Deck 5: Job-Order Costing

Question 1

Manufacturing and service firms producing unique products or services require job-order accounting systems.

Answer 1

True

Question 2

Production costs consist of direct materials, direct labor, and overhead.

Answer 2

True

Question 3

The key feature of job-order costing is that the cost of one job differs from that of another job and must be kept track of separately.

Answer 3

True

Question 4

Departmental overheads cannot be added together to get plantwide overhead.

Question 5

If the overhead variance is immaterial, it is allocated among the ending balances of Work in Process, Finished Goods, and Cost of Goods Sold.

Question 6

Using a time ticket, the cost accounting department can enter the cost of direct materials onto the correct job-order cost sheet.

Question 7

The difference between actual overhead and applied overhead is called an overhead variance.

Question 8

The use of normal costing means that actual overhead costs are assigned directly to jobs.

Question 9

Costs reported on the financial statements must be estimated costs.

Question 10

Actual overhead is reconciled with applied overhead at the beginning of the period.

Question 11

The cost of goods sold appearing on the income statement as an expense is the normal cost of goods sold.

Question 12

The raw materials account is an inventory account located on the income statement.

Question 13

A job-order cost sheet is the source document where direct labor costs are assigned to individual jobs.

Question 14

In an actual cost system, actual direct materials, actual direct labor and estimated overhead are used to determine unit cost.

Question 15

Actual overhead is used to arrive at the cost of goods manufactured.

Question 16

The use of a departmental rate has the advantage of being simple and reduces data collection requirements.

Question 17

The three manufacturing cost elements are direct materials, direct labor, and overhead.

Question 18

There are other source documents besides the time ticket and the material requisition form used to fill out the job-order cost sheet.

Question 19

The work-in-process account consists of all the job-order cost sheets for the completed jobs.

Question 20

If actual overhead is greater than applied overhead, the variance is called underapplied overhead.

Question 21

MATCHING
Match each item with the correct statement below.
a.
actual cost system
b.
job-order costing system
c.
normal cost system
d.
process-costing system
A costing system that accumulates production costs by process or by department for a given period of time

Question 22

MATCHING
Match each item with the correct statement below.
a.
actual cost system
b.
job-order costing system
c.
normal cost system
d.
process-costing system
A costing system in which costs are collected and assigned to units of production for each individual job

Question 23

Match each item with the correct statement below.
a.
predetermined overhead rate
b.
plantwide overhead rate
c.
departmental overhead rate
d.
overhead variance
e.
overapplied overhead
f.
underapplied overhead
g.
applied overhead
h.
normal cost of goods sold
The amount by which applied overhead exceeds actual overhead

Question 24

In job-order costing, the journal entry for a completed job costing $7,000 but not sold is:

Question 25

Match each item with the correct statement below.
a.
predetermined overhead rate
b.
plantwide overhead rate
c.
departmental overhead rate
d.
overhead variance
e.
overapplied overhead
f.
underapplied overhead
g.
applied overhead
h.
normal cost of goods sold
An overhead rate computed using estimated data

Question 26

When materials are put into production, they are taken from the Raw Materials account and put into the Work in Process account.

Question 27

Match each item with the correct statement below.
a.
predetermined overhead rate
b.
plantwide overhead rate
c.
departmental overhead rate
d.
overhead variance
e.
overapplied overhead
f.
underapplied overhead
g.
applied overhead
h.
normal cost of goods sold
The difference between actual overhead and applied overhead

Question 28

In job-order costing, the journal entry for $7,200 raw materials requisitioned for use in production is:

Question 29

Actual overhead costs are accumulated in the overhead control account.

Question 30

Overhead costs are assigned to Finished Goods using a predetermined rate.

Question 31

The cost of completed units is always debited to Work-in-Process and credited to Finished Goods.

Question 32

Match each item with the correct statement below.
a.
predetermined overhead rate
b.
plantwide overhead rate
c.
departmental overhead rate
d.
overhead variance
e.
overapplied overhead
f.
underapplied overhead
g.
applied overhead
h.
normal cost of goods sold
Overhead assigned to production using predetermined rates

Question 33

MATCHING
Match each item with the correct statement below.
a.
actual cost system
b.
job-order costing system
c.
normal cost system
d.
process-costing system
An approach that assigns the actual costs of direct materials and direct labor to products but uses a predetermined rate to assign overhead costs

Question 34

Match each item with the correct statement below.
a.
predetermined overhead rate
b.
plantwide overhead rate
c.
departmental overhead rate
d.
overhead variance
e.
overapplied overhead
f.
underapplied overhead
g.
applied overhead
h.
normal cost of goods sold
The amount by which actual overhead exceeds applied overhead

Question 35

Match each item with the correct statement below.
a.
predetermined overhead rate
b.
plantwide overhead rate
c.
departmental overhead rate
d.
overhead variance
e.
overapplied overhead
f.
underapplied overhead
g.
applied overhead
h.
normal cost of goods sold
A single overhead rate calculated using all estimated overhead for a factory divided by the estimated activity level across the entire factory

Question 36

In job-order costing, the journal entry for overhead applied at the rate of $3 per direct labor hour when 210 direct labor hours were worked is:

Question 37

The journal entry for $17 of underapplied overhead is:

Question 38

In job-order costing, the journal entry for $1,700 of unpaid direct labor is:

Question 39

The journal entry for $17,000 materials purchased on account is:

Question 40

MATCHING
Match each item with the correct statement below.
a.
actual cost system
b.
job-order costing system
c.
normal cost system
d.
process-costing system
An approach that assigns actual costs of direct materials, direct labor, and overhead to products

Question 41

In a _______________________________ costs are accumulated by job.

Question 42

Match the following cost flows with the proper event in a job-costing firm:
a.
completion of job
b.
end of each accounting period
c.
materials are moved from storage into production
d.
product is sold
e.
end of year
costs of product are removed from finished goods and added to cost of goods sold

Question 43

Strict ______________________ are rarely used because they cannot provide accurate unit cost information on a timely basis.

Question 44

Match each item with the correct statement below. Answers may be used more than once.
a.
Job-order cost sheet
b.
Time ticket
c.
Materials requisition form
This form is filled out by each employee every day.

Question 45

Match each item with the correct statement below. Answers may be used more than once.
a.
Job-order cost sheet
b.
Time ticket
c.
Materials requisition form
The job order number, or name, head this form.

Question 46

Match the following cost flows with the proper event in a job-costing firm:
a.
completion of job
b.
end of each accounting period
c.
materials are moved from storage into production
d.
product is sold
e.
end of year
actual overhead is reconciled with applied overhead

Question 47

Match the following cost flows with the proper event in a job-costing firm:
a.
completion of job
b.
end of each accounting period
c.
materials are moved from storage into production
d.
product is sold
e.
end of year
cost of materials is removed from materials account and added to work-in- process account

Question 48

__________________________ is a costing system that accumulates production costs by process or by department for a given period of time.

Question 49

Match each item with the correct statement below. Answers may be used more than once.
a.
Job-order cost sheet
b.
Time ticket
c.
Materials requisition form
Every time a new job is started this is prepared.

Question 50

Match each item with the correct statement below.
a.
predetermined overhead rate
b.
plantwide overhead rate
c.
departmental overhead rate
d.
overhead variance
e.
overapplied overhead
f.
underapplied overhead
g.
applied overhead
h.
normal cost of goods sold
Estimated overhead for a single department divided by the estimated activity level for that same department

Question 51

A _______ is one distinct unit or set of units.

Question 52

Match the following cost flows with the proper event in a job-costing firm:
a.
completion of job
b.
end of each accounting period
c.
materials are moved from storage into production
d.
product is sold
e.
end of year
schedule of costs of goods sold is prepared

Question 53

_________________ is found by multiplying the predetermined overhead rate by the actual use of the associated activity for the period.

Question 54

Match each item with the correct statement below. Answers may be used more than once.
a.
Job-order cost sheet
b.
Time ticket
c.
Materials requisition form
This form may be used to maintain proper control over a firm's inventory of direct materials.

