Question 1

Luca Company over applied manufacturing overhead during 2020.Which one of the following is part of the year-end entry to dispose of the over-applied amount assuming the amount is material?

Accepted Answer

A) an increase to Finished Goods 
B) a decrease to Applied Overhead 
C) a decrease to Work in Process Inventory 
D) an increase to Cost of Goods Sold

Question 2

A job-order cost system

Accepted Answer

A) is most appropriate when products that are produced do not have their own distinguishing characteristics. 
B) is appropriate for homogeneous products that are continuously mass produced. 
C) and a process cost system are two alternative cost accounting systems. 
D) identifies costs with a particular activity within the production process, such as mixing, or cutting.

Question 3

A company incurred indirect labour related to production jobs during 2020.Which account should increase as a result of this cost being incurred?

Accepted Answer

A) Manufacturing Overhead 
B) Operating Expenses 
C) The specific jobs recorded on the respective time ticket 
D) The Factory Labour account

Question 4

Order Online views machine hours as the best activity base for its manufacturing overhead.The estimate of overhead costs for the year for its jobs was $205,000.The company used 1,000 hours of processing on its Job B12 during the period and incurred overhead costs totalling $210,000.The budgeted machine hours for the year totalled 20,000.How much overhead should be applied to Job B12?

Accepted Answer

A) $210 
B) $10,250 
C) $10,500 
D) $205

Question 5

Chmelar Manufacturing Company developed the following data: $\begin{array}{cc}
  \text { Beginning work in process inventory } &\$60,000\
 \text {  Direct materials used} &360,000\
 \text {  Actual overhead} &120,000\
 \text { Overhead applied } &405,000\
 \text { Cost of goods manufactured } &960,000\
 \text { Ending work in process} &45,000\
\end{array}$
 How much are total manufacturing costs for the period?

Accepted Answer

A) $1,185,000 
B) $945,000 
C) $825,000 
D) $915,000

Question 6

During 2020 Caruba Manufacturing expected Job 25 to cost $75,000 of overhead, $130,000 of material, and $25,000 in labour.Caruba applied overhead based on direct labour cost.Actual production required an overhead cost of $80,000, $140,000 in materials used; and $20,000 in labour.All of the goods were completed.What amount was transferred to Finished Goods?

Accepted Answer

A) $240,000 
B) $230,000 
C) $220,000 
D) $210,000

Question 7

In a job-order cost accounting system, the Work in Process account is

Accepted Answer

A) closed at year end. 
B) a period cost. 
C) an expense. 
D) a control account.

Question 8

The denominator in a predetermined overhead rate is usually

Accepted Answer

A) actual overhead costs. 
B) estimated overhead costs. 
C) actual activity level. 
D) estimated activity level.

Question 9

Which of the following is true?

Accepted Answer

A) The Work in Process Inventory account is a subsidiary of the job-order cost sheets control account. 
B) There should be a Work in Process ledger account for each job. 
C) The transfer of direct materials to the production area causes an increase in work in process. 
D) The Work in Process inventory account includes actual rather than applied manufacturing overhead.

Question 10

Cal, Inc.showed the following amounts in its manufacturing overhead account at the end of 2020: $$\begin{array}{l}
\begin{array} { l | l } 
\text { Manufacturing}& \text {Overhead }\
\hline 20,000 & \
16,000 & 55,000 \
22,000 & 
\end{array}
\end{array}$$ Based on this information, which statement is true?

Accepted Answer

A) No manufacturing overhead has been applied. 
B) Manufacturing overhead expense will be reported in the operating section of the Income Statement in the amount of $3,000. 
C) Manufacturing overhead has been over applied. 
D) Manufacturing overhead has been under applied.

Question 11

Which one of the following is a source document that impacts the job cost sheet?

Accepted Answer

A) labour time tickets 
B) finished goods shipping documents 
C) raw material receiving slips 
D) material purchase orders

Question 12

For which one of the following is process costing used?

