Question 1

Under normal costing, which of the following statements is true regarding factory overhead?

Accepted Answer

A)  The balance in factory overhead at the end of the accounting period is closed. 
B)  Different overhead rates are used for different quantities of predicted activity. 
C)  The balance in factory overhead at the end of the accounting period is kept open. 
D)  The immaterial balance in factory overhead at the end of the accounting period is allocated to the cost of goods sold and inventory accounts. 
A)  The balance in factory overhead at the end of the accounting period is closed. 
B)  Different overhead rates are used for different quantities of predicted activity. 
C)  The balance in factory overhead at the end of the accounting period is kept open. 
D)  The immaterial balance in factory overhead at the end of the accounting period is allocated to the cost of goods sold and inventory accounts.

Question 2

The costs of a completed job are transferred from the work-in-process inventory account to the finished goods inventory account.

Accepted Answer

A) True 
 B)False

Question 3

Figure 5 - 2 The Cameron Corporation manufactures custom-made purses. The following data pertains to Job XY5:
  Factory overhead is applied using a plant-wide rate based on direct labor hours. Factory overhead was budgeted at $80,000 for the year and the direct labor hours were estimated to be 20,000. Job XY5 consists of 50 units.
Refer to Figure 5-2. What the total cost assigned to Job XY5?

Accepted Answer

A)  $5,1500 
B)  $4,400 
C)  $4,200 
D)  $4,950 
A)  $5,1500 
B)  $4,400 
C)  $4,200 
D)  $4,950

Question 4

The source document known as a time ticket assigns the direct overhead to each particular job.

Accepted Answer

A) True 
 B)False

Question 5

In a job-order costing system, direct labor costs assigned to a job are different than the costs assigned to work-in-process inventory.

Accepted Answer

A) True 
 B)False

Question 6

When a job is shipped to a customer, the finished job cost becomes the cost of the __________ sold.

Accepted Answer

The answer of When a job is shipped to a...

Question 7

Figure 5 - 3 Robinson Corporation constructs new homes. Assume that Robinson uses a job costing system. During July 2014, the following transactions occurred:
Robinson purchased $4,500 of lumber on account.
Robinson used $3,750 of lumber in production and incurred 50 hours of direct labor hours at $15 per hour.
Depreciation of $1,500 on equipment used to build new houses was recorded.
A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash.
Refer to Figure 5-3. The journal entry to record the requisition of lumber for Robinson would include a

Accepted Answer

A)  debit to Work-in-Process of $4,500. 
B)  debit to Materials Inventory of $3,750. 
C)  credit to Finished Goods of $3,750. 
D)  debit to Work-in-Process of $3,750. 
A)  debit to Work-in-Process of $4,500. 
B)  debit to Materials Inventory of $3,750. 
C)  credit to Finished Goods of $3,750. 
D)  debit to Work-in-Process of $3,750.

Question 8

Determining the dollar amounts of direct materials, direct labor, and overhead used in production involves:

Accepted Answer

A)  Job order costing 
B)  Cost accumulation 
C)  Cost assignment 
D)  Cost measurement 
A)  Job order costing 
B)  Cost accumulation 
C)  Cost assignment 
D)  Cost measurement

Question 9

Figure 5 - 3 Robinson Corporation constructs new homes. Assume that Robinson uses a job costing system. During July 2014, the following transactions occurred:
Robinson purchased $4,500 of lumber on account.
Robinson used $3,750 of lumber in production and incurred 50 hours of direct labor hours at $15 per hour.
Depreciation of $1,500 on equipment used to build new houses was recorded.
A house that was completed last period at a cost of $150,000 was sold for $180,000 in cash.
Refer to Figure 5-3. The journal entry to record labor for Robinson would include a

Accepted Answer

A)  debit to Finished Goods of $750. 
B)  debit to Wages Payable of $750. 
C)  credit to Finished Goods of $750. 
D)  debit to Work-in-Process of $750. 
A)  debit to Finished Goods of $750. 
B)  debit to Wages Payable of $750. 
C)  credit to Finished Goods of $750. 
D)  debit to Work-in-Process of $750.

Question 10

Figure 5-7 The following information is available pertaining to the Production Division of Clarkson Enterprises:
  Refer to Figure 5-7. What is the plantwide overhead rate based on direct labor hours?

Accepted Answer

A)  $1.00 
B)  $1.50 
C)  $3.00 
D)  $9.00 
A)  $1.00 
B)  $1.50 
C)  $3.00 
D)  $9.00

Question 11

Which of the following products would NOT use job-order costing?

Accepted Answer

A)  houses 
B)  chemicals 
C)  ships 
D)  custom-built furniture 
A)  houses 
B)  chemicals 
C)  ships 
D)  custom-built furniture

Question 12

Figure 5 - 2 The Cameron Corporation manufactures custom-made purses. The following data pertains to Job XY5:
  Factory overhead is applied using a plant-wide rate based on direct labor hours. Factory overhead was budgeted at $80,000 for the year and the direct labor hours were estimated to be 20,000. Job XY5 consists of 50 units.
Refer to Figure 5-2. What is the labor cost per unit for Job XY5?

