Question 1

In a job order costing system, when supplies are issued from inventory to production, the Overhead account is increased.

Accepted Answer

A) True 
 B)False  True

Question 2

The following partially completed T accounts summarize the transactions of Carlton Company for last year:   The applied overhead is

Accepted Answer

A)  $28,000. 
B)  $29,000. 
C)  $30,000. 
D)  $40,000. 
A)  $28,000. 
B)  $29,000. 
C)  $30,000. 
D)  $40,000. B

Question 3

The following partially completed T accounts summarize the transactions of Carlton Company for last year:   The cost of goods sold (after adjusting for under- or overapplied overhead) is

Accepted Answer

A)  $62,300. 
B)  $63,300. 
C)  $64,300. 
D)  $65,300. 
A)  $62,300. 
B)  $63,300. 
C)  $64,300. 
D)  $65,300. D

Question 4

In a job order costing system, at the end of the accounting period, the balance in the subsidiary ledger for unfinished jobs should equal the ending balance in the Work in Process Inventory account.

Accepted Answer

A) True 
 B)False

Question 5

The following partially completed T accounts summarize the transactions of Carlton Company for last year:   The cost of goods manufactured is

Accepted Answer

A)  $57,300 
B)  $59,300 
C)  $60,300 
D)  $61,300 
A)  $57,300 
B)  $59,300 
C)  $60,300 
D)  $61,300

Question 6

A process costing system is used by companies that manufacture large amounts of similar products or liquid products.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following could not be learned by analyzing job order cost cards?

Accepted Answer

A)  The balance of Work in Process Inventory at the end of the period 
B)  The cost of all jobs done for a particular customer 
C)  The completion time of jobs yet to be completed 
D)  The type of products ordered by a particular customer 
A)  The balance of Work in Process Inventory at the end of the period 
B)  The cost of all jobs done for a particular customer 
C)  The completion time of jobs yet to be completed 
D)  The type of products ordered by a particular customer

Question 8

When direct materials are issued from inventory to production under a job order costing system, an increase is recorded in

Accepted Answer

A)  Overhead. 
B)  Work in Process Inventory. 
C)  Materials Inventory. 
D)  Finished Goods Inventory. 
A)  Overhead. 
B)  Work in Process Inventory. 
C)  Materials Inventory. 
D)  Finished Goods Inventory.

Question 9

If the applied overhead is more than actual overhead by an immaterial dollar amount, which of the following is part of the entry?

Accepted Answer

A)  A credit to the Overhead account 
B)  A debit to the Overhead account 
C)  A debit to the Cost of Goods Sold account 
D)  A debit to the Work in Process Inventory account 
A)  A credit to the Overhead account 
B)  A debit to the Overhead account 
C)  A debit to the Cost of Goods Sold account 
D)  A debit to the Work in Process Inventory account

Question 10

Morgan & Morgan is a small firm that assists clients in the preparation of their tax returns. The firm has five accountants and five researchers, and it uses job order costing to determine the cost of each client's return. The firm is divided into two departments: (1) Preparation and (2) Research & Planning. Each department has its own overhead application rate. The Preparation Department's rate is based on accountant labor costs and Research & Planning is based on the number of research hours. The following is the company's estimates for the current year's operations.
   Client No. 2006-713 was completed during April of the current year and incurred the following costs and hours:
   
a. Compute the overhead rates to be used by both departments.
b. Determine the cost of Client No. 2006-713, by department and in total.

Accepted Answer

a. Preparation Department overhead rate

Question 11

In a job order costing system, the Factory Payroll account is a clearing account.

Accepted Answer

A) True 
 B)False

Question 12

Taylor Company manufactures guitars and uses a job order costing system with a predetermined overhead rate of 110 percent per direct labor dollar.
On September 11, 2010, Those Guys ordered 200 beginner guitars which were completed on October 13, 2010. The Job Order number is 1031. Complete the job order cost card based on the following information:
 $\begin{array}{lrr} 
& \text { September } & \text { October } \
\text { Direct materials } & \$ 1,800 & \$ 1,950 \
\text { Direct labor dollars } & \$ 1,500 & \$ 1,800 \
\text { Direct labor hours } & 100 & 120 \
\text { Machine hours } & 20 & 30
\end{array}$

Accepted Answer

The answer of Taylor Company manufactures guitars and uses a...

Question 13

Job order cost cards for incomplete jobs make up the subsidiary ledger for the Finished Goods Inventory account.

Accepted Answer

A) True 
 B)False

Question 14

Accounting for the incurrence of __________ does not change significantly between job order costing and process costing.

