Question 1

When determining costs of jobs, how does a company account for indirect material?

Accepted Answer

A)  It is transferred out of Raw Materials into Manufacturing Overhead when used.
B)  It is transferred out of Raw Materials into Work in Process as used.
C)  It is added to Work in Process as used.
D)  It remains part of Raw Materials Inventory.

Question 2

Sportly, Inc.finished Job B14 during 2016.The job cost sheet listed the following:   Direct materials $66,000 Direct labour $36,000 Manufacturing overhead applied $24,000 Units produced3,000 units Units sold 1,800 units \begin{array}{lr}  	ext { Direct materials } &\$66,000\ 	ext { Direct labour } &\$36,000\ 	ext { Manufacturing overhead applied } &\$24,000\ 	ext {  Units produced} &3,000	ext { units }\ 	ext {Units sold  } &1,800	ext { units }\\end{array} Direct materials  Direct labour  Manufacturing overhead applied  Units producedUnits sold ​$66,000$36,000$24,0003,000 units 1,800 units ​ 
 How much is the cost of the finished goods on hand from this job?

Accepted Answer

A)  $126,000
B)  $75,600
C)  $50,400
D)  $61,200

Question 3

Costs of jobs are recorded in the period in which the costs are paid.

Accepted Answer

A) True 
 B)False

Question 4

The transfer of direct materials to the production area causes an increase in work in process.

Accepted Answer

A) True 
 B)False

Question 5

Which one of the following correctly describes job-order costing?

Accepted Answer

A)  have distinguishing characteristics
B)  A series of connected manufacturing processes is necessary.
C)  Homogeneous goods are being produced.
D)  Large batches are produced.

Question 6

When monthly financial statements are prepared, where will you expect to find under-applied overhead if immaterial?

Accepted Answer

A)  included with Cost of Goods Sold on the Income Statement
B)  as a current liability on the Balance Sheet
C)  as part of Work in Process Inventory
D)  as a Prepaid Expense account on the Balance Sheet

Question 7

Which one of the following describes an activity base?

Accepted Answer

A)  a denominator used by management based on estimated useful lives of the company's plant assets
B)  a measure which is estimated by management based on prior year's operations
C)  a measure that has a correlation with assigning overhead
D)  a guess by management on a fair method of applying overhead

Question 8

If the financial statements of Sushi Show, Inc.show $500 of over-applied overhead for the current year, where will that balance be shown in the financial statements if not material?

Accepted Answer

A)  in the current assets section as a prepaid amount
B)  No amount should be shown in the financial statements for over-applied overhead.
C)  in the current liabilities section as Unearned Revenue
D)  as part of Cost of Goods Sold

Question 9

Which of the following is true of materials requisition slips?

Accepted Answer

A)  They are prepared after the goods have been sold.
B)  They trigger a transaction which increases finished goods.
C)  They may indicate indirect materials used in production.
D)  They indicate receipt of materials from the supplier.

Question 10

Total manufacturing costs for a period consists of the costs of direct material used, the cost of direct labour incurred, and the actual manufacturing overhead incurred during the period.

Accepted Answer

A) True 
 B)False

Question 11

The Raw Materials account is used to recognize all raw materials purchases, purchases returns and allowances, and freight costs related to materials.

Accepted Answer

A) True 
 B)False

Question 12

For what reason have companies recently chosen machine hours as an activity base when calculating a predetermined overhead rate?

Accepted Answer

A)  an increase in direct labour costs
B)  it is a more reliable source than other activity bases
C)  the lack of verifiable hours for direct labour
D)  an increasing use of automated manufacturing operations

Question 13

When monthly financial statements are prepared, where will you expect to find a difference between actual overhead and overhead applied?

Accepted Answer

A)  on the Statement of Stockholders' Equity
B)  none of the financial statements
C)  on the Balance Sheet
D)  on the Income Statement

Question 14

Which one of the following is a source document that impacts the job cost sheet?

Accepted Answer

A)  labour time tickets
B)  finished goods shipping documents
C)  raw material receiving slips
D)  material purchase orders

Question 15

When a job is completed, what happens to the cost of the job?

Accepted Answer

A)  It is removed from Work in Process and included in Cost of Goods Sold.
B)  It is removed from Finished Goods and included in Cost of Goods Sold.
C)  It is removed from Materials Inventory and included in Work in Process.
D)  It is removed from Work in Process and included in Finished Goods.

Question 16

For which one of the following is process costing used?

Accepted Answer

A)  production of products which are unique to each customer
B)  production of homes
C)  production of products which are similar in nature
D)  production of in-ground swimming pools for customers

Question 17

Materials requisition slips indicate the receipt of materials from a supplier.

Accepted Answer

A) True 
 B)False

Question 18

Tra Corporation is analyzing its account balances for 2016.As of the end of 2016, a debit balance of $4,000 remains in the Manufacturing Overhead account.What impact will this have on the financial statements?

Accepted Answer

A)  It will increase assets by $4,000 and have no effect on income.
B)  It will increase income by $4,000.
C)  It will reduce income by $4,000.
D)  It will decrease gross profit but have no effect on income.

