Question 1

A typical job-cost record would provide information about all of the following items related to an order except:

Accepted Answer

A)  the cost of direct materials used.
B)  administrative costs.
C)  direct labor costs incurred.
D)  applied manufacturing overhead.
E)  direct labor hours worked.

Question 2

Use the following labor budget data for Roy & Miller Accounting, LLP.  The budgeted overhead cost for the year is $1,260,000.The company has estimated that one-third of the budgeted overhead cost is incurred to support the ﬁrm's two partners, and two-thirds goes to support the staff accountants.The current audit bid for Monoco Industries requires $18,000 in direct partner professional labor, $30,000 in direct staff accountant professional labor, $5,000 in direct material. What is the overhead rate based on a single cost driver (rounded to the nearest percentage) ?

Accepted Answer

A)  71%
B)  90%
C)  210 %
D)  83%
E)  60%

Question 3

In a public accounting ﬁrm, for example, costs are assigned to an audit engagement in much the same way they are assigned to a single batch of tables by a furniture manufacturer.

Accepted Answer

A) True 
 B)False

Question 4

Job-order costing methods are used in a variety of service industry ﬁrms and nonproﬁt organizations.

Accepted Answer

A) True 
 B)False

Question 5

Two-stage cost allocation uses a ﬁrst stage to assign all product costs to production departments and then a second stage to apply different cost drivers to improve eﬃciency.

Accepted Answer

A) True 
 B)False

Question 6

As production takes place, all manufacturing costs are added to the:

Accepted Answer

A)  Work-in-Process Inventory account.
B)  Manufacturing-Overhead Inventory account.
C)  Cost-of-Goods-Sold account.
D)  Finished-Goods Inventory account.
E)  Production Labor account.

Question 7

If the amount of effort and attention to products varies substantially throughout a company's various manufacturing operations, the company might consider the use of:

Accepted Answer

A)  a plant-wide overhead rate.
B)  departmental overhead rates.
C)  actual overhead rates instead of predetermined overhead rates.
D)  direct labor hours to determine the overhead rate.
E)  machine hours to determine the overhead rate.

Question 8

A manufacturing ﬁrm produces goods in accordance with customer speciﬁcations, commencing production upon receipt of a purchase order.To accumulate the cost of each order, the company would use a:

Accepted Answer

A)  job-cost record.
B)  cost allocation matrix.
C)  production log.
D)  overhead sheet.
E)  manufacturing cost record.

Question 9

Which of the following statements is true?

Accepted Answer

A)  Product costing is not used in ﬁnancial accounting.
B)  There is only one way to assign indirect costs.
C)  All product cost numbers can be easily derived due to their objective nature.
D)  Product costing is limited to manufacturing ﬁrms.
E)  Relative proﬁtability depends upon the way we assign costs and deﬁne outputs as

Question 10

Boxer Industries worked on four jobs during its ﬁrst year of operation: nos.401, 402, 403, and 404. A review of job no.403's cost record revealed direct material charges of $40,000 and total manufacturing costs of $50,000.If Boxer applies overhead at 150% of direct labor cost, the overhead applied to job no.403 must have been:

Accepted Answer

A)  $0.
B)  $6,000.
C)  $4,000.
D)  $3,333.
E)  $5,000.

Question 11

Which of the following is not considered to be a service department?

Accepted Answer

A)  Equipment maintenance department
B)  Material handling department
C)  Machining department
D)  Factory custodial service department
E)  Vehicle repair department

Question 12

As soon as products are completed, their product costs are transferred from Raw Materials Inventory to Finished-Goods Inventory.

Accepted Answer

A) True 
 B)False

Question 13

Dubois Decors is an interior decorator in St.Louis, Missouri.The following costs were incurred in the ﬁrm's contract to redecorate a corporate CEO's oﬃce.  The ﬁrm's budget for the year included the following estimates:  Overhead is applied to contracts using a predetermined overhead rate calculated annually.The rate is based on direct professional labor cost. What is the total cost of the ﬁrm's contract to redecorate the CEO's oﬃce?

Accepted Answer

A)  $155,000
B)  $95,000
C)  $191,000
D)  $650,000
E)  $132,500

Question 14

The left side of the Manufacturing Overhead account is used to accumulate:

Accepted Answer

A)  actual manufacturing overhead costs incurred throughout the accounting period.
B)  overhead applied to Work-in-Process Inventory.
C)  underapplied overhead.
D)  predetermined overhead.
E)  overapplied overhead.

Question 15

The process of assigning overhead costs to the jobs that are worked on is commonly called:

Accepted Answer

A)  service department cost allocation.
B)  overhead cost distribution.
C)  overhead application.
D)  transfer costing.
E)  overhead cost apportionment.

Question 16

A custom-home builder would likely utilize:

Accepted Answer

A)  job-order costing.
B)  process costing.
C)  mass customization.
D)  process budgeting.
E)  joint costing.

Question 17

Which of the following statements is true?

Accepted Answer

A)  Service ﬁrms have little need for determining the cost of their services.
B)  The concept of product costing is relevant only for manufacturing ﬁrms.
C)  The cost of year-end inventory appears on the balance sheet as an expense.
D)  Service companies use cost information for planning and control purposes.
E)  Mining and petroleum companies have no inventoriable costs.

