Cost Accounting__Job Process Costing
Williams Company uses a job-order costing system and the following information is available from its records. The company has three jobs in process: #6, #9, and #13. Raw material used P120,000 Direct labor per hour P8.50 Overhead applied based on direct labor cost 120% Direct material was requisitioned as follows for each job respectively: 30 percent, 25 percent, and 25 percent; the balance of the requisitions was considered indirect. Direct labor hours per job are 2,500; 3,100; and 4,200; respectively. Indirect labor is P33,000. Other actual overhead costs totaled P36,000. Refer to Williams Company. Assume the balance in Work in Process Inventory was P18,500 on June 1 and P25,297 on June 30. The balance on June 30 represents one job that contains direct material of P11,250. How many direct labor hours have been worked on this job (rounded to the nearest hour)? a. 751 b. 1,324 c. 1,653 d. 2,976
a. 751 Step 1: Determine DL and FOH WIP at June 30: 25,297 Less DM in WIP: 11,250 = 14,047 Step 2: Separate DL and FOH Let x = DL; 1.2x = FOH x + 1.2x = 14,047 2.2x = 14,047 x = P6,385 Step 3: Compute DL Hours P6,385 ÷ 8.50 = 751 hours
Gamma Co. uses a job-order costing system. At the beginning of January, the company had two jobs in process with the following costs: Direct Material Direct Labor Overhead Job #456 P3,400 P510 P255 Job #461 1,100 289 ? Gamma pays its workers P8.50 per hour and applies overhead on a direct labor hour basis. Refer to Gamma Company. How much overhead was included in the cost of Job #461 at the beginning of January? a. P 144.50 b. P 153.00 c. P2,200.00 d. P2,456.50
a. P 144.50 Direct Labor Hours: P289/P8.50 = 34 hrs Overhead Application Rate: P255 / 60 hrs = P 4.25 34 hrs * P4.25/hr = P 144.50
Gamma Co. uses a job-order costing system. At the beginning of January, the company had two jobs in process with the following costs: Direct Material Direct Labor Overhead Job #456 P3,400 P510 P255 Job #461 1,100 289 ? Gamma pays its workers P8.50 per hour and applies overhead on a direct labor hour basis. Refer to Gamma Company. During January, Gamma's employees worked on Job #649. At the end of the month, P714 of overhead had been applied to this job. Total Work in Process at the end of the month was P6,800 and all other jobs had a total cost of P3,981. What amount of direct material is included in Job #649? a. P 677.00 b. P1,391.00 c. P2,142.00 d. P4,658.00
a. P 677.00 Direct Materials--Job 649 Total Work in Process = P 6,800 - Other Work in Process = (-3,981) = Costs remaining in WIP = 2,819 Overhead = 714 + Direct Labor (OH x 2) P714 * 2 = 1,428 = 2,142 Direct Materials = 2,819-2,142 = P 677
West Company is a print shop that produces jobs to customer specifications. During January, Job #3051 was worked on and the following information is available: Direct material used P2,500 Direct labor hours worked 15 Machine time used 6 Direct labor rate per hour P7 Overhead application rate per hour of machine time P18 What was the total cost of Job #3051 for January? a. P2,713 b. P2,770 c. P2,812 d. P3,052
a. P2,713 Direct Materials (P 2,500) + Direct Labor (15 hours * P7/hour) = (105) + Factory Overhead (6 hrs machine time * P18/mach hr) = (108) = P 2,713
Bobcat Company. uses a job-order costing system. During April, the following costs appeared in the Work in Process Inventory account: Beginning balance P 24,000 Direct material used 70,000 Direct labor incurred 60,000 Applied overhead 48,000 Cost of goods manufactured 185,000 Bobcat Company applies overhead on the basis of direct labor cost. There was only one job left in Work in Process at the end of April which contained P5,600 of overhead. What amount of direct material was included in this job? a. P4,400 b. P4,480 c. P6,920 d. P8,000
a. P4,400 Total Costs Incurred (202,000) - Less: Cost of Goods Manufactured (-185,000) = Costs remaining in WIP (17,000) Overhead (5,600) + Direct Labor (5,600/.80) = (7,000) = 12,600 Costs remaining in WIP (17,000) - 12,600 = Direct Materials 4,400
If abnormal spoilage occurs in a job-order costing system, has a material peso value, and is related to a specific job, the recovery value of the spoiled goods should be debited to credited to a. a scrap inventory account the specific job in process b. the specific job in process overhead c. a loss account the specific job in process d. factory overhead sales
a. a scrap inventory account the specific job in process
In a normal cost system, a debit to Work in Process Inventory would not be made for a. actual overhead. b. applied overhead. c. actual direct material. d. actual direct labor.
a. actual overhead.