Question 19

Cal, Inc.showed the following amounts in its manufacturing overhead account at the end of 2016:   Manufacturing Overhead 20,00016,00055,00022,000\begin{array} { l | l }  { 	ext { Manufacturing Overhead } } \\hline 20,000 & \16,000 & 55,000 \22,000 &\end{array} Manufacturing Overhead 20,00016,00022,000​55,000​​  Based on this information, which statement is true?

Accepted Answer

A)  No manufacturing overhead has been applied.
B)  Manufacturing overhead expense will be reported in the operating section of the income statement in the amount of $3,000.
C)  Manufacturing overhead has been over applied.
D)  Manufacturing overhead has been under applied.

Question 20

In applying costs using a pre-determined overhead rate, the most common allocation base is generally

Accepted Answer

A)  direct labour hours.
B)  direct materials used.
C)  indirect labour hours.
D)  indirect materials used.

Exam 3: Job-Order Cost Accounting

In applying costs using a pre-determined overhead rate, the most common allocation base is generally

Correct Answer
verified

When monthly financial statements are prepared, where will you expect to find under-applied overhead if immaterial?

Correct Answer
verified

Which one of the following is a source document that impacts the job cost sheet?

Correct Answer
verified

Which of the following is true of materials requisition slips?

Correct Answer
verified

The transfer of direct materials to the production area causes an increase in work in process.

Correct Answer
verified

Which one of the following correctly describes job-order costing?

Correct Answer
verified

Which one of the following describes an activity base?

Correct Answer
verified

Costs of jobs are recorded in the period in which the costs are paid.

Correct Answer
verified

For what reason have companies recently chosen machine hours as an activity base when calculating a predetermined overhead rate?

Correct Answer
verified

Correct Answer
verified

If the financial statements of Sushi Show, Inc.show $500 of over-applied overhead for the current year, where will that balance be shown in the financial statements if not material?

Correct Answer
verified

Cal, Inc.showed the following amounts in its manufacturing overhead account at the end of 2016: $\begin{array} { l | l } { \text { Manufacturing Overhead } } \\\hline 20,000 & \\16,000 & 55,000 \\22,000 &\end{array}$ Based on this information, which statement is true?

Correct Answer
verified

Materials requisition slips indicate the receipt of materials from a supplier.

Correct Answer
verified

The Raw Materials account is used to recognize all raw materials purchases, purchases returns and allowances, and freight costs related to materials.

Correct Answer
verified

When determining costs of jobs, how does a company account for indirect material?

Correct Answer
verified

Total manufacturing costs for a period consists of the costs of direct material used, the cost of direct labour incurred, and the actual manufacturing overhead incurred during the period.

Correct Answer
verified

Tra Corporation is analyzing its account balances for 2016.As of the end of 2016, a debit balance of $4,000 remains in the Manufacturing Overhead account.What impact will this have on the financial statements?

Correct Answer
verified

When monthly financial statements are prepared, where will you expect to find a difference between actual overhead and overhead applied?

Correct Answer
verified

When a job is completed, what happens to the cost of the job?

Correct Answer
verified

For which one of the following is process costing used?

Correct Answer
verified

Exam 3: Job-Order Cost Accounting

In applying costs using a pre-determined overhead rate, the most common allocation base is generally

Correct AnswerverifiedShow Answer

When monthly financial statements are prepared, where will you expect to find under-applied overhead if immaterial?

Correct AnswerverifiedShow Answer

Which one of the following is a source document that impacts the job cost sheet?

Correct AnswerverifiedShow Answer

Which of the following is true of materials requisition slips?

Correct AnswerverifiedShow Answer

The transfer of direct materials to the production area causes an increase in work in process.

Correct AnswerverifiedShow Answer

Which one of the following correctly describes job-order costing?

Correct AnswerverifiedShow Answer

Which one of the following describes an activity base?

Correct AnswerverifiedShow Answer

Costs of jobs are recorded in the period in which the costs are paid.

Correct AnswerverifiedShow Answer

For what reason have companies recently chosen machine hours as an activity base when calculating a predetermined overhead rate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

If the financial statements of Sushi Show, Inc.show $500 of over-applied overhead for the current year, where will that balance be shown in the financial statements if not material?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Materials requisition slips indicate the receipt of materials from a supplier.

Correct AnswerverifiedShow Answer

The Raw Materials account is used to recognize all raw materials purchases, purchases returns and allowances, and freight costs related to materials.

Correct AnswerverifiedShow Answer

When determining costs of jobs, how does a company account for indirect material?

Correct AnswerverifiedShow Answer

Total manufacturing costs for a period consists of the costs of direct material used, the cost of direct labour incurred, and the actual manufacturing overhead incurred during the period.

Correct AnswerverifiedShow Answer

Tra Corporation is analyzing its account balances for 2016.As of the end of 2016, a debit balance of $4,000 remains in the Manufacturing Overhead account.What impact will this have on the financial statements?

Correct AnswerverifiedShow Answer

When monthly financial statements are prepared, where will you expect to find a difference between actual overhead and overhead applied?

Correct AnswerverifiedShow Answer

When a job is completed, what happens to the cost of the job?

Correct AnswerverifiedShow Answer

For which one of the following is process costing used?

Correct AnswerverifiedShow Answer

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