Deck 2: Job Order Costing

Question 1

A materials requisition form is used to authorize the purchase of direct materials.A materials requisition form is used to control the physical flow of materials out of inventory and into production,and record the cost of raw materials in the accounting system.

Answer 1

False

Question 2

The total manufacturing cost for a job is based on the amount of applied overhead using the predetermined overhead rate.The total manufacturing cost is based on the amount of overhead applied using the predetermined overhead rate.

Answer 2

True

Question 3

A predetermined overhead rate is calculated by dividing estimated total manufacturing overhead cost by estimated units in the allocation base.This is the formula for the predetermined overhead rate.

Answer 3

True

Question 4

The predetermined overhead rate is estimated at the end of the period and used to assign manufacturing overhead to jobs that were completed during the period.Accountants estimate the predetermined overhead rate in advance,before the accounting period begins,and use it throughout the period to assign manufacturing overhead costs to specific jobs.

Question 5

Commissions expense and advertising expense are included as part of manufacturing overhead and treated as a product cost.Instead of being treated as part of the product cost (included in inventory and,eventually,cost of goods sold),nonmanufacturing costs such as advertising expense and commissions expense are expensed during the period in which they are incurred.

Question 6

When job order costing is used,costs are accumulated on a job cost sheet.A job cost sheet is used for each unique job,project,or customer.

Question 7

The Raw Materials Inventory account shows the cost of only direct materials purchased during the period.The Raw Materials Inventory account shows the cost of all materials purchased but not yet issued into production,and includes both direct and indirect material purchases.

Question 8

Process costing averages the total cost of the process over the number of units produced.Process costing breaks the production process down into its basic steps,or processes,and then averages the total cost of the process over the number of units produced.

Question 9

A law firm would most likely use job order costing.A law firm is likely to use job order costing,as each client receives a unique service from the firm.

Question 10

Actual manufacturing overhead costs are debited to the Manufacturing Overhead account.Actual manufacturing overhead costs are recorded on the debit side of the Manufacturing Overhead account.

Question 11

A job cost sheet will record the direct materials and direct labor used by the job but not the manufacturing overhead applied.A job cost sheet summarizes all of the costs incurred on a specific job.

Question 12

Source documents are used to assign all manufacturing costs to jobs.Direct materials and direct labor are assigned to jobs using source documents such as a materials requisition form and a labor time ticket.However,manufacturing overhead is applied using a predetermined overhead rate.

Question 13

Allocation base and cost driver are two terms that can often be used interchangably.The following terms are used somewhat interchangeably: Indirect Cost and Overhead;Assign,Allocate,and Apply;Allocation Base and Cost Driver.

Question 14

Indirect materials are recorded directly on the job cost sheet.Indirect materials are not recorded directly to the job cost sheet or Work in Process Inventory.Rather,these indirect costs are accumulated in the Manufacturing Overhead account and will be assigned to the product using the predetermined overhead rate.

Question 15

When goods are completed,a debit is made to Work in Process Inventory and a credit is made to Finished Goods Inventory.When a job is completed,its total manufacturing cost is transferred out of Work in Process Inventory with a credit,and into Finished Goods Inventory with a debit.

Question 16

Labor that can be traced to a specific job is recorded directly on the job cost sheet.If the labor can be traced to a specific job,the cost is added to the job cost sheet and the Work in Process Inventory account.

Question 17

Direct labor costs are recorded using labor time tickets.A direct labor time ticket shows how much time a worker has spent on various jobs each week,and the cost of that time.

Question 18

A marketing consulting firm would most likely use process costing.A marketing consulting firm is more likely to use job order costing,which is used by companies that offer customized or unique products or services.

Question 19

When manufacturing overhead is applied to a job,a credit is made to the Work in Process account.Applied manufacturing overhead is credited to Work in Process inventory.

Question 20

Process costing is used when all of the products produced are unique.Process costing is used when each unit of the final product comes out identical to the next.

Question 21

The source document that captures how much time a worker has spent on various jobs during the period is a

A)Cost driver sheet.
B)Materials requisition form.
C)Labor time ticket.
D)Job cost sheet.

Question 22

Which of the following types of firms would most likely use job order costing?

