03 Job Quiz 3 Answers PDF

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03 Job Costing Quiz 3 Answers

03 Job Costing Quiz 3 Answers 1. With a ____________ system, costs are gathered by job or order. a. job b. order c. job cost d. management e. none of the above Answer: c) 2. The cost of each job is accumulated on a separate ____________. a. total cost sheet b. management cost sheet c. job cost sheet d. management sheet e. none of the above Answer: c) 3. In a manufacturing system the three cost elements which flow into work in process are ____________, ____________, and ____________. a. direct labor, direct materials, factory overhead b. direct labor, indirect materials, indirect factory overhead c. indirect labor, indirect materials, factory overhead d. indirect labor, direct materials, factory overhead e. none of the above Answer: a) 4. Materials are kept in a storeroom or warehouse and issued upon receipt of a ____________. a. cost requisition b. materials requisition c. materials collection d. warehouse requisition e. none of the above Answer: b) 5. Items not easily traced to individual jobs like sandpaper, lubricants, and so on are considered to be ____________. a. direct materials b. indirect materials c. indirect labor d. direct labor e. none of the above Answer: b) 6. Labor costs are accumulated by means of ____________ and labor summaries. a. job sheets b. order sheets c. time sheets d. cost sheets e. none of the above Answer: c) 7. The overhead application rate is computed by dividing ____________ factory overhead by the ____________ application base.

03 Job Costing Quiz 3 Answers

a. actual, estimated c. estimated, actual e. none of the above Answer: d)

b. actual, actual d. estimated, estimated

8. The applied overhead is credited to the ____________ account. a. cost b. expense c. factory overhead d. sales e. none of the above Answer: c) 9. After recording actual and applied overhead in the factory overhead account, a resulting debit balance would indicate ____________factory overhead. a. underapplied b. overapplied c. actual d. estimated e. none of the above Answer: a) 10. The ____________ account is adjusted for under- or overapplied overhead. a. sales b. factory overhead c. cost of goods sold d. expenses e. none of the above Answer: c) 11. ____________ are the factors that cause specific costs to be incurred within an organization. a. expenses b. cost of goods sold c. cost drivers d. indirect labor e. none of the above Answer: c) 12. ____________ are those costs that are easily traced to a job and are charged to individual jobs that are worked on during the accounting period. a. job overhead b. overhead c. indirect cost d. direct cost e. none of the above Answer: d) 13. Of the following manufacturing operations, which is best suited to the utilization of a job order system? a. Helicopter manufacturing. b. Soft drink bottling operation. c. Crude oil refining. d. Plastic molding operation. Answer A) 14. Which of the following statements concerning job cost sheets is incorrect? a. A job cost sheet would show the direct materials used on that specific job.

03 Job Costing Quiz 3 Answers

b. A job cost sheet would reveal the selling costs associated with a particular job. c. The total costs recorded on a job cost sheet should also be reflected in the Work in Process account in the general ledger. d. The amount of overhead on a job cost sheet is the applied factory overhead rather than the actual factory overhead. Answer B) 15. Under normal circumstances the Work in Process account used in a job costing system: a. Will include charges for direct labor, direct materials, and applied overhead. b. Will include only charges for direct materials and applied overhead. The labor is charged to expense as incurred. c. Will include charges for direct labor, direct materials, and actual overhead. d. Will include only charges for direct labor and direct materials. Answer A) 16. The Factory Overhead account in a job costing system is credited for the: a. Excess of applied overhead over actual overhead. b. Actual overhead. c. Applied overhead. d. Indirect materials and indirect labor. Answer C) 17. The overhead application rate is calculated by: a. Dividing the estimated factory overhead by the estimated application base. b. Dividing estimated per unit factory overhead by the sum of the per unit cost for direct labor and direct materials. c. Multiplying the estimated factory overhead by the estimated application base. d. Dividing the estimated application base by the estimated factory overhead. Answer A) 