Question 1

When a manufacturing company purchases raw materials,the Raw Materials Inventory account is debited.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is typically used as a subsidiary ledger for Work in Process in a job cost system?

Accepted Answer

A)  Job cost sheet.
B)  Balance sheet.
C)  Materials requisition.
D)  Timesheet.
E)  None of the answer choices is correct.F) A) and B)
G) C) and D)

Question 3

When using a job cost system,which of the following will not appear on a job cost sheet?

Accepted Answer

A)  Direct labor.
B)  Direct materials.
C)  Actual manufacturing overhead incurred.
D)  Manufacturing overhead applied.
E)  None of the answer choices is correct.F) A) and B)
G) B) and D)

Question 4

Underapplied overhead occurs when actual overhead costs are lower than overhead costs applied to jobs.

Accepted Answer

A) True 
 B)False

Question 5

When direct materials are transferred into production,the journal entry includes a debit to the Work in Process Inventory account.

Accepted Answer

A) True 
 B)False

Question 6

The entry to record the requisition of indirect materials in a job cost system includes a:

Accepted Answer

A)  debit to Work in Process Inventory.
B)  debit to Manufacturing Overhead.
C)  credit to Accounts Payable.
D)  credit to Work in Process Inventory.
E)  None of the answer choices is correct.F) A) and E)
G) A) and D)

Question 7

Which of the following companies would probably not use job order costing?

Accepted Answer

A)  A window washing service.
B)  A milk manufacturer.
C)  A car repair business.
D)  An electrician.
E)  None of the answer choices is correct.F) B) and D)
G) A) and D)

Question 8

Goodman Company has $30,000 in underapplied overhead,which is considered by the company to be a material amount.Other account balances include:
Work in Process Inventory $140,000
Finished Goods Inventory 40,000
Cost of Goods Sold 20,000
Which one of the following would be the correct journal entry for closing the underapplied overhead?

Accepted Answer

A)  Work in Process Inventory 21,000Finished Goods Inventory 6,000Cost of Goods Sold 3,000Manufacturing Overhead 30,000
B)  Manufacturing Overhead 30,000Work in Process Inventory 21,000Finished Goods Inventory 6,000Cost of Goods Sold 3,000
C)  Manufacturing Overhead 30,000Work in Process Inventory 10,000Finished Goods Inventory 10,000Cost of Goods Sold 10,000
D)  Work in Process Inventory 10,000Finished Goods Inventory 10,000Cost of Goods Sold 10,000Manufacturing Overhead 30,000
E)  None of the answer choices is correct.F) B) and E)
G) C) and D)

Question 9

Specialty Chocolates recently expanded its operations beyond its existing kitchen to serve its retail operations by establishing a new kitchen to serve a wholesale market for local specialty shops.With this new arrangement,Specialty Chocolates will continue to have a retail shop attached to its original kitchen (Department 1) and the new wholesale operations shipping out of the new kitchen (Department 2) .Using normal costing,the company applies monthly overhead using predetermined overhead rates based on direct labor hours for the older operation in Department 1 and machine hours for overhead rates in the more automated Department 2.

Given this information,what are the respective overhead application rates to be used per pound of chocolate for Departments 1 and 2?

Accepted Answer

A)  Department 1: $1.50 per pound;Department 2: $0.20 per pound.
B)  Department 1: $0.25 per pound;Department 2: $0.20 per pound.
C)  Department 1: $2.50 per pound;Department 2: $0.80 per pound.
D)  Department 1: $0.25 per pound;Department 2: $2.00 per pound.
E)  None of the answer choices is correct.F) A) and B)
G) A) and C)

Question 10

The entry to record wages owed to the production supervisor should include a debit to:

Accepted Answer

A)  Wages Payable.
B)  Wages Expense.
C)  Work in Process Inventory.
D)  Manufacturing Overhead.
E)  None of the answer choices is correct.F) D) and E)
G) C) and E)

Question 11

Adams Company placed $2,000 of direct materials into production.Which one of the following journal entries should Jones record for this transaction?

