True or false: The cost of each individual unit is tracked to products under both job order and process costing.
answer
False
question
The basic formula for process costing is ______.
average unit cost = total manufacturing cost/total units produced
total cost = actual direct materials + actual direct labor + applied overhead
average unit cost = total units produced/total manufacturing costs
answer
average unit cost = total manufacturing cost/total units produced
question
Job-order costing would most likely be used in a(n) ______.
construction company
dairy farm that produces raw milk
soda bottling factory
oil refinery
answer
construction company
question
A blend of process and job order costing is called__ costing
answer
operations
question
Which of the following is not a manufacturing cost category?
Selling & administrative costs
Direct labor
Manufacturing overhead
Direct materials
answer
Selling & administrative costs
question
The major difference between job order and process costing is ______.
whether the products produced are hand made or machine made
whether the products produced are similar or different
job order costing is used for products and process costing is used for services
answer
whether the products produced are similar or different
question
Which of the following would most likely NOT be classified as a direct material?
Nails and screws
Laptop keyboard
Drywall
Automobile engine
answer
Nails and screws
question
Select all that apply
Process costing ______.
is used for mass production
uses job cost sheets
accumulates costs by customer
is used for homogeneous products
answer
is used for mass production
is used for homogeneous products
question
Which of the following would NOT be part of direct labor cost?
Supervisor salaries
Attorney salaries
Plumber wages
Assembly-workers wages
answer
Supervisor salaries
question
True or false: Job-order costing can only be used in manufacturing firms.
answer
False
question
Select all that apply
Manufacturing overhead costs ______.
include some materials and labor
must be manufacturing costs
are indirect costs
must be traceable to specific jobs
answer
include some materials and labor
must be manufacturing costs
are indirect costs
question
Which of the following companies would be most likely to use operations costing?
A custom home builder
A dog food manufacturer
An automobile manufacturer
A law firm
answer
An automobile manufacturer
question
Job order costing requires a good record-keeping system that uses __documents that trace direct costs to specific jobs.
answer
source
question
Select all that apply
Categories of manufacturing costs include ______.
selling expenses
direct labor
direct materials
manufacturing overhead
administrative expenses
answer
direct labor
direct materials
manufacturing overhead
question
What document specifies the type and quantity of direct materials used on a specific job?
Job cost sheet
Direct labor time ticket
Materials requisition form
Bill of materials form
answer
Materials requisition form
question
Major inputs such as lumber and fixtures that can be easily traced to a specific job are called __ __
answer
direct materials
question
Select all that apply
A direct labor time ticket includes the ______.
materials used on each job worked
amount of time spent on each job
job numbers of jobs worked on
answer
amount of time spent on each job
job numbers of jobs worked on
question
The costs incurred for each unique product, project, or service are recorded on a document called a(n) __ __ sheet
answer
job cost
question
Select all that apply
Materials requisition forms are used to ______.
control the flow of materials from inventory into production
specify the cost of materials to be ordered
summarize the cost of a job
record the cost of raw materials in the accounting system
answer
control the flow of materials from inventory into production
record the cost of raw materials in the accounting system
question
A direct labor__ __ is a document used to record how long workers spend on each job and task.
answer
time ticket
question
What document specifies the type and quantity of direct materials used on a specific job?
Direct labor time ticket
Materials requisition form
Bill of materials form
Job cost sheet
answer
Materials requisition form
question
Select all that apply
Materials requisition forms are used to ______.
specify the cost of materials to be ordered
summarize the cost of a job
control the flow of materials from inventory into production
record the cost of raw materials in the accounting system
answer
control the flow of materials from inventory into production
record the cost of raw materials in the accounting system
question
Predetermined overhead rates are ______.
based on some secondary allocation measure
generally calculated for each month of the year
calculated using estimated costs and actual cost driver usage
used to assign both direct and indirect manufacturing costs to jobs
answer
based on some secondary allocation measure
question
An allocation base is a(n) ______.
measure of activity used to assign overhead costs to products and services
activity that causes overhead costs to change
measure used to assign all manufacturing costs to products and services
answer
measure of activity used to assign overhead costs to products and services
question
A cost driver is ______.
the rate that is used to apply manufacturing overhead to products and services
the total estimated manufacturing overhead cost
another name for predetermined overhead rate
a measure that explains or influences the amount of manufacturing overhead cost incurred
answer
a measure that explains or influences the amount of manufacturing overhead cost incurred
question
The formula for a predetermined overhead rate is ______.
