Deck 8: Job Costing

Question 1

A "job"

A) can only be found in a manufacturing environment.
B) is a distinct unit of production (output) with unique costs assigned to it.
C) includes period costs but not product costs.
D) will never be used for determining costing in service firms.

Answer 1

is a distinct unit of production (output) with unique costs assigned to it.

Question 2

A job cost sheet is

A) the control or overview document which compiles direct materials, direct labor, and applied manufacturing overhead costs used to complete each job.
B) the list of raw materials needed to manufacture the product.
C) the document that records the workers scheduled on a production run.
D) does not include manufacturing overhead costs.

Answer 2

the control or overview document which compiles direct materials, direct labor, and applied manufacturing overhead costs used to complete each job.

Question 3

Which of the following is not included in a job cost sheet?

A) Direct material Cost
B) Direct labor Cost
C) Product retail selling price
D) Applied manufacturing overhead Cost

Answer 3

Product retail selling price

Question 4

Which of the following is equivalent to indirect costs?

A) Direct materials
B) Manufacturing overhead
C) Direct labor
D) Accounts Receivable

Question 5

Which of the following is an indirect cost?

A) Factory electric bill
B) Direct materials cost
C) Direct labor cost
D) Salesperson's salary

Question 6

Which of the following would typically never be considered an indirect cost?

A) Factory rent
B) Direct materials cost
C) Factory utility bills
D) Factory supplies

Question 7

Raw materials cost on the balance sheet consists of

A) raw materials invoice cost plus freight-in cost.
B) raw materials invoice cost plus direct labor cost.
C) freight-in cost only.
D) indirect materials cost only.

Question 8

Raw Materials Inventory consists of

A) direct materials and direct labor.
B) direct materials only.
C) direct materials and indirect materials.
D) indirect materials only.

Question 9

The Manufacturing Overhead Control account includes

A) actual manufacturing overhead only.
B) applied manufacturing overhead only.
C) both actual manufacturing overhead and applied manufacturing overhead.
D) direct material cost and direct labor cost.

Question 10

The dollar amount of manufacturing overhead to "apply" to Work-In-Process (WIP)
Inventory is computed using which of the following formulas?

A) Budgeted Manufacturing Overhead Rate X Actual Usage of Cost Driver
B) Budgeted Manufacturing Overhead Rate X Budgeted Usage of Cost Driver
C) Actual Manufacturing Overhead Rate X Actual Usage of Cost Driver
D) Actual Manufacturing Overhead Rate X Budgeted Usage of Cost Driver

Question 11

Within the Manufacturing Overhead Control account, if no manufacturing overhead has been applied, the posted entries for "actual manufacturing overhead" will generate a

A) "debit balance" or "credit balance."
B) "debit balance."
C) "credit balance."
D) zero balance, throughout the period.

Question 12

Within the manufacturing overhead control account, if no manufacturing entries have been posted for actual manufacturing overhead incurred, then the posted entries for "applied manufacturing overhead" will

A) generate a "debit balance" or "credit balance."
B) generate a "debit balance."
C) generate a "credit balance."
D) not affect the account since "applied manufacturing overhead" amounts are not included in the manufacturing overhead control account.

Question 13

The journal entry to record actual depreciation on factory is a

A) debit to Manufacturing Overhead Control and a credit to Applied Manufacturing Overhead.
B) debit to Applied Manufacturing Overhead and a credit to Manufacturing Overhead Control.
C) debit to Manufacturing Overhead Control and a credit to Work-In-Process Inventory.
D) debit to Manufacturing Overhead Control and a credit to Accumulated Depreciation-Factory.

Question 14

In a normal costing system, another term for the budgeted overhead rate is the

A) predetermined manufacturing overhead rate.
B) actual manufacturing overhead rate.
C) cost-of-goods-sold rate.
D) work-in-process rate.

Question 15

The journal entry to move a completed job out of production is a

A) debit to Work-In-Process Inventory and credit to Finished Goods Inventory.
B) debit to Work-In-Process Inventory and credit to Raw Materials Inventory.
C) debit to Finished Goods Inventory and credit to Work-In-Process Inventory.
D) debit to Cost of Goods Sold and credit to Finished Goods Inventory.