Accepted Answer

A)  selling expenses 
B)  direct materials and conversion costs 
C)  direct materials costs 
D)  conversion costs 
A)  selling expenses 
B)  direct materials and conversion costs 
C)  direct materials costs 
D)  conversion costs

Question 15

Unique products are produced in a continuous flow production process.

Accepted Answer

A) True 
 B)False

Question 16

The Work in Process Inventory account for Corbett Company for the month ended June 30 appears below.
   Overhead is applied based on direct labor dollars. Direct material costs for the one job remaining in work in process on June 30 was $12,300. 
a. What was the overhead rate used to apply overhead to jobs?
b. Determine the amount of direct labor charged to the one remaining job.

Accepted Answer

The answer of The Work in Process Inventory account for...

Question 17

Unit costs for each job are computed by dividing

Accepted Answer

A)  estimated total costs by planned units to be produced. 
B)  actual costs by actual units sold. 
C)  cost of direct materials, direct labor, and overhead by number of units produced. 
D)  estimated total costs by actual units produced. 
A)  estimated total costs by planned units to be produced. 
B)  actual costs by actual units sold. 
C)  cost of direct materials, direct labor, and overhead by number of units produced. 
D)  estimated total costs by actual units produced.

Question 18

The typical product costing system in a factory incorporates parts of both job order costing and process costing to create a hybrid system.

Accepted Answer

A) True 
 B)False

Question 19

Teddy's To Hug, produces Teddy Bears for heart patients. Last month the company produced 5,000 bears. Using job order costing, determine the product unit cost for one bear based on the following costs: production facility utilities, $600; depreciation on production equipment, $550; indirect materials, $450; direct materials, $1,300; indirect labor, $900; direct labor, $2,500; sales commissions, $3,000; president's salary, $5,000; insurance on production facility, $700; advertising expense, $600; rent on production facility, $5,000; rent on sales office, $3,000; and legal expense, $300. Carry your answer to two decimal places.

Accepted Answer

The answer of Teddy's To Hug, produces Teddy Bears for...

Question 20

Service organizations incur little or no cost for

Accepted Answer

A)  applied overhead. 
B)  actual overhead. 
C)  materials. 
D)  labor. 
A)  applied overhead. 
B)  actual overhead. 
C)  materials. 
D)  labor.

Exam 20: Costing Systems: Job Order Costing

In a job order costing system, when supplies are issued from inventory to production, the Overhead account is increased.

The following partially completed T accounts summarize the transactions of Carlton Company for last year: The applied overhead is

The following partially completed T accounts summarize the transactions of Carlton Company for last year: The cost of goods sold (after adjusting for under- or overapplied overhead) is

In a job order costing system, at the end of the accounting period, the balance in the subsidiary ledger for unfinished jobs should equal the ending balance in the Work in Process Inventory account.

The following partially completed T accounts summarize the transactions of Carlton Company for last year: The cost of goods manufactured is

A process costing system is used by companies that manufacture large amounts of similar products or liquid products.

Which of the following could not be learned by analyzing job order cost cards?

When direct materials are issued from inventory to production under a job order costing system, an increase is recorded in

If the applied overhead is more than actual overhead by an immaterial dollar amount, which of the following is part of the entry?

In a job order costing system, the Factory Payroll account is a clearing account.

Job order cost cards for incomplete jobs make up the subsidiary ledger for the Finished Goods Inventory account.

Accounting for the incurrence of __________ does not change significantly between job order costing and process costing.

Unique products are produced in a continuous flow production process.

Unit costs for each job are computed by dividing

The typical product costing system in a factory incorporates parts of both job order costing and process costing to create a hybrid system.

Service organizations incur little or no cost for

Uses of Accounting Information and the Financial Statements

Analyzing Business Transactions

Measuring Business Income

Completing the Accounting Cycle

Financial Reporting and Analysis

The Operating Cycle and Merchandising Operations

Internal Control

Inventories

Cash and Receivables

Current Liabilities and Fair Value Accounting

Long Term Assets

Contributed Capital

Long Term Liabilities

The Corporate Income Statement and the Statement of Stockholders Equity

The Statement of Cash Flows

Financial Performance Measurement

Partnerships

The Changing Business Environment-A Managers Pers

Cost Concepts and Cost Allocation

Costing Systems Process Costing

Activity-Based Systems-Abm and Lean

Cost Behavior Analysis

The Budgeting Process

Performance Management and Evaluation

Standard Costing and Variance Analysis

Short Run Decision Analysis

Capital Investment Analysis

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