Question 1

Overapplied or underapplied overhead should be removed from the Factory Overhead account at the end of each accounting period.

Accepted Answer

Overapplied or underapplied overhead is a balancing figure that results from the difference between actual overhead costs and applied overhead costs. To ensure that the Factory Overhead account reflects actual overhead costs, the overapplied or underapplied amount should be removed from the account and allocated to Cost of Goods Sold or Work in Process at the end of each accounting period.

Question 2

Job order manufacturing is also known as:
A) Mass production manufacturing.
B) Process manufacturing.
C) Unit manufacturing.
D) Customized production.
E) Standard costing.

Accepted Answer

The term "job order" refers to manufacturing products on a per-order basis, which is also known as customized production. This type of manufacturing involves producing unique or custom-made products to meet specific customer demand. It is different from mass production manufacturing (A) which involves the continuous production of large quantities of standardized goods, process manufacturing (B) which involves the production of goods that are indistinguishable from one another, unit manufacturing (C) which is not a commonly used term, and standardized costing (E) which is a method of cost accounting used in manufacturing companies.

Question 3

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):
A) Materials ledger card.
B) Materials requisition.
C) Purchase order.
D) Materials voucher.
E) Purchase ledger.

Accepted Answer

A materials ledger card is a document that provides a perpetual record of a raw materials item. It 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. This information can be used to accurately track inventory levels and costs associated with raw materials.

Question 4

A job order manufacturing system would be appropriate for a company that produces which one of the following items?
A) A landscaping design for a new hospital.
B) Seedlings for sale in a nursery.
C) Sacks of yard fertilizer.
D) Packets of flower seeds.
E) Small gardening tools, including rakes, shovels, and hoes.

Accepted Answer

A job order manufacturing system is suitable for customized, unique, or one-off products, like a landscaping design for a new hospital, which requires specific plans and designs tailored to the client's needs.

Question 5

Dell Builders manufactures each house to customer specifications.It most likely would use:
A) Capital process costing.
B) A periodic inventory system.
C) Unique costing.
D) Job order costing.
E) Activity-based costing.

Accepted Answer

Dell Builders manufactures each house to customer specifications, indicating that each house is a unique product. Job order costing is the best choice for such a manufacturing process, as it allocates costs to individual jobs or orders based on their unique characteristics.

Question 6

A source document that production managers use to request materials for manufacturing and that is used to assign materials costs to specific jobs or to overhead is a:
A) Job cost sheet.
B) Production order.
C) Materials requisition.
D) Materials purchase order.
E) Receiving report.

Accepted Answer

A materials requisition is a document used by production managers to request materials for manufacturing. This document is also important for assigning materials costs to specific jobs or to overhead. A job cost sheet is used to accumulate the costs associated with a particular job, a production order is a document authorizing the manufacturing of a specific product, a materials purchase order is a document authorizing the procurement of specific materials, and a receiving report is a document used to verify the receipt of materials. None of these documents are specifically used for requesting materials for manufacturing or assigning materials costs to specific jobs or overhead.

Question 7

The production activities for a customized product represent a(n):
A) Operation.
B) Job.
C) Unit.
D) Pool.
E) Process.

Accepted Answer

In a customized product scenario, each product is unique and requires customization to meet the specific needs of the customer. This means that production activities are designed and implemented on a per-job basis, making B the best choice. The other options may be applicable in other production scenarios but are not as relevant in the context of customized products.

Question 8

Cost accounting systems used by manufacturing companies are based on the:
A) Periodic inventory system.
B) Perpetual inventory system.
C) Finished goods inventories.
D) Weighted average inventories.
E) LIFO inventory system

Accepted Answer

Manufacturing companies typically use the perpetual inventory system, which provides continuous tracking of inventory levels and costs. This is necessary to accurately calculate the cost of goods sold and determine the value of inventory on hand. The other choices listed are not specific to cost accounting systems used by manufacturing companies.

Question 9

The job order cost sheets used by Garza Company revealed the following:
$$\begin{array} { c c c } 
\text { Job. No. } & \text { Bal. May 1 } & \text { May Production }  \
&&\text { Costs } \
124 & \$ 1,700 & \$-- \
125 & 1,200 & 300 \
126 &-- & 900
\end{array}$$

Job No.125 was completed during May and Jobs No.124 and 125 were shipped to customers in May.What was the company's cost of goods sold for May and the goods in process inventory on May 31?
A) $3,200; $900
B) $2,900; $1,200
C) $1,200; $2,900
D) $1,700; $1,200
E) $4,100; $ 0

Accepted Answer

The cost of goods sold for May is the sum of the costs of Jobs No. 124 and 125, which were completed and shipped during May. The cost of goods sold is $1,700 + $300 = $2,000. The goods in process inventory on May 31 is the cost of Job No. 126, which was not completed during May. The cost of goods in process inventory is $900.

Question 10

A job cost sheet includes:
A) Direct materials, direct labor, operating costs.
B) Direct materials, overhead, administrative costs.
C) Direct labor, overhead, selling costs.
D) Direct material, direct labor, overhead.
E) Direct materials, direct labor, selling costs.

Accepted Answer

A job cost sheet typically includes the costs of direct materials, direct labor, and overhead for a specific job or project. Option D is the only choice that includes all three of these cost categories in its answer.