Accepted Answer

A) production of products which are unique to each customer 
B) production of homes 
C) production of products which are similar in nature 
D) production of in-ground swimming pools for customers

Question 13

Which of the following statements is correct?

Accepted Answer

A) Both actual costing and normal costing systems trace direct costs to a cost object by using actual cost data. 
B) An actual costing system is timelier than a normal costing system. 
C) An actual costing system is less accurate than a normal costing system. 
D) Both actual costing and normal costing systems will result in the same total cost of production per unit at all points in the production process.

Question 14

If a company has under-applied overhead at the end of the accounting period, how is it accounted for?

Accepted Answer

A) No entry occurs. 
B) It is transferred to Finished Goods with the other job costs. 
C) It is debited to Cost of Goods Sold. 
D) It is credited to Cost of Goods Sold.

Question 15

Which one of the following correctly describes job-order costing?

Accepted Answer

A) They have distinguishing characteristics. 
B) A series of connected manufacturing processes is necessary. 
C) Homogeneous goods are being produced. 
D) Large batches are produced.

Question 16

Globe Manufacturing Company's Manufacturing Overhead account has a credit balance at the end of a period.What does this imply?

Accepted Answer

A) Actual overhead costs were less than overhead costs applied to jobs. 
B) Actual overhead costs were greater than overhead costs applied to jobs. 
C) Actual overhead costs were equal to overhead costs applied to jobs. 
D) No overhead has been applied during the year.

Question 17

Which of the following is true?

Accepted Answer

A) In a job-order cost system, each entry to the Raw Material Inventory account should be accompanied by a posting to one or more job cost sheets. 
B) When direct materials are requisitioned from the storeroom, the cost of the materials should be removed from the Work in Process Inventory account and added to the job cost sheets for the individual jobs on which the material was used. 
C) Materials requisition slips indicate the receipt of materials from a supplier. 
D) Upon purchase of raw materials there is no attempt to associate the cost of materials with specific jobs or orders.

Question 18

Where would you expect to find overhead applied in the monthly financial statements?

Accepted Answer

A) an operating expense 
B) assigned to a product account 
C) a deduction of raw materials inventory 
D) a liability

Question 19

What is one of the key distinguishing features that separate a job-order costing system from a process costing system?

Accepted Answer

A) Job-order costing is best suited for small work or jobs. 
B) Process costing emphasizes larger business activities. 
C) Process costing is time-based whereas job-order costing is more item-specific. 
D) Process costing is more item-specific whereas job-order costing is more time-based.

Question 20

Which of the following is true of materials requisition slips?

Accepted Answer

A) They are prepared after the goods have been sold. 
B) They trigger a transaction which increases finished goods. 
C) They may indicate indirect materials used in production. 
D) They indicate receipt of materials from the supplier.

Exam 3: Job Order Costing

Luca Company over applied manufacturing overhead during 2020.Which one of the following is part of the year-end entry to dispose of the over-applied amount assuming the amount is material?

A job-order cost system

A company incurred indirect labour related to production jobs during 2020.Which account should increase as a result of this cost being incurred?

In a job-order cost accounting system, the Work in Process account is

The denominator in a predetermined overhead rate is usually

Which of the following is true?

Cal, Inc.showed the following amounts in its manufacturing overhead account at the end of 2020: $\begin{array}{l}\begin{array} { l | l } \text { Manufacturing}& \text {Overhead }\\\hline 20,000 & \\16,000 & 55,000 \\22,000 & \end{array}\end{array}$ Based on this information, which statement is true?

Which one of the following is a source document that impacts the job cost sheet?

For which one of the following is process costing used?

Which of the following statements is correct?

If a company has under-applied overhead at the end of the accounting period, how is it accounted for?

Which one of the following correctly describes job-order costing?

Globe Manufacturing Company's Manufacturing Overhead account has a credit balance at the end of a period.What does this imply?

Which of the following is true?

Where would you expect to find overhead applied in the monthly financial statements?

What is one of the key distinguishing features that separate a job-order costing system from a process costing system?

Which of the following is true of materials requisition slips?