Accepted Answer

A)  Raw Materials Inventory 2,000Accounts Payable 2,000
B)  Work in Process Inventory 2,000Manufacturing Overhead 2,000
C)  Manufacturing Overhead 2,000Raw Materials Inventory 2,000
D)  Work in Process Inventory 2,000Raw Materials Inventory 2,000
E)  None of the answer choices is correct.F) C) and E)
G) A) and E)

Question 12

The entry to record depreciation on the factory building should include a:

Accepted Answer

A)  debit to Work in Process Inventory.
B)  debit to Manufacturing Overhead.
C)  debit to Cost of Goods Sold.
D)  credit to Work in Process Inventory.
E)  None of the answer choices is correct.F) None of the above
G) C) and D)

Question 13

All of the following are reasons that managers track revenues and costs using a job costing system except:

Accepted Answer

A)  Managers use the information to record product costs as period costs.
B)  Managers want to know if individual jobs are profitable.
C)  Managers compare actual costs with estimated costs throughout the project to identify unexpected changes as early as possible.
D)  Managers assess the accuracy of original cost estimates.
E)  None of the answer choices is correct.F) All of the above
G) A) and D)

Question 14

The law firm,Keen and Sholer,assigns overhead to clients based on direct labor hours using normal costing.During June,they compiled the following information regarding hours worked and costs:
Actual direct labor hours 900 hours
Actual overhead costs $7,200
Estimated direct labor hours 1,000 hours
Estimated overhead costs $9,000
The amount of applied overhead for June is:

Accepted Answer

A)  $8,100
B)  $7,200
C)  $6,480
D)  $9,000
E)  None of the answer choices is correct.F) None of the above
G) A) and B)

Question 15

The overhead costs applied to jobs using a predetermined overhead rate are recorded by debiting Work in Process Inventory and crediting Manufacturing Overhead.

Accepted Answer

A) True 
 B)False

Question 16

The Work in Process Inventory account for Baja Manufacturing Company shows a balance of $7,200 at the end of the accounting period.The job cost sheets of the only two uncompleted jobs,Jobs 4 and 7,show respective charges of $2,400 and $1,200 for direct materials used.Jobs 4 and 7 also show respective charges of $1,600 and $800 for direct labor used.Based on this information,what is the predetermined overhead rate as a percentage of direct labor costs that Morris is using?

Accepted Answer

A)  200%
B)  50%
C)  33.3%
D)  16.7%
E)  None of the answer choices is correct.F) A) and C)
G) None of the above

Question 17

All of the following are ways that a job costing system used by a service organization may differ from one used by a manufacturing company except:

Accepted Answer

A)  Costs in service organizations are typically tracked by customer rather than product.
B)  Account names for service organizations are slightly different from those used by manufacturers.
C)  Service organizations tend to use fewer materials.
D)  The process of tracking labor for service organizations is completely different from the process used by manufacturers.
E)  None of the answer choices is correct.F) B) and E)
G) A) and D)

Question 18

Kaplan Inc.applies overhead on the basis of direct labor hours.During 2012,the predetermined overhead rate used was $9.00.If overhead was underapplied by $16,500 during 2012,which of the following would not be a reason for the underapplied overhead?

Accepted Answer

A)  Estimated direct labor hours differed from actual direct labor hours.
B)  Applied overhead was lower than actual overhead.
C)  Estimated overhead costs differed from actual overhead costs.
D)  Applied overhead was higher than actual overhead.
E)  None of the answer choices is correct.F) None of the above
G) A) and C)

Question 19

Service organizations often use a predetermined overhead rate similar to manufacturing companies.

Accepted Answer

A) True 
 B)False

Question 20

Process costing is best described by which statement?