Question 16

A "smart thermostat" learning a household's schedule and then, adjusting the temperature, accordingly, is an example of

A) job costing.
B) process costing.
C) normal costing.
D) data analytics.

Question 17

The journal entry to assign direct materials into production involves a

A) debit to Accounts Payable and a Credit to Raw Materials Inventory.
B) debit to Raw Materials Inventory and a credit to Accounts Payable.
C) debit to Raw Materials Inventory and a credit to Cash.
D) debit to Work-In-Process Inventory and a credit to Raw Materials Inventory.

Question 18

The journal entry to record the purchase of raw materials on account involves a

A) debit to Accounts Payable and a credit to Raw Materials Inventory.
B) debit to Raw Materials Inventory and a credit to Accounts Payable.
C) debit to Raw Materials Inventory and a credit to Cash.
D) debit to Work-In-Process Inventory and a credit to Raw Materials Inventory.

Question 19

The journal entry to record the assignment of indirect materials into production involves a

A) debit to Manufacturing Overhead Control and a credit to Raw Materials Inventory.
B) debit to Manufacturing Overhead Control and a credit to Finished Goods Inventory.
C) debit to Manufacturing Overhead Control and a credit to Work-In-Process Inventory.
D) debit to Cost of Goods Sold and a credit to Raw Materials Inventory.

Question 20

The journal entry to record direct labor worked on a particular job involves a

A) debit to Manufacturing Overhead Control and a credit to Salaries and Wages Payable.
B) debit to Salaries and Wages Payable and credit Work-In-Process Inventory.
C) debit to Work-In-Process Inventory and credit Finished Goods Inventory.
D) debit to Work-In-Process Inventory and credit Salaries and Wages Payable.

Question 21

The budgeted manufacturing overhead rate is determined by dividing

A) actual manufacturing overhead costs for the year by total actual usage of cost driver.
B) actual manufacturing overhead costs for the year by total budgeted usage of cost driver.
C) budgeted manufacturing overhead costs for the year by total budgeted usage of cost driver.
D) budgeted manufacturing overhead costs for the year by total actual usage of cost driver.

Question 22

The journal entry to assign applied manufacturing overhead to Work in Process inventory is a

A) debit to Work-in-Process Inventory and a credit to Manufacturing Overhead Control.
B) debit to Manufacturing Overhead Control and a credit to Work-in-Process Inventory.
C) debit to Finished Goods Inventory and a credit to Manufacturing Overhead Control.
D) debit to Raw Material Inventory and a credit to Manufacturing Overhead Control.

Question 23

Which of the following costs would typically be considered an "actual manufacturing overhead" cost?

A) Salesperson's vehicle expense
B) Factory supplies
C) Advertising expense
D) Sales commission

Question 24

Which of the following costs would typically be considered an "actual manufacturing overhead" cost?

A) Depreciation on factory equipment
B) Salesperson's salary
C) Advertising expense
D) Sales commission

Question 25

Which of the following cost would typically be considered an "actual manufacturing overhead" cost?

A) Salesperson's hourly wage
B) Newspaper advertising cost
C) Rent for factory.
D) Utility cost for sales showroom

Question 26

Which of the following would typically be considered an "Actual Manufacturing Overhead" Cost?

A) Repairs and maintenance for factory.
B) Salary of vice president of marketing.
C) Advertising costs.
D) Wages for employees on sales floor.

Question 27

Which of the following would typically be considered an "Actual Manufacturing Overhead" Cost?

A) Factory supervisor's salary.
B) Salary of vice president of marketing.
C) Advertising costs.
D) Wages for employees on sales floor

Question 28

Typically, a labor-intensive manufacturing process would most likely include which of the following as its cost driver?

A) Direct labor hours
B) Machine hours
C) Raw material pounds
D) Linear feet

Question 29

The entry to move a completed job from production to Finished Goods Inventory, involves a

A) debit to Finished Goods Inventory and credit to Raw Materials Inventory.
B) debit to Finished Goods Inventory and a credit to Cost of Goods Sold.
C) debit to Cost of Goods Sold and a credit to Finished Goods Inventory.
D) debit to Finished Goods Inventory and a credit to Work-in-Process Inventory.

