Question 1

Job cost sheets are used as a subsidiary ledger to the Raw Materials Inventory account.

Accepted Answer

A) True 
 B)False

Question 2

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

Question 3

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) B) and C)
G) A) and E)

Question 4

Underapplied manufacturing overhead results in a debit balance in the Manufacturing Overhead account.

Accepted Answer

A) True 
 B)False

Question 5

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 D)
G) C) and D)

Question 6

Match between columns
                        Premises: Firm that manufactures liquid soap.
Landscape architect.
Butter processing plant.
Firm that bottles sports drinks.
Auto repair shop.
Heating and air-conditioning repair business.
Electrician.
Plumber.
Custom home builder.
Pet food manufacturer.

Accepted Answer

The Answer of process costing and job costing is...

Question 7

Auto Machinery makes automobile production equipment and uses normal costing.Overhead is applied on the basis of $12 per machine hour.The following information relates to the August jobs:
$\begin{array}{lrrr}
&\text { Job } 22&\text { Job } 33&\text { Job }44\
\text { Materials used } & \$ 40,000 & \$ 74,000 & \$ 43,000 \
\text { Direct labor } & \$ 96,000 & \$ 117,000 & \$ 84,000 \
\text { Machine hours } & 9,200 & 7,700 & 6,400
\end{array}$ 
Jobs 22 and 33 were completed and sold,but Job 44 remained in inventory at the end of August.For August,actual overhead incurred totaled $274,000.
 (1) Compute the amount of overhead to be applied to each job.

(2) Compute Cost of Goods Sold for August and ending WIP Inventory at Angust 31 .

(3) Compute the amount of overapplied or underapplied overhead for August.

(4) Assume that revenue for Jobs 22 and 33 amounted to $ \$ 1,090,000 $, selling expensestotaled $ \$ 218,000 $, general and administrative expenses were equal $ \$ 98,000 $, and over-or underapplied overhead is immaterial. Using this information, prepare an income statement for the manufacturer for August.

Accepted Answer

None...

Question 8

The three most common allocation bases for establishing a predetermined overhead rate include direct labor hours,machine hours,and direct labor costs.

Accepted Answer

A) True 
 B)False

Question 9

All of the following are examples of firms who would use job costing except:

Accepted Answer

A)  An automobile repair business.
B)  A custom sailboat builder.
C)  An interior designing firm.
D)  A sport drink manufacturing company.
E)  None of the answer choices is correct.F) A) and D)
G) None of the above

Question 10

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 11

All account names for job costing systems in service organizations are the same as those used by manufacturing companies.

Accepted Answer

A) True 
 B)False

Question 12

Normal costing is preferred by most companies because it assigns actual overhead costs to jobs.

Accepted Answer

A) True 
 B)False

Question 13

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) C) and D)
G) A) and B)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Kaplan Inc.applies overhead on the basis of direct labor hours.During 2016,the predetermined overhead rate used was $9.00.If overhead was underapplied by $16,500 during 2016,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) B) and C)
G) A) and D)

Question 17

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) A) and D)
G) B) and E)

Question 18

Records at Sandy Inc.indicate that indirect materials totaling $800 were requisitioned and placed in production.Which one of the following journal entries should Sandy record for this transaction?

Accepted Answer

A)  Raw Materials Inventory 800Work in Process Inventory 800
B)  Manufacturing Overhead 800Raw Materials Inventory 800
C)  Raw Materials Inventory 800Accounts Payable 800
D)  Work in Process Inventory 800Raw Materials Inventory 800
E)  None of the answer choices is correct.F) A) and B)
G) B) and E)

Question 19

A process costing system is used by companies that make identical units of product in batches.

Accepted Answer

A) True 
 B)False

Question 20

If the under- or overapplied overhead amount is considered to be material,which of the following accounts would be the least likely to be used when closing the Manufacturing Overhead account at the end of the period?

Accepted Answer

A)  Raw Materials Inventory.
B)  Work in Process Inventory.
C)  Finished Goods Inventory.
D)  Cost of Goods Sold.
E)  None of the answer choices is correct.F) A) and D)
G) None of the above

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

Job cost sheets are used as a subsidiary ledger to the Raw Materials Inventory account.

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

For each of the following, select which are likely to use job costing (A) and which are likely to use process costing (B).

Correct Answer
verified

All account names for job costing systems in service organizations are the same as those used by manufacturing companies.

Correct Answer
verified

A process costing system is used by companies that make identical units of product in batches.

Correct Answer
verified

Correct Answer
verified

The three most common allocation bases for establishing a predetermined overhead rate include direct labor hours,machine hours,and direct labor costs.

Correct Answer
verified

Correct Answer
verified
None...
View Answer

Kaplan Inc.applies overhead on the basis of direct labor hours.During 2016,the predetermined overhead rate used was $9.00.If overhead was underapplied by $16,500 during 2016,which of the following would not be a reason for the underapplied overhead?

Correct Answer
verified

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
verified

If the under- or overapplied overhead amount is considered to be material,which of the following accounts would be the least likely to be used when closing the Manufacturing Overhead account at the end of the period?

Correct Answer
verified

Underapplied manufacturing overhead results in a debit balance in the Manufacturing Overhead account.

Correct Answer
verified

Records at Sandy Inc.indicate that indirect materials totaling $800 were requisitioned and placed in production.Which one of the following journal entries should Sandy record for this transaction?

Correct Answer
verified

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

Correct Answer
verified

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
verified

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

Correct Answer
verified

All of the following are examples of firms who would use job costing except:

Correct Answer
verified

Normal costing is preferred by most companies because it assigns actual overhead costs to jobs.

Correct Answer
verified

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

Job cost sheets are used as a subsidiary ledger to the Raw Materials Inventory account.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

For each of the following, select which are likely to use job costing (A) and which are likely to use process costing (B).

Correct AnswerverifiedShow Answer

All account names for job costing systems in service organizations are the same as those used by manufacturing companies.

Correct AnswerverifiedShow Answer

A process costing system is used by companies that make identical units of product in batches.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The three most common allocation bases for establishing a predetermined overhead rate include direct labor hours,machine hours,and direct labor costs.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedNone...View AnswerShow Answer

Kaplan Inc.applies overhead on the basis of direct labor hours.During 2016,the predetermined overhead rate used was $9.00.If overhead was underapplied by $16,500 during 2016,which of the following would not be a reason for the underapplied overhead?

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

If the under- or overapplied overhead amount is considered to be material,which of the following accounts would be the least likely to be used when closing the Manufacturing Overhead account at the end of the period?

Correct AnswerverifiedShow Answer

Underapplied manufacturing overhead results in a debit balance in the Manufacturing Overhead account.

Correct AnswerverifiedShow Answer

Records at Sandy Inc.indicate that indirect materials totaling $800 were requisitioned and placed in production.Which one of the following journal entries should Sandy record for this transaction?

Correct AnswerverifiedShow Answer

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

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

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

Correct AnswerverifiedShow Answer

All of the following are examples of firms who would use job costing except:

Correct AnswerverifiedShow Answer

Normal costing is preferred by most companies because it assigns actual overhead costs to jobs.

Correct AnswerverifiedShow Answer

Correct 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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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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None...
View Answer

Correct 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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Correct 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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