Question 1

Like a job order costing system,a process costing system is restricted to one Work in Process Inventory account.

Accepted Answer

A) True 
 B)False  False

Question 2

Job estimates must be compared with actuals for evaluating performance.

Accepted Answer

A) True 
 B)False  True

Question 3

In which of the following situations should a company use process costing rather than job order costing?

Accepted Answer

A) If the product cost is accumulated in a single Work in Process Inventory account 
B) If the product is produced based on individual customer specifications 
C) If the product is composed of mass-produced homogeneous units 
D) If the product goes through a single stage of production 
A) If the product cost is accumulated in a single Work in Process Inventory account 
B) If the product is produced based on individual customer specifications 
C) If the product is composed of mass-produced homogeneous units 
D) If the product goes through a single stage of production C

Question 4

The following information is available at the end of the period for the completed Job 73:  What is the unit cost for Job 73?

Accepted Answer

A) $2.55 
B) $3.19 
C) $1.50 
D) $3.92 
A) $2.55 
B) $3.19 
C) $1.50 
D) $3.92

Question 5

When Smith Builder's Designer House #201 is completed,Smith's

Accepted Answer

A) Work in Process Inventory is increased. 
B) total assets are increased. 
C) Work in Process Inventory is decreased. 
D) total assets are decreased. 
A) Work in Process Inventory is increased. 
B) total assets are increased. 
C) Work in Process Inventory is decreased. 
D) total assets are decreased.

Question 6

A job order costing system measures product costs

Accepted Answer

A) using process cost reports. 
B) in several Work in Process Inventory account. 
C) with regard to the process that created the cost. 
D) for each completed unit. 
A) using process cost reports. 
B) in several Work in Process Inventory account. 
C) with regard to the process that created the cost. 
D) for each completed unit.

Question 7

When planning,managers allocate overhead costs using either the traditional or ABC approach.

Accepted Answer

A) True 
 B)False

Question 8

After a job is completed,the product's unit cost can be determined from the job order cost card.

Accepted Answer

A) True 
 B)False

Question 9

In a job order costing system,indirect labor costs are recorded by increasing the Payroll Payable account and increasing the Overhead account.

Accepted Answer

A) True 
 B)False

Question 10

Applied overhead of a company exceeds actual overhead when the

Accepted Answer

A) Overhead account has a credit balance. 
B) journal entry to account for the difference involves a debit to Cost of Goods Sold. 
C) Overhead account has a debit balance. 
D) company has overspent in the overhead cost area. 
A) Overhead account has a credit balance. 
B) journal entry to account for the difference involves a debit to Cost of Goods Sold. 
C) Overhead account has a debit balance. 
D) company has overspent in the overhead cost area.

Question 11

Service organizations incur little or no cost for

Accepted Answer

A) services. 
B) overhead. 
C) materials. 
D) labor. 
A) services. 
B) overhead. 
C) materials. 
D) labor.

Question 12

An advertising company would probably use a process costing system.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) $62,300 
B) $64,000 
C) $18,000 
D) $1,700 
A) $62,300 
B) $64,000 
C) $18,000 
D) $1,700

Question 14

An allocation base used in the process cost allocation is known as

Accepted Answer

A) cost processor. 
B) cost object. 
C) cost driver. 
D) cost pooler. 
A) cost processor. 
B) cost object. 
C) cost driver. 
D) cost pooler.

Question 15

Ad-on International is an advertising company.It estimated the overhead costs for March,2014,to be $950,000 and direct labor hours to be 5,000 hours.In March,it incurred overhead costs of $1,150,000 and 5,100 labor hours. 
-What is the predetermined overhead rate for March,2014?

Accepted Answer

A) $186 per direct labor hour 
B) $190 per direct labor hour 
C) $225 per direct labor hour 
D) $230 per direct labor hour 
A) $186 per direct labor hour 
B) $190 per direct labor hour 
C) $225 per direct labor hour 
D) $230 per direct labor hour

Question 16

Which of the following is true of activity-based costing?

Accepted Answer

A) It is also called single-plantwide overhead costing. 
B) It is helpful when companies manufacture one product. 
C) It categorizes all indirect costs by activity. 
D) The total overhead costs accumulate in one cost pool. 
A) It is also called single-plantwide overhead costing. 
B) It is helpful when companies manufacture one product. 
C) It categorizes all indirect costs by activity. 
D) The total overhead costs accumulate in one cost pool.

Question 17

Pearl Inc.incurred overhead costs of $65,000 in May,2014.The overhead applied on the basis of direct labor hours for May was $90,000.The company worked for 500 hours in the month.What is the predetermined overhead rate per direct labor hour?

Accepted Answer

A) $130 per direct labor hour 
B) $180 per direct labor hour 
C) $1.38 per direct labor hour 
D) $500 per direct labor hour 
A) $130 per direct labor hour 
B) $180 per direct labor hour 
C) $1.38 per direct labor hour 
D) $500 per direct labor hour

Question 18

The applied overhead of a job is more than the actual overhead and it is considered immaterial by the company.An entry to record this would involve a

Accepted Answer

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

Question 19

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

Accepted Answer

A) $92,300. 
B) $60,300. 
C) $34,300. 
D) $66,300. 
A) $92,300. 
B) $60,300. 
C) $34,300. 
D) $66,300.

Question 20

In a job order costing system,a separate job order cost card is used for each individual job.

Accepted Answer

A) True 
 B)False

Exam 18: Costing Systems: Job Order Costing

Like a job order costing system,a process costing system is restricted to one Work in Process Inventory account.

Job estimates must be compared with actuals for evaluating performance.

In which of the following situations should a company use process costing rather than job order costing?

The following information is available at the end of the period for the completed Job 73: What is the unit cost for Job 73?

When Smith Builder's Designer House #201 is completed,Smith's

A job order costing system measures product costs

When planning,managers allocate overhead costs using either the traditional or ABC approach.

After a job is completed,the product's unit cost can be determined from the job order cost card.

In a job order costing system,indirect labor costs are recorded by increasing the Payroll Payable account and increasing the Overhead account.

Applied overhead of a company exceeds actual overhead when the

Service organizations incur little or no cost for

An advertising company would probably use a process costing system.

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

An allocation base used in the process cost allocation is known as

Ad-on International is an advertising company.It estimated the overhead costs for March,2014,to be $950,000 and direct labor hours to be 5,000 hours.In March,it incurred overhead costs of $1,150,000 and 5,100 labor hours. -What is the predetermined overhead rate for March,2014?

Which of the following is true of activity-based costing?

Pearl Inc.incurred overhead costs of $65,000 in May,2014.The overhead applied on the basis of direct labor hours for May was $90,000.The company worked for 500 hours in the month.What is the predetermined overhead rate per direct labor hour?

The applied overhead of a job is more than the actual overhead and it is considered immaterial by the company.An entry to record this would involve a

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

In a job order costing system,a separate job order cost card is used for each individual job.

Accounting Principles and the Financial Statements

Analyzing and Recording Business Transactions

Adjusting the Accounts

Completing the Accounting Cycle

Foundations of Financial Reporting and the Classified Balance Sheet

Accounting for Merchandising Operations

Inventories

Cash and Internal Control

Receivables

Long -Term Assets

Current Liabilities and Fair Value Accounting

Accounting for Partnerships

Accounting for Corporations

Long Term Liabilities

The Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting and Cost Concepts

Costing Systems Process Costing

Value-Based Systems: Activity-Based Costing and Lean Accounting

Cost-Volume-Profit Analysis

The Budgeting Process

Flexible Budgets and Performance Analysis

Standard Costing and Variance Analysis

Short-Run Decision Analysis and Capital Budgeting

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