Accounting- Introduction to Managerial Accounting Chapter 2

Which of the following is not a manufacturing cost category?

A. Direct Materials B. Manufacturing Overhead C. Selling & Administrative costs D. Direct Labor Ans: C. Selling & Administrative Costs

The document that records the material, labor, and manufacturing overhead costs charged to a job is the:

A. Job Cost Sheet B. Time Ticket C. Materials Requisition Form D. Production Order Ans: A. Job Cost Sheet

Factory labor charges that cannot be easily traced to a job are treated as:

A. Manufacturing overhead B. Nonmanufacturing Costs C. Direct Labor Ans: A. Manufacturing Overhead

The type and quantity of each type of direct material needed to complete a unit of product is listed on the

A. Materials requisition form B. Bill of Materials C. Production order D. Time Ticket Ans: B. Bill of Materials

Categories of manufacturing costs include _____. "Select all that apply. a. administrative expenses, b. selling expenses, c. direct materials, d. direct labor, e. manufacturing overhead."

Ans: c. direct materials, d. direct labor, e. manufacturing overhead.

Widely used allocation bases in manufacturing are: "Select All that Applies: a. Units of Product, b. nonmanufacturing costs, c. machine hours, d. direct labor hours, e. direct labor cost, f. product revenue."

Ans: a. Units of Product c. Machine Hours d. Direct labor hours e. Direct labor costs

A normal costing system applied overhead by job by multiplying a(n) _____ ______ rate by the _____amount of the allocation base incurred by the job. Enter only one word per blank.)

Ans: Predetermined, overhead, actual. A normal costing system applied overhead by job by multiplying a(n) predetermined overhead rate by the actual amount of the allocation base incurred by the job.

The process used to assign overhead costs to products is called overhead ______. (Enter only one word per blank.)

Application; Allocation

Jones company uses a job ordering costing system with a predetermined overhead rate of 120% of direct labor cost. The job cost for job #420 showed that Jones company spent $4000 on direct materials and $5000 on direct labor on the job. What is the total cost of job #420?

Cost of Job #420 = Direct Materials + Direct Labor + Predetermined overhead rate x direct labor costs = $4000 +120% x $5000 = $15000 ans: $15000

The total cost of a job is calculated by adding the total of direct labor cost, direct materials cost and

applied manufacturing overhead cost

A SERVICE firm that would most likely use job- order costing is a

law practice text: "For example, hospitals, law firms, movie studios, accounting firms, advertising agencies, and repair shops. "(pg 66.)

An allocation base is a(n):

A. Measure of Activity used to assign overhead costs to products and services B. Activity that causes overhead costs to change C. Measure used to assign all manufacturing costs to products and services. Ans: A. Measure of Activity used to assign overhead costs to products and services

To calculate a predetermined overhead rate, divide estimated manufacturing overhead by the ______.

A. estimated units of production B. estimated allocation base C. estimated direct labor hours D. actual manufacturing overhead Ans: B. estimated allocation base

In the formula Y = a + bX, b represents the estimated:

A. total manufactuing overhead costs B. total amount of the allocation base C. total fixed manufacturing overhead cost D. variable manufacturing overhead cost per unit Ans: D. variable manufacturing overhead cost per unit

All manufacturing costs are assigned to units of product and all nonmanufacturing costs are treated as period cost _____ costing (Enter only one word per blank.)

ABSORPTION

Manufacturing Overhead: "Select all that apply: a. is directly traceable to units produced, b. is an indirect cost, c. consists of many different types of costs, d. contains fixed cost"

ANS: B. is an indirect cost C. consists of many different types of costs D. contains fixed costs

Companies that make many different products each period use _____-_____ costing. (Enter one word per blank.)

ANS: job, order. Companies that make many different products each period use JOB-ORDER costing.