Question 1

Which of the following statements is false?

Accepted Answer

A)  In job costing,costs are accumulated by job order. 
B)  In process costing,the cost per unit is found by averaging the costs incurred over the units produced. 
C)  In process costing,the production costs are assigned to each unit produced. 
D)  In job costing,the cost of each unit of a particular job is found by dividing the total cost of the job by the number of units in the job. 
A)  In job costing,costs are accumulated by job order. 
B)  In process costing,the cost per unit is found by averaging the costs incurred over the units produced. 
C)  In process costing,the production costs are assigned to each unit produced. 
D)  In job costing,the cost of each unit of a particular job is found by dividing the total cost of the job by the number of units in the job.

Question 2

If a manufacturer underestimated the manufacturing overhead budget and overestimates the activity base for the year,what is the result?

Accepted Answer

A)  Overapplied factory overhead 
B)  Underapplied factory overhead 
C)  Overstated finished goods inventory 
D)  Understated work in process inventory 
A)  Overapplied factory overhead 
B)  Underapplied factory overhead 
C)  Overstated finished goods inventory 
D)  Understated work in process inventory

Question 3

The estimates used to calculate the predetermined overhead rate:

Accepted Answer

A)  will generally prove to be incorrect to some degree 
B)  will usually result in a non-zero balance left in the manufacturing overhead account at the end of the year 
C)  are likely to result in either overapplied or underapplied overhead 
D)  All of the given answers 
A)  will generally prove to be incorrect to some degree 
B)  will usually result in a non-zero balance left in the manufacturing overhead account at the end of the year 
C)  are likely to result in either overapplied or underapplied overhead 
D)  All of the given answers

Question 4

With job costing,a job cost sheet is used to record the manufacturing overheads allocated,when finishing a specific job.

Accepted Answer

A) True 
 B)False

Question 5

The following data apply to Stratford Ltd
What was the actual manufacturing overhead incurred during the year?

Accepted Answer

A)  $22 000 
B)  $20 000 
C)  $18 000 
D)  $16 000 
A)  $22 000 
B)  $20 000 
C)  $18 000 
D)  $16 000

Question 6

Which of the following statements is not correct regarding work in process?

Accepted Answer

A)  Work in process is partially completed inventory. 
B)  Work in process consists of direct labour,direct material and allocated manufacturing overhead. 
C)  Work in process is debited as product costs are incurred. 
D)  Work in process is credited when goods are sold. 
A)  Work in process is partially completed inventory. 
B)  Work in process consists of direct labour,direct material and allocated manufacturing overhead. 
C)  Work in process is debited as product costs are incurred. 
D)  Work in process is credited when goods are sold.

Question 7

Which of the following statements correctly completes this sentence? 'For a manufacturing firm,when goods are completed and ready for sale …'

Accepted Answer

A)  the firm's total assets are increased. 
B)  the firm's total assets are decreased. 
C)  there is no change in the value of the firm's assets. 
D)  the firm's work in process inventory is increased. 
A)  the firm's total assets are increased. 
B)  the firm's total assets are decreased. 
C)  there is no change in the value of the firm's assets. 
D)  the firm's work in process inventory is increased.

Question 8

Which of the following would appear on the credit side of the overhead account?

Accepted Answer

A)  Actual overhead cost incurred in the period 
B)  Overhead applied (charged)to production 
C)  Underapplied overhead for the period 
D)  Overhead applied (charged)to production AND underapplied overhead for the period 
A)  Actual overhead cost incurred in the period 
B)  Overhead applied (charged)to production 
C)  Underapplied overhead for the period 
D)  Overhead applied (charged)to production AND underapplied overhead for the period

Question 9

The assignment of direct labour costs to individual jobs is based on:

Accepted Answer

A)  actual total payroll costs divided equally among all the jobs in process. 
B)  estimated total payroll costs divided equally among all the jobs in process. 
C)  the actual time spent on each job multiplied by the wage rate. 
D)  the estimated time spent on each job multiplied by the wage rate. 
A)  actual total payroll costs divided equally among all the jobs in process. 
B)  estimated total payroll costs divided equally among all the jobs in process. 
C)  the actual time spent on each job multiplied by the wage rate. 
D)  the estimated time spent on each job multiplied by the wage rate.