A)Happy-Oh Cereal Company
B)Huey,Lewey & Dewie,Attorneys
C)SoooSweet Beverage
D)C-5 Cement Company

Question 23

Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $415,000,actual labor hours were 21,000.The amount of manufacturing overhead applied to production would be

A)$400,000
B)$415,000
C)$420,000
D)$435,750

Question 24

The total amount of cost assigned to jobs that were completed during the year is the cost of goods sold.The total amount of cost assigned to jobs that were completed during the year is the cost of goods manufactured.

Question 25

Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $215,000,actual labor hours were 21,000.The amount of manufacturing overhead applied to production would be

A)$200,000
B)$215,000
C)$210,000
D)$225,750

Question 26

To eliminate underapplied overhead at the end of the year,Manufacturing Overhead would be credited and Cost of Goods Sold would be debited.If manufacturing overhead is underapplied during the year,Manufacturing Overhead will need to be credited to bring the account balance to zero,while Cost of Goods Sold would be debited.

Question 27

If there is a debit balance in the Manufacturing Overhead account at the end of the period,overhead was underapplied.If there is a debit balance in the Manufacturing Overhead account at the end of the period,actual is greater than applied overhead,so overhead was underapplied.

Question 28

Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $415,000,actual labor hours were 21,000.The predetermined manufacturing overhead rate would be

A)$20.00
B)$0.05
C)$20.75
D)$19.05

Question 29

Which of the following types of firms would most likely use process costing?

A)Superior Auto Body & Repair
B)Crammond Custom Cabinets
C)Sunshine Soft Drinks
D)Jackson & Taylor Tax Service

Question 30

All the costs assigned to an individual job are summarized on a

A)Cost driver sheet.
B)Job cost sheet.
C)Materials requisition form.
D)Labor time ticket.

Question 31

In a service firm,the cost associated with time that employees spend on training,paperwork,and supervision is considered part of manufacturing overhead.Service firms incur many indirect costs that cannot be traced to specific clients or accounts.Examples include the nonbillable time that employees spend on training,paperwork,and supervision.These indirect costs are treated just like manufacturing overhead in a factory.

Question 32

Which of the following is a characteristic of a manufacturing environment that would use job order costing?

A)Standardized production process
B)Continuous manufacturing
C)Homogenous products
D)Differentiated products

Question 33

To eliminate underapplied overhead at the end of the year,Manufacturing Overhead would be debited and Cost of Goods Sold would be credited.If manufacturing overhead is underapplied during the year,Manufacturing Overhead will need to be credited to bring the account balance to zero,while Cost of Goods Sold would be debited.

Question 34

For service firms,the primary driver used to assign cost is direct material.Because service firms tend to be labor intensive,the primary driver used to assign cost is billable hours.

Question 35

Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $215,000,actual labor hours were 21,000.The predetermined overhead rate would be

A)$10.00
B)$1.05
C)$10.75
D)$10.24

Question 36

The cost of materials used on a specific job is first captured on which source document?

A)Cost driver sheet
B)Materials requisition form
C)Labor time ticket
D)Process cost sheet

Question 37

Manufacturing overhead is applied to each job using which formula?

A)Predetermined overhead rate x actual value of the allocation base for the job
B)Predetermined overhead rate x estimated value of the allocation base for the job
C)Actual overhead rate x estimated value of the allocation base for the job
D)Predetermined overhead rate/actual value of the allocation base for the job

Question 38

The most common method for disposing of the balance in Manufacturing Overhead is to make a direct adjustment to Cost of Goods Sold.The most common method for disposing of the balance in Manufacturing Overhead is to make a direct adjustment to Cost of Goods Sold.Doing so makes sense as long as most of the jobs worked on during the period were completed and sold.

Question 39

A predetermined overhead rate is calculated using which formula?

A)Actual manufacturing overhead cost/estimated units in the allocation base
B)Estimated units in the allocation base/estimated manufacturing overhead cost
C)Estimated manufacturing overhead cost/actual units in the allocation base
D)Estimated manufacturing overhead cost/estimated units in the allocation base

Question 40

Manufacturing overhead was estimated to be $500,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $450,000,actual direct labor hours were 19,000.The predetermined overhead rate would be

A)$22.50
B)$25.00
C)$23.68
D)$26.32

Question 41

In recording the purchase of materials that are not traced to any specific job,which of the following is correct?

A)Raw Materials Inventory would be debited
B)Work in Process Inventory would be debited
C)Manufacturing Overhead would be debited
D)Manufacturing Overhead would be credited

Question 42

When direct materials are used in production,which of the following accounts is debited?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold

Question 43

Which of the following represents the cost of jobs completed but not yet sold?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold

Question 44

When units are sold,the cost associated with the units is debited to which account?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold

Question 45

Manufacturing overhead was estimated to be $500,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $450,000,actual direct labor hours were 19,000.The amount of manufacturing overhead applied to production would be

A)$500,000
B)$450,000
C)$427,500
D)$475,000

Question 46

Sawyer Company had the following information for the year: Sawyer Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours.Assume the only inventory balance is an ending Finished Goods balance of $9,000.How much overhead was applied during the year?

A)$245,000
B)$273,000
C)$280,000
D)$320,000

Question 47

When units are completed,the cost associated with the job is credited to which account?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold

Question 48

Which of the following represents the accumulated costs of jobs as yet incomplete?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold

Question 49

When manufacturing overhead is applied to production,which of the following accounts is credited?

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

Question 50

When units are completed,the cost associated with the job is debited to which account?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold

Question 51

When direct materials are used in production,which of the following accounts is credited?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold

Question 52

When materials are purchased,which of the following accounts is debited?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold

Question 53

Kilt Company had the following information for the year: Kilt Company used a predetermined overhead rate of $42 per direct labor hour for the year and estimated that direct labor hours would total 5,500 hours.Assume the only inventory balance is an ending Work in Process balance of $17,000.How much overhead was applied during the year?

A)$231,000
B)$150,000
C)$166,000
D)$210,000

Question 54

Which of the following represents the cost of materials purchased but not yet issued to production?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold

Question 55

If materials being placed into production are not traced to a specific job,

A)Raw Materials Inventory would be debited.
B)Work in Process Inventory would be debited.
C)Manufacturing Overhead would be debited.
D)Manufacturing Overhead would be crediteD.When indirect materials are placed into production,the cost is transferred from Raw Materials Inventory with a credit,and debited to Manufacturing Overhead.

Question 56

When materials are placed into production,

A)Raw Materials Inventory is debited if the materials are traced directly to the job.
B)Work in Process Inventory is debited if the materials are traced directly to the job.
C)Manufacturing Overhead is debited if the materials are traced directly to the job.
D)Raw Materials Inventory is credited only if the materials are traced directly to the job,otherwise manufacturing overhead is crediteD.When direct materials are placed into production,the cost is transferred from Raw Materials Inventory with a credit,and debited to Work in Process Inventory.

Question 57

Which of the following would be used to record the labor cost that is traceable to a specific job?

A)Raw Materials Inventory would be debited
B)Work in Process Inventory would be debited
C)Manufacturing Overhead would be debited
D)Manufacturing Overhead would be credited

Question 58

When units are sold,the cost associated with the units is credited to which account?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold

Question 59

Jackson Company had the following information for the year: Jackson Company used a predetermined overhead rate using estimated overhead of $320,000 and 8,000 estimated direct labor hours.Assume the only inventory balance is an ending Finished Goods balance of $19,000.How much overhead was applied during the year?

A)$245,000
B)$343,000
C)$360,000
D)$320,000

Question 60

Which of the following represents the cost of the jobs sold during the period?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold

Question 61

Which of the following would be used to record the factory supervisor's salary?

A)Raw Materials Inventory would be debited
B)Work in Process Inventory would be debited
C)Manufacturing Overhead would be debited
D)Manufacturing Overhead would be credited

Question 62

Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $415,000,and actual labor hours were 21,000.Which of the following would be correct?

A)Overhead is underapplied by $15,000
B)Overhead is underapplied by $5,000
C)Overhead is overapplied by $5,000
D)Overhead is overapplied by $15,000

Question 63

Which of the following would be used to record the usage of indirect manufacturing resources?

A)Raw Materials Inventory would be debited
B)Work in Process Inventory would be debited
C)Manufacturing Overhead would be debited
D)Manufacturing Overhead would be credited

Question 64

Which of the following would be used to apply manufacturing overhead to production for the period?

A)Raw Materials Inventory would be debited
B)Work in Process Inventory would be debited
C)Manufacturing Overhead would be debited
D)Work in Process Inventory would be credited

Question 65

Overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours.Actual overhead was $225,000,and actual direct labor hours were 19,000.The amount debited to the manufacturing overhead account would be

A)$250,000
B)$225,000
C)$213,750
D)$237,500

Question 66

Which of the following would be used to transfer the cost of completed goods during the period?

A)Credit to Raw Materials Inventory
B)Credit to Work in Process Inventory
C)Debit to Manufacturing Overhead
D)Credit to Manufacturing Overhead

Question 67

Which of the following would be used to apply manufacturing overhead to production for the period?

A)Credit to Raw Materials Inventory
B)Credit to Work in Process Inventory
C)Debit to Manufacturing Overhead
D)Credit to Manufacturing Overhead

Question 68

Which of the following would be used to record the depreciation of manufacturing equipment?

A)Raw Materials Inventory would be debited
B)Work in Process Inventory would be debited
C)Manufacturing Overhead would be debited
D)Manufacturing Overhead would be credited

Question 69

Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $215,000,and actual labor hours were 21,000.The amount credited to the Manufacturing Overhead account would be

A)$200,000
B)$215,000
C)$210,000
D)$225,750

Question 70

Overhead costs are overapplied if the amount applied to Work in Process is

A)greater than estimated overhead.
B)less than estimated overhead.
C)greater than actual overhead incurred.
D)less than actual overhead incurreD.Overhead cost is overapplied if the amount applied is more than the actual overhead cost.

Question 71

Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $215,000,and actual labor hours were 21,000.Which of the following would be correct?

A)Overhead is underapplied by $15,000
B)Overhead is underapplied by $5,000
C)Overhead is overapplied by $5,000
D)Overhead is overapplied by $15,000

Question 72

Which of the following would be used to record the labor cost that is not traceable to a specific job?

A)Raw Materials Inventory would be debited
B)Work in Process Inventory would be debited
C)Manufacturing Overhead would be debited
D)Manufacturing Overhead would be credited

Question 73

Which of the following would be used to record the property taxes on a factory building?

A)Raw Materials Inventory would be debited
B)Work in Process Inventory would be debited
C)Manufacturing Overhead would be debited
D)Manufacturing Overhead would be credited

Question 74

If a company uses a predetermined overhead rate,which of the following statements is correct?

A)Manufacturing Overhead will be debited for estimated overhead
B)Manufacturing Overhead will be credited for estimated overhead
C)Manufacturing Overhead will be debited for actual overhead
D)Manufacturing Overhead will be credited for actual overhead

Question 75

Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $415,000,and actual labor hours were 21,000.The amount credited to the Manufacturing Overhead account would be

A)$400,000
B)$415,000
C)$420,000
D)$435,750

Question 76

Manufacturing overhead was estimated to be $400,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $415,000,and actual labor hours were 21,000.The amount debited to the Manufacturing Overhead account would be

A)$400,000
B)$415,000
C)$420,000
D)$435,750

Question 77

Manufacturing overhead was estimated to be $250,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $225,000,and actual direct labor hours were 19,000.The amount credited to the Manufacturing Overhead account would be

A)$250,000
B)$225,000
C)$213,750
D)$237,500

Question 78

Overhead costs are underapplied if the amount applied to Work in Process is

A)greater than estimated overhead.
B)less than estimated overhead.
C)greater than actual overhead incurred.
D)less than actual overhead incurreD.Overhead cost is underapplied if the amount applied is less than the actual overhead cost.

Question 79

Manufacturing overhead was estimated to be $200,000 for the year along with 20,000 direct labor hours.Actual manufacturing overhead was $215,000,and actual labor hours were 21,000.The amount debited to the Manufacturing Overhead account would be

A)$200,000
B)$215,000
C)$210,000
D)$225,750

Question 80

Which of the following accounts is not affected by applied manufacturing overhead?

A)Raw Materials Inventory
B)Work in Process Inventory
C)Finished Goods Inventory
D)Cost of Goods Sold