Deck 3: Job Costing

Question 1

Companies use process costing when their products or services vary in terms of materials needed,time required to complete the product,and/or the complexity of the production process.

Answer 1

False

Question 2

The end goal of process costing and job costing at a manufacturing company is to find the cost of producing one unit of product.

Answer 2

True

Question 3

What type of product costing system would a manufacturer of plywood use?

A)Job costing
B)Process costing
C)Either job or process
D)Both job and process

Answer 3

B

Question 4

Generally Accepted Accounting Principles (GAAP)mandates the type of product costing system (job costing or process costing)that must be used by a manufacturer for external reporting.

Question 5

What types of businesses can use a job costing system?

A)Manufacturing and merchandising businesses
B)Service and manufacturing businesses
C)Service and merchandising businesses
D)Service,manufacturing,and merchandising businesses

Question 6

Which product costing system would better account for a unique product?

A)Job costing system
B)Overhead costing system
C)Process costing system
D)Product costing system

Question 7

Job costing should only be used by manufacturers.

Question 8

Job order costing might be used by a

A)candy manufacturer.
B)crude oil refinery.
C)custom home builder.
D)cereal maker.

Question 9

Job costing systems accumulate the costs for each individual job.

Question 10

Process costing is often used by professional service providers,such as law firms.

Question 11

Which of the following is most likely to use job order costing?

A)DuPont Chemical
B)Ashley Custom Furnishings
C)Exxon-Mobile (gasoline)
D)General Mills (cereal)

Question 12

Job costing is used by companies that produce large numbers of identical units of production in a continuous fashion.

Question 13

A food and beverage company like Pepsi would most likely use process costing.

Question 14

Companies should always use job costing rather than process costing.

Question 15

All manufacturers use either a pure process costing system or a pure job costing system.

Question 16

What type of product costing system would a manufacturer of luxury yachts use?

A)Job costing
B)Process costing
C)Either job or process
D)Both job and process

Question 17

What are the two basic types of costing systems?

A)Job costing and process costing
B)Periodic costing and perpetual costing
C)Product costing and materials inventory costing
D)Periodic costing and process costing

Question 18

Which of the following is an example of an industry that would use a process costing rather than a job costing-system?

A)Boeing Jets
B)Coca-Cola
C)Centex Custom Homes
D)Snyder & Lewis,Attorneys at Law

Question 19

Job costing is most likely used in which of the following industries?

A)Chemicals
B)Food and beverage
C)Pharmaceuticals
D)Commercial building construction

Question 20

An example of an industry that uses process costing might be a

A)custom printer.
B)company that makes cement.
C)shipbuilder.
D)homebuilder.

Question 21

When raw materials are transferred out of the storeroom to the factory,their cost is transferred out of raw materials inventory and into finished goods inventory.

Question 22

A production schedule indicates the quantity and types of inventory that are scheduled to be manufactured during the period.

Question 23

Which of these documents informs the storeroom to send specific materials to the factory floor?

A)Receiving report
B)Bill of materials
C)Materials requisition
D)Purchase order

Question 24

A type of costing used for many similar products is called

A)batch costing.
B)process costing.
C)service costing.
D)job costing.

Question 25

The quantities of incoming shipments of raw materials are counted and recorded on a receiving report.

Question 26

The system for assigning costs to unique cost objects is called

A)time costing.
B)process costing.
C)service costing.
D)job costing.

Question 27

A job cost record is a document that accumulates direct materials costs,direct labour costs and manufacturing overhead costs assigned to jobs.

Question 28

A production schedule always covers a one-year period of time.

Question 29

Briefly explain the difference between job order and process costing and give examples of each.

Question 30

When the products are shipped to customers,the cost of manufacturing those products becomes Cost of Goods Sold (COGS)shown on the company's balance sheet.

Question 31

The bill of materials lists all of the raw materials needed to manufacture the job.

Question 32

At a manufacturing company,inventory flows from work in process inventory,to raw materials inventory,to finished goods inventory.

Question 33

The assignment of direct and indirect materials to cost objects reduces

A)finished goods inventory.
B)manufacturing overhead.
C)raw materials inventory.
D)work in process inventory.

Question 34

A labour time record identifies the employee and the amount of time the employee spent on a particular job.

Question 35

A receiving report is used to order needed materials from suppliers.

Question 36

When direct materials are requisitioned,they flow directly into

A)cost of goods sold.
B)finished goods inventory.
C)manufacturing overhead.
D)work in process inventory.

Question 37

Which of these documents substantiates the balance of the raw materials inventory account shown on the company's balance sheet?

