Managerial Accounting, 4e (Whitecotton) Chapter 2 Job Order Costing

A marketing consulting firm would most likely use process costing.

FALSE

A materials requisition form is used to authorize the purchase of direct materials

FALSE

Indirect materials are recorded directly on the job cost sheet.

FALSE

Source documents are used to assign all manufacturing costs to jobs.

FALSE

The total amount of cost assigned to jobs that were completed during the year is the cost of goods sold.

FALSE

A predetermined overhead rate is calculated by dividing estimated total manufacturing overhead cost by estimated total cost driver.

TRUE

If there is a debit balance in the Manufacturing Overhead account at the end of the period, overhead was underapplied.

TRUE

In a service firm, the cost associated with time that employees spend on training, paperwork, and supervision is considered part of manufacturing overhead.

TRUE

Process costing averages the total cost of the process over the number of units produced.

TRUE

The most common method for disposing of the balance in Manufacturing Overhead is to make a direct adjustment to Cost of Goods Sold.

TRUE

The total manufacturing cost for a job includes the amount of applied overhead using the predetermined overhead rate.

TRUE

When job order costing is used, costs are accumulated on a job cost sheet

TRUE

A job cost sheet will record the direct materials and direct labor used by the job but not the manufacturing overhead applied.

FALSE

To eliminate under-applied overhead at the end of the year, Manufacturing Overhead would be debited and Cost of Goods Sold would be credited.

FALSE

When manufacturing overhead is applied to a job, a credit is made to the Work in Process account.

FALSE