The use of standard material or labor costs in job-order costing a. is similar to the use of predetermined overhead rates in a normal costing system. b. will keep actual costs of jobs from fluctuating due to changes in component costs. c. is appropriate for any company making a units to customer specification. d. all answers are correct.
a. is similar to the use of predetermined overhead rates in a normal costing system.
What is the best cost accumulation procedure to use when many batches, each differing as to product specifications, are produced? a. job-order b. process c. actual d. standard
a. job-order
The __________ provides management with a historical summation of total costs for a given product. a. job-order cost sheet b. employee time sheet c. material requisition form d. bill of lading
a. job-order cost sheet
A company producing which of the following would be most likely to use a time standard for labor? a. mattresses b. custom-made picture frames c. floral arrangements d. stained-glass windows
a. mattresses
Which of the following organizations would be most likely to use a job-order costing system? a. the loan department of a bank b. the check clearing department of a bank c. A manufacturer of processed cheese food d. A manufacturer of video cassette tapes
a. the loan department of a bank
Spoiled units are a. units that cannot be economically reworked to bring them up to standard. b. units that can be economically reworked to bring them up to standard. c. the same as defective units. d. considered abnormal losses.
a. units that cannot be economically reworked to bring them up to standard.
Which of the following costing systems allows management to quickly recognize materials, labor, and overhead variances and take measures to correct them? Actual Cost System Normal Cost System a. yes yes b. yes no c. no yes d. no no
d. no no
Which of the following statements is false? a. While the use of standard costing is acceptable for job-order costing systems, actual cost records should still be maintained. b. It is normally more time-consuming for a company to use standard costs in a job-order costing system. c. Standards can be used in a job-order costing system, if the company usually produces items that are similar in nature. d. Standard costs may be used for material, labor, or both material and labor in a job-order costing environment.
b. It is normally more time-consuming for a company to use standard costs in a job-order costing system.
Which of the following statements about job-order cost sheets is true? a. All job-order cost sheets serve as the general ledger control account for Work in Process Inventory. b. Job-order cost sheets can serve as subsidiary ledger information for both Work in Process Inventory and Finished Goods Inventory. c. If material requisition forms are used, job-order cost sheets do not need to be maintained. d. Job-order cost sheets show costs for direct material and direct labor, but not for manufacturing overhead since it is an applied amount.
b. Job-order cost sheets can serve as subsidiary ledger information for both Work in Process Inventory and Finished Goods Inventory.