A)Raw materials records
B)Bill of materials
C)Materials requisition
D)Labour time record

Question 38

Which of these documents are used to accumulate the costs of a job?

A)Labour time record
B)Materials inventory requisition form
C)Job cost record
D)Bill of materials

Question 39

A receiving report is typically a duplicate of the purchase order,but without the quantity pre-listed on the form.

Question 40

Custom Cedar Products (CCP)manufactures a line of outdoor furniture.In April,CCP received an order Outdoor Spaces for ten 36 inch planter.The order from Outdoor Spaces became Job 1405 at CCP.A Materials requisition for Job 1405 is presented in the following section.In addition to the materials requisition,the labour time records (partial)or the week that these tables were made are presented.Other products were also being produced during that week,so not all labour belongs to Job 1405,but all labour belonging to Job 1405 is shown.



Requirements:
1.Calculate the total for the Materials Requisition form.Post the information from the Materials Requisition form to the Job Cost Record.
2.Complete the labour time records for each of the employees and post the information to Job1405 to the Job Cost Record.
3.Complete the Job Cost Record.

Question 41

A source document for tracking employee hours is called a

A)job cost record.
B)process costing.
C)labour time record.
D)job costing.

Question 42

Which comes third in the flow of costs?

A)Cost of goods sold
B)Finished goods inventory
C)Raw materials inventory
D)Work in process inventory

Question 43

Custom Cedar Products (CCP)manufactures a line of outdoor furniture.In May,CCP received an order Outdoor Spaces for 20 thirty inch planter.The order from Outdoor Spaces became Job 2100 at CCP.
A Materials requisition for Job 2100 is presented in the following section.In addition to the materials requisition,the labour time records (partial)or the week that these tables were made are presented.Other products were also being produced during that week,so not all labour belongs to Job 2100,but all labour belonging to Job 2100 is shown.



Requirements:
1.Calculate the total for the Materials Requisition form.Post the information from the Materials Requisition form to the Job Cost Record.
2.Complete the labour time records for each of the employees and post the information to Job2100 to the Job Cost Record.
3.Complete the Job Cost Record.

Question 44

Custom Cedar Products (CCP)manufactures a line of outdoor furniture.In June,CCP received an order Outdoor Spaces for 25,54 inch tables with umbrella stand.The order from Outdoor Spaces became Job 3300 at CCP.A Materials requisition for Job 3300 is presented in the following section.In addition to the materials requisition,the labour time records (partial)or the week that these tables were made are presented.Other products were also being produced during that week,so not all labour belongs to Job 3300,but all labour belonging to Job 3300 is shown.



Requirements:
1.Calculate the total for the Materials Requisition form.Post the information from the Materials Requisition form to the Job Cost Record.
2.Complete the labour time records for each of the employees and post the information to Job3300 to the Job Cost Record.
3.Complete the Job Cost Record.

Question 45

Which comes last in the flow of costs?

A)Cost of goods sold
B)Finished goods inventory
C)Raw materials inventory
D)Work in process inventory

Question 46

Manufacturing overhead costs can be directly traced to jobs.

Question 47

For a manufacturer that uses job costing,show the order of the cost flow through the following accounts by numbering them from 1 to 4.

Question 48

Payroll costs for factory employees who do not work directly on the product are considered

A)direct labour.
B)manufacturing overhead.
C)selling expenses.
D)administrative costs.

Question 49

Custom Cedar Products (CCP)manufactures a line of outdoor furniture.In November,CCP received an order Outdoor Spaces for six 42 inch diameter tables with umbrella stand.The order from Outdoor Spaces became job 1296 at CCP.A Materials requisition for Job 1296 is presented in the following section.In addition to the materials requisition,The labour time records (partial)or the week that these tables were made are presented.Other products were also being produced during that week,so not all labour belongs to Job 1296,but all labour belonging to Job 1296 is shown.



Requirements:
1.Calculate the total for the Materials Requisition form.Post the information from the Materials Requisition form to the Job Cost Record.
2.Complete the labour time records for each of the employees and post the information to the Job Cost Record for Job 1296.
3.Complete the Job Cost Record.

Question 50

What is the document which is prepared by manufacturing personnel to request materials for the production process?

A)Cost ticket
B)Job cost record
C)Manufacturing ticket
D)Materials requisition

Question 51

Which comes first in the flow of costs?

A)Cost of goods sold
B)Finished goods inventory
C)Raw materials inventory
D)Work in process inventory

Question 52

A document that accumulates job costs is called a

A)job cost record.
B)bill of materials.
C)labour time record.
D)production schedule.

Question 53

Briefly explain the cost flow of materials through a job costing system from the purchase to the sale.