Question 30

The entry to record a sale with the removal of the cost of the finished good involves a

A) debit to Finished Goods Inventory and credit to Raw Materials Inventory.
B) debit to Finished Goods Inventory and a credit to Cost of Goods Sold.
C) debit to Cost of Goods Sold and a credit to Finished Goods Inventory.
D) debit to Finished Goods Inventory and a credit to Work-in-Process Inventory.

Question 31

Product costs are transferred from the balance sheet to the income statement only when the goods are ___________.

A) completed.
B) moved from Work-In-Process Inventory.
C) sold.
D) moved to Finished Goods Inventory.

Question 32

When products are sold, the account, _________________, is debited.

A) Finished Goods Inventory
B) Work-in-Process Inventory
C) Cost of Goods Sold
D) Accounts payable

Question 33

Synergy Corporation applies manufacturing overhead based on direct labor hours. Synergy estimates its budgeted manufacturing overhead cost for the coming year to be $400,000 and its budgeted direct labor hours to be 100,000 hours. What is Synergy's budgeted overhead rate?

A) $.25 per direct labor hour
B) $25 per direct labor hour
C) $250 per direct labor hour
D) $4 per direct labor hour

Question 34

Linear Technologies Inc. applies manufacturing overhead based on machine hours. Budgeted manufacturing overhead cost for the coming year is $600,000 and budgeted machine hours are 300,000 hours. Actual manufacturing overhead totaled $80,000. Manufacturing overhead was overapplied by $20,000. How many machine hours were actually used during the year?

A) 300,000 machine hours
B) 30,000 machine hours
C) 50,000 machine hours
D) 600,000 machine hours

Question 35

The account, Raw Materials Inventory, includes which of the following costs?

A) Indirect materials, direct materials, and manufacturing overhead costs
B) Only indirect materials cost
C) Only direct materials cost
D) Direct materials and indirect materials costs

Question 36

The cost for the factory rent for a manufacturer would be

A) shown on the income statement as rent expense.
B) accounted for as a product cost, and then, assigned to the Work-in-Process Inventory.
C) expensed immediately, when incurred, regardless of when the product is sold.
D) shown on the balance sheet as rent expense.

Question 37

All of the following costs will be accounted for as product costs, except

A) factory maintenance.
B) factory utility costs.
C) factory property taxes
D) rent on corporate headquarters

Question 38

Because the Manufacturing Overhead Control account does not appear on the financial statements at the end of the period, this account must be

A) closed
B) increased
C) opened
D) expensed

Question 39

The Manufacturing Overhead Control account will

A) appear on the balance sheet as a current asset.
B) appear on the balance sheet as part of Raw Materials Inventory.
C) appear on the balance sheet as part of accumulated depreciation.
D) not appear on any financial statement.

Question 40

If a company has a sound business idea and is successful at selling its products, at the end of the year, the majority of product costs should be in:

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

Question 41

If a company chooses to "prorate and apportion" the difference between Actual Manufacturing Overhead and Applied Manufacturing Overhead, at end-of-period, the difference will be prorated and apportioned between which of the following three accounts?

A) Raw Materials Inventory, Work-In-Process Inventory, Finished Goods Inventory
B) Raw Materials Inventory, Work-In-Process Inventory, Cost of Goods Sold
C) Work-In-Process Inventory, Finished Goods Inventory, Cost of Goods Sold
D) Raw Materials Inventory, Finished Goods Inventory, Costs of Goods Sold

Question 42

The two commonly used approaches to eliminate the balance of under- or over-applied manufacturing overhead costs are

A) "Direct Write-Off Method" and "Prorated Method"
B) "Expensing Method" and "Capitalizing Method"
C) "Direct Write-Off Method" and "Capitalizing Method"
D) "Prorated Method" and "Capitalizing Method"

Question 43

In accordance with Generally Accepted Accounting Principles (GAAP), in which Balance Sheet account shown below, do we find a unit's "product cost"?

A) Cash
B) Accounts Receivable
C) Finished Goods Inventory
D) Supplies

Question 44

In accordance with Generally Accepted Accounting Principles (GAAP), in which income statement account shown below, do we find a unit's "product cost"?

A) Cost of Goods Sold
B) Revenue
C) General and Administrative Expense
D) Finished Goods Inventory

Question 45

For the most recent period, Ratesh Company recorded sales of $25,000 and Cost of Goods Sold of $5,000. What is Ratesh Company's gross margin?

A) $30,000
B) $25,000
C) $20,000
D)$5,000

Question 46

For the most recent period, Chen Company recorded sales of $25,000 and reported a gross margin of $19,000. What is Chen Company's Cost of Goods Sold?

A)$6,000
B) $19,000
C) $44,000
D) $25,000

Question 47

For the most recent period, Shanice Corporation recorded the following information:
Total sales = $100,000.
Selling price = $10/unit.
Product cost = $2/unit
What was Shanice Corporation's gross margin for the period?

A) $120,000
B)$50,000
C)$80,000
D) $180,000

Question 48

For the most recent period, Zidan Company earned sales of $120,000 and a gross margin of $30,000. If the selling price per unit was $4, what is the product cost per unit?

A) $7
B) $6
C) $5
D) $3

Question 49

A footwear manufacturer using RFID (radio-frequency identification) to track inventory through the supply chain to determine which items are selling, is an example of implementing

A) job costing.
B) process costing.
C) normal costing.
D) data analytics.

Question 50

Intentionally misrepresenting job costs is ____________

A) acceptable business practice.
B) allowable creative accounting.
C) fraud.
D) ethical.

Question 51

An accounting firm is considered to be a

A) service firm.
B) manufacturer.
C) retailer.
D) wholesaler.

Question 52

Typically, a service firm would not have which of the following items on its income statement?

A) Cost of sales
B) Sales
C) Gross margin
D) Cost of Goods Sold

Question 53

Typically, a service firm would not have which of the following accounts on its balance sheet?

A) Accounts Receivable
B) Accrued Liabilities
C) Wages Payable
D) Raw Materials Inventory

Question 54

The three most commonly used "cost drivers" for manufacturers are

A) machine hours, direct labor hours and direct labor cost.
B) machine hours, direct labor hours and raw material cost.:
C) raw materials cost, direct Labor hours and direct labor cost.:
D) machine hours, raw material cost and direct labor cost.:

Question 55

The ____________________ is the home for all accounts in an accounting system.

A) Balance sheet
B) Income statement
C) General ledger
D) Job cost sheet

Question 56

A ____________ is simply a general ledger account that contains all transactions of a certain type.

A) sub-ledger
B) journal
C) job cost sheet
D) balance sheet

Question 57

The control document which compiles direct materials, direct labor and the applied manufacturing overhead is called the

A) bill of materials
B) labor timesheet
C) materials requisition sheet
D) job cost sheet

Question 58

Akio Company uses the direct write-off method to eliminate the difference between actual MOH and applied MOH. At year-end, Akio makes this adjustment by debiting Manufacturing Overhead Control, $10,000. Assuming that at year-end, the total applied MOH was $80,000, what was the total for actual MOH, just prior to adjustment?

A) $90,000
B) $70,000
C) $80,000
D) $10,000

Question 59

Kiara Corporation is a service company and uses the direct write-off method to eliminate the difference between actual overhead and applied overhead. At year-end, Kiara makes this adjustment by crediting Manufacturing Overhead Control, $20,000. Assuming that at year-end, the total for applied overhead was $60,000, what was the total for actual overhead, just prior to adjustment?

A) $60,000
B) $70,000
C) $10,000
D) $80,000

Question 60

Assume that prior to period-end adjustments, Latonya Company reported Cost of Goods Sold of $15,000, and Sales of $85,000. If Latonya Company had underapplied manufacturing overhead of $5,000, what amount of gross margin will appear on the income statement, after adjustments?