A company producing which of the following would be most likely to use a price standard for material? a. Furniture b. NFL-logo jackets c. custom-made picture frames d. none of the above
b. NFL-logo jackets
Williams Company uses a job-order costing system and the following information is available from its records. The company has three jobs in process: #6, #9, and #13. Raw material used P120,000 Direct labor per hour P8.50 Overhead applied based on direct labor cost 120% Direct material was requisitioned as follows for each job respectively: 30 percent, 25 percent, and 25 percent; the balance of the requisitions was considered indirect. Direct labor hours per job are 2,500; 3,100; and 4,200; respectively. Indirect labor is P33,000. Other actual overhead costs totaled P36,000. Refer to Williams Company. How much overhead is applied to Work in Process? a. P 69,000 b. P 99,960 c. P132,960 d. P144,000
b. P 99,960 Direct Labor Hours: Job 6: 2500 Job 9: 3100 Job 1: 4200 Total: 9,800 Direct Labor Rate P8.50 Overhead Application Rate 120% = Total Overhead Applied P 99,960
Sigma Company The following information pertains to Sigma Company for September: Direct Material Direct Labor Overhead Job #323 P3,200 P4,500 ? Job #325 ? 5,000 ? Job #401 5,670 ? P5,550 Sigma Company applies overhead for Job #323 at 140 percent of direct labor cost and at 150 percent of direct labor cost for Jobs #325 and #401. The total cost of Jobs #323 and #325 is identical. Refer to Sigma Co. What is the amount of direct materials for Job #325? a. P1,950 b. P1,500 c. P3,700 d. P7,500
b. P1,500 Step 1: Determine OH for Jobs 323 and 325 Job 323: 6,300 Job 325: 7,500 Step 2: Compute Total Cost of Job 323 DM: 3,200 DL: 4,500 FOH: 6,300 Total: 14,000 Step 3: Compute Direct Materials for Job 325 (14,000 - (5,000 + 7,500) = 1,500
After the completion of production, standard and actual costs are compared to determine the ______ of the production process. a. Effectiveness b. Complexity c. Homogeneity d. Efficiency
d. Efficiency
A material requisition form should show all of the following information except a. job number. b. quantity required. c. unit cost. d. purchase order number.
d. purchase order number.
Williams Company uses a job-order costing system and the following information is available from its records. The company has three jobs in process: #6, #9, and #13. Raw material used P120,000 Direct labor per hour P8.50 Overhead applied based on direct labor cost 120% Direct material was requisitioned as follows for each job respectively: 30 percent, 25 percent, and 25 percent; the balance of the requisitions was considered indirect. Direct labor hours per job are 2,500; 3,100; and 4,200; respectively. Indirect labor is P33,000. Other actual overhead costs totaled P36,000. Refer to Williams Company. What is the prime cost of Job #6? a. P42,250 b. P57,250 c. P73,250 d. P82,750
b. P57,250 Direct Materials (P120,000 * 30%) P36,000 Direct Labor (2,500 hrs * P8.50) 21,250 = Total Prime Costs P 57,250
Sigma Company The following information pertains to Sigma Company for September: Direct Material Direct Labor Overhead Job #323 P3,200 P4,500 ? Job #325 ? 5,000 ? Job #401 5,670 ? P5,550 Sigma Company applies overhead for Job #323 at 140 percent of direct labor cost and at 150 percent of direct labor cost for Jobs #325 and #401. The total cost of Jobs #323 and #325 is identical. Refer to Sigma Co. What amount of overhead is applied to Job #325? a. P8,325 b. P7,500 c. P7,000 d. P5,000
b. P7,500 Direct Labor P 5,000 * Application Rate 150% = Total Overhead P 7,500
The journal entry to apply overhead to production includes a credit to Manufacturing Overhead control and a debit to a. Finished Goods Inventory. b. Work in Process Inventory. c. Cost of Goods Sold. d. Raw Material Inventory.
b. Work in Process Inventory.
Which of the following could not be used in job-order costing? a. Standards b. an average cost per unit for all jobs c. normal costing d. overhead allocation based on the job's direct labor hours
b. an average cost per unit for all jobs
Which of the following could not be used in job-order costing? a. standards b. an average cost per unit for all jobs c. normal costing d. overhead allocation based on the job's direct labor hours
b. an average cost per unit for all jobs
The trend in job-order costing is to a. eliminate the data entry function for the accounting system. b. automate the data collection and data entry functions. c. use accounting software to change the focal point of the job-order system. d. create an Intranet to share information between competitors.
b. automate the data collection and data entry functions.
The net cost of normal spoilage in a job-order costing system in which spoilage is common to all jobs should be a. assigned directly to the jobs that caused the spoilage. b. charged to manufacturing overhead during the period of the spoilage. c. charged to a loss account during the period of the spoilage. d. allocated only to jobs that are completed during the period.
b. charged to manufacturing overhead during the period of the spoilage.
Debits to Cost of Goods Sold typically represent the a. transfer of completed items to Finished Goods Inventory. b. costs of items sold. c. selling price of items sold. d. the cost of goods manufactured.
b. costs of items sold.
The source document that records the amount of time an employee worked on a job and his/her pay rate is the a. job-order cost sheet. b. employee time sheet. c. interoffice memo. d. labor requisition form.
b. employee time sheet.