estimated total manufacturing overhead cost / estimated total cost driver
estimated total cost driver / estimated total manufacturing overhead cost
actual total manufacturing overhead cost / actual total cost driver
actual total cost driver / actual total manufacturing overhead cost
answer
estimated total manufacturing overhead cost / estimated total cost driver
question
True or false: A predetermined overhead rate of $50 per direct labor hour means that the total cost of direct labor and indirect cost equals $50 per hour.
answer
False
question
The first step in assigning manufacturing overhead costs using a predetermined overhead rate is to ______.
calculate the predetermined overhead rate
determine the cost driver
assign manufacturing overhead
answer
determine the cost driver
question
The first step in assigning manufacturing overhead is to determine the __ __ or cost driver
answer
allocation base
question
When calculating a predetermined overhead rate, the ideal allocation base should be a(n) __ __
answer
cost driver
question
To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the ______.
answer
estimated total cost driver
question
The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the ______ the job.
overhead applied to
total cost of
predetermined overhead rate for
actual overhead for
answer
overhead applied to
question
A predetermined overhead rate of $20 per direct labor hours means that ______.
for each direct labor hour, $20 is added to cover indirect costs
the total cost of direct and indirect labor is $20 per hour
employees who directly work on the job are paid $20 per hour
answer
for each direct labor hour, $20 is added to cover indirect costs
question
Murphy Manufacturing estimated $100,000 in manufacturing overhead and 5,000 direct labor hours for 2016. Actual overhead for the year was $120,000 and 7,500 actual direct labor-hours were used. How much overhead was applied to a job completed during 2016 that used 200 direct labor-hours?
$4,000
$3,200
$4,800
$100,000
answer
$4,000
question
When is the predetermined overhead rate calculated?
As soon as actual overhead is known
After the period is over
Before the period begins
Throughout the year
answer
before the period begins
question
Ideally an allocation base should ______.
be a cost associated with producing the firm's goods
should not be a cost driver
explain or influence the amount of overhead incurred
be calculated using a predetermined overhead rate
answer
explain or influence the amount of overhead incurred
question
A cost driver is ______.
the rate that is used to apply manufacturing overhead to products and services
the total estimated manufacturing overhead cost
a measure that explains or influences the amount of manufacturing overhead cost incurred
another name for predetermined overhead rate
answer
a measure that explains or influences the amount of manufacturing overhead cost incurred
question
Select all that apply
Which of the following statements are true?
Direct labor costs flow through the Raw materials inventory account.
Raw materials inventory represents the cost of materials not yet used in production.
When materials are purchased they are recorded in the Raw materials inventory account.
Raw materials inventory only includes the cost of direct materials.
answer
Raw materials inventory represents the cost of materials not yet used in production.
When materials are purchased they are recorded in the Raw materials inventory account.
question
What is the formula for applying overhead to a specific job?
Estimated manufacturing overhead / estimated total cost driver usage
Actual manufacturing overhead rate Γ actual cost driver usage for the specific job
Predetermined overhead rate Γ the actual cost driver usage for the specific job
Estimated manufacturing overhead / cost driver usage for the specific job
answer
Predetermined overhead rate Γ the actual cost driver usage for the specific job
question
A company's calculated predetermined overhead rate is $90 per direct labor hour. If a job requires 4 direct labor hours, ______.
the total cost of labor and overhead for the job is $360
$360 is assigned to the job to cover indirect costs
the total cost of labor for the job is $360
answer
$360 is assigned to the job to cover indirect costs
question
The balance of work in process inventory may be calculated by ______.
subtracting the cost of goods sold from the sum of all manufacturing costs
summing the sales value of all jobs in process
summing the costs of all jobs in process
subtracting the cost of finished goods inventory from the sum of all manufacturing costs
answer
summing the costs of all jobs in process
question
Predetermined overhead rates are ______.
used to assign both direct and indirect manufacturing costs to jobs
based on some secondary allocation measure
generally calculated for each month of the year
calculated using estimated costs and actual cost driver usage
answer
based on some secondary allocation measure
question
All materials that will be used in future production are first recorded in the __ __ Inventory account.
answer
raw materials
question
The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the __ job
answer
overhead applied to
question
In a job-order costing system costs flow first to ______.
the income statement and then to the inventory accounts
the inventory accounts and then to cost of goods sold
cost of goods manufactured and then to the inventory accounts
the inventory accounts and then to the Finished Goods account
answer
the inventory accounts and then to cost of goods sold
question
Costs of partially completed units are accounted for in ______.
cost of goods manufactured
finished goods
work in process
raw materials
answer
work in process
question
Ideally an allocation base should ______.
be a cost associated with producing the firm's goods
should not be a cost driver
be calculated using a predetermined overhead rate
explain or influence the amount of overhead incurred
answer
explain or influence the amount of overhead incurred
question
The work in process account accumulates ______.
