Question 1

A job order production system would be appropriate for a company that produces which one of the following items?

Accepted Answer

A job order production system is suitable for customized, one-of-a-kind products or services, such as a unique landscaping design for a new hospital. This system is not typically used for mass-produced items like seedlings, fertilizer, flower seeds, or small gardening tools, which are better suited for a continuous or batch production system.

Question 2

The production activities for a customized product represent a(n):

Accepted Answer

A job refers to a specific order or project that is uniquely customized to meet the needs of a particular customer. It involves a set of activities that are performed in a specific sequence to produce the final product or service. Hence, the production activities for a customized product represent a job.

Question 3

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the balance in the Work in Process account at the end of September relative to Job A3B?

Accepted Answer

The answer of Job A3B was ordered by a customer...

Question 4

A job cost sheet shows information about each of the following items except:

Accepted Answer

A job cost sheet provides information related to the costs of producing a particular job, including direct labor costs, overhead costs, and direct material costs. It does not typically include information about costs incurred by the marketing department in selling the job. The name of the customer may or may not be included, depending on the company's policies.

Question 5

A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a(n):

Accepted Answer

A materials ledger card is a document that tracks the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory. It provides a perpetual record of a raw materials item and is essential in managing inventory levels and costs. Options B, C, D, and E are not specific to tracking raw materials inventory.

Question 6

The balance in the Work in Process Inventory at any point in time is equal to:

Accepted Answer

The work in process inventory represents the total cost of all unfinished products in production. Therefore, the balance in the Work in Process Inventory at any point in time is equal to the sum of the costs for all jobs in process but not yet completed. Option A is incorrect because it only considers the costs of jobs finished but not yet sold, which may not be in the Work in Process Inventory. Option B is incorrect because it only considers the cost of jobs not yet started, which are not in the Work in Process Inventory. Option D is incorrect because it includes the costs of all jobs started during the period, regardless of completion status, which may not be in the Work in Process Inventory. Option E is incorrect because it only considers the costs paid during the period, which may not reflect the total Work in Process Inventory balance.

Question 7

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials in October and additional direct labor of $6,500 to finish the job. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost. What is the amount of job costs added to Work in Process Inventory during October?

Accepted Answer

The answer of Job A3B was ordered by a customer...

Question 8

Large aircraft producers such as the Boeing Company normally use:

Accepted Answer

Large aircraft producers such as the Boeing Company typically use job order costing as it allows them to track the cost of each aircraft they produce separately. Each aircraft is considered a unique project, and the direct materials, labor, and overhead costs are tracked and assigned to that specific project. This allows for more accurate costing and helps management make informed decisions on pricing, production, and profitability.

Question 9

Job order production is also known as:

Accepted Answer

Job order production is a production process in which products are manufactured individually to meet the specific needs of a customer. It is also called customized production as it involves the production of specialized products as per customer requirements. It is different from mass production, which produces standardized goods in large quantities, and process production, which involves the continuous production of homogeneous products. Unit production and standard costing are not the correct terms to describe job order production.

Question 10

Omega Contractors manufactures each house to customer specifications. It most likely would use:

Accepted Answer

Job order costing is commonly used in manufacturing environments where products are produced based on specific customer orders or job specifications. Omega Contractors fabricates each house to customer specifications, which makes job order costing the most appropriate costing method for this scenario.

Question 11

A document in a job order costing system that is used to record the costs of producing a job is a(n):

Accepted Answer

A job cost sheet is specifically used in job order costing systems to document the costs associated with a specific job or project being produced. The other options listed are not relevant to job order costing systems.

Question 12

A type of production that yields customized products or services for each customer is called:

Accepted Answer

Job order production is a type of production that involves producing customized products or services for each customer. This involves tailoring products or services to meet the specific requirements of individual customers, which makes it ideal for businesses that cater to niche markets or offer unique or bespoke products or services.

Question 13

The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $3,200 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $1,400 and direct labor cost of $800. Therefore, the amount of the applied overhead is:

Accepted Answer

The answer of The Work in Process Inventory account of...

Question 14

The job order cost sheets used by Greene Company revealed the following:  Job No. 135 was completed during May and Jobs No. 134 and 135 were shipped to customers in May. What was the company's cost of goods sold for May and the Work in Process inventory on May 31?

Accepted Answer

The answer of The job order cost sheets used by...

Question 15

The Work in Process Inventory account of a manufacturing company that uses an overhead rate based on direct labor cost has a $4,400 debit balance after all posting is completed. The cost sheet of the one job still in process shows direct material cost of $2,000 and direct labor cost of $800. Therefore, the company's overhead application rate is:

Accepted Answer

The total cost in Work in Process is $4,400, which includes direct materials ($2,000), direct labor ($800), and applied overhead. The overhead is the difference: $4,400 - $2,000 - $800 = $1,600. The overhead rate is $1,600 / $800 = 200% of direct labor cost.

Question 16

Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the total cost of the job when it is completed in October?

Accepted Answer

The answer of Job A3B was ordered by a customer...

Question 17

A job cost sheet includes:

Accepted Answer

A job cost sheet includes the direct cost components of a job, which are direct materials, direct labor, and applied overhead. Therefore, the best choice is D, which includes all three of these cost components. Choices A, B, and E are incorrect because they either include incorrect cost components or exclude important ones.

Question 18

A job order costing system would best fit the needs of a company that makes:

Accepted Answer

A job order costing system works best for companies that produce custom products, such as custom machinery, where the cost of materials, labor, and overhead can be easily tracked for each individual job or project. Shoes and apparel, paint, cement, pencils and erasers are often produced in large quantities and would be best suited to a process costing system.

Question 19

The target cost for a job using job costing is calculated as:

Accepted Answer

The target cost for a job using job costing is the expected selling price minus the desired profit. This is because the target cost is the maximum amount that can be spent on direct costs in order to achieve the desired profit margin. Therefore, the formula is: target cost = expected selling price - desired profit.

Question 20

A company that makes which of the following types of products would best be suited for a job costing system?

Accepted Answer

A job costing system is used to track the costs associated with completing specific jobs or projects. Custom jewelry is a specialized product that is made to a customer's specifications, meaning that each piece would likely require a unique set of materials and labor costs. Therefore, a company that produces custom jewelry would most likely benefit from using a job costing system to track the costs associated with each individual piece.

Quiz 2: Job Order Costing and Analysis

A job order production system would be appropriate for a company that produces which one of the following items?

The production activities for a customized product represent a(n) :

A job cost sheet shows information about each of the following items except:

A perpetual record of a raw materials item that records data on the quantity and cost of units purchased, units issued for use in production, and units that remain in the raw materials inventory, is called a(n) :

The balance in the Work in Process Inventory at any point in time is equal to:

Large aircraft producers such as the Boeing Company normally use:

Job order production is also known as:

Omega Contractors manufactures each house to customer specifications. It most likely would use:

A document in a job order costing system that is used to record the costs of producing a job is a(n) :

A type of production that yields customized products or services for each customer is called:

The job order cost sheets used by Greene Company revealed the following: Job No. 135 was completed during May and Jobs No. 134 and 135 were shipped to customers in May. What was the company's cost of goods sold for May and the Work in Process inventory on May 31?

A job cost sheet includes:

A job order costing system would best fit the needs of a company that makes:

The target cost for a job using job costing is calculated as:

A company that makes which of the following types of products would best be suited for a job costing system?