Question 11

A job order cost accounting system would best fit the needs of a company that makes:
A) Shoes and apparel.
B) Paint.
C) Cement.
D) Custom machinery.
E) Pencils and erasers.

Accepted Answer

A job order cost accounting system is used for custom-made or unique products, which fits the description of custom machinery. The other products listed can be mass-produced and would be better suited for a process cost accounting system.

Question 12

A system of accounting for manufacturing operations that produces timely information about inventories and manufacturing costs per unit of product is a:
A) Finished goods accounting system.
B) General accounting system.
C) Manufacturing accounting system.
D) Cost accounting system.
E) Production accounting system.

Accepted Answer

A cost accounting system specifically focuses on tracking and analyzing the costs associated with manufacturing, including inventories and costs per unit. The other choices do not necessarily prioritize this type of information.

Question 13

In comparison to a general accounting system for a manufacturing company,a cost accounting system places an emphasis on:
A) Periodic inventory counts.
B) Total costs.
C) Unit costs and cost control.
D) Products and average costs.
E) Large volume operations involving standardized products.

Accepted Answer

A cost accounting system places an emphasis on unit costs and cost control. This is because the system is designed to help the manufacturing company accurately calculate the cost of producing each unit of product, and then use that information to improve cost efficiency and make informed pricing decisions. Periodic inventory counts (A) are important in both general accounting and cost accounting, but they are not the main focus of a cost accounting system. Total costs (B) are important to track overall financial performance, but again, a cost accounting system is more concerned with the cost of each individual unit produced. Products and average costs (D) are relevant to both general accounting and cost accounting, but do not necessarily imply a focus on cost control. Large volume operations involving standardized products (E) may benefit from a cost accounting system, but it is not a defining characteristic of such a system.

Question 14

A type of manufacturing that produces customized products or services for each customer is called:
A) Customer orientation manufacturing.
B) Job order manufacturing.
C) Just-in-time manufacturing.
D) Job lot manufacturing.
E) Process manufacturing.

Accepted Answer

Job order manufacturing is a type of manufacturing where each product is customized based on the customer's order. This type of manufacturing is common in industries such as furniture, automotive, and construction, where each product may have unique specifications based on the customer's needs. The other options mentioned are not specific to customized products or services for each customer.

Question 15

A document in a job order cost accounting system that is used to record the costs of producing a job is a(n):
A) Job cost sheet.
B) Job lot.
C) Finished goods summary.
D) Process cost system.
E) Units-of-production sheet.

Accepted Answer

A job cost sheet is a document used in job order cost accounting systems to record the cost of producing a job. It contains information on direct materials, direct labor, and manufacturing overhead costs allocated to the job.

Question 16

Job order costing systems normally use:
A) Periodic inventory systems.
B) Perpetual inventory systems.
C) Real inventory systems.
D) General inventory systems.
E) All of the above.

Accepted Answer

Job order costing systems typically use perpetual inventory systems to continuously track inventory levels and costs associated with each job.

Question 17

A job cost sheet shows information about each of the following items except:
A) The direct labor costs assigned to the job.
B) The name of the customer.
C) The costs incurred by the marketing department in selling the job.
D) The overhead costs assigned to the job.
E) The direct materials costs assigned to the job.

Accepted Answer

A job cost sheet typically includes information about direct labor costs, overhead costs, and direct materials costs assigned to the job. However, it typically does not include information about the costs incurred by the marketing department in selling the job. The name of the customer may or may not be included on the job cost sheet, depending on the company's record-keeping practices.

Question 18

Underapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead allocation rate exceeds the overhead incurred during a period.

Accepted Answer

Underapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead allocation rate is less than the overhead incurred during a period.

Question 19

Overapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead allocation rate exceeds the overhead incurred during a period.

Accepted Answer

Overapplied overhead occurs when the predetermined overhead rate results in more overhead being allocated to jobs than what was actually incurred.

Question 20

Large aircraft manufacturers such as McDonnell Douglas normally use:
A) Job order costing.
B) Process costing.
C) Mixed costing.
D) Full costing.
E) Simple costing.

Accepted Answer

Job order costing is used for large, customized products that require individualized accounting for each unit produced. This is appropriate for large aircraft manufacturers like McDonnell Douglas, where each plane is unique and requires specific materials and labor costs.

Quiz 15: Job Order Costing and Analysis

Overapplied or underapplied overhead should be removed from the Factory Overhead account at the end of each accounting period.

Job order manufacturing is also known as:

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) :

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

Dell Builders manufactures each house to customer specifications.It most likely would use:

A source document that production managers use to request materials for manufacturing and that is used to assign materials costs to specific jobs or to overhead is a:

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

Cost accounting systems used by manufacturing companies are based on the:

A job cost sheet includes:

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

A system of accounting for manufacturing operations that produces timely information about inventories and manufacturing costs per unit of product is a:

In comparison to a general accounting system for a manufacturing company,a cost accounting system places an emphasis on:

A type of manufacturing that produces customized products or services for each customer is called:

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

Job order costing systems normally use:

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

Underapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead allocation rate exceeds the overhead incurred during a period.

Overapplied overhead is the amount by which overhead applied to jobs using the predetermined overhead allocation rate exceeds the overhead incurred during a period.

Large aircraft manufacturers such as McDonnell Douglas normally use: