Deck 3: Job Costing

Question 1

A receiving report is typically a duplicate of the purchase order but without the prices and quantities pre-listed on the form.

Answer 1

True

Question 2

Which product costing system would be better for custom-order products?

A)Product costing system
B)Company costing system
C)Job costing system
D)Overhead costing system

Answer 2

C

Question 3

A paper mill company like International Paper would most likely use job costing.

Answer 3

False

Question 4

Job costing systems accumulate the costs for each individual job.

Question 5

Generally Accepted Accounting Principles (GAAP)mandates the type of product costing system (job costing or process costing)that must be used by a manufacturer.

Question 6

Companies should always use job costing rather than process costing.

Question 7

Which product costing system would better account for a unique product?

A)Overhead costing system
B)Job costing system
C)Process costing system
D)Product costing system

Question 8

All manufacturers use either a pure process costing system or a pure job costing system.

Question 9

The two basic types of costing systems are

A)product costing and materials inventory costing.
B)periodic costing and perpetual costing.
C)job costing and process costing.
D)periodic costing and process costing.

Question 10

A food and beverage company like Coca-Cola would most likely use job costing.

Question 11

Which of the following is an example of an industry that would use a process costing-rather than a job costing-system?

A)Brugman Custom Cabinetry
B)Computer Repair
C)Pepsi
D)Smith & Zu Certified Public Accountants

Question 12

Which of the following is an example of an industry that would use a process costing-rather than a job costing-system?

A)Coca-Cola
B)Boeing Jets
C)Centex Custom Homes
D)Snyder & Lewis,Attorneys at Law

Question 13

Which of the following industries would be most likely to use a job costing system?

A)Chemicals
B)Food and beverage
C)Commercial building construction
D)Pharmaceuticals

Question 14

Process costing is used by companies that produce large numbers of identical units of production in a continuous fashion.

Question 15

Which of the following is most likely not to use process costing?

A)DuPont Chemical
B)Exxon-Mobile (gasoline)
C)Ashley Custom Furnishings
D)General Mills (cereal)

Question 16

The end goal of process costing and job costing at a manufacturing company is the same: to find the cost of producing one unit of product.

Question 17

Job costing should only be used by manufacturers.

Question 18

Job costing is often used by professional service providers,such as law firms.

Question 19

A job costing system can be used by which types of companies?

A)Manufacturing and merchandising businesses
B)Service and manufacturing businesses
C)Service,manufacturing,and merchandising businesses
D)Service and merchandising businesses

Question 20

Companies use job costing when their products or services vary in terms of materials needed,time required to complete the product,and/or the complexity of the production process.

Question 21

When raw materials are transferred out of the storeroom to the factory,their cost is transferred out of raw materials inventory and into work in process inventory.

Question 22

State whether each company below would be more likely to use a job costing system or a process costing system.

Question 23

A purchase order is used to order needed materials from suppliers.

Question 24

A manufacturer of luxury yachts would use which type of costing system?

A)Process costing
B)Job costing
C)Either job or process
D)Both job and process

Question 25

A job cost record is a document that accumulates direct materials costs,direct labor costs and manufacturing overhead costs assigned to each individual job.

Question 26

A production schedule indicates the quantity and types of inventory that are scheduled to be manufactured during the period.

Question 27

When the products are shipped to customers,the cost of manufacturing those products becomes Cost of Goods Sold (COGS)shown on the company's balance sheet.

Question 28

Briefly explain the difference between job order and process costing and give examples of each.

Question 29

At a manufacturing company,inventory flows from work in process inventory,to raw materials inventory,to finished goods inventory.

Question 30

A labor time record identifies the employee and the amount of time the employee spent on a particular job.

Question 31

The bill of materials lists all of the raw materials needed to manufacture the job.

Question 32

________ is the system for assigning costs to unique cost objects.

A)Time costing
B)Process costing
C)Job costing
D)Service costing

Question 33

Job order costing might be used by a

A)candy manufacturer.
B)custom home builder.
C)crude oil refinery.
D)cereal maker.

