Job-Order Costing
A credit balance in the Manufacturing OH account at the end of the year means that overhead was under-applied.
FALSE
In a job-order costing system, costs are traced to departments and then allocated to units of product using an average process.
FALSE
In order to improve the accuracy of unit costs, most companies recompute the predetermine value overhead rate each month.
FALSE
Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job.
FALSE
Job-order costing is used in manufacturing companies and process costing is used in service firms
FALSE
Normally, a job cost sheet is not prepared for a job until after the job has been completed.
FALSE
The most common accounting treatment of under-applied manufacturing OH is to transfer it to the manufacturing OH control account.
FALSE
When completed goods are sold, the transaction is recorded as a debit to Cost of Goods Sold and a credit to Finished Goods.
FALSE
When the predetermined overhead rate is based on direct labor-hours, the amount of overhead applied to a job is proportional to the estimated amount of direct labor-hours for the job.
TRUE
In job-order costing, the Work in Process Inventory account contains the actual costs of direct labor, direct materials and manufacturing overhead incurred on partially completed jobs.
TRUE
Indirect materials are not charged to a specific job but rather are included in manufacturing OH.
TRUE
Job-order costing would be more likely to be used than process costing in situations where many different products or services are produced each period to customer satisfaction.
TRUE
Non-manufacturing costs are expensed as incurred, rather than going to the WIP account.
TRUE
The following journal entry would be made to apply overhead cost to jobs in a job-order costing system. WIP Debit, Manufacturing OH Credit
TRUE
The labor time ticket contains a detailed summary of the direct and the indirect labor hours of an employee.
TRUE