Accepted Answer

A)  $4 
B)  $15 
C)  $0.80 
D)  $40 
A)  $4 
B)  $15 
C)  $0.80 
D)  $40

Question 13

Explain why actual costing systems are rarely used in practice.

Accepted Answer

Actual costing systems are rarely used i

Question 14

Manufacturers producing unique or customized products would employ a(n)

Accepted Answer

A)  process costing system. 
B)  job-costing system. 
C)  homogeneous costing system. 
D)  all of the above. 
A)  process costing system. 
B)  job-costing system. 
C)  homogeneous costing system. 
D)  all of the above.

Question 15

The following information was taken from the job cost sheet for Job 101 for McDonald Manufacturing Company:
     Job 101 was sold on account on January 25, 2015, for 160 percent of its cost. Factory overhead is applied on the basis of direct labor costs.
Required:

Accepted Answer

The answer of The following information was taken from the...

Question 16

Which of the following is a manufactured product?

Accepted Answer

A)  bungee jumping 
B)  beauty salon 
C)  automobile 
D)  restaurant 
A)  bungee jumping 
B)  beauty salon 
C)  automobile 
D)  restaurant

Question 17

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 debited to Finished Goods Inventory in 2011?

Accepted Answer

A)  $490,000 
B)  $510,000 
C)  $450,000 
D)  $550,000 
A)  $490,000 
B)  $510,000 
C)  $450,000 
D)  $550,000

Question 18

Service firms produce intangible products that are not separable from the customer.

Accepted Answer

A) True 
 B)False

Question 19

In developing unit costs, overhead costs should be assigned using activity drivers. Which would be the likely activity driver for a production process using a lathe?

Accepted Answer

A)  units produced 
B)  direct labor hours 
C)  machine hours 
D)  direct materials cost 
A)  units produced 
B)  direct labor hours 
C)  machine hours 
D)  direct materials cost

Question 20

Salazar Company completed the following transactions with respect to its manufacturing operations during October 2014:
   Required:
Prepare journal entries for each of the transactions that occurred during October 2014.

Accepted Answer

The answer of Salazar Company completed the following transactions with...

Under normal costing, which of the following statements is true regarding factory overhead?

The costs of a completed job are transferred from the work-in-process inventory account to the finished goods inventory account.

The source document known as a time ticket assigns the direct overhead to each particular job.

In a job-order costing system, direct labor costs assigned to a job are different than the costs assigned to work-in-process inventory.

When a job is shipped to a customer, the finished job cost becomes the cost of the __________ sold.

Determining the dollar amounts of direct materials, direct labor, and overhead used in production involves:

Figure 5-7 The following information is available pertaining to the Production Division of Clarkson Enterprises: Refer to Figure 5-7. What is the plantwide overhead rate based on direct labor hours?

Which of the following products would NOT use job-order costing?

Explain why actual costing systems are rarely used in practice.

Manufacturers producing unique or customized products would employ a(n)

The following information was taken from the job cost sheet for Job 101 for McDonald Manufacturing Company: Job 101 was sold on account on January 25, 2015, for 160 percent of its cost. Factory overhead is applied on the basis of direct labor costs. Required:

Which of the following is a manufactured product?

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 debited to Finished Goods Inventory in 2011?

Service firms produce intangible products that are not separable from the customer.

In developing unit costs, overhead costs should be assigned using activity drivers. Which would be the likely activity driver for a production process using a lathe?

Salazar Company completed the following transactions with respect to its manufacturing operations during October 2014: Required: Prepare journal entries for each of the transactions that occurred during October 2014.

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

Under normal costing, which of the following statements is true regarding factory overhead?

The costs of a completed job are transferred from the work-in-process inventory account to the finished goods inventory account.

The source document known as a time ticket assigns the direct overhead to each particular job.

In a job-order costing system, direct labor costs assigned to a job are different than the costs assigned to work-in-process inventory.

When a job is shipped to a customer, the finished job cost becomes the cost of the __________ sold.

Determining the dollar amounts of direct materials, direct labor, and overhead used in production involves:

Figure 5-7 The following information is available pertaining to the Production Division of Clarkson Enterprises: Refer to Figure 5-7. What is the plantwide overhead rate based on direct labor hours?

Which of the following products would NOT use job-order costing?

Explain why actual costing systems are rarely used in practice.

Manufacturers producing unique or customized products would employ a(n)

The following information was taken from the job cost sheet for Job 101 for McDonald Manufacturing Company: Job 101 was sold on account on January 25, 2015, for 160 percent of its cost. Factory overhead is applied on the basis of direct labor costs. Required:

Which of the following is a manufactured product?

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 debited to Finished Goods Inventory in 2011?

Service firms produce intangible products that are not separable from the customer.

In developing unit costs, overhead costs should be assigned using activity drivers. Which would be the likely activity driver for a production process using a lathe?

Salazar Company completed the following transactions with respect to its manufacturing operations during October 2014: Required: Prepare journal entries for each of the transactions that occurred during October 2014.

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