Question 34

For a manufacturing system,inventory flows from raw materials inventory to work in process inventory to finished goods inventory.

Question 35

A production schedule always covers a one-year period of time.

Question 36

An example of an industry that uses process costing might be a

A)custom printer.
B)homebuilder.
C)shipbuilder.
D)company that makes cement.

Question 37

A manufacturer of plywood would use what type of product costing system?

A)Process costing
B)Job costing
C)Either job or process
D)Both job and process

Question 38

Which of the following types of costing is used for many similar products?

A)Process costing
B)Batch costing
C)Service costing
D)Job costing

Question 39

The quantities of incoming shipments of raw materials are counted and recorded on a purchase order.

Question 40

State whether each company below would be more likely to use a job costing system or a process costing system.

Question 41

When used,raw materials

A)would be classified as direct materials.
B)would be classified as direct labor.
C)would be classified as indirect materials.
D)cannot be determined with the information provided.

Question 42

Which of these documents authorizes the purchase of specific raw materials from a specific supplier?

A)Labor time record
B)Materials inventory requisition form
C)Job cost record
D)Purchase order

Question 43

A ________ is a source document used to track employee hours.

A)labor time record
B)process costing
C)job cost record
D)job costing

Question 44

A ________ is used to accumulate all of the direct materials and direct labor used on the job,as well as the manufacturing overhead allocated to the job.

A)bill of materials
B)job cost record
C)labor time record
D)production schedule

Question 45

In the basic flow of inventory through a manufacturing system,which of the following occurs third in the job costing system?

A)Finished goods inventory
B)Cost of goods sold
C)Raw materials inventory
D)Work in process inventory

Question 46

Briefly explain the flow of inventory through a manufacturing system into a company's job costing system from the purchase of materials to the sale of the products.

Question 47

For a manufacturer that uses job costing,show the order of the cost flow through the following accounts by numbering them from 1 to 4.

Question 48

In the basic flow of inventory through a manufacturing system,which of the following occurs first in a job costing system?

A)Cost of goods sold
B)Finished goods inventory
C)Work in process inventory
D)Raw materials inventory

Question 49

An internal request to transfer raw materials requires personnel to complete a

A)materials requisition document.
B)bill of materials document.
C)purchase order document.
D)labor time record document.

Question 50

For each of the following items,determine whether it would be more appropriate to increase

A)manufacturing overhead,or
B)work in process inventory.Enter either the letter A or the letter B on the line in front of each of the following statements.

Question 51

A ________ is used to accumulate the costs of a job.

A)labor time record
B)materials inventory requisition form
C)bill of materials
D)job cost record

Question 52

When direct materials are requisitioned,they flow directly into

A)cost of goods sold account.
B)finished goods inventory account.
C)work in process inventory account.
D)manufacturing overhead account.

Question 53

The ________ substantiates the total of the raw materials inventory account shown on the company's balance sheet.

A)bill of materials
B)raw materials records
C)materials requisition
D)labor time record

Question 54

In the basic flow of inventory through a manufacturing system,which of the following occurs last in the job costing system?

A)Finished goods inventory
B)Cost of goods sold
C)Raw materials inventory
D)Work in process inventory

Question 55

On the line in front of each statement,enter the letter corresponding to the term that best fits that statement.You may use a letter more than once and some letters may not be used at all.

Question 56

In the basic flow of inventory through a manufacturing system,which of the following occurs second in the job costing system?

A)Cost of goods sold
B)Finished goods inventory
C)Work in process inventory
D)Raw materials inventory

Question 57

The assignment of direct and indirect materials to a cost object reduces the

A)finished goods inventory account.
B)raw materials inventory account.
C)manufacturing overhead account.
D)work in process inventory account.

Question 58

A ________ is a document manufacturing production personnel use to request that the itemized materials be sent from the showroom into the factory.

