Question 1

A job order cost system traces direct materials cost to a particular job by means of:

Accepted Answer

A) Materials requisitions. 
B) A production budget. 
C) The Materials Inventory controlling account. 
D) A debit to the job cost sheet for the job. 
A) Materials requisitions. 
B) A production budget. 
C) The Materials Inventory controlling account. 
D) A debit to the job cost sheet for the job.

Question 2

Alice Blue is a wholesale dress manufacturer.In manufacturing dresses,the following costs were incurred in March:   Projected overhead for the year was $560,000 to be allocated based on project direct labor cost of $395,000.What are the total manufacturing costs for March (round your answers)?

Accepted Answer

The answer of Alice Blue is a wholesale dress manufacturer.In...

Question 3

Activity-based costing uses multiple activity bases to assign overhead costs to units of production.

Accepted Answer

A) True 
 B)False

Question 4

The Work in Process account in a job order cost accounting system will be debited for:

Accepted Answer

A) Only direct labor and direct materials. 
B) Direct labor,direct materials,and applied overhead. 
C) Direct labor,direct materials,and actual overhead. 
D) Only direct materials and applied overhead. 
A) Only direct labor and direct materials. 
B) Direct labor,direct materials,and applied overhead. 
C) Direct labor,direct materials,and actual overhead. 
D) Only direct materials and applied overhead.

Question 5

What are the factory utilities costs allocated to Baby Swings during the current month?

Accepted Answer

A) $210,000. 
B) $51,808. 
C) $34,016. 
D) $19,177. 
A) $210,000. 
B) $51,808. 
C) $34,016. 
D) $19,177.

Question 6

Benefits of activity-based costing include all of the following except:

Accepted Answer

A) More accurate measures of product costs. 
B) More accurate evaluations of product profitability. 
C) A better understanding of what "drives" manufacturing overhead costs. 
D) More subjective product pricing decisions. 
A) More accurate measures of product costs. 
B) More accurate evaluations of product profitability. 
C) A better understanding of what "drives" manufacturing overhead costs. 
D) More subjective product pricing decisions.

Question 7

If actual overhead costs are less than the amount of overhead applied to production,this indicates that manufacturing overhead is over-applied.

Accepted Answer

A) True 
 B)False

Question 8

A credit balance in the manufacturing overhead account at month end indicates that the actual overhead costs were less than the amount of overhead costs applied to jobs.

Accepted Answer

A) True 
 B)False

Question 9

Job order costing is appropriate for businesses that produce mass quantities of identical units using the same amount of direct materials,direct labor,and manufacturing overhead.

Accepted Answer

A) True 
 B)False

Question 10

An activity base is said to be a "driver" of overhead costs when the activity base:

Accepted Answer

A) Is independent of the amount of overhead cost incurred. 
B) Results in an overhead application rate greater than 100%. 
C) Is a causal factor in the amount of overhead cost incurred. 
D) Is the largest of the various types of expenditures classified as manufacturing overhead. 
A) Is independent of the amount of overhead cost incurred. 
B) Results in an overhead application rate greater than 100%. 
C) Is a causal factor in the amount of overhead cost incurred. 
D) Is the largest of the various types of expenditures classified as manufacturing overhead.

Question 11

A predetermined overhead application rate:

Accepted Answer

A) Expresses an expected relationship between overhead costs and an activity base. 
B) Can be determined by dividing budgeted direct labor cost by the budgeted factory overhead costs. 
C) Is computed at the end of the period once actual overhead costs are known. 
D) Applies the same amount of overhead to each product or service. 
A) Expresses an expected relationship between overhead costs and an activity base. 
B) Can be determined by dividing budgeted direct labor cost by the budgeted factory overhead costs. 
C) Is computed at the end of the period once actual overhead costs are known. 
D) Applies the same amount of overhead to each product or service.

Question 12

The method used by managers when comparing unit costs with budgeted costs or other measures is broadly known as:

Accepted Answer

A) Sales management. 
B) Cost control. 
C) Employee evaluation. 
D) Account reconciliation. 
A) Sales management. 
B) Cost control. 
C) Employee evaluation. 
D) Account reconciliation.

Question 13

The cost of salaries paid to employees who work in a factory maintaining the heating system is considered:

Accepted Answer

A) Direct labor. 
B) Indirect materials. 
C) Factory overhead. 
D) General and administrative costs. 
A) Direct labor. 
B) Indirect materials. 
C) Factory overhead. 
D) General and administrative costs.

Question 14

Doyle Co.uses a job order cost accounting system.At year-end the Work-in-Process Inventory controlling account showed a debit balance of $43,125.For the two jobs in process at year-end,one showed $6,000 in direct materials and $4,500 in direct labor.The job cost sheet for the second job showed $9,000 in direct materials and $6,750 in direct labor.If the company is using a predetermined overhead application rate based on direct labor cost,the rate is:

Accepted Answer

A) 50%. 
B) 100%. 
C) 150%. 
D) 200%. 
A) 50%. 
B) 100%. 
C) 150%. 
D) 200%.

Question 15

Since cost accounting systems provide managers with information necessary to manage operations,the information from cost accounting systems is not useful for external reporting purposes.

Accepted Answer

A) True 
 B)False

Question 16

If manufacturing overhead is materially over-applied,it is best to close it to:

Accepted Answer

A) Work-in-process inventory. 
B) Finished goods inventory. 
C) Cost of goods sold. 
D) Apportioned among work-in-process,finished goods,and cost of goods sold. 
A) Work-in-process inventory. 
B) Finished goods inventory. 
C) Cost of goods sold. 
D) Apportioned among work-in-process,finished goods,and cost of goods sold.

Question 17

A cost driver is an activity base that is highly correlated with manufacturing overhead costs.

Accepted Answer

A) True 
 B)False

Question 18

Allocating activity cost pools to products
Burgandy Corporation makes plastic and wooden picture frames.The company has assigned $107,000 in monthly manufacturing overhead costs to two cost pools as follows: $67,000 to power costs,and $40,000 to production set-up costs.Additional monthly data are provided below:   Power costs are allocated to products using machine hours as an activity base.Set-up costs are allocated to products based on the number of production runs each product line requires.
(a)Allocate manufacturing overhead from the activity cost pools to each product line.
(b)Compare the total per-unit cost of manufacturing plastic frames and wooden frames.
(c)On a per-unit basis,which product line appears to be most profitable?

Accepted Answer

The answer of Allocating activity cost pools to products
Burgandy Corporation...

Question 19

Marty's Metal Shop uses a job order cost system.It applies overhead to jobs at a rate of 175% of direct labor costs.Job No.2617 required $800 in direct labor costs.The job was initially budgeted to require $850 in direct labor costs.Overhead applied to Job No.2617 during the period amounted to:

Accepted Answer

A) $850. 
B) $1,400. 
C) $1,275. 
D) Some other amount. 
A) $850. 
B) $1,400. 
C) $1,275. 
D) Some other amount.

Question 20

At the end of the accounting period,applied overhead was larger than actual overhead by a material amount.The over-applied overhead should be:

Accepted Answer

A) Treated as an extraordinary gain. 
B) Treated as an extraordinary loss. 
C) Apportioned among Work in Process Inventory,Finished Goods Inventory,and Cost of Goods Sold. 
D) Ignored; actual overhead is determined only for internal control purposes. 
A) Treated as an extraordinary gain. 
B) Treated as an extraordinary loss. 
C) Apportioned among Work in Process Inventory,Finished Goods Inventory,and Cost of Goods Sold. 
D) Ignored; actual overhead is determined only for internal control purposes.

Exam 17: Job Order Cost Systems and Overhead Allocations

A job order cost system traces direct materials cost to a particular job by means of:

Alice Blue is a wholesale dress manufacturer.In manufacturing dresses,the following costs were incurred in March: Projected overhead for the year was $560,000 to be allocated based on project direct labor cost of $395,000.What are the total manufacturing costs for March (round your answers)?

Activity-based costing uses multiple activity bases to assign overhead costs to units of production.

The Work in Process account in a job order cost accounting system will be debited for:

What are the factory utilities costs allocated to Baby Swings during the current month?

Benefits of activity-based costing include all of the following except:

If actual overhead costs are less than the amount of overhead applied to production,this indicates that manufacturing overhead is over-applied.

A credit balance in the manufacturing overhead account at month end indicates that the actual overhead costs were less than the amount of overhead costs applied to jobs.

Job order costing is appropriate for businesses that produce mass quantities of identical units using the same amount of direct materials,direct labor,and manufacturing overhead.

An activity base is said to be a "driver" of overhead costs when the activity base:

A predetermined overhead application rate:

The method used by managers when comparing unit costs with budgeted costs or other measures is broadly known as:

The cost of salaries paid to employees who work in a factory maintaining the heating system is considered:

Since cost accounting systems provide managers with information necessary to manage operations,the information from cost accounting systems is not useful for external reporting purposes.

If manufacturing overhead is materially over-applied,it is best to close it to:

A cost driver is an activity base that is highly correlated with manufacturing overhead costs.

Marty's Metal Shop uses a job order cost system.It applies overhead to jobs at a rate of 175% of direct labor costs.Job No.2617 required $800 in direct labor costs.The job was initially budgeted to require $850 in direct labor costs.Overhead applied to Job No.2617 during the period amounted to:

At the end of the accounting period,applied overhead was larger than actual overhead by a material amount.The over-applied overhead should be:

Accounting: Information for Decision Making

Basic Financial Statements

The Accounting Cycle: Capturing Economic Events

The Accounting Cycle: Accruals and Deferrals

The Accounting Cycle: Reporting Financial Results

Merchandising Activities

Financial Assets

Inventories and the Cost of Goods Sold

Plant and Intangible Assets

Liabilities

Stockholders Equity: Paid-In Capital

Income and Changes in Retained Earnings

Statement of Cash Flows

Financial Statement Analysis

Global Business and Accounting

Management Accounting: a Business Partner

Process Costing

Costing and the Value Chain

Cost-Volume-Profit Analysis

Incremental Analysis

Responsibility Accounting and Transfer Pricing

Operational Budgeting

Standard Cost Systems

Rewarding Business Performance

Capital Budgeting

Forms of Business Organization

The Time Value of Money: Future Amounts and Present Values

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