Question 1

Which of the following would be accounted for using a job-order cost system?

Accepted Answer

A) the production of paper clips 
B) the legal representation of a client 
C) the production of toothpaste 
D) the production of cans of paint

Question 2

To which control account do job cost sheets represent the subsidiary ledger?

Accepted Answer

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

Question 3

How is the authorization for issuing materials made when an effective system of internal control is in place?

Accepted Answer

A) by utilizing pre-numbered materials requisition slips 
B) by acquiring the materials from the delivery driver when the shipment is received from a trucking company 
C) by receiving authorization to begin a job from the production supervisor 
D) by approval from the accounting department

Question 4

Which one of the following statements is true in determining total manufacturing costs on the cost of goods manufactured schedule?

Accepted Answer

A) Actual manufacturing overhead is added to direct materials and direct labour. 
B) The schedule calculates the balance in the work in process account. 
C) Beginning work in process inventory will be less than ending work in process. 
D) Applied manufacturing overhead costs are listed for the amount of manufacturing overhead.

Question 5

Where might you find under-applied overhead on the monthly financial statements?

Accepted Answer

A) As part of Manufacturing Overhead Expense in the operating expenses section on the Income Statement 
B) As part of "Other Revenues and Gains" on the Income Statement 
C) Included with Cost of Goods Sold on the Income Statement 
D) As a prepaid expense in the current asset section of the Balance Sheet

Question 6

Why do most manufacturers use a perpetual inventory system?

Accepted Answer

A) It is a requirement of Revenue Canada for all Canadian companies. 
B) It is generally accepted accounting principles. 
C) It is required for all manufacturers. 
D) It is a characteristic of a proper cost accounting system.

Question 7

Which of the following more closely describes job-order and process accounting differences?

Accepted Answer

A) Job-order costing is best used when there are more material costs than labour costs involved. 
B) Process costing assigns costs to departments while job-order costing assigns costs to jobs. 
C) Process costing emphasizes the application of overheads more than job-order costing. 
D) Job-order costing emphasizes the application of overheads more than process costing.

Question 8

The perpetual inventory method is used in a cost accounting system.

Accepted Answer

A) True 
 B)False

Question 9

A job-order cost system and a process cost system are two alternative cost accounting systems.

Accepted Answer

A) True 
 B)False

Question 10

When goods are completed, the Finished Goods account is debited and the Work in Process Inventory account is credited.

Accepted Answer

A) True 
 B)False

Question 11

Which one of the following is an example of an activity associated with job-order cost flow?

Accepted Answer

A) having a supervisor responsible for specific inventory functions within the manufacturing process 
B) using a job cost accountant to verify accounting records 
C) assigning costs to cost of goods sold 
D) using inventory item descriptions to track inventory costs

Question 12

Which one of the following is one of the components of cost accounting?

Accepted Answer

A) It requires GAAP to be applied. 
B) It requires cost minimizing principles. 
C) It involves measuring product costs. 
D) It involves the determination of company profits.

Question 13

What is the best way to handle manufacturing overhead costs in order to get the most timely job cost information?

Accepted Answer

A) The company should account for only the direct production costs. 
B) The company should apply overhead using an estimated rate throughout the year. 
C) The company should add actual manufacturing overhead costs to jobs as soon as the overhead costs are incurred. 
D) The company should determine an allocation rate as soon as the actual costs are known, and then apply manufacturing overhead to jobs.

Question 14

Use the following information for questions 
Payne Company developed the following data for the current year: $\begin{array}{ll}
  \text { Beginning work in process inventory } &\$68,000\
 \text {  Direct materials used.} &104,000\
 \text { Actual overhead. } &88,000\
 \text { Overhead applied } &92,000\
 \text { Cost of goods manufactured } &450,000\
 \text {  Total manufacturing costs.} &428,000\
\end{array}$

-How much is Payne Company's ending work in process inventory for the year?

Accepted Answer

A) $46,000 
B) $242,000 
C) $42,000 
D) $186,000

Question 15

Which of the following pairs are control accounts?

Accepted Answer

A) Work in Process and Manufacturing Overhead 
B) Raw Materials Inventory and Wages Payable 
C) Factory Labour and Wages Payable 
D) Work in Process and Job Revenue

Question 16

Which one of the following is NEVER part of recording the issuance of raw materials in a job-order cost system?

Accepted Answer

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

Question 17

Actual manufacturing overhead costs are recorded in the respective Manufacturing Overhead Expense account as incurred.

Accepted Answer

A) True 
 B)False

Question 18

What is another name for an accounting record of a job?

Accepted Answer

A) a job cost record 
B) a job cost sheet 
C) the Work in Process control account 
D) Raw Materials inventory records

Question 19

Marion Manufacturing has the following labour costs: $\begin{array}{lc}
  \text {Factory-Gross wages  } &\$282,000\
 \text { Factory-Net wages. } &236,000\
 \text { Emplover Pavroll Taxes Pavable } &46,000\
\end{array}$
 How much should Marion debit to Factory Labour to record these amounts?

Accepted Answer

A) $518,000 
B) $328,000 
C) $282,000 
D) $564,000

Question 20

Which one of the following would most likely be a subsidiary account for Manufacturing Overhead?

Accepted Answer

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

Exam 3: Job-Order Cost Accounting

Which of the following would be accounted for using a job-order cost system?

To which control account do job cost sheets represent the subsidiary ledger?

How is the authorization for issuing materials made when an effective system of internal control is in place?

Which one of the following statements is true in determining total manufacturing costs on the cost of goods manufactured schedule?

Where might you find under-applied overhead on the monthly financial statements?

Why do most manufacturers use a perpetual inventory system?

Which of the following more closely describes job-order and process accounting differences?

The perpetual inventory method is used in a cost accounting system.

A job-order cost system and a process cost system are two alternative cost accounting systems.

When goods are completed, the Finished Goods account is debited and the Work in Process Inventory account is credited.

Which one of the following is an example of an activity associated with job-order cost flow?

Which one of the following is one of the components of cost accounting?

What is the best way to handle manufacturing overhead costs in order to get the most timely job cost information?

Which of the following pairs are control accounts?

Which one of the following is NEVER part of recording the issuance of raw materials in a job-order cost system?

Actual manufacturing overhead costs are recorded in the respective Manufacturing Overhead Expense account as incurred.

What is another name for an accounting record of a job?

Marion Manufacturing has the following labour costs: $\begin{array}{lc} \text {Factory-Gross wages } &\$282,000\\ \text { Factory-Net wages. } &236,000\\ \text { Emplover Pavroll Taxes Pavable } &46,000\\\end{array}$ How much should Marion debit to Factory Labour to record these amounts?

Which one of the following would most likely be a subsidiary account for Manufacturing Overhead?