A)cost ticket
B)job cost record
C)materials requisition
D)manufacturing ticket

Question 59

Payroll-related costs for factory employees who do not work directly on the product are considered

A)direct labor.
B)selling expenses.
C)manufacturing overhead.
D)administrative costs.

Question 60

Which of these documents informs the storeroom to send specific materials to the factory floor?

A)Receiving report
B)Bill of materials
C)Purchase order
D)Materials requisition

Question 61

The overhead allocation base should be the cost driver of manufacturing overhead costs.

Question 62

Generally accepted accounting principles (GAAP)mandate that manufacturing overhead must be treated as an inventoriable product cost for financial reporting purposes.

Question 63

Manufacturers follow four steps to implement a manufacturing overhead allocation system.In the last step,the company estimates the total amount of manufacturing overhead costs for the year.

Question 64

The key to allocating indirect manufacturing costs to jobs is to identify an appropriate allocation base.

Question 65

Allocating manufacturing overhead to jobs simply means "splitting up" the total manufacturing overhead costs among the jobs produced during the year.

Question 66

Manufacturers follow four steps to implement a manufacturing overhead allocation system.What is the first step?

A)Select an allocation base and estimate the total amount that will be used during the year.
B)Allocate some manufacturing overhead to each individual job.
C)Calculate a predetermined manufacturing overhead rate.
D)Estimate total manufacturing overhead costs for the coming year.

Question 67

Manufacturing overhead may include depreciation on the factory plant and equipment,utilities to run the plant,property taxes and insurance on the plant,and salaries of plant janitors.

Question 68

The first three steps to allocating manufacturing overhead are taken before the year begins and include all of the following except

A)estimating total manufacturing overhead costs for the coming year.
B)selecting an allocation base and estimating the total amount that will be used during the year.
C)allocating some manufacturing overhead to each individual job.
D)calculating the predetermined manufacturing overhead rate.

Question 69

What is the primary factor that causes a "cost" called?

A)Cost driver
B)Cost allocation
C)Materials requisition
D)Predetermined manufacturing overhead rate

Question 70

The predetermined manufacturing overhead rate is calculated by multiplying the total estimated manufacturing overhead costs by the total estimated amount of the allocation base.

Question 71

The predetermined manufacturing overhead rate is calculated by dividing the total estimated manufacturing overhead costs by the total estimated amount of the allocation base.

Question 72

Manufacturers follow four steps to implement a manufacturing overhead allocation system.The last step is

A)allocate some manufacturing overhead to each individual job.
B)select an allocation base and estimate the total amount that will be used during the year.
C)estimate total manufacturing overhead costs for the coming year.
D)calculate a predetermined manufacturing overhead rate.

Question 73

Manufacturing overhead costs cannot be directly traced to jobs.

Question 74

Manufacturers follow four steps to implement a manufacturing overhead allocation system.Which step is not performed before the year begins?

A)Allocate some manufacturing overhead to each individual job.
B)Select an allocation base and estimate the total amount that will be used during the year.
C)Estimate total manufacturing overhead costs for the coming year.
D)Calculate a predetermined manufacturing overhead rate.

Question 75

Assigning manufacturing overhead costs and other indirect costs is called

A)cost driver.
B)cost allocation.
C)materials requisition.
D)predetermined manufacturing overhead rate.

Question 76

An equal amount of manufacturing overhead should be allocated to each job.

Question 77

The cost of wages paid to assembly-line workers should be treated as a manufacturing overhead cost.

Question 78

Manufacturers follow four steps to implement a manufacturing overhead allocation system.In the first step,the company estimates its total manufacturing overhead costs for the coming year.

Question 79

Manufacturers follow four steps to implement a manufacturing overhead allocation system.In the last step,to the company allocates some manufacturing overhead to each individual job.

Question 80

A(n)________ is an estimated manufacturing overhead rate computed during the year.

A)cost allocation
B)cost driver
C)predetermined manufacturing overhead rate
D)actual manufacturing overhead rate