Question 1

Direct materials requisitioned from the storeroom should be charged to the Work In Process Inventory account and the job cost sheets for the individual jobs on which the materials were used.

Accepted Answer

A) True 
 B)False

Question 2

Finished Goods Inventory is charged for the cost of jobs completed during a period.

Accepted Answer

A) True 
 B)False

Question 3

At the end of the year, the accountant credits the amount of the overapplied overhead to Cost of Goods Sold.

Accepted Answer

A) True 
 B)False

Question 4

Manufacturing overhead is the only product cost that can be assigned to jobs as soon as the costs are incurred.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

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

Question 6

Emley Company incurred direct materials costs of $750,000 during the year. Manufacturing overhead applied was $700,000 and is applied based on direct labor costs. The predetermined overhead rate is 70%. How much are Emley Company's total manufacturing costs for the year?

Accepted Answer

A)   $1,940,000
B)   $1,750,000
C)   $1,450,000
D)   $2,450,000E) C) and D)
F) None of the above

Question 7

The predetermined overhead rate is

Accepted Answer

A)   determined on a moving average basis throughout the year.
B)   not calculated until actual overhead costs are incurred.
C)   determined at the beginning of the year.
D)   determined at the end of the current year.E) A) and C)
F) B) and C)

Question 8

Which of the following statements about under- or overapplied manufacturing overhead is correct?

Accepted Answer

A)   After the entry to transfer over- or underapplied overhead to Cost of Goods Sold is posted, Manufacturing Overhead will have a zero balance.
B)   When Manufacturing Overhead has a credit balance, overhead is said to be under-applied.
C)   At the end of the year, under- or overapplied overhead is eliminated by a closing entry.
D)   When annual financial statements are prepared, overapplied overhead is reported in current liabilities.E) C) and D)
F) A) and B)

Question 9

If Manufacturing Overhead has a credit balance at the end of the period, then

Accepted Answer

A)   overhead has been underapplied.
B)   the overhead assigned to Work in Process Inventory is less than the overhead incurred.
C)   overhead has been overapplied.
D)   management must take corrective action.E) A) and B)
F) All of the above

Question 10

The predetermined overhead rate is based on the relationship between estimated annual overhead costs and expected annual operating activity expressed in terms of a common activity base.

Accepted Answer

A) True 
 B)False

Question 11

Process costing is not used when

Accepted Answer

A)   similar goods are being produced.
B)   large volumes are produced.
C)   jobs have distinguishing characteristics.
D)   a series of connected manufacturing processes is necessary.E) C) and D)
F) A) and C)

Question 12

The job cost sheet does not show

Accepted Answer

A)   costs chargeable to a specific job.
B)   the total costs of a completed job.
C)   the unit cost of a completed job.
D)   the cost of goods sold.E) C) and D)
F) A) and D)

Question 13

If the Manufacturing Overhead account has a debit balance at the end of a period, it means that

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 jobs have been completed.E) A) and C)
F) B) and C)

Question 14

Raw Materials Inventory, Factory Labor, and Manufacturing Overhead are all control accounts in the general ledger when a job order cost accounting system is used.

Accepted Answer

A) True 
 B)False

Question 15

Records of individual items of raw materials would not be maintained

Accepted Answer

A)   electronically.
B)   manually.
C)   on stores ledger cards.
D)   in the Raw Materials Inventory account.E) None of the above
F) B) and C)

Question 16

The formula for the predetermined overhead rate is estimated annual overhead costs divided by an expected annual operating activity.

Accepted Answer

A) True 
 B)False

Question 17

The labor costs that have been identified as indirect labor should be charged to

Accepted Answer

A)   manufacturing overhead.
B)   direct labor.
C)   the individual jobs worked on.
D)   salary expense.E) B) and C)
F) C) and D)

Question 18

Cost of raw materials is debited to Raw Materials Inventory when the

Accepted Answer

A)   materials are ordered.
B)   materials are received.
C)   materials are put into production.
D)   bill for the materials is paid.E) A) and C)
F) C) and D)

Question 19

Process costing is used when

Accepted Answer

A)   the production process is continuous.
B)   production is aimed at filling a specific customer order.
C)   dissimilar products are involved.
D)   costs are to be assigned to specific jobs.E) B) and C)
F) A) and B)

Question 20

The Manufacturing Overhead account shows debits of $30,000, $24,000, and $28,000 and one credit for $86,000. Based on this information, manufacturing overhead

Accepted Answer

A)   has been overapplied.
B)   has been underapplied.
C)   has not been applied.
D)   shows a zero balance.E) C) and D)
F) B) and C)

Exam 2: Job Order Costing

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

Correct AnswerverifiedShow Answer

If Manufacturing Overhead has a credit balance at the end of the period, then

Correct AnswerverifiedShow Answer

Cost of raw materials is debited to Raw Materials Inventory when the

Correct AnswerverifiedShow Answer

If the Manufacturing Overhead account has a debit balance at the end of a period, it means that

Correct AnswerverifiedShow Answer

The predetermined overhead rate is based on the relationship between estimated annual overhead costs and expected annual operating activity expressed in terms of a common activity base.

Correct AnswerverifiedShow Answer

Process costing is used when

Correct AnswerverifiedShow Answer

Raw Materials Inventory, Factory Labor, and Manufacturing Overhead are all control accounts in the general ledger when a job order cost accounting system is used.

Correct AnswerverifiedShow Answer

Records of individual items of raw materials would not be maintained

Correct AnswerverifiedShow Answer

Emley Company incurred direct materials costs of $750,000 during the year. Manufacturing overhead applied was $700,000 and is applied based on direct labor costs. The predetermined overhead rate is 70%. How much are Emley Company's total manufacturing costs for the year?

Correct AnswerverifiedShow Answer

Finished Goods Inventory is charged for the cost of jobs completed during a period.

Correct AnswerverifiedShow Answer

The Manufacturing Overhead account shows debits of $30,000, $24,000, and $28,000 and one credit for $86,000. Based on this information, manufacturing overhead

Correct AnswerverifiedShow Answer

Direct materials requisitioned from the storeroom should be charged to the Work In Process Inventory account and the job cost sheets for the individual jobs on which the materials were used.

Correct AnswerverifiedShow Answer

The job cost sheet does not show

Correct AnswerverifiedShow Answer

Manufacturing overhead is the only product cost that can be assigned to jobs as soon as the costs are incurred.

Correct AnswerverifiedShow Answer

At the end of the year, the accountant credits the amount of the overapplied overhead to Cost of Goods Sold.

Correct AnswerverifiedShow Answer

The predetermined overhead rate is

Correct AnswerverifiedShow Answer

Process costing is not used when

Correct AnswerverifiedShow Answer

Which of the following statements about under- or overapplied manufacturing overhead is correct?

Correct AnswerverifiedShow Answer

The formula for the predetermined overhead rate is estimated annual overhead costs divided by an expected annual operating activity.

Correct AnswerverifiedShow Answer

The labor costs that have been identified as indirect labor should be charged to

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified