CH 2: Job Order Costing ACCT 333

A SERVICE firm that would most likely use job-order costing is a Blank______. Multiple choice question. law practice clothing shop car manufacturer

law practice

The type and quantity of each type of direct material needed to complete a unit of product is listed on the ______. Multiple choice question. production order time ticket bill of materials materials requisition form

bill of materials

In a system that uses multiple predetermined overhead rates, overhead is applied ______. Multiple choice question. in each department as jobs proceed through the department at the end of each period at the end of the total production process before production begins

in each department as jobs proceed through the department

An hour-by-hour summary of an employee's activities throughout the day is found on the ________________

time ticket

Why is the unit product cost different from the cost that would be incurred if another (additional) unit were produced? The cost that would be incurred if another unit were produced cannot be calculated. There would be no additional cost to produce another unit. The unit product cost is an average, not an incremental cost. The predetermined overhead rate changes with each unit produced.

The unit product cost is an average, not an incremental cost

A predetermined overhead rate is calculated by dividing the ______ total manufacturing overhead by the ______ total allocation base. Multiple choice question. actual; actual estimated; estimated estimated; actual actual; estimated

estimated; estimated

When a company uses cost-plus pricing, they consider both the costs of production and the desired profit. True false question. True False

false

Average manufacturing overhead cost per unit usually varies from one period to the next because Blank______. Multiple choice question. the makeup of manufacturing overhead changes from period to period fixed manufacturing overhead remains constant in total even when production changes variable overhead costs per unit vary when production changes

fixed manufacturing overhead remains constant in total even when production changes

The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find Blank______. Multiple choice question. overhead applied to the job actual overhead the predetermined overhead rate for the job the total cost of the job

overhead applied to the job

When all of a company's job cost sheets are viewed collectively, they form what is known as a(n) Blank______. Multiple choice question. financial statement backup subsidiary ledger book of original entry job cost ledger

subsidiary ledger

When all of a company's job cost sheets are viewed collectively, they form what is known as a(n) ______________-_______________ .

subsidiary ledger

A measure such as direct labor-hours or machine hours used to assign overhead costs to products and services is called a cost driver or a(n)

allocation base

A job-order costing system may inaccurately assign costs to jobs due to Blank______. Multiple choice question. inaccurate allocation of direct labor an inappropriate allocation base inaccurate allocation of direct materials

an inappropriate allocation base

Factory labor charges that cannot be easily traced to a job are treated as ______. Multiple choice question. direct labor nonmanufacturing costs manufacturing overhead

manufacturing overhead

The approach used when overhead is applied to jobs by multiplying a predetermined overhead rate by the actual amount of the allocation base incurred by the jobs is called ________________ costing.

normal

The formula for applying overhead to a specific job is: Blank______ amount of allocation base incurred by job.

predetermined overhead divided by the

Which of the following would not be considered a direct labor cost in a service firm that uses job-order costing? Multiple choice question. The salary of an attorney at a law firm. The salary of the manager at a hair salon. The salary of a surgeon at a hospital. The wages of technicians at an auto repair shop.

the salary of the manager at a hair salon

A normal cost system assigns overhead to jobs using Blank______. Multiple choice question. an actual overhead rate budgeted production standards a predetermined overhead rate

a predetermined overhead rate

Select all that apply The appeal of using predetermined departmental overhead rates is they presumably provide Blank______. Multiple select question. a more accurate accounting of costs enhanced information for decision making higher profitability for the company

a more accurate accounting of costs enhanced information for decision making

Job-order costing would most likely be used in a(n) Blank______. Multiple choice question. construction company soda bottling factory oil refinery dairy farm that produces raw milk

construction company

A factor that causes overhead costs is called a Blank______. Multiple choice question. manufacturing cost cost object cost driver predetermined overhead rate

cost driver

An allocation base should be:

cost driver

Direct materials costs are recorded on the job cost sheet when the Blank______. Multiple choice question. job is complete requisition form is submitted to the storeroom clerk job is sold to a customer materials are issued to the job

materials are issued to the job

An allocation base is a(n) Blank______. Multiple choice question. activity that causes overhead costs to change measure of activity used to assign overhead costs to products and services measure used to assign all manufacturing costs to products and services

measure of activity used to assign overhead costs to products and services

When compared to a departmental approach, using activity-based costing results in Blank______ overhead rates. Multiple choice question. the same number of less more

more

When all overhead is assigned using direct-labor hours, the company has chosen to use a(n) _______________________ overhead rate, which is a single predetermined overhead rate.

plantwide

To keep track of labor time and costs, many firms have replaced Blank______. Multiple choice question. computerized systems with bar code systems paper time tickets with computerized systems computerized systems with paper time tickets bar code systems with computerized systems

paper time tickets with computerized systems

Average manufacturing overhead cost per unit usually varies from one period to the next because Blank______. Multiple choice question. the makeup of manufacturing overhead changes from period to period fixed manufacturing overhead remains constant in total even when production changes variable overhead costs per unit vary when production changes

fixed manufacturing overhead remains constant in toral even when production changes

To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the Blank______. Multiple choice question. estimated units of production Reason: Estimated manufacturing overhead is divided by estimated units of production only if units of production is the allocation base. actual total manufacturing overhead estimated total allocation base estimated total direct labor hours

estimated total allocation base

Costs assigned to units of product under absorption costing include: Multiple select question. -fixed manufacturing. -variable manufacturing. -fixed nonmanufacturing. -variable nonmanufacturing.