Accepted Answer

A)  Only direct materials and manufacturing overhead are assigned to products under process costing.
B)  Units produced in a process costing system are unique and are produced individually.
C)  Product costs are tracked by department and assigned to products passing through each department.
D)  There cannot be any beginning or ending Work in Process Inventory with process costing.
E)  None of the answer choices is correct.F) A) and D)
G) C) and D)

Exam 2: How Is Job Costing Used to Track Production Costs

All of the following are ways that a job costing system used by a service organization may differ from one used by a manufacturing company except:

Correct Answer
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Correct Answer
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The overhead costs applied to jobs using a predetermined overhead rate are recorded by debiting Work in Process Inventory and crediting Manufacturing Overhead.

Correct Answer
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Kaplan Inc.applies overhead on the basis of direct labor hours.During 2012,the predetermined overhead rate used was $9.00.If overhead was underapplied by $16,500 during 2012,which of the following would not be a reason for the underapplied overhead?

Correct Answer
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Process costing is best described by which statement?

Correct Answer
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When a manufacturing company purchases raw materials,the Raw Materials Inventory account is debited.

Correct Answer
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Correct Answer
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Correct Answer
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Which of the following is typically used as a subsidiary ledger for Work in Process in a job cost system?

Correct Answer
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When direct materials are transferred into production,the journal entry includes a debit to the Work in Process Inventory account.

Correct Answer
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Service organizations often use a predetermined overhead rate similar to manufacturing companies.

Correct Answer
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Which of the following companies would probably not use job order costing?

Correct Answer
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Correct Answer
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Adams Company placed $2,000 of direct materials into production.Which one of the following journal entries should Jones record for this transaction?

Correct Answer
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The entry to record the requisition of indirect materials in a job cost system includes a:

Correct Answer
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Underapplied overhead occurs when actual overhead costs are lower than overhead costs applied to jobs.

Correct Answer
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The entry to record depreciation on the factory building should include a:

Correct Answer
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All of the following are reasons that managers track revenues and costs using a job costing system except:

Correct Answer
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When using a job cost system,which of the following will not appear on a job cost sheet?

Correct Answer
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The entry to record wages owed to the production supervisor should include a debit to:

Correct Answer
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Exam 2: How Is Job Costing Used to Track Production Costs

All of the following are ways that a job costing system used by a service organization may differ from one used by a manufacturing company except:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The overhead costs applied to jobs using a predetermined overhead rate are recorded by debiting Work in Process Inventory and crediting Manufacturing Overhead.

Correct AnswerverifiedShow Answer

Kaplan Inc.applies overhead on the basis of direct labor hours.During 2012,the predetermined overhead rate used was $9.00.If overhead was underapplied by $16,500 during 2012,which of the following would not be a reason for the underapplied overhead?

Correct AnswerverifiedShow Answer

Process costing is best described by which statement?

Correct AnswerverifiedShow Answer

When a manufacturing company purchases raw materials,the Raw Materials Inventory account is debited.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following is typically used as a subsidiary ledger for Work in Process in a job cost system?

Correct AnswerverifiedShow Answer

When direct materials are transferred into production,the journal entry includes a debit to the Work in Process Inventory account.

Correct AnswerverifiedShow Answer

Service organizations often use a predetermined overhead rate similar to manufacturing companies.

Correct AnswerverifiedShow Answer

Which of the following companies would probably not use job order costing?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Adams Company placed $2,000 of direct materials into production.Which one of the following journal entries should Jones record for this transaction?

Correct AnswerverifiedShow Answer

The entry to record the requisition of indirect materials in a job cost system includes a:

Correct AnswerverifiedShow Answer

Underapplied overhead occurs when actual overhead costs are lower than overhead costs applied to jobs.

Correct AnswerverifiedShow Answer

The entry to record depreciation on the factory building should include a:

Correct AnswerverifiedShow Answer

All of the following are reasons that managers track revenues and costs using a job costing system except:

Correct AnswerverifiedShow Answer

When using a job cost system,which of the following will not appear on a job cost sheet?

Correct AnswerverifiedShow Answer

The entry to record wages owed to the production supervisor should include a debit to:

Correct AnswerverifiedShow Answer

Correct Answer
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