Chapter 5 - Job Costing Accounting

66. 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.

62. 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

59. 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

64. 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

Actual Cost System Normal Cost System D. no no

68. 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

63. 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

71. 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.

69. 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.

67. 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

60. 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.

61. 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.

70. A job-order costing system is likely to provide better (1) inventory valuations for financial statements. (2) control over inventory. (3) information about the 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

65. Which of the following costing methods of valuation are acceptable in a job-order costing system? 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