In a perpetual inventory system, a transaction that requires two journal entries (or one compound entry) is needed when a. raw materials are purchased on account. b. goods are sold for either cash or on account. c. goods are finished and transferred out of Work in Process Inventory. d. overhead is applied to Work in Process Inventory.
b. goods are sold for either cash or on account.
Underapplied overhead resulting from unanticipated and immaterial price increases for overhead items should be written off by a. decreasing Cost of Goods Sold. b. increasing Cost of Goods Sold. c. decreasing Cost of Goods Sold, Work in Process Inventory, and Finished Goods Inventory. d. increasing Cost of Goods Sold, Work in Process Inventory, and Finished Goods Inventory.
b. increasing Cost of Goods Sold.
The primary accounting document in a job-order costing system is a(n) a. bill of materials. b. job-order cost sheet. c. employee time sheet. d. materials requisition.
b. job-order cost sheet.
In job-order costing, payroll taxes paid by the employer for factory employees are commonly accounted for as a. direct labor cost. b. manufacturing overhead cost. c. indirect labor cost. d. administrative cost.
b. manufacturing overhead cost.
Normal spoilage is defined as unacceptable production that a. arises because of a special job or process. b. occurs in on-going operations. c. is caused specifically by human error. d. is in excess of that which is expected.
b. occurs in on-going operations.
Overapplied overhead would result if a. the plant were operated at less than normal capacity. b. overhead costs incurred were less than costs charged to production. c. overhead costs incurred were unreasonably large in relation to units produced. d. overhead costs incurred were greater than costs charged to production.
b. overhead costs incurred were less than costs charged to production.
Abnormal spoilage is a. spoilage that is forecasted or planned. b. spoilage that is in excess of planned. c. accounted for as a product cost. d. debited to Cost of Goods Sold.
b. spoilage that is in excess of planned.
Shrinkage should be treated as a. defective units. b. spoiled units. c. miscellaneous expense. d. a reduction of overhead.
b. spoiled units.
The journal entry to record the incurrence and payment of overhead costs for factory insurance requires a debit to a. Cash and a credit to Manufacturing Overhead. b. Manufacturing Overhead and a credit to Accounts Payable. c. Manufacturing Overhead and a credit to Cash. d. Work in Process Inventory and a credit to Cash.
c. Manufacturing Overhead and a credit to Cash.
Gamma Company Gamma Co. uses a job-order costing system. At the beginning of January, the company had two jobs in process with the following costs: Direct Material Direct Labor Overhead Job #456 P3,400 P510 P255 Job #461 1,100 289 ? Gamma pays its workers P8.50 per hour and applies overhead on a direct labor hour basis. Refer to Gamma Company. What is the overhead application rate per direct labor hour? a. P 0.50 b. P 2.00 c. P 4.25 d. P30.00
c. P 4.25 Direct Labor Hours: P510/P8.50 = 60 hrs Overhead Application Rate: P255 / 60 hrs = 4.25
Sigma Company The following information pertains to Sigma Company for September: Direct Material Direct Labor Overhead Job #323 P3,200 P4,500 ? Job #325 ? 5,000 ? Job #401 5,670 ? P5,550 Sigma Company applies overhead for Job #323 at 140 percent of direct labor cost and at 150 percent of direct labor cost for Jobs #325 and #401. The total cost of Jobs #323 and #325 is identical. Refer to Sigma Co. Assume that Jobs #323 and #401 are incomplete at the end of September. What is the balance in Work in Process Inventory at that time? a. P18,920 b. P22,620 c. P28,920 d. P30,120
c. P28,920 Step 1: Determine DL for Job 401 P5,550 ÷ 150% = 3,700 Step 2: Compute Total Cost of Job 401 DM: 5,670 DL: 3,700 FOH: 5,550 = Total: 14,920 Step 2: Compute Total Cost of Job 323 DM: 3,200 DL: 4,500 FOH: 6,300 = Total: 14,000 Total Costs of Jobs 323 and 401 = 28,920
Sigma Company The following information pertains to Sigma Company for September: Direct Material Direct Labor Overhead Job #323 P3,200 P4,500 ? Job #325 ? 5,000 ? Job #401 5,670 ? P5,550 Sigma Company applies overhead for Job #323 at 140 percent of direct labor cost and at 150 percent of direct labor cost for Jobs #325 and #401. The total cost of Jobs #323 and #325 is identical. Refer to Sigma Co. What amount of overhead is applied to Job #323? a. P4,800 b. P5,550 c. P6,300 d. P7,500