A) $75,000
B) $80,000
C) $65,000
D) $85,000

Question 61

Recording too many costs for a job will result in

A) under-charging.
B) accurate charging.
C) over-charging.
D) balanced charging.

Question 62

Omitting costs for a job will result in

A) under-charging.
B) accurate charging.
C) over-charging.
D) balanced charging.

Question 63

Stating that a job is 90% complete, when it is in effect only 70% complete, results in

A) accurate costing.
B) balanced Charging.
C) correctly representing the completion of a job.
D) misrepresenting the completion of a job.

Question 64

Creative Accountant CPAs, LLC is a service firm, reporting a gross margin of $60,000 and adjusted Cost of Goods Sold of $50,000. What were their sales for this same period?

A) $10,000
B) $60,000
C) $110,000
D) $100,000

Question 65

Wessling Consultants, LLC is a service firm, reporting a negative gross margin of ($30,000) and adjusted Cost of Goods Sold of $60,000. What was Wessling Consultant's sales for this same period?

A) $0
B) $60,000
C) $90,000
D) $30,000

Question 66

Companies that use actual costing, include the actual MOH cost when costing a product or service, which indicates that they choose to prioritize

A) relevance/timeliness of information over the accuracy of information.
B) accuracy of information over the relevance/timeliness of that information.
C) inaccuracy of information over the relevance/timeliness of that information.
D) irrelevance of information without regard to timeliness of information.

Question 67

Product costs are classified as

A) direct materials, direct labor, and selling cost.
B) direct materials, direct labor, and administrative cost..
C) direct materials, direct labor, and manufacturing overhead cost.
D) selling costs, direct labor, and selling costs.

Question 68

When a manufacturer makes purchases of raw materials, these purchases will normally include

A) both direct and indirect materials,
B) only direct materials,
C) only indirect materials,
D) neither indirect materials nor direct materials.

Question 69

Direct labor is tracked through

A) materials requisition forms.
B) overhead application forms.
C) labor timesheets.
D) finished goods forms.

Question 70

Production costs are expensed when they are sold to adhere to the

A) Expense Recognition Principle
B) Revenue Recognition Principle
C) Under-Charging Principle
D) Over-Charging Principle

Question 71

Which of the following documents is used to make a formal request to remove items from the raw materials storage area?

A) Bill of materials.
B) Labor timesheet
C) Job cost sheet
D) Materials requisition sheet

Question 72

The journal entry to apply manufacturing overhead involves a

A) debit to Manufacturing Overhead Control and a credit to Work-in-Process Inventory.
B) debit to Work-in-Process Inventory and a credit to Manufacturing Overhead Control.
C) debit to Work-in-Process Inventory and a credit to Finished Goods Inventory.
D) debit to Work-in-Process Inventory and a credit to Cost of Goods Sold.

Question 73

At the start of each new accounting period, the Manufacturing Overhead Control account will have a ____________ balance.

A) debit
B) credit
C) zero
D) impossible to determine

Question 74

When purchasing raw materials, the cost will include items such as

A) freight-in and non-recoverable taxes.
B) advertising and salesperson's salaries.
C) direct labor cost.
D) salaries of administrators.

Question 75

Indirect labor cost is part of

A) direct Labor.
B) raw materials.
C) advertising.
D) manufacturing overhead.

Question 76

The Manufacturing Overhead Account is considered to be a(n):

A) Clearing account
B) Asset
C) Liability
D) Selling expense

Question 77

An automated manufacturing process would most likely include which of the following as its cost driver?

A) Direct labor cost
B) Machine hours
C) Raw materials pounds
D) Linear feet

Question 78

Which of the following terms best describes the concept of a cause-and-effect relationship when determining the MOH predetermined rate in a job cost environment?

A) Raw materials
B) Direct materials
C) Direct labor
D) Cost driver

Question 79

The best place to find the amounts that specific customers owe the company is in the

A) General Ledger
B) Balance Sheet
C) Income Statement
D) Accounts Receivable Sub-Ledger

Question 80

The ________________________ is the home of all accounts in an accounting system.

A) General Ledger
B) Balance Sheet
C) Income Statement
D) Job Cost Sheet