Question 54

Generally accepted accounting principles (GAAP)mandate that manufacturing overhead must be treated as a product cost for financial reporting purposes.

Question 55

An internal request for raw materials calls for a ________ to be completed.

A)purchase order
B)bill of materials
C)materials requisition
D)labour time record

Question 56

Which comes second in the flow of costs?

A)Cost of goods sold
B)Finished goods inventory
C)Raw materials inventory
D)Work in process inventory

Question 57

When used,raw materials

A)would be classified as direct materials.
B)would be classified as direct labour.
C)would be classified as indirect materials.
D)cannot be classified based on the information provided.

Question 58

Manufacturers follow four steps to implement a manufacturing overhead allocation system.The last step is to

A)select an allocation base and estimate the total amount that will be used during the year.
B)allocate some manufacturing overhead to each individual job.
C)estimate total manufacturing overhead costs for the coming year.
D)calculate a predetermined manufacturing overhead rate.

Question 59

Here are selected data for Fritzel Company:

Manufacturing overhead is allocated at 60% of direct labour cost.
What was the amount of direct labour costs?

A)$95,000
B)$184,375
C)$209,375
D)$295,000

Question 60

Manufacturers follow four steps to implement a manufacturing overhead allocation system.The first step is to calculate a manufacturing overhead rate.

Question 61

Manufacturers follow four steps to implement a manufacturing overhead allocation system.The first step is to

A)select an allocation base and estimate the total amount that will be used during the year.
B)allocate some manufacturing overhead to each individual job.
C)estimate total manufacturing overhead costs for the coming year.
D)calculate a predetermined manufacturing overhead rate.

Question 62

Computing the predetermined manufacturing overhead rate is done

A)before the period starts.
B)during the period.
C)at the end of the period.
D)at any time.

Question 63

The key to allocating indirect manufacturing costs to jobs is to identify an appropriate allocation base.

Question 64

Assigning manufacturing overhead costs and other indirect costs is called

A)cost allocation.
B)cost driver.
C)materials requisition.
D)predetermined manufacturing overhead rate.

Question 65

The predetermined manufacturing overhead rate is calculated by dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base.

Question 66

The primary factor causing a "cost" is called a

A)cost allocation.
B)cost driver.
C)materials requisition.
D)predetermined manufacturing overhead rate.

Question 67

An estimated manufacturing overhead rate computed before the year begins is a(n)

A)cost allocation.
B)cost driver.
C)actual manufacturing overhead rate.
D)predetermined manufacturing overhead rate.

Question 68

An equal amount of manufacturing overhead should be allocated to each job.

Question 69

The predetermined manufacturing overhead rate is calculated by multiplying the total estimated manufacturing overhead costs by the total estimated amount of the allocation base.

Question 70

Manufacturers follow four steps to implement a manufacturing overhead allocation system.The last step is to calculate a manufacturing overhead rate.

Question 71

Manufacturers follow four steps to implement a manufacturing overhead allocation system.The last step is to estimate the total amount of manufacturing overhead costs for the year.

Question 72

Allocating manufacturing overhead to jobs simply means "splitting up" the total manufacturing overhead costs among the jobs produced during the year.

Question 73

Manufacturing overhead would include

A)indirect labour costs only.
B)all manufacturing costs except direct materials and direct labour.
C)all manufacturing costs.
D)indirect materials only.

Question 74

The overhead allocation base should be the cost driver of manufacturing overhead costs.

Question 75

A typical manufacturing overhead cost would be

A)direct materials.
B)sales revenue.
C)depreciation on factory equipment.
D)direct labour.

Question 76

How do you calculate the predetermined manufacturing overhead rate used to allocate
Manufacturing overhead costs?

A)By dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base
B)By dividing the total estimated amount of the allocation base by the total estimated manufacturing overhead costs
C)By dividing the total estimated manufacturing overhead costs by the total actual amount of the allocation base
D)By multiplying the total estimated manufacturing overhead costs by the total estimated amount of the allocation base

Question 77

The cost of wages paid to assembly-line workers should be treated as a manufacturing overhead cost.

Question 78

If the Garrett Company allocates overhead based on direct labour cost,what are the total actual manufacturing overhead costs?

A)$230,100
B)$173,600
C)$260,300
D)$283,800

Question 79

What is the finished goods ending inventory at Ansel Corporation?

A)$93,500
B)$293,000
C)$78,500
D)$492,500

Question 80

Here are selected data for Anthony Corporation:

What is the balance in work in process inventory at the end of the year?

A)$18,200
B)$23,800
C)$19,100
D)$55,200