c. P6,300 Direct Labor P 4,500 * Application Rate 140% = Total Overhead P 6,300
Green Corporation manufactures products on a job-order basis. The job cost sheet for Job #656 shows the following for March: Direct material P5,000 Direct labor (100 hours @ P7.25) P725 Machine hours incurred 40 Predetermined overhead rate per machine hour P26 At the end of March, what total cost appears on the job cost sheet for Job #656? a. P5,725 b. P5,765 c. P6,765 d. P8,325
c. P6,765 Direct Materials = P 5,000 + Direct Labor (15 hours * P7/hour) = 725 + Factory Overhead (26 hrs machine time * P40/mach hr) = 1,040 = P 6,765
Williams Company uses a job-order costing system and the following information is available from its records. The company has three jobs in process: #6, #9, and #13. Raw material used P120,000 Direct labor per hour P8.50 Overhead applied based on direct labor cost 120% Direct material was requisitioned as follows for each job respectively: 30 percent, 25 percent, and 25 percent; the balance of the requisitions was considered indirect. Direct labor hours per job are 2,500; 3,100; and 4,200; respectively. Indirect labor is P33,000. Other actual overhead costs totaled P36,000. Refer to Williams Company. What is the total amount of actual overhead? a. P36,000 b. P69,000 c. P93,000 d. P99,960
c. P93,000 Indirect Materials (P120,000 * 20%) P 24,000 Indirect Labor 33,000 Other Overhead Costs 36,000 = Total Prime Costs P 93,000
The cost sheets for incomplete jobs at the end of the period comprise the subsidiary ledger for a. Finished Goods Inventory. b. Raw Material Inventory. c. Work in Process Inventory. d. Supplies Inventory.
c. Work in Process Inventory.
A credit to the Manufacturing Overhead control account represents the a. actual cost of overhead incurred. b. actual cost of overhead paid this period. c. amount of overhead applied to production. d. amount of indirect material and labor used during the period.
c. amount of overhead applied to production.
Overhead is applied to jobs in a job-order costing system a. at the end of a period. b. as jobs are completed. c. at the end of a period or as jobs are completed, whichever is earlier. d. at the end of a period or as jobs are completed, whichever is later.
c. at the end of a period or as jobs are completed, whichever is earlier.
A service organization would be most likely to use a predetermined overhead rate based on a. machine hours. b. standard material cost. c. direct labor. d. number of complaints.
c. direct labor.
A journal entry includes a debit to Work in Process Inventory and a credit to Raw Material Inventory. The explanation for this would be that a. indirect material was placed into production. b. raw material was purchased on account. c. direct material was placed into production. d. direct labor was used for production.
c. direct material was placed into production.
The logical explanation for an entry that includes a debit to Manufacturing Overhead control and a credit to Prepaid Insurance is a. the insurance company sent the company a refund of its policy premium. b. overhead for insurance was applied to production. c. insurance for production equipment expired. d. insurance was paid on production equipment.
c. insurance for production equipment expired.
In a job-order costing system, the subsidiary ledger for Finished Goods Inventory is comprised of a. all job-order cost sheets. b. job-order cost sheets for all uncompleted jobs. c. job-order cost sheets for all completed jobs not yet sold. d. job-order cost sheets for all ordered, uncompleted, and completed jobs.
c. job-order cost sheets for all completed jobs not yet sold.
In a production environment that manufactures goods to customer specifications, a job-order costing system a. can be used only if standard costs are used for materials and labor. b. will provide reasonable product cost information only when all jobs utilize approximately the same quantities of material and labor. c. may be maintained using either actual or predetermined overhead rates. d. emphasizes that large customers create the most costs even though they also provide the most revenues.
c. may be maintained using either actual or predetermined overhead rates.