Fixed manufacturing Variable Manufacturing

Companies that make many different products each period use ____________ - __________ costing.

Job- Order

The type and quantity of materials to be drawn from the storeroom and the job that will be charged for the materials is specified on the ______.

Materials Requisition Form

A cost driver is ______. Multiple choice question. the amount of overhead assigned to a job something you want to know the cost of a measure that is used to assign overhead costs to products and services a factor that causes overhead costs to occur

a factor that causes overhead costs to occur

Cost-plus pricing occurs when Blank______. Multiple choice question. a markup percentage is added to the cost of a job the cost of the job is multiplied by 2 non-manufacturing costs are added to manufacturing costs

a markup percentage is added to the cost of a job

When a company uses a departmental approach rather than a plantwide approach to applying overhead, the selling price of the product will always be Blank______. Multiple choice question. the same higher different lower

different

To calculate the unit product cost using the job cost sheet Blank______ by the number of units produced. Multiple choice question. add direct labor to direct materials and divide divide the total job cost add direct labor to manufacturing overhead and divide multiply the total job cost

divide the total job cost

A normal cost system assigns overhead to jobs using Blank______. Multiple choice question. an actual overhead rate a predetermined overhead rate budgeted production standards

predetermined overhead rate

The formula for applying overhead to a specific job is: Blank______ amount of allocation base incurred by job. Multiple choice question. predetermined overhead rate ÷ estimated manufacturing overhead × estimated manufacturing overhead ÷ predetermined overhead rate ×

predetermined overhead x

The most common approach to product costing throughout the world is ______ costing.

Absorption

The adjustment for underapplied overhead ______. Multiple choice question. increases cost of goods sold and decreases net operating income decreases both cost of goods sold and net operating income increases both cost of goods sold and net operating income decreases cost of goods sold and increases net operating income

increases costs of goods sold and decreases net operating income

A job cost sheet contains ______ the job. Multiple select question. labor costs charged to selling costs charged to materials costs charged to the selling price of manufacturing overhead charged to

labor costs materials costs manufacturing overhead charged

The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find Blank______. Multiple choice question. the predetermined overhead rate for the job overhead applied to the job the total cost of the job actual overhead

overhead applied to the job

Bar codes can be used to: Multiple choice question. automatically record and post direct labor costs to jobs. reduce the amount of direct labor time spent on a job. trace indirect costs to jobs. automatically record and post indirect labor costs to jobs.

automatically record and post direct labor costs to jobs

Select all that apply The unit product cost is the same as the Blank______. Multiple select question. average product cost per unit total job cost divided by number of units cost that would be incurred if another unit were produced incremental unit cost

average product cost per unit total job cost divided by number of units

The predetermined overhead rate is calculated Blank______. Multiple choice question. before the period begins after the period is over as soon as actual overhead is known as the period progresses

before the period begins

Costs assigned to units of product in absorption costing include Blank______ manufacturing costs. Multiple choice question. neither variable nor fixed both variable and fixed only fixed only variable

both variable and fixed

Select all that apply Manufacturing overhead costs Blank______. Multiple select question. do not impact the average cost per unit consist of many different items tend to vary significantly, in total, from one period to the next are indirect costs

consist of many different items are indirect costs

Materials requisition forms are used for ______. Multiple select question. specifying the cost of materials to be ordered controlling the flow of materials into production summarizing the cost of a job making journal entries in accounting records

controlling the flow of materials to be ordered making journal entries in accounting records

Select all that apply A bill of materials contains the Blank______. Multiple select question. type of each direct material needed to complete a unit of product quantity of materials to be drawn from the storeroom type of materials to be drawn from the storeroom quantity of each direct material needed to complete a unit of product

type of each direct material needed to complete a unit of product quantity of each direct material needed to complete a unit of product

The average manufacturing overhead cost per unit tends to ______ when the number of units produced fluctuate. Multiple choice question. vary from one period to the next contain direct materials costs remain fairly constant be more than direct materials cost per unit

vary from one period to the next

Allocation bases that do not drive overhead costs Blank______. Multiple choice question. are difficult to keep track of will not accurately measure the cost of overhead used cannot be used to calculate overhead using a predetermined rate

will not accurately measure the cost of overhead used