Question 1

What are job cost sheets, and how are they used in a job-order cost system?

Accepted Answer

The answer of What are job cost sheets, and how...

Question 2

The use of raw materials in production is:

Accepted Answer

A) An asset source transaction. 
B) An asset use transaction. 
C) An asset exchange transaction. 
D) A claims exchange transaction.

Question 3

Process cost systems do not distinguish the cost of one unit of product from another.

Accepted Answer

A) True 
 B)False

Question 4

When manufacturing overhead is applied to production in a job order cost system, the accounting records would reflect an increase in which of the following accounts?

Accepted Answer

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

Question 5

Marion Company uses process costing and the weighted average method. The following information was available for April: During April, 1,000 units were started, and costs incurred during the month were $37,000. Ending inventory was 50% complete. Based on the information given, (A) above would equal what amount?
$$\begin{array} { | l | r | l | } 
\hline & \text { Units } & \text { Costs } \
\hline \text { Work in Process, April 1 } & 100 & \$ 3,000 \
\hline \text { Work in Process, April 30 } & 200 & \text { (A) } \
\hline
\end{array}$$

Accepted Answer

A) $8,000 
B) $3,000 
C) $4,000 
D) $3,300

Question 6

O'Hare Company, is a manufacturing firm that uses a job-order cost system to determine the costs of its products. During the current accounting period, O'Hare paid $700 for equipment rental and other indirect costs. The recognition of this event would:

Accepted Answer

A) Decrease total assets. 
B) Increase total assets. 
C) Reduce net income. 
D) Have no impact on total assets.

Question 7

Brown Company engaged in the following transactions during May. Indicate whether each is an asset source (AS), asset use (AU), or asset exchange (AE) transaction.Purchased raw materials for cash, $42,000
Used raw materials to begin jobs, $28,400
Paid wages of production employees, $18,000
Applied overhead at rate of $1.25 per direct labor dollar
Completed job that had cost $32,000
Sold goods for $44,000 cash
The goods referred to in the transaction above had cost $29,500 to complete

Accepted Answer

The answer of Brown Company engaged in the following transactions...

Question 8

In process cost systems, product costs flow through the same accounts as in a job-order cost system.

Accepted Answer

A) True 
 B)False

Question 9

Job-order and process cost systems are two different costing systems that a company chooses between based on the preference of management.

Accepted Answer

A) True 
 B)False

Question 10

All of the following are source documents used in job order cost systems except:

Accepted Answer

A) Time card. 
B) Standard cost card. 
C) Work ticket. 
D) Materials requisition.

Question 11

A laundry detergent manufacturer would most likely use:

Accepted Answer

A) Process costing. 
B) Job order costing. 
C) Hybrid order costing. 
D) Batch order costing.

Question 12

A company that uses a process cost system would calculate the cost per equivalent unit and then use that amount to allocate costs between the goods transferred out and the beginning work in process inventory.

Accepted Answer

A) True 
 B)False

Question 13

A materials requisition is sent to the purchasing agent by the materials storeroom clerk to request that additional materials be purchased.

Accepted Answer

A) True 
 B)False

Question 14

How should a company choose between a job-order cost system and a process cost system?

Accepted Answer

The answer of How should a company choose between a...

Question 15

In a job-order cost system, as goods are produced, product costs (direct material, direct labor, and overhead) are accumulated in the:

Accepted Answer

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

Question 16

If overhead was overapplied during the accounting period by an insignificant amount, the entry to close the Manufacturing Overhead account will include a:

Accepted Answer

A) Debit to Cost of Goods Sold and a credit to Manufacturing Overhead. 
B) Debit to Cost of Goods Sold and a credit to Finished Goods Inventory. 
C) Debit to Manufacturing Overhead and a credit to Cost of Goods Sold. 
D) Debit to Finished Goods Inventory and a credit to Manufacturing Overhead.

Question 17

O'Hare Company is a manufacturing firm that uses a job-order cost system to determine the costs of its products. O'Hare Company sold job #132 for $8,200 cash. The job cost sheet for that job reported total manufacturing costs of $5,900. The recognition of this event on the financial statements would include a(n):

Accepted Answer

A) Decrease to total assets and total equity. 
B) Decrease to total liabilities. 
C) Increase to total assets, total equity and net income. 
D) Decrease to net income.

Question 18

Kidd Company uses a process cost system and the weighted average method. The company had 800 units of product in its work in process inventory at the beginning of the period. During the period 3,000 additional units of product were started. At the end of the period there were 1,500 units of product in the work in process account. The ending work in process inventory was estimated to be 30% complete. The beginning work in process inventory had a balance of $4,000. Product costs totaling $84,000 were added to work in process during the period. The amount of cost in ending work in process inventory is:

Accepted Answer

A) $33,600. 
B) $48,000. 
C) $14,400. 
D) $8,400.

Question 19

The primary advantage of process cost systems is that there is no underapplied or overapplied overhead to account for.

Accepted Answer

A) True 
 B)False

Question 20

The 10,000 units in Department B that are 30% complete are equivalent to 3,000 whole units.

Accepted Answer

A) True 
 B)False

Exam 12: Job-Order, Process, and Hybrid Costing Systems

What are job cost sheets, and how are they used in a job-order cost system?

The use of raw materials in production is:

Process cost systems do not distinguish the cost of one unit of product from another.

When manufacturing overhead is applied to production in a job order cost system, the accounting records would reflect an increase in which of the following accounts?

O'Hare Company, is a manufacturing firm that uses a job-order cost system to determine the costs of its products. During the current accounting period, O'Hare paid $700 for equipment rental and other indirect costs. The recognition of this event would:

In process cost systems, product costs flow through the same accounts as in a job-order cost system.

Job-order and process cost systems are two different costing systems that a company chooses between based on the preference of management.

All of the following are source documents used in job order cost systems except:

A laundry detergent manufacturer would most likely use:

A company that uses a process cost system would calculate the cost per equivalent unit and then use that amount to allocate costs between the goods transferred out and the beginning work in process inventory.

A materials requisition is sent to the purchasing agent by the materials storeroom clerk to request that additional materials be purchased.

How should a company choose between a job-order cost system and a process cost system?

In a job-order cost system, as goods are produced, product costs (direct material, direct labor, and overhead) are accumulated in the:

If overhead was overapplied during the accounting period by an insignificant amount, the entry to close the Manufacturing Overhead account will include a:

The primary advantage of process cost systems is that there is no underapplied or overapplied overhead to account for.

The 10,000 units in Department B that are 30% complete are equivalent to 3,000 whole units.