Question 1

Overapplied overhead occurs when the actual overhead costs incurred during a period are greater than the overhead costs applied during the period.An overapplied overhead situation occurs when the applied overhead exceeds the actual overhead incurred.

Accepted Answer

Overapplied overhead occurs when the applied overhead is less than the actual overhead incurred, not when it exceeds it.

Question 2

The journal entry to apply manufacturing overhead costs to completed jobs credits either Applied Manufacturing Overhead or Manufacturing Overhead (Control).The credit can be made to either account depending on the organization's chart of accounts.

Accepted Answer

The journal entry to apply manufacturing overhead costs to completed jobs typically credits either Applied Manufacturing Overhead or Manufacturing Overhead (Control), and the specific account used may vary depending on the organization's chart of accounts.

Question 3

A job is a product or service that can be easily and conveniently distinguished from other products/services.This is a definition of a job.

Accepted Answer

This definition accurately describes what a job is - it is a specific type of product or service that is distinct from other similar goods or services.

Question 4

Underapplied overhead occurs when the actual overhead costs incurred during a period are greater than the overhead costs applied during the period.An underapplied overhead situation occurs when the actual overhead incurred exceeds the applied overhead.

Accepted Answer

Underapplied overhead occurs when the actual overhead costs incurred during a period are greater than the overhead costs applied during the period.

Question 5

Service organizations,by their nature,cannot have a balance in Work-in-Process Inventory.A service may take several accounting periods to complete so there may very well be a Work-in-Process.

Accepted Answer

Service organizations do not have work-in-process inventory as there are no tangible goods being produced. However, a service may take several accounting periods to complete, which may result in work that is in progress but it is not considered work-in-process inventory.

Question 6

It is unethical to intentionally charge costs to the wrong job.It is unethical to knowingly do something wrong.

Accepted Answer

Intentionally charging costs to the wrong job is a form of intentional wrongdoing and is considered unethical behavior.

Question 7

Actual costing does not use a predetermined overhead rate to apply manufacturing overhead costs to jobs completed during the period.The application rate is based on the actual costs incurred during the period.

Accepted Answer

In actual costing, the overhead costs are applied based on the actual costs incurred during the period, rather than using a predetermined overhead rate.

Question 8

The periodic allocation of manufacturing overhead costs to job cost sheets is based on an event,not a transaction.The allocation of manufacturing overhead takes place at the end of a period (Work-in-Process)or the completion of a job (transfer to Finished Goods Inventory).

Accepted Answer

The periodic allocation of manufacturing overhead costs to job cost sheets does rely on an event, which is the end of the period or the completion of a job. This differs from transactions, which occur as individual events.

Question 9

Accounting for direct materials and direct labor is easier than accounting for manufacturing overhead costs.This is because direct costs are traceable to jobs while overhead is allocated.

Accepted Answer

Direct materials and direct labor costs can be easily traced to the specific job or product, while manufacturing overhead costs cannot be directly traced and need to be allocated based on an overhead rate or other predetermined method.

Question 10

Service organizations generally use the same job costing procedures as manufacturers.The difference is the product being produced is intangible.

Accepted Answer

Service organizations may use job costing procedures to assign costs to individual jobs or projects, even though the product being produced is not physical or tangible. This can help them better understand the profitability of each job and make pricing decisions.

Question 11

The journal entry to record actual manufacturing overhead for indirect material debits Manufacturing Overhead (Control)and credits Accounts Payable.The credit is to materials inventory.

Accepted Answer

The answer of The journal entry to record actual manufacturing...

Question 12

One difference between jobs and projects is the account titles used in the costing process.The main difference is the length of time to complete the work.

Accepted Answer

The answer of One difference between jobs and projects is...

Question 13

The journal entry to record actual manufacturing overhead for indirect labor debits Manufacturing Overhead (Control)and credits Work-in-Process inventory.The credit should be to Wages Payable.

Accepted Answer

The journal entry to record actual manufacturing overhead for indirect labor debits Manufacturing Overhead (Control) and credits Wages Payable, not Work-in-Process inventory.

Question 14

Indirect material and indirect labor are two examples of manufacturing overhead costs.Indirect material and labor are included in overhead because they are considered to be insignificant in cost (material)and not directly related to the job (labor).

Accepted Answer

Indirect material and indirect labor are examples of manufacturing overhead costs because they are not directly related to specific product units or jobs. They are considered insignificant in cost and are allocated as part of the overhead cost in manufacturing.

Question 15

Job shops have three types of inventory accounts: Direct Materials,Work-in-Process,and Finished Goods.This is a correct statement as far as inventory accounts.

Accepted Answer

Job shops typically have inventory accounts for Direct Materials, Work-in-Process, and Finished Goods. These accounts allow the company to keep track of the materials and products at different stages of production and ensure that they have enough inventory to meet customer demand.

Question 16

At the end of the accounting period,manufacturing overhead costs are applied to uncompleted jobs using the same predetermined overhead rate that is used to apply manufacturing overhead costs to completed jobs.The same overhead rate is applied to all manufacturing activity during the business year.

Accepted Answer

This statement accurately describes the process of applying manufacturing overhead costs to uncompleted jobs using a predetermined overhead rate that remains consistent throughout the accounting period.

Question 17

Normal costing uses the actual allocation base activity to apply manufacturing overhead costs to jobs during the period.Normal costing uses the actual allocation base activity to apply manufacturing overhead costs to jobs during the period.

Accepted Answer

The answer of Normal costing uses the actual allocation base...

Question 18

The cost in the ending Finished Goods inventory account consists of the direct materials,direct labor,and manufacturing overhead of all jobs still in process at the end of the period.The ending Finished Goods inventory account consists of the direct materials,direct labor,and manufacturing overhead of all jobs that have been completed.

Accepted Answer

The statement is incorrect. The ending Finished Goods inventory account consists of the direct materials, direct labor, and manufacturing overhead of all jobs that have been completed AND transferred to the Finished Goods inventory account, not jobs still in process at the end of the period.

Question 19

Job cost sheets are used in accounting systems as a subsidiary ledger for the Work-in-Process account.Job cost sheets contain the details of the unfinished work;and constitute the subsidiary ledger for Work-in-Process,Finished Goods,and Cost of Goods Sold.

Accepted Answer

Job cost sheets are indeed used as a subsidiary ledger for the Work-in-Process account and contain details of unfinished work, acting as a subsidiary for Work-in-Process, Finished Goods, and Cost of Goods Sold in accounting systems.

Question 20

The predetermined overhead rate is computed by dividing the estimated activity of the allocation base into the estimated manufacturing overhead costs.Rate = estimated overhead/estimated activity.

Accepted Answer

The predetermined overhead rate is calculated by dividing the estimated manufacturing overhead by the estimated activity of the allocation base.

Quiz 7: Job Costing