Chapter 4

The job-order cost sheet is a subsidiary account to a. Raw Materials. b. Work in Process. c. Finished Goods. d. Cost of Goods Sold. e. Jobs Started.

b

The predetermined overhead rate equals a. actual overhead divided by actual activity level for a period. b. estimated overhead divided by estimated activity level for a period. c. actual overhead minus estimated overhead. d. actual overhead multiplied by actual activity level for a period. e. one-twelfth of estimated overhead.

b

Those departments responsible for creating products or services that are sold to customers are referred to as a. profit-making departments. b. producing departments. c. cost centers. d. support departments. e. None of these.

b

Those departments that provide essential services to producing departments are referred to as a. revenue-generating departments. b. support departments. c. profit centers. d. production departments. e. None of these.

b

When materials are requisitioned for use in production in a job-order costing firm, the cost of materials is added to the a. raw materials account. b. work-in-process account. c. finished goods account. d. accounts payable account. e. cost of goods sold account.

b

The ending balance of which of the following accounts is calculated by summing the totals of the open (unfinished) job-order cost sheets? a. Raw Materials b. Overhead Control c. Work in Process d. Finished Goods e. Cost of Goods Sold.

c

The method that assigns support department costs by giving full recognition to support department interactions is known as a. the sequential method. b. the proportional method. c. the reciprocal method. d. the direct method. e. None of these.

c

When a job costing $2,000 is finished but not sold, the following journal entry is made: a. Cost of Goods Sold 2,000 Finished Goods 2,000 b. Finished Goods 2,000 Cost of Goods Sold 2,000 c. Finished Goods 2,000 Work in Process 2,000 d. Work in Process 2,000 Finished Goods 2,000 e. Cost of Goods Sold 2,000 Sales 2,000

c

When a job is completed, the total cost of the job is a. subtracted from the raw materials account. b. added to the work-in-process account. c. added to the finished goods account. d. added to the accounts payable account. e. subtracted from the cost of goods sold account.

c

An example of a producing department is a. a materials storeroom. b. the maintenance department. c. engineering design. d. assembly. e. All of these.

d

The method that assigns support department costs only to producing departments in proportion to each department's usage of the service is known as a. the sequential method. b. the proportional method. c. the reciprocal method. d. the direct method. e. None of these.

d

Which of the following statements is true? a. Job-order costing is used only in manufacturing firms. b.Process costing is used only for services. c. Job-order costing is simpler to use than process costing because the recordkeeping requirements are less. d.The job cost sheet is subsidiary to the work-in-process account. e.All of these.

d

Applied overhead is a. an important part of normal costing. b. never used in normal costing. c. an important part of actual costing. d. the predetermined overhead rate multiplied by estimated activity level. e. the predetermined overhead rate multiplied by estimated activity level for the month.

a

In a normal costing system, the cost of a job includes a. actual direct materials, actual direct labor, and estimated (applied) overhead. b. estimated direct materials, estimated direct labor, and estimated overhead. c. actual direct materials, actual direct labor, actual overhead, and actual selling cost. d. actual direct materials, actual direct labor, and actual overhead. e. None of these. Job-order costing requires the use of actual, not normal, costing.

a

The method that assigns support department costs by giving partial recognition to support department interactions is known as a. the sequential method. b. the proportional method. c. the reciprocal method. d. the direct method. e. None of these.

a

The overhead variance is overapplied if a. actual overhead is less than applied overhead. b. actual overhead is more than applied overhead. c. applied overhead is less than actual overhead. d. estimated overhead is less than applied overhead. e. estimated overhead is more than applied overhead.

a

Which of the following is typically a process-costing firm? a. Paint manufacturer b. Custom cabinetmaker c. Large regional medical center d. Law office e. Custom framing shop

a

Wilson Company has a predetermined overhead rate of $5 per direct labor hour. The job-order cost sheet for Job 145 shows 500 direct labor hours costing $10,000 and materials requisitions totaling $17,500. Job 145 had 1,000 units completed and transferred to Finished Goods. What is the cost per unit for Job 145? a. $20 b. $17.50 c. $25 d. $30 e. $22,500

d

An example of a support department is a. data processing. b. personnel. c. a materials storeroom. d. payroll. e. All of these.

e

The costs of a job are accounted for on the a. materials requisition sheet. b. time ticket. c. requisition for overhead application. d. sales invoice. e. job-order cost sheet.

e

Which of the following is typically a job-order costing firm? a. Paint manufacturer b. Pharmaceutical manufacturer c. Cleaning products manufacturer d. Cement manufacturer e. Large regional medical center

e