The cost of abnormal losses (net of disposal costs) should be written off as Product cost Period cost a. yes no b. yes yes c. no yes d. no no
c. no yes
Production overhead does not include the costs of a. factory depreciation and supplies. b. factory employees' cafeteria departments. c. production line labor. d. the maintenance department for the factory.
c. production line labor.
As data input functions are automated, Intranet data becomes more a. complicated to access. b. manufacturing, but not accounting, oriented. c. real-time accessible. d. expensive to install, but easier to use.
c. real-time accessible.
Total manufacturing costs for the year plus beginning Work in Process Inventory cost equals a. cost of goods manufactured in the year. b. ending Work in Process Inventory. c. total manufacturing costs to account for. d. cost of goods available for sale.
c. total manufacturing costs to account for.
Williams Company uses a job-order costing system and the following information is available from its records. The company has three jobs in process: #6, #9, and #13. Raw material used P120,000 Direct labor per hour P8.50 Overhead applied based on direct labor cost 120% Direct material was requisitioned as follows for each job respectively: 30 percent, 25 percent, and 25 percent; the balance of the requisitions was considered indirect. Direct labor hours per job are 2,500; 3,100; and 4,200; respectively. Indirect labor is P33,000. Other actual overhead costs totaled P36,000. Refer to Williams Company. If Job #13 is completed and transferred, what is the balance in Work in Process Inventory at the end of the period if overhead is applied at the end of the period? a. P 96,700 b. P 99,020 c. P139,540 d. P170,720
d. P170,720 Step 1: Compute Total Cost of Job #6 DM: P120,000 * .30 = 36,000 DL: 2,500 * 8.50 = 21,250 FOH: 21,250 * 120% = 25,500 = 82,750 Step 2: Compute Total Cost of Job #9 DM: P120,000 * .25 = 30,000 DL: 3,100 * 8.50 = 26,350 FOH: 26,350 * 120% = 31,620 = 87,970 Total Costs of Jobs 6 and 9 = 170,720
Products at Forrest Manufacturing are sent through two production departments: Fabricating and Finishing. Overhead is applied to products in the Fabricating Department based on 150 percent of direct labor cost and P18 per machine hour in Finishing. The following information is available about Job #297: Fabricating Finishing Direct material P1,590 P580 Direct labor cost ? 48 Direct labor hours 22 6 Machine hours 5 15 Overhead applied 429 ? What is the total cost of Job #297? a. P2,647 b. P3,005 c. P3,093 d. P3,203
d. P3,203 Direct Labor Fabricating P429/1.50 = P286 Applied Overhead Finishing 15 hrs * P18 = P270 Fabricating Finishing Direct material P 1,590 P 580 Direct labor cost 286 48 Overhead applied 429 270 Total Costs 2,305 898 P 3,203
Williams Company uses a job-order costing system and the following information is available from its records. The company has three jobs in process: #6, #9, and #13. Raw material used P120,000 Direct labor per hour P8.50 Overhead applied based on direct labor cost 120% Direct material was requisitioned as follows for each job respectively: 30 percent, 25 percent, and 25 percent; the balance of the requisitions was considered indirect. Direct labor hours per job are 2,500; 3,100; and 4,200; respectively. Indirect labor is P33,000. Other actual overhead costs totaled P36,000. Refer to Williams Company. What is the total amount of overhead applied to Job #9? a. P18,250 b. P26,350 c. P30,000 d. P31,620
d. P31,620 Direct Labor Hours 3,100 * Direct Labor Rate P8.50 * OH Application Rate 120% = Total P31,620
Carolina Company applies overhead to jobs at the rate of 40 percent of direct labor cost. Direct material of P1,250 and direct labor of P1,400 were expended on Job #145 during June. On May 31, the balance of Job #145 was P2,800. The balance on June 30 is: a. P3,210. b. P4,760. c. P5,450. d. P6,010.
d. P6,010. Beginning WIP P2,800 + Direct Materials 1,250 + Direct Labor 1,400 + Factory Overhead (P1,400 * 40%) 560 = Ending WIP P 6,010
Which of the following would be least likely to be supported by subsidiary accounts or ledgers in a company that employs a job-order costing system? a. Work in Process Inventory b. Raw Material Inventory c. Accounts Payable d. Supplies Inventory
d. Supplies Inventory
Knowing specific job costs enables managers to effectively perform which of the following tasks? a. estimate costs of future jobs. b. establish realistic job selling prices. c. evaluate job performance. d. all answers are correct.
d. all answers are correct.
