Question 1

Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.

Accepted Answer

A) True 
 B)False

Question 2

Job order cost accounting systems can be used only for companies that manufacture a product.

Accepted Answer

A) True 
 B)False

Question 3

A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.

Accepted Answer

A) True 
 B)False

Question 4

Costs that are treated as assets until the product is sold are

Accepted Answer

A)   product costs
B)   period costs
C)   conversion costs
D)   selling expensesE) All of the above
F) C) and D)

Question 5

If the underapplied factory overhead amount is immaterial, it is transferred to Cost of Goods Sold at the end of the fiscal year.

Accepted Answer

A) True 
 B)False

Question 6

If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a

Accepted Answer

A)   debit balance and be underapplied
B)   credit balance and be underapplied
C)   credit balance and be overapplied
D)   debit balance and be overappliedE) A) and D)
F) B) and C)

Question 7

A service organization will not use the job order costing method because it has no direct materials.

Accepted Answer

A) True 
 B)False

Question 8

The entry to record the flow of direct labor costs into production in a job order cost accounting system is to

Accepted Answer

A)   debit Factory Overhead, credit Work in Process
B)   debit Finished Goods, credit Wages Payable
C)   debit Work in Process, credit Wages Payable
D)   debit Factory Overhead, credit Wages PayableE) None of the above
F) A) and B)

Question 9

A job order cost system would be appropriate for a crude oil refining business.

Accepted Answer

A) True 
 B)False

Question 10

Materials purchased on account during the month amounted to $190,000. Materials requisitioned and placed in production totaled $156,000. The entry to record the transaction for materials requisitioned by the production department is

Accepted Answer

A)   Materials                                156,000      Work in Process                                     156,000
B)   Work in Process                     190,000      Materials                                                190,000
C)   Work in Process                     156,000      Materials                                                156,000
D)   Work in Process                     156,000      Cash                                                       156,000E) B) and D)
F) A) and C)

Question 11

Adams Company is a manufacturing company that has worked on several production jobs during the first quarter of the year.  Below is a list of all the jobs for the quarter:  Jobs 356, 357, 358, and 359 were completed.  Jobs 356 and 357 were sold at a profit of $500 on each job.
What is the ending balance of Work in Process for Adams Company at the end of the first quarter?

Accepted Answer

A)   $0
B)   $456
C)   $3,208
D)   $2,752E) None of the above
F) All of the above

Question 12

Depreciation expense on factory equipment is part of factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 13

The current year's advertising costs are normally considered period costs.

Accepted Answer

A) True 
 B)False

Question 14

The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket.

Accepted Answer

A) True 
 B)False

Question 15

The document that serves as the basis for recording direct labor on a job cost sheet is the clock card.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a product cost?

Accepted Answer

A)   salary of a sales manager
B)   advertising for a particular product
C)   drill bits for a drill press used in the plant assembly area
D)   salary of the company receptionistE) A) and B)
F) A) and C)

Question 17

The recording of the factory labor incurred for general factory use would include a debit to

Accepted Answer

A)   Factory Overhead
B)   Wages Payable
C)   Wages Expense
D)   Cost of Goods SoldE) B) and D)
F) All of the above

Question 18

The balance of Material Q on May 1 and the receipts and issuances during May are as follows:  
Determine the cost of each of the issuances under a perpetual system, using the FIFO method.

Accepted Answer

May 17 issue:
(8 × ...

Question 19

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. Calculate the predetermined overhead rate to apply factory overhead.

Accepted Answer

$1,470,000...

Question 20

List the accounts used in the cost flow for: 
(a) a manufacturer 
(b) a service provider.

Accepted Answer

(a) Materials
Wages Payable
...

Exam 2: Job Order Costing

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. Calculate the predetermined overhead rate to apply factory overhead.

Correct Answer
verified
$1,470,000...
View Answer

A service organization will not use the job order costing method because it has no direct materials.

Correct Answer
verified

Which of the following is a product cost?

Correct Answer
verified

Job order cost accounting systems can be used only for companies that manufacture a product.

Correct Answer
verified

Costs that are treated as assets until the product is sold are

Correct Answer
verified

A job order cost system would be appropriate for a crude oil refining business.

Correct Answer
verified

Correct Answer
verified

The current year's advertising costs are normally considered period costs.

Correct Answer
verified

The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket.

Correct Answer
verified

The document that serves as the basis for recording direct labor on a job cost sheet is the clock card.

Correct Answer
verified

If the underapplied factory overhead amount is immaterial, it is transferred to Cost of Goods Sold at the end of the fiscal year.

Correct Answer
verified

The balance of Material Q on May 1 and the receipts and issuances during May are as follows: Determine the cost of each of the issuances under a perpetual system, using the FIFO method.

Correct Answer
verified
May 17 issue:
(8 × ...
View Answer

Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.

Correct Answer
verified

A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.

Correct Answer
verified

The entry to record the flow of direct labor costs into production in a job order cost accounting system is to

Correct Answer
verified

Depreciation expense on factory equipment is part of factory overhead cost.

Correct Answer
verified

The recording of the factory labor incurred for general factory use would include a debit to

Correct Answer
verified

Materials purchased on account during the month amounted to $190,000. Materials requisitioned and placed in production totaled $156,000. The entry to record the transaction for materials requisitioned by the production department is

Correct Answer
verified

List the accounts used in the cost flow for: (a) a manufacturer (b) a service provider.

Correct Answer
verified
(a) Materials
Wages Payable
...
View Answer

If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a

Correct Answer
verified

Exam 2: Job Order Costing

The Cavy Company estimates that the factory overhead for the following year will be $1,470,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. Calculate the predetermined overhead rate to apply factory overhead.

Correct Answerverified$1,470,000...View AnswerShow Answer

A service organization will not use the job order costing method because it has no direct materials.

Correct AnswerverifiedShow Answer

Which of the following is a product cost?

Correct AnswerverifiedShow Answer

Job order cost accounting systems can be used only for companies that manufacture a product.

Correct AnswerverifiedShow Answer

Costs that are treated as assets until the product is sold are

Correct AnswerverifiedShow Answer

A job order cost system would be appropriate for a crude oil refining business.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The current year's advertising costs are normally considered period costs.

Correct AnswerverifiedShow Answer

The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket.

Correct AnswerverifiedShow Answer

The document that serves as the basis for recording direct labor on a job cost sheet is the clock card.

Correct AnswerverifiedShow Answer

If the underapplied factory overhead amount is immaterial, it is transferred to Cost of Goods Sold at the end of the fiscal year.

Correct AnswerverifiedShow Answer

The balance of Material Q on May 1 and the receipts and issuances during May are as follows: Determine the cost of each of the issuances under a perpetual system, using the FIFO method.

Correct AnswerverifiedMay 17 issue: (8 × ...View AnswerShow Answer

Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.

Correct AnswerverifiedShow Answer

A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.

Correct AnswerverifiedShow Answer

The entry to record the flow of direct labor costs into production in a job order cost accounting system is to

Correct AnswerverifiedShow Answer

Depreciation expense on factory equipment is part of factory overhead cost.

Correct AnswerverifiedShow Answer

The recording of the factory labor incurred for general factory use would include a debit to

Correct AnswerverifiedShow Answer

Materials purchased on account during the month amounted to $190,000. Materials requisitioned and placed in production totaled $156,000. The entry to record the transaction for materials requisitioned by the production department is

Correct AnswerverifiedShow Answer

List the accounts used in the cost flow for: (a) a manufacturer (b) a service provider.

Correct Answerverified(a) Materials Wages Payable ...View AnswerShow Answer

If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a

Correct AnswerverifiedShow Answer

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verified
$1,470,000...
View Answer

Correct Answer
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Correct Answer
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May 17 issue:
(8 × ...
View Answer

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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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(a) Materials
Wages Payable
...
View Answer

Correct Answer
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