Question 10

Manufacturing overhead:

Accepted Answer

A)  consists of direct material and direct labour costs 
B)  is easily traced to jobs 
C)  should not be assigned to individual jobs because it bears no obvious relationship to them 
D)  is a heterogeneous pool of indirect production costs that can include gas and electricity costs and depreciation 
A)  consists of direct material and direct labour costs 
B)  is easily traced to jobs 
C)  should not be assigned to individual jobs because it bears no obvious relationship to them 
D)  is a heterogeneous pool of indirect production costs that can include gas and electricity costs and depreciation

Question 11

If manufacturing overhead is overapplied for the period,a method to bring the balance of the manufacturing overhead account to zero would be:

Accepted Answer

A)  Debit cost of goods sold,credit manufacturing overhead 
B)  Debit work in process inventory,credit manufacturing overhead 
C)  Debit manufacturing overhead,credit raw materials inventory 
D)  Debit manufacturing overhead,credit cost of goods sold 
A)  Debit cost of goods sold,credit manufacturing overhead 
B)  Debit work in process inventory,credit manufacturing overhead 
C)  Debit manufacturing overhead,credit raw materials inventory 
D)  Debit manufacturing overhead,credit cost of goods sold

Question 12

The following information relates to Wells Fargo for July 2008:
Assuming underapplied or overapplied overhead is transferred to cost of goods sold at the end of the period,which of the following would be the entry to the cost of goods sold account?

Accepted Answer

A)  $80 000 debit 
B)  $80 000 credit 
C)  $40 000 credit 
D)  $40 000 debit 
A)  $80 000 debit 
B)  $80 000 credit 
C)  $40 000 credit 
D)  $40 000 debit

Question 13

Howard Corporation has a job order costing system.The following debits (credits)appear in the firm's work in process account for the month of June:
Overhead is applied at 90 per cent of direct labour cost.There is only one job still in process at the end of June,and this job has been charged with $2250 factory overhead.What was the amount of direct materials charged to that job?

Accepted Answer

A)  $2250 
B)  $2500 
C)  $4250 
D)  $9000 
A)  $2250 
B)  $2500 
C)  $4250 
D)  $9000

Question 14

Leisure Life manufactures a variety of sporting equipment.The firm's predetermined overhead application rate was 150 per cent of direct labour cost.Job 101 included direct materials of $15 000 and direct labour of $6000.The manufacturing overhead applied to Job 101 during the year was:

Accepted Answer

A)  $4000 
B)  $6000 
C)  $8000 
D)  $9000 
A)  $4000 
B)  $6000 
C)  $8000 
D)  $9000

Question 15

Managers using costing data for making decisions will usually use the following data in product cost information.

Accepted Answer

A)  Manufacturing costs 
B)  Manufacturing and upstream costs 
C)  Manufacturing and downstream costs 
D)  Manufacturing,upstream and downstream costs 
A)  Manufacturing costs 
B)  Manufacturing and upstream costs 
C)  Manufacturing and downstream costs 
D)  Manufacturing,upstream and downstream costs

Question 16

The following data apply to Stratford Ltd
Predetermined overhead rate-200 per cent of direct labour cost
Calculate the amount of direct labour cost incurred during the year.

Accepted Answer

A)  $20 000 
B)  $18 000 
C)  $10 000 
D)  None of the given answers 
A)  $20 000 
B)  $18 000 
C)  $10 000 
D)  None of the given answers

Question 17

Under Australian accounting standards,manufactured products are generally:

Accepted Answer

A)  valued at market value and expensed in the period made 
B)  valued at market value and expensed in the period sold 
C)  valued at cost and expensed in the period made 
D)  valued at cost and expensed in the period sold 
A)  valued at market value and expensed in the period made 
B)  valued at market value and expensed in the period sold 
C)  valued at cost and expensed in the period made 
D)  valued at cost and expensed in the period sold

Question 18

The following data apply to Stratford Ltd
Calculate the cost of goods manufactured during the year.

Accepted Answer

A)  $62 500 
B)  $67 500 
C)  $70 500 
D)  $72 500 
A)  $62 500 
B)  $67 500 
C)  $70 500 
D)  $72 500

Question 19

The flow of manufacturing overheads is:
Raw materials → WIP → Finished Goods → COGS

Accepted Answer

A) True 
 B)False

Question 20

Richardson & Sons purchased direct material worth $15 000 during the most recent period.At the end of the period the direct material account balance was $6000 larger than the beginning balance.Cost of goods sold was $150 000.Overhead is applied at 50 per cent of direct labour cost.Other account balances are:
What is the amount of prime cost added to production for the period?

Accepted Answer

A)  $9000 
B)  $29 000 
C)  $33 000 
D)  $36 000 
A)  $9000 
B)  $29 000 
C)  $33 000 
D)  $36 000

Which of the following statements is false?

If a manufacturer underestimated the manufacturing overhead budget and overestimates the activity base for the year,what is the result?

The estimates used to calculate the predetermined overhead rate:

With job costing,a job cost sheet is used to record the manufacturing overheads allocated,when finishing a specific job.

The following data apply to Stratford Ltd What was the actual manufacturing overhead incurred during the year?

Which of the following statements is not correct regarding work in process?

Which of the following statements correctly completes this sentence? 'For a manufacturing firm,when goods are completed and ready for sale …'

Which of the following would appear on the credit side of the overhead account?

The assignment of direct labour costs to individual jobs is based on:

Manufacturing overhead:

If manufacturing overhead is overapplied for the period,a method to bring the balance of the manufacturing overhead account to zero would be:

The following information relates to Wells Fargo for July 2008: Assuming underapplied or overapplied overhead is transferred to cost of goods sold at the end of the period,which of the following would be the entry to the cost of goods sold account?

Leisure Life manufactures a variety of sporting equipment.The firm's predetermined overhead application rate was 150 per cent of direct labour cost.Job 101 included direct materials of $15 000 and direct labour of $6000.The manufacturing overhead applied to Job 101 during the year was:

Managers using costing data for making decisions will usually use the following data in product cost information.

The following data apply to Stratford Ltd Predetermined overhead rate-200 per cent of direct labour cost Calculate the amount of direct labour cost incurred during the year.

Under Australian accounting standards,manufactured products are generally:

The following data apply to Stratford Ltd Calculate the cost of goods manufactured during the year.

The flow of manufacturing overheads is: Raw materials → WIP → Finished Goods → COGS

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters

Exam 4: Product Costing Systems

Which of the following statements is false?

If a manufacturer underestimated the manufacturing overhead budget and overestimates the activity base for the year,what is the result?

The estimates used to calculate the predetermined overhead rate:

With job costing,a job cost sheet is used to record the manufacturing overheads allocated,when finishing a specific job.

The following data apply to Stratford Ltd What was the actual manufacturing overhead incurred during the year?

Which of the following statements is not correct regarding work in process?

Which of the following statements correctly completes this sentence? 'For a manufacturing firm,when goods are completed and ready for sale …'

Which of the following would appear on the credit side of the overhead account?

The assignment of direct labour costs to individual jobs is based on:

Manufacturing overhead:

If manufacturing overhead is overapplied for the period,a method to bring the balance of the manufacturing overhead account to zero would be:

The following information relates to Wells Fargo for July 2008: Assuming underapplied or overapplied overhead is transferred to cost of goods sold at the end of the period,which of the following would be the entry to the cost of goods sold account?

Leisure Life manufactures a variety of sporting equipment.The firm's predetermined overhead application rate was 150 per cent of direct labour cost.Job 101 included direct materials of $15 000 and direct labour of $6000.The manufacturing overhead applied to Job 101 during the year was:

Managers using costing data for making decisions will usually use the following data in product cost information.

The following data apply to Stratford Ltd Predetermined overhead rate-200 per cent of direct labour cost Calculate the amount of direct labour cost incurred during the year.

Under Australian accounting standards,manufactured products are generally:

The following data apply to Stratford Ltd Calculate the cost of goods manufactured during the year.

The flow of manufacturing overheads is: Raw materials → WIP → Finished Goods → COGS

Management Accounting: Information for Creating Value and Managing Resources

Management Accounting: Cost Terms and Concepts

Cost Behaviour, Cost Drivers and Cost Estimation

Process Costing and Operation Costing

Service Costing

A Closer Look at Overhead Costs

Activity-Based Costing

Budgeting Systems

Standard Costs for Control: Direct Material and Direct Labour

Standard Costs for Control: Flexible Budgets and Manufacturing Overhead

Managing and Reporting Performance

Financial Performance Measures and Incentive Schemes

Strategic Performance Measurement Systems

Managing Suppliers and Customers

Managing Costs and Quality

Sustainability and Management Accounting

Cost Volume Profit Analysis

Information for Decisions: Relevant Costs and Benefits

Pricing and Product Mix Decisions

Information for Capital Expenditure Decisions

Filters