. 
D)  Indirect or payroll. 
E)  Direct or sunk. 
A)  Direct or indirect. 
B)  Indirect or sunk. 
C)  Direct or payroll. 
D)  Indirect or payroll. 
E)  Direct or sunk.

Question 10

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. The journal entry to record the purchase of materials is:

Accepted Answer

A)  Debit Raw Materials Inventory $198,000; credit Accounts Payable $198,000. 
B)  Debit Goods in Process Inventory $198,000; credit Accounts Payable $198,000. 
C)  Debit Raw Materials Inventory $198,000; credit Goods in Process Inventory $198,000. 
D)  Debit Goods in Process Inventory $195,000; credit Raw Materials Inventory $195,000. 
E)  Debit Raw Materials Inventory $198,000; credit Finished Goods Inventory $198,000. 
A)  Debit Raw Materials Inventory $198,000; credit Accounts Payable $198,000. 
B)  Debit Goods in Process Inventory $198,000; credit Accounts Payable $198,000. 
C)  Debit Raw Materials Inventory $198,000; credit Goods in Process Inventory $198,000. 
D)  Debit Goods in Process Inventory $195,000; credit Raw Materials Inventory $195,000. 
E)  Debit Raw Materials Inventory $198,000; credit Finished Goods Inventory $198,000.

Question 11

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 12

The job cost sheet for Job number 93-471 includes the following information:
DIRECT MATERIALS:
7/12 Requisition R93-566: 20 units @ $3.50 per unit
7/13 Requisition R93-576: 18 units @ $5.00 per unit
7/13 Requisition R93-578: 4 units @ $25.00 per unit
7/14 Requisition R93-591: 40 units @ $1.25 per unit
DIRECT LABOR:
7/12 Employee 19: 8 hours @ $9.00 per hour
7/13 Employee 19: 6 hours @ $9.00 per hour
7/13 Employee 37: 6 hours @ $7.00 per hour
7/14 Employee 19: 5 hours @ $9.00 per hour
7/14 Employee 92: 5 hours @ $11.00 per hour
FACTORY OVERHEAD:
Assigned at 150% of direct labor cost.
What is the total cost of Job number 93-471?

Accepted Answer

The answer of The job cost sheet for Job number...

Question 13

BC Company uses a job order cost accounting system. During the month of April, the following events occurred:
(a) Purchased raw materials on credit, $32,000.
(b) Raw materials requisitioned: $25,800 as direct materials and $10,500 indirect materials.
(c) Paid factory payroll for the month totaling $37,700 which includes $8,200 indirect labor.
(d) Assigned the factory payroll to jobs and overhead.
Make the necessary journal entries to record the above transactions and events.

Accepted Answer

The answer of BC Company uses a job order cost...

Question 14

The following data relates to the Density Company's first operating period. Calculate the total cost of goods sold for each product.

Accepted Answer

* Overhead applied:
A: $12.00 x 60% = $7

Question 15

Prepare journal entries to record the following transactions and events for April using a job order cost accounting system.
(a) Purchased raw materials on credit, $69,000.
(b) Raw materials requisitioned: $26,000 direct and $5,400 indirect.
(c) Factory payroll totaled $46,000 (paid in cash), including $9,500 indirect labor.
(d) Paid other actual overhead costs totaling $14,500 cash.
(e) Applied overhead totaling $28,200.
(f) Finished and transferred jobs totaling $77,500.
(g) Jobs costing $58,800 were sold on credit for $103,000.

Accepted Answer

The answer of Prepare journal entries to record the following...

Question 16

When factory payroll costs for labor are allocated in a job cost accounting system:

Accepted Answer

A)  Factory Payroll is debited and Goods in Process Inventory is credited. 
B)  Goods in Process Inventory and Factory Overhead are debited and Factory Payroll is credited. 
C)  Cost of Goods Manufactured is debited and Direct Labor is credited. 
D)  Direct Labor and Indirect Labor are debited and Factory Payroll is credited. 
E)  Goods in Process Inventory is debited and Factory Payroll is credited. 
A)  Factory Payroll is debited and Goods in Process Inventory is credited. 
B)  Goods in Process Inventory and Factory Overhead are debited and Factory Payroll is credited. 
C)  Cost of Goods Manufactured is debited and Direct Labor is credited. 
D)  Direct Labor and Indirect Labor are debited and Factory Payroll is credited. 
E)  Goods in Process Inventory is debited and Factory Payroll is credited.

Question 17

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 18

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. The total manufacturing costs added during the period are:

Accepted Answer

A)  $440,000. 
B)  $470,000. 
C)  $500,000. 
D)  $570,000. 
E)  $540,000. 
A)  $440,000. 
B)  $470,000. 
C)  $500,000. 
D)  $570,000. 
E)  $540,000.

Question 19

A company that uses a job order cost accounting system incurred $10,000 of factory payroll during May. Present the May 31 entry assuming $8,000 is direct labor and $2,000 is indirect labor.

Accepted Answer

The answer of A company that uses a job order...

Question 20

Canoe Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. Canoe Company's production costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied $6,000. The overhead application rate was:

Accepted Answer

A)  5.0%. 
B)  12.0%. 
C)  20.0%. 
D)  500.0%. 
E)  16.7%. 
A)  5.0%. 
B)  12.0%. 
C)  20.0%. 
D)  500.0%. 
E)  16.7%.

A system of accounting for production operations that produces timely information about inventories and manufacturing costs per unit of product is a:

Cost accounting systems used by manufacturing companies are based on the:

A type of production that yields customized products or services for each customer is called:

A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a(n):

A company that produces a large number of standardized units would normally use a job order cost accounting system.

Predetermined overhead rates are necessary because cost accountants use periodic inventory systems.

Labor costs in production can be:

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

The following data relates to the Density Company's first operating period. Calculate the total cost of goods sold for each product.

When factory payroll costs for labor are allocated in a job cost accounting system:

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 job order cost accounting system incurred $10,000 of factory payroll during May. Present the May 31 entry assuming $8,000 is direct labor and $2,000 is indirect labor.

Canoe Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. Canoe Company's production costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied $6,000. The overhead application rate was:

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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Exam 19: Job Order Cost Accounting

A system of accounting for production operations that produces timely information about inventories and manufacturing costs per unit of product is a:

Cost accounting systems used by manufacturing companies are based on the:

A type of production that yields customized products or services for each customer is called:

A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a(n):

A company that produces a large number of standardized units would normally use a job order cost accounting system.

Predetermined overhead rates are necessary because cost accountants use periodic inventory systems.

Labor costs in production can be:

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

The following data relates to the Density Company's first operating period. Calculate the total cost of goods sold for each product.

When factory payroll costs for labor are allocated in a job cost accounting system:

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 job order cost accounting system incurred $10,000 of factory payroll during May. Present the May 31 entry assuming $8,000 is direct labor and $2,000 is indirect labor.

Canoe Company uses a job order cost accounting system and allocates its overhead on the basis of direct labor costs. Canoe Company's production costs for the year were: direct labor, $30,000; direct materials, $50,000; and factory overhead applied $6,000. The overhead application rate was:

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

Filters