Question 18

The ﬁnal step in recognizing the completion of production requires a company to:

Accepted Answer

A)  debit Finished-Goods Inventory and credit Work-in-Process Inventory.
B)  debit Work-in-Process Inventory and credit Finished-Goods Inventory.
C)  add direct labor to Work-in-Process Inventory.
D)  add direct materials, direct labor, and manufacturing overhead to Work-in-Process
E)  add direct materials to Finished-Goods Inventory.

Question 19

Travers Manufacturing incurred $106,000 of direct labor and $11,000 of indirect labor.The proper journal entry to record these events would include a debit to Work in Process for:

Accepted Answer

A)  $0 because Work in Process should be credited.
B)  $0 because Work in Process is not affected.
C)  $11,000.
D)  $106,000.
E)  $117,000.

Question 20

Boston, Inc.applies manufacturing overhead at the rate of $40 per machine hour.Budgeted machine hours for the current period were anticipated to be 120,000; however, a lengthy strike resulted in actual machine hours being worked of only 90,000.Budgeted and actual manufacturing overhead ﬁgures for the year were $4,800,000 and $4,180,000, respectively.On the basis of this information, the company's year-end overhead was:

Accepted Answer

A)  overapplied by $580,000.
B)  underapplied by $580,000.
C)  overapplied by $1,200,000.
D)  underapplied by $1,200,000.
E)  underapplied by $900,000.

Exam 3: Product Costing and Cost Accumulation in a Batch Production Environment

Travers Manufacturing incurred $106,000 of direct labor and $11,000 of indirect labor.The proper journal entry to record these events would include a debit to Work in Process for:

Correct Answer
verified

Job-order costing methods are used in a variety of service industry ﬁrms and nonproﬁt organizations.

Correct Answer
verified

Correct Answer
verified

In a public accounting ﬁrm, for example, costs are assigned to an audit engagement in much the same way they are assigned to a single batch of tables by a furniture manufacturer.

Correct Answer
verified

The left side of the Manufacturing Overhead account is used to accumulate:

Correct Answer
verified

If the amount of effort and attention to products varies substantially throughout a company's various manufacturing operations, the company might consider the use of:

Correct Answer
verified

The process of assigning overhead costs to the jobs that are worked on is commonly called:

Correct Answer
verified

Two-stage cost allocation uses a ﬁrst stage to assign all product costs to production departments and then a second stage to apply different cost drivers to improve eﬃciency.

Correct Answer
verified

A manufacturing ﬁrm produces goods in accordance with customer speciﬁcations, commencing production upon receipt of a purchase order.To accumulate the cost of each order, the company would use a:

Correct Answer
verified

As production takes place, all manufacturing costs are added to the:

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A typical job-cost record would provide information about all of the following items related to an order except:

Correct Answer
verified

A custom-home builder would likely utilize:

Correct Answer
verified

The ﬁnal step in recognizing the completion of production requires a company to:

Correct Answer
verified

Which of the following statements is true?

Correct Answer
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As soon as products are completed, their product costs are transferred from Raw Materials Inventory to Finished-Goods Inventory.

Correct Answer
verified

Which of the following is not considered to be a service department?

Correct Answer
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Which of the following statements is true?

Correct Answer
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Correct Answer
verified

Exam 3: Product Costing and Cost Accumulation in a Batch Production Environment

Travers Manufacturing incurred $106,000 of direct labor and $11,000 of indirect labor.The proper journal entry to record these events would include a debit to Work in Process for:

Correct AnswerverifiedShow Answer

Job-order costing methods are used in a variety of service industry ﬁrms and nonproﬁt organizations.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

In a public accounting ﬁrm, for example, costs are assigned to an audit engagement in much the same way they are assigned to a single batch of tables by a furniture manufacturer.

Correct AnswerverifiedShow Answer

The left side of the Manufacturing Overhead account is used to accumulate:

Correct AnswerverifiedShow Answer

If the amount of effort and attention to products varies substantially throughout a company's various manufacturing operations, the company might consider the use of:

Correct AnswerverifiedShow Answer

The process of assigning overhead costs to the jobs that are worked on is commonly called:

Correct AnswerverifiedShow Answer

Two-stage cost allocation uses a ﬁrst stage to assign all product costs to production departments and then a second stage to apply different cost drivers to improve eﬃciency.

Correct AnswerverifiedShow Answer

A manufacturing ﬁrm produces goods in accordance with customer speciﬁcations, commencing production upon receipt of a purchase order.To accumulate the cost of each order, the company would use a:

Correct AnswerverifiedShow Answer

As production takes place, all manufacturing costs are added to the:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A typical job-cost record would provide information about all of the following items related to an order except:

Correct AnswerverifiedShow Answer

A custom-home builder would likely utilize:

Correct AnswerverifiedShow Answer

The ﬁnal step in recognizing the completion of production requires a company to:

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

As soon as products are completed, their product costs are transferred from Raw Materials Inventory to Finished-Goods Inventory.

Correct AnswerverifiedShow Answer

Which of the following is not considered to be a service department?

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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