Question 1

The association of production costs with the units produced is called __________ .

Accepted Answer

The answer of The association of production costs with the...

Question 2

cost assignment is the assignment of costs to products or services once the costs have been accumulated and measured.

Accepted Answer

A) True 
 B)False

Question 3

Figure 5 - 4 Lanyard Company uses a job-order costing system to account for product costs. The following information pertains to 2014:
  Factory overhead rate is $18 per direct labor hour.
Refer to Figure 5-4. What is the total amount credited to Materials Inventory for Lanyard in 2014?

Accepted Answer

A)  $480,000 
B)  $170,000 
C)  $140,000 
D)  $110,000 
A)  $480,000 
B)  $170,000 
C)  $140,000 
D)  $110,000

Question 4

Unit cost information is needed for

Accepted Answer

A)  costing inventory. 
B)  financial reporting requirements. 
C)  decision making. 
D)  all of the above. 
A)  costing inventory. 
B)  financial reporting requirements. 
C)  decision making. 
D)  all of the above.

Question 5

Stainless Steel Company has two production departments: A and
B. Stainless Steel has following budgeted overhead costs and activity:
Overhead costs Direct labor hours Machine hours
Department A $ 50,000 10,000 5,000
175,000 5,000 25,000
Total $225,000 15,000 30,000
Production data for job 20 and 21 are given below:
Dept B Dept A Dept B
Prime costs $7,000 $12,000 $22,000 $30,000
Direct labor hours 50 5 60 5
Machine hours 10 40 10 50
Job 20 Job 21
Units produced 100 100
Required:
a. Compare the costs per unit of Job 20 if Stainless Steel uses
1. a plantwide rate based on direct labor hours;
2. a plantwide rate based on machine hours;
3. departmental rates with Department A based on direct
labor hours and Department B using machine hours.
(round to 2 decimal places)
b. Why is there such a variation in the cost per unit? Which method provides the best
cost assignment?

Accepted Answer

Department B Job 20

Question 6

Direct labor costs are assigned to individual jobs using a source document known as a

Accepted Answer

A)  job-order cost sheet. 
B)  payroll check. 
C)  time sheet. 
D)  requisition form. 
A)  job-order cost sheet. 
B)  payroll check. 
C)  time sheet. 
D)  requisition form.

Question 7

Purchases of direct materials are recorded as a debit to the __________ account.

Accepted Answer

The answer of Purchases of direct materials are recorded as...

Question 8

When normal costing is used, actual overhead costs are

Accepted Answer

A)  recorded in the work-in-process account. 
B)  recorded in the overhead control account. 
C)  recorded in the finished goods account. 
D)  not recorded. 
A)  recorded in the work-in-process account. 
B)  recorded in the overhead control account. 
C)  recorded in the finished goods account. 
D)  not recorded.

Question 9

Figure 5-5 Tonneau Corporation had the following information available for October 2014:
  Factory overhead rate is 150 percent of direct labor costs.
Job cost sheets had the following balances:
  Jobs Z3 and Z4 were not completed at the end of December.
Refer to Figure 5-5. What is the cost of goods finished during October for Tonneau Corporation?

Accepted Answer

A)  $85,000 
B)  $87,500 
C)  $56,250 
D)  $53,750 
A)  $85,000 
B)  $87,500 
C)  $56,250 
D)  $53,750

Question 10

The total applied overhead at a given point in time is given by the credit balance in the __________ control account.

Accepted Answer

The answer of The total applied overhead at a given...

Question 11

Figure 5 - 1 The Nautical Corporation manufactures custom-made wood wall units. The following data pertains to Job X4A:
  Factory overhead rate is $22.50 per machine hour. Job X4A consists of 500 units.
Refer to Figure 5-1. One-half of Job X4A was sold for $10,000. What is the total amount of costs assigned to Job X4A?

Accepted Answer

A)  $20,250 
B)  $15,750 
C)  $13,500 
D)  $9,000 
A)  $20,250 
B)  $15,750 
C)  $13,500 
D)  $9,000

Question 12

Unit cost is important information for which of the following?

Accepted Answer

A)  valuing inventory 
B)  determining income 
C)  decision making 
D)  all of the above 
A)  valuing inventory 
B)  determining income 
C)  decision making 
D)  all of the above

Question 13

Samuelson Company has the following selected debit balance accounts at the end of the current year: Work-in-Process, $25,000; Finished Goods, $12,500; Cost of Goods Sold, $37,500; and Factory Overhead, $6,000. The pro-rated amount charged to Cost of Goods Sold for factory overhead will be

Accepted Answer

A)  $25,000. 
B)  $3,000. 
C)  $37,500. 
D)  $6,000. 
A)  $25,000. 
B)  $3,000. 
C)  $37,500. 
D)  $6,000.

Question 14

Activity level is the average activity usage over the long term and normal activity level is the production level for one year.

Accepted Answer

A) True 
 B)False

Question 15

Cost flow follows costs from the point they are incurred to the point they are recognized as an expense on the income statement.

Accepted Answer

A) True 
 B)False

Question 16

The effect of uniform production levels on unit production costs can be achieved

Accepted Answer

A)  by using a factory overhead rate based on long-run normal production activity level. 
B)  by using a factory overhead rate based on selling price. 
C)  by closing the factory overhead at the end of the accounting period. 
D)  by using a factory overhead rate based on different production levels for each year. 
A)  by using a factory overhead rate based on long-run normal production activity level. 
B)  by using a factory overhead rate based on selling price. 
C)  by closing the factory overhead at the end of the accounting period. 
D)  by using a factory overhead rate based on different production levels for each year.

Question 17

Heterogeneity means that services cannot be inventoried and must be consumed when performed.

Accepted Answer

A) True 
 B)False

Question 18

Manufacturing firms produce intangible products that cannot be inventoried.

Accepted Answer

A) True 
 B)False

Question 19

Which of the following firms would make extensive use of a job-order costing?

Accepted Answer

A)  dental and medical services 
B)  canned foods 
C)  discount brokers 
D)  petroleum 
A)  dental and medical services 
B)  canned foods 
C)  discount brokers 
D)  petroleum

Question 20

The __________ costing system assigns costs by the job.
or

Accepted Answer

The answer of The __________ costing system assigns costs by...

The association of production costs with the units produced is called __________ .

cost assignment is the assignment of costs to products or services once the costs have been accumulated and measured.

Figure 5 - 4 Lanyard Company uses a job-order costing system to account for product costs. The following information pertains to 2014: Factory overhead rate is $18 per direct labor hour. Refer to Figure 5-4. What is the total amount credited to Materials Inventory for Lanyard in 2014?

Unit cost information is needed for

Direct labor costs are assigned to individual jobs using a source document known as a

Purchases of direct materials are recorded as a debit to the __________ account.

When normal costing is used, actual overhead costs are

The total applied overhead at a given point in time is given by the credit balance in the __________ control account.

Unit cost is important information for which of the following?

Samuelson Company has the following selected debit balance accounts at the end of the current year: Work-in-Process, $25,000; Finished Goods, $12,500; Cost of Goods Sold, $37,500; and Factory Overhead, $6,000. The pro-rated amount charged to Cost of Goods Sold for factory overhead will be

Activity level is the average activity usage over the long term and normal activity level is the production level for one year.

Cost flow follows costs from the point they are incurred to the point they are recognized as an expense on the income statement.

The effect of uniform production levels on unit production costs can be achieved

Heterogeneity means that services cannot be inventoried and must be consumed when performed.

Manufacturing firms produce intangible products that cannot be inventoried.

Which of the following firms would make extensive use of a job-order costing?

The __________ costing system assigns costs by the job. or

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters

Exam 5: Product and Service Costing: Job-Order System

The association of production costs with the units produced is called __________ .

cost assignment is the assignment of costs to products or services once the costs have been accumulated and measured.

Figure 5 - 4 Lanyard Company uses a job-order costing system to account for product costs. The following information pertains to 2014: Factory overhead rate is $18 per direct labor hour. Refer to Figure 5-4. What is the total amount credited to Materials Inventory for Lanyard in 2014?

Unit cost information is needed for

Direct labor costs are assigned to individual jobs using a source document known as a

Purchases of direct materials are recorded as a debit to the __________ account.

When normal costing is used, actual overhead costs are

The total applied overhead at a given point in time is given by the credit balance in the __________ control account.

Unit cost is important information for which of the following?

Samuelson Company has the following selected debit balance accounts at the end of the current year: Work-in-Process, $25,000; Finished Goods, $12,500; Cost of Goods Sold, $37,500; and Factory Overhead, $6,000. The pro-rated amount charged to Cost of Goods Sold for factory overhead will be

Activity level is the average activity usage over the long term and normal activity level is the production level for one year.

Cost flow follows costs from the point they are incurred to the point they are recognized as an expense on the income statement.

The effect of uniform production levels on unit production costs can be achieved

Heterogeneity means that services cannot be inventoried and must be consumed when performed.

Manufacturing firms produce intangible products that cannot be inventoried.

Which of the following firms would make extensive use of a job-order costing?

The __________ costing system assigns costs by the job. or

Introduction to Cost Management

Basic Cost Management Concepts

Cost Behavior

Activity-Based Costing

Process Costing

Allocating Costs of Support Departments and Joint Products

Budgeting for Planning and Control Key

Standard Costing: a Functional-Based Control Approach

Decentralization: Responsibility Accounting, Performance Evaluation, and Transfer Pricing

Strategic Cost Management

Activity-Based Management

The Balanced Scorecard: Strategic-Based Control

Quality and Environmental Cost Management

Lean Accounting and Productivity Measurement

Cost-Volume-Profit Analysis

Activity Resource Usage Model and Tactical Decision Making

Pricing and Profitability Analysis

Capital Investment

Inventory Management: Economic Order Quantity, Jit, and the Theory of Constraints

Filters