Deck 5: Job Order Costing

Question 1

In a job-order costing system, costs are accumulated for each individual job.

Answer 1

True

Question 2

In a normal job-order costing system, factory overhead is applied using actual rates times actual input.

Answer 2

False

Question 3

A company that manufactures custom bridal gowns will use a process costing system to track costs.

Answer 3

False

Question 4

In a standard job-order costing system, factory overhead is applied using actual rates times standard input.

Question 5

Cost flows and physical flows of units are identical.

Question 6

In a normal job-order costing system, actual factory overhead is applied at the end of the period.

Question 7

In a standard job-order costing system, factory overhead is applied using predetermined rates times actual input.

Question 8

A company that manufactures large quantities of homogenous goods will use a process costing system.

Question 9

A company that manufactures custom bridal gowns will use a job-order costing system to track production costs.

Question 10

In an actual job-order costing system, factory overhead is assigned to a job continuously during the production process.

Question 11

A company that manufactures small quantities of identifiable products will use a process costing system.

Question 12

In a normal job-order costing system, factory overhead is applied using predetermined rates times standard input.

Question 13

When raw materials are placed into production, the materials inventory account is debited.

Question 14

In a standard job-order costing system, factory overhead is applied using predetermined rates times standard input.

Question 15

A company that produces sugar will use a job-order costing system to track production costs.

Question 16

In a normal job-order costing system, factory overhead is applied using predetermined rates times actual input.

Question 17

A company that manufactures large quantities of homogenous goods will use a job-order costing system.

Question 18

In an actual job-order costing system, factory overhead is assigned to a job on a periodic basis.

Question 19

A company that manufactures small quantities of identifiable products will use a job-order costing system.

Question 20

A company that produces sugar will use a process costing system to track production costs.

Question 21

A company that manufactures sugar will use a ____________________ costing system to track production costs

Question 22

Overapplied overhead that is material in amount is allocated between Finished Goods Inventory, Work in Process, and Cost of Goods Sold at year end.

Question 23

When manufacturing overhead is charged to a job, the manufacturing overhead account is debited.

Question 24

A company that manufactures custom bridal gowns will use a ____________________ costing system to track production costs

Question 25

The journal entry to record normal spoilage specifically identified with a particular job includes a credit to Work in Process.

Question 26

When indirect labor is recorded for a job in process, the work in process account is debited.

Question 27

Overapplied factory overhead that is material in amount is closed to cost of goods sold at year end.

Question 28

Normal spoilage is considered a period cost.

Question 29

The journal entry to record normal spoilage specifically identified with a particular job includes a debit to Work in Process.

Question 30

Standards can be computed for materials, labor, and overhead.

Question 31

When manufacturing overhead is charged to a job, the work in process account is credited.

Question 32

If a normal loss is anticipated on a specific job, the overhead application rate should include an amount for the cost of defective units less disposal value.

Question 33

When indirect labor is applied to a job in process, the manufacturing overhead account is debited.

Question 34

When manufacturing overhead is charged to a job, the work in process account is debited.

Question 35

Overapplied factory overhead that is immaterial in amount is closed to cost of goods sold at year end.

Question 36

Spoilage occurring on specific jobs should be considered in computing predetermined factory overhead rates.

Question 37

Abnormal spoilage is considered a period cost.

Question 38

Standards can be used in a job-order costing system if the products manufactured are varied in nature.

Question 39

Standards can be used in a job-order costing system if the products manufactured are similar in nature.

Question 40

If a normal loss is anticipated on all jobs, the overhead application rate should include an amount for the cost of defective units less disposal value.

Question 41

When manufacturing overhead is applied to a job in process, the ______________________________ account is credited.

Question 42

A company that manufactures small quantities of identifiable products will normally use a ____________________ costing system.

Question 43

When indirect labor is recorded for a job in process, ______________________________ is debited.

Question 44

When manufacturing overhead is applied to a job in process, the ______________________________ account is debited

Question 45

If a substandard product cannot be reworked, it is known as ____________________.

Question 46

When indirect materials are added to a job, the ______________________________ account is debited.

Question 47

When job-order costing is used, the primary focal point of cost accumulation is the

A) department.
B) supervisor.
C) item.
D) job.

Question 48

Underapplied factory overhead that is immaterial in amount is closed to ___________________________________ at year end.

Question 49

A company that manufactures large quantities of homogeneous goods will normally use a ____________________ costing system.

Question 50

Three methods of job-cost valuation are normal, standard, and ____________________.

Question 51

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

Question 52

The document that contains all information about the costs of a specific job is a ________________________________________.

Question 53

When a job is begun, the first document in the job-order process is the ___________________________________.

Question 54

When production is completed on a job, finished goods are transferred to the _____________________________________________ account.

Question 55

In a standard job-order costing system, factory overhead is applied using ____________________ rates times ____________________ input.

Question 56

Underapplied factory overhead that is material in amount is closed to ______________________________, ______________________________, and ______________________________ at year end.

Question 57

When raw materials are placed into production, the ______________________________ account is debited

Question 58

The difference between a standard and an actual quantity, price, or rate is a(n) ____________________.

Question 59

If a substandard product can be reworked, it is known as a ____________________.

Question 60

In a normal job-order costing system, factory overhead is applied using ____________________ rates times ____________________ input.

Question 61

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

Question 62

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.

Question 63

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

Question 64

Which of the following statements about job-order cost sheets is true?

A) All job-order cost sheets serve as the general ledger control account for Work in Process Inventory.
B) Job-order cost sheets can serve as subsidiary ledger information for both Work in Process Inventory and Finished Goods Inventory.
C) If material requisition forms are used, job-order cost sheets do not need to be maintained.
D) Job-order cost sheets show costs for direct material and direct labor, but not for manufacturing overhead since it is an applied amount.

Question 65

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.

Question 66

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.

Question 67

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

Question 68

A material requisition form should show all of the following information except

A) job number.
B) quantity required.
C) unit cost.
D) purchase order number.

Question 69

The source document that records the amount of raw material that has been requested by production is the

A) job-order cost sheet.
B) bill of lading.
C) interoffice memo.
D) material requisition.

Question 70

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

Question 71

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.

Question 72

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

Question 73

The primary accounting document in a job-order costing system is a(n)

A) bill of materials.
B) job-order cost sheet.
C) employee time sheet.
D) materials requisition.

Question 74

A credit to Work in Process Inventory represents

A) work still in process.
B) raw material put into production.
C) the application of overhead to production.
D) the transfer of completed items to Finished Goods Inventory.

Question 75

The source document that records the amount of time an employee worked on a job and his/her pay rate is the

A) job-order cost sheet.
B) employee time sheet.
C) interoffice memo.
D) labor requisition form.

Question 76

job-order costing and process costing have which of the following characteristics?

A) homogeneous products heterogeneous products and large quantities and small quantities
B) homogeneous products heterogeneous products and small quantities and large quantities
C) heterogeneous products homogeneous products and large quantities and large quantities
D) heterogeneous products homogeneous products and small quantities and large quantities

Question 77

Which of the following costing systems allows management to quickly recognize materials, labor, and overhead variances and take measures to correct them?

A) yes yes
B) yes no
C) no yes
D) no no

Question 78

The ____ provides management with a historical summation of total costs for a given product.

A) job-order cost sheet
B) employee time sheet
C) material requisition form
D) bill of lading

Question 79

A job-order costing system is likely to provide better

A) yes no no
B) no yes yes
C) no no no
D) yes yes yes

Question 80

The cost sheets for incomplete jobs at the end of the period comprise the subsidiary ledger for

A) Finished Goods Inventory.
B) Raw Material Inventory.
C) Work in Process Inventory.
D) Supplies Inventory.