actual direct materials, actual direct labor, and applied overhead costs
actual direct material, applied direct labor, and applied overhead costs
applied direct material, applied direct labor, and actual overhead costs
actual direct materials, actual direct labor, and actual overhead costs
answer
actual direct materials, actual direct labor, and applied overhead costs
question
Finished goods ______.
consists of goods that require additional processing before being sold
is the same as cost of goods manufactured
consists of completed, unsold goods
consists of goods that have been sold to customers during the period
answer
consists of completed, unsold goods
question
When goods are sold to customers, ______.
costs are transferred from Finished Goods to Sales Revenue
costs are transferred from Work in Process to Finished Goods
the inventory accounts are not affected
costs are transferred from Finished Goods to Cost of Goods Sold
answer
costs are transferred from Finished Goods to Cost of Goods Sold
question
The balance of work in process inventory may be calculated by ______.
summing the sales value of all jobs in process
subtracting the cost of goods sold from the sum of all manufacturing costs
summing the costs of all jobs in process
subtracting the cost of finished goods inventory from the sum of all manufacturing costs
answer
summing the costs of all jobs in process
question
Costs are transferred from raw materials inventory to ______.
finished goods inventory only
manufacturing overhead only
work in process inventory only
either finished goods or work in process
either work in process or manufacturing overhead
answer
either work in process or manufacturing overhead
question
As jobs are worked on the Work in Process account accumulates ______.
actual direct materials and applied direct labor and overhead costs
actual direct materials, direct labor, and overhead costs
actual direct materials and direct labor costs and applied overhead costs
estimated direct materials and direct labor and applied overhead costs
answer
actual direct materials and direct labor costs and applied overhead costs
question
In a job-order costing system costs flow first to ______.
the income statement and then to the inventory accounts
the inventory accounts and then to the Finished Goods account
cost of goods manufactured and then to the inventory accounts
the inventory accounts and then to cost of goods sold
answer
the inventory accounts and then to cost of goods sold
question
Actual manufacturing overhead costs are accumulated on the ______ side of the Manufacturing Overhead account and applied costs are shown on the ______ side.
credit, debit
debit, credit
answer
debit, credit
question
True or false: At the end of the accounting period, a balance in the Manufacturing Overhead account always means that overhead was underapplied.
True
False
answer
False
question
Select all that apply
When materials are requisitioned into production, ______.
direct materials are recorded on the job cost sheet
indirect materials are recorded in Work in Process
direct materials are recorded in Work in Process
indirect materials are recorded as a separate line item on the job cost sheet
answer
direct materials are recorded on the job cost sheet
direct materials are recorded in Work in Process
question
True or false: Job cost sheets serve as a subsidiary ledger to the overall Work in Process Inventory account.
answer
true
question
Select all that apply
Labor costs ______.
are determined from the job cost sheets
are always recorded directly into Work in Process
are recorded in basically the same way as material costs
may be direct or indirect
answer
are recorded in basically the same way as material costs
may be direct or indirect
question
True or false: The Manufacturing Overhead account is a temporary account used to accumulate actual and applied overhead costs.
answer
true
question
Overhead costs are debited to Work in Process when ______.
the actual costs are incurred
the job is sold
they are applied to jobs
the job is started
answer
they are applied to jobs
question
Select all that apply
At the end of the reporting period, any differences between actual and applied manufacturing overhead may be ______.
reported on the income statement as a gain or loss
ignored if the amount is insignificant
adjusted directly to Cost of Goods Sold (COGS)
adjusted to Work in Process, Finished Goods, and COGS
answer
adjusted directly to Cost of Goods Sold (COGS)
adjusted to Work in Process, Finished Goods, and COGS
question
Actual manufacturing overhead consists of all ______.
costs other than direct labor and direct materials
manufacturing costs other than direct labor and direct materials
indirect costs
manufacturing costs
answer
manufacturing costs other than direct labor and direct materials
question
When materials are purchased they are first recorded in the ______ account.
Raw Materials Inventory
Work in Process Inventory
Finished Goods Inventory
Manufacturing Overhead
answer
raw materials inventory
question
The job cost sheet serves as a(n) __ __to the overall Work in Process Inventory account.
answer
subsidiary ledger
question
When actual manufacturing overhead costs are incurred, ______.
work in process inventory is debited
the manufacturing overhead cost is debited
work in process inventory is credited
the manufacturing overhead cost is credited
answer
the manufacturing overhead cost is debited
question
Cost of goods manufactured is the ______.
value of all jobs transferred from Work in Process to Finished Goods
value of all jobs in Finished Goods at the end of a period
average value of the Work in Process account
value of all jobs transferred from Finished Goods to Cost of Goods Sold
answer
value of all jobs transferred from Work in Process to Finished Goods
question
When a job is completed, its costs are transferred into ______.
Cost of Goods Sold
Finished Goods
Sales Revenue
Work in Process
answer
finished goods
question
Select all that apply
Labor costs ______.
are always recorded directly into Work in Process
are determined from the job cost sheets
are recorded in basically the same way as material costs
may be direct or indirect
answer
are recorded in basically the same way as material costs
may be direct or indirect
question
Overhead costs are debited to Work in Process when ______.
the job is started
the job is sold
the actual costs are incurred
they are applied to jobs
answer
they are applied to jobs
question
Actual manufacturing overhead consists of all ______.
indirect costs
manufacturing costs other than direct labor and direct materials
costs other than direct labor and direct materials
manufacturing costs
answer
manufacturing costs other than direct labor and direct materials
question
The cost of goods __ is the sum of all amounts transferred from Work in process to Finished goods during a period.
answer
manufactured
question
When a job is completed, its costs are transferred out of ______.
Cost of Goods Sold
Finished Goods
Work in Process
Manufacturing Overhead
answer
work in process
question
Ending Work in Process Inventory represents the cost of goods ______.
not yet completed
not yet sold
to be started on next period
answer
not yet completed
question
Nonmanufacturing costs increase ______.
various asset and liability accounts
the Manufacturing Overhead account
the Selling, General & Administrative expense accounts
the Cost of Goods sold account
answer
the Selling, General & Administrative expense accounts
question
Applied manufacturing overhead costs are credited to the Manufacturing Overhead account ______.
as they are incurred
when the jobs are sold
at the end of the period
as the costs are applied to jobs
answer
as the costs are applied to jobs
question
When actual manufacturing overhead costs are incurred, ______.
work in process inventory is credited
the manufacturing overhead cost is credited
the manufacturing overhead cost is debited
work in process inventory is debited
answer
the manufacturing overhead cost is debited
question
Cost of goods manufactured is the ______.
value of all jobs in Finished Goods at the end of a period
average value of the Work in Process account
value of all jobs transferred from Work in Process to Finished Goods
value of all jobs transferred from Finished Goods to Cost of Goods Sold
answer
value of all jobs transferred from Work in Process to Finished Goods
question
Nonmanufacturing costs incurred during a period are treated as ______.
liabilities
assets
product costs
period expenses
answer
period expenses
question
The difference between overhead applied to jobs and actual overhead is ______.
cost of goods manufactured
ending work in process inventory
overapplied or underapplied overhead
cost of goods sold
answer
overapplied or underapplied overhead
question
If there is a credit balance in the Manufacturing Overhead account after overhead have been applied to all jobs it means overhead was__
answer
overapplied
question
The most common method for disposing of the balance in Manufacturing Overhead is ______.
allocating it between Work in Process and Finished Goods inventory
adjusting Finished Goods inventory
adjusting Cost of Goods Sold
allocating it between Cost of Goods Sold and inventory accounts
answer
adjusting Cost of Goods Sold
question
If the Manufacturing Overhead account has a credit balance at the end of the period that indicates that overhead was ______ and Cost of Goods Sold must be ______.
answer
overapplied, decreased
question
Overhead is underapplied if ______.
actual overhead is more than applied overhead
actual overhead is less than applied overhead
cost of goods manufactured is less than cost of goods sold
adjusted cost of goods sold is less than unadjusted cost of goods sold
answer
actual overhead is more than applied overhead
question
Underapplied or overapplied overhead is the ______.
sum of overhead applied to jobs and actual overhead
same as actual overhead
difference between overhead applied to jobs and actual overhead
total overhead applied to work in process
answer
difference between overhead applied to jobs and actual overhead
question
The total cost transferred out of Work in Process inventory into Finished Goods inventory is ______.
gross profit
net operating income
cost of goods sold
cost of goods manufactured
answer
cost of goods manufactured
question
If there is a debit balance in Manufacturing Overhead after overhead has been applied to all jobs it means overhead was
answer
underapplied
question
Select all that apply
Which methods can be used to dispose of underapplied or overapplied manufacturing overhead?
Allocate it to Work in Process, Finished Goods, and Cost of Goods Sold
Make a direct adjustment to Cost of Goods Sold
Close it out to Work in process
Allocate it to Raw Materials, Work in Process, and Finished Goods
Make a direct adjustment to Finished Goods
answer
Allocate it to Work in Process, Finished Goods, and Cost of Goods Sold
Make a direct adjustment to Cost of Goods Sold
question
Given the following, compute the cost of goods manufactured. Direct material cost: $40,000 Direct labor cost: $100,000 Applied overhead: $120,000 Beginning work in process inventory: $30,000 Ending work in process inventory: $12,000
$278,000
$302,000
$242,000
$260,000
answer
$278,000
question
If the Manufacturing Overhead account has a ______ balance at the end of the period that indicates that overhead was underapplied and Cost of Goods Sold must be ______.
answer
debit, increased
question
Overhead is overapplied if ______.
actual overhead is more than applied overhead
actual overhead is less than applied overhead
cost of goods manufactured is less than cost of goods sold
adjusted cost of goods sold is more than unadjusted cost of goods sold
answer
actual overhead is less than applied overhead
question
Raw materials inventory was $27,000 at the beginning of the year and $25,000 at the end of the year. During the year, $100,000 in raw materials were purchased, including $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.
$130,000
$70,000
$102,000
$74,000
answer
$74,000
question
Calculate total current manufacturing costs given the following: Direct materials cost: $62,000 Direct labor cost: $78,000 Manufacturing overhead applied: $46,000 Actual manufacturing overhead: $51,000 Beginning Work in process inventory: $32,000 Ending Work in process inventory: $35,000
$183,000
$186,000
$191,000
answer
$186,000
question
Given: Cost of goods manufactured of $234,000, beginning finished goods inventory of $18,000, and ending finished goods inventory of $24,000, calculate unadjusted cost of goods sold.
$258,000
$240,000
$252,000
$228,000
answer
$228,000
question
the cost of goods manufactured report includes ______ manufacturing overhead costs.
actual
applied
answer
applied
question
Carlisle, Inc. had Sales revenue of $500,000, Unadjusted cost of goods sold of $395,000, Underapplied manufacturing overhead of $5,000, and Selling and administrative expenses of $50,000. Calculate gross profit.
$100,000
$110,000
$50,000
$105,000
answer
$100,000
question
Raw materials inventory was $5,000 at the beginning of the year and $12,000 at the end of the year. During the year, a total of $27,000 in raw materials were purchased, including $4,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.
$30,000
$20,000
$16,000
$24,000
answer
$16,000
question
Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000
$302,000
$260,000
$242,000
$278,000
answer
$260,000
question
Given: Cost of goods manufactured of $410,000, beginning finished goods inventory of $110,000, and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.
$535,000
$395,000
$520,000
$425,000
answer
$395,000
question
Gross profit minus selling and administrative expenses equals ______.
net operating income
cost of goods sold
net operating assets
cost of goods manufactured
answer
net operating income
question
Jonas Corporation used $20,000 of direct materials, incurred $40,000 of direct labor cost, and applied $30,000 of manufacturing overhead to jobs this period. No jobs were incomplete at the beginning of the period, but at the end of the period, jobs with a total cost of $25,000 were unfinished. What was the cost of goods manufactured for this period?
$115,000
$25,000
$65,000
$90,000
answer
$65,000
question
Gemini had Sales of $50,000, Unadjusted Cost of goods sold of $23,000, Overapplied Manufacturing Overhead of $3,000, and Selling and administrative expenses of $25,000. Calculate gross profit.
$5,000
$24,000
$27,000
$30,000
answer
$30,000
question
to calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ______.
only beginning raw materials inventory
ending raw materials inventory and indirect materials used
only ending raw materials inventory
beginning raw materials inventory and indirect materials used
answer
ending raw materials inventory and indirect materials used
question
Luver Corporation's Gross profit is $100,000, Cost of goods sold equals $70,000, and Selling and administrative expenses total $45,000. Calculate the net operating income (loss).
answer
$55,000
question
Raw materials inventory was $27,000 at the beginning of the year and $25,000 at the end of the year. During the year, $100,000 in raw materials were purchased, including $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.
answer
$74,000
question
Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000
$302,000
$278,000
$242,000
$260,000
answer
$260,000
question
Gross profit minus selling and administrative expenses equals ______.
net operating assets
cost of goods sold
net operating income
cost of goods manufactured
answer
net operating income
question
Which of the following would not be considered a job in a service firm that uses job-order costing?
answer
The tax department in an accounting firm
question
Raw materials inventory was $27,000 at the beginning of the year and $25,000 at the end of the year. During the year, $100,000 in raw materials were purchased, including $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.
$102,000
$130,000
$70,000
$74,000
answer
$74,000
Haven't found what you need?
Search for quizzes and test answers now
Quizzes.studymoose.com uses cookies. By continuing you agree to our cookie policy