Which of the following are drawbacks to applying actual overhead to production? a. A delay occurs in assigning costs to jobs or products. b. Fluctuations in quantities produced during a period could cause varying per-unit charges for fixed overhead. c. Seasonality of overhead costs may cause distortions in job or product costs. d. all answers are correct.
d. all answers are correct.
In a job-order costing system, the peso amount of the entry that debits Finished Goods Inventory and credits Work in Process Inventory is the sum of the costs charged to all jobs a. started in process during the period. b. In process during the period. c. completed and sold during the period. d. completed during the period.
d. completed during the period.
Which of the following journal entries records the accrual of the cost of indirect labor used in production? a. debit Work in Process Inventory, credit Wages Payable b. debit Work in Process Inventory, credit Manufacturing Overhead c. debit Manufacturing Overhead, credit Work in Process Inventory d. debit Manufacturing Overhead, credit Wages Payable
d. debit Manufacturing Overhead, credit Wages Payable
A unit that is rejected at a quality control inspection point, but that can be reworked and sold, is referred to as a a. spoiled unit. b. scrap unit. c. abnormal unit. d. defective unit.
d. defective unit.
job-order costing and process costing have which of the following characteristics? job-order Costing Process Costing a. homogeneous products heterogeneous products and large quantities and small quantities b. homogeneous products heterogeneous products and small quantities and large quantities c. heterogeneous products homogeneous products and large quantities and small quantities d. heterogeneous products homogeneous products and small quantities and large quantities
d. heterogeneous products homogeneous products and small quantities and large quantities
When job-order costing is used, the primary focal point of cost accumulation is the a. department. b. supervisor. c. item. d. job.
d. job.
In a job-order costing system, the use of indirect material would usually be reflected in the general ledger as an increase in a. stores control. b. work in process control. c. manufacturing overhead applied. d. manufacturing overhead control.
d. manufacturing overhead control.
The source document that records the amount of raw material that has been requested by production is the a. job-order cost sheet. b. bill of lading. c. interoffice memo. d. material requisition.
d. material requisition.
Which of the following would fall within the range of tolerance for a production cycle? Abnormal loss Normal loss a. yes yes b. yes no c. no no d. no yes
d. no yes
In a job-order costing system, a. standards cannot be used. b. an average cost per unit within a job cannot be computed. c. costs are accumulated by departments and averaged among all jobs. d. overhead is typically assigned to jobs on the basis of some cost driver.
d. overhead is typically assigned to jobs on the basis of some cost driver.
In a job-order costing system, the net cost of normal spoilage is equal to a. estimated disposal value plus the cost of spoiled work. b. the cost of spoiled work minus estimated spoilage cost. c. the units of spoiled work times the predetermined overhead rate. d. the cost of spoiled work minus the estimated disposal value.
d. the cost of spoiled work minus the estimated disposal value.
A credit to Work in Process Inventory represents a. work still in process. b. raw material put into production. c. the application of overhead to production. d. the transfer of completed items to Finished Goods Inventory.
d. the transfer of completed items to Finished Goods Inventory.
A job-order costing system is likely to provide better (1) inventory valuations for financial statements. (2) control over inventory. (3) information about ability to accept additional production work. (1) (2) (3) a. yes no no b. no yes yes c. no no no d. yes yes yes
d. yes yes yes
Which of the following costing methods of valuation are acceptable in a job-order costing system? Actual Material Cost Standard Material Cost Actual Labor Cost Predetermined Overhead Cost a. yes yes no yes b. yes no yes no c. no yes yes yes d. yes yes yes yes
d. yes yes yes yes
When job-order costing is used, the primary focal point of cost accumulation is the a. department. b. supervisor. c. item. d. job.
d.job.