Question 55

Match the following cost flows with the proper event in a job-costing firm:
a.
completion of job
b.
end of each accounting period
c.
materials are moved from storage into production
d.
product is sold
e.
end of year
immaterial overhead variance closed to costs of goods sold

Question 56

Match the following cost flows with the proper event in a job-costing firm:
a.
completion of job
b.
end of each accounting period
c.
materials are moved from storage into production
d.
product is sold
e.
end of year
direct materials, direct labor and applied overhead are totaled to yield manufacturing cost of job

Question 57

A(n) ___________________________ determines unit cost by adding actual direct materials, actual direct labor, and estimated overhead.

Question 58

Match the following cost flows with the proper event in a job-costing firm:
a.
completion of job
b.
end of each accounting period
c.
materials are moved from storage into production
d.
product is sold
e.
end of year
the costs of job are transferred from the work-in-process account to finished goods account

Question 59

The ___________________________ is calculated at the beginning of the year by dividing the total estimated annual overhead by the total estimated level of cost driver.

Question 60

Match each item with the correct statement below. Answers may be used more than once.
a.
Job-order cost sheet
b.
Time ticket
c.
Materials requisition form
This form asks for the type, quantity, and unit price of direct materials.

Question 61

When units are sold, their total cost is debited to _______________ and credited to ____________.

Question 62

The difference between actual overhead and applied overhead is called a (n) _________________.

Question 63

A _____________________ is a single overhead rate calculated by using all estimated overhead for a factory divided by the estimated activity level across the entire factory.

Question 64

Applied overhead costs are charged to ________________.

Question 65

If actual overhead is greater than applied overhead, then the variance is called ___________________.

Question 66

Production costs do not include

A) direct materials.
B) direct labor.
C) variable overhead.
D) fixed overhead.
E) All of these are production costs.

Question 67

Which of the following is the assignment process used with normal costing?

A) Actual direct materials, actual direct labor and actual overhead cost are assigned to products.
B) Actual direct materials cost is assigned to products, but direct labor and overhead costs are assigned using predetermined rates.
C) Actual direct labor cost is assigned to products, but direct material and overhead costs are assigned using predetermined rates.
D) Actual direct material and direct labor costs are assigned to products, but overhead costs are assigned using predetermined rates.
E) All manufacturing costs are assigned using predetermined rates.

Question 68

A __________________________ is used by the cost accounting department to enter the cost of direct materials onto the correct job-order cost sheet.

Question 69

Which of the following are easy to trace to individual jobs?

A) direct materials and overhead
B) direct materials and direct labor
C) direct labor and overhead
D) overhead and indirect labor
E) depreciation on machinery and indirect labor

Question 70

The ____________________ of allocation recognizes all interactions among support departments.

Question 71

Which method of measuring costs associated with production is more widely used in practice?

A) normal Costing
B) actual Costing
C) both are used equally.
D) neither one is used.
E) cannot be determined.

Question 72

Which of the following is not a characteristic of job-order costing?

A) Wide variety of distinct products.
B) Unit cost is computed by dividing process costs of the period by the units produced in the period.
C) Unit cost is computed by dividing total job costs by units produced on that job.
D) Costs accumulated by job.
E) Typically, the cost of one job is different from that of another job.

Question 73

_________________________ is the amount that appears as an expense on the income statement after the adjustment for the period's overhead variance is recorded.

Question 74

________________________ are directly responsible for creating the products or services sold to customers.

Question 75

The cost of goods sold before an adjustment for an overhead variance is called ____________________.

Question 76

Firms in the ____ business are most likely to use a process-costing system.

A) printing
B) dental
C) construction
D) petroleum
E) automobile repair

Question 77

How are unit costs calculated?

A) by dividing total cost associated with the units produced by the unit cost
B) by adding all variable costs per unit associated with the units produced
C) by dividing total fixed costs by the number of units produced
D) by dividing total cost associated with the units produced by the number of units produced
E) by adding unit variable costs to total fixed costs

Question 78

A source document by which direct labor costs are assigned to individual jobs is known as a _______________.

Question 79

When materials are requested for production the cost is removed from ____________ and added to ____________.

Question 80

The _____________________ is subsidiary to the work-in-process account and is the primary document for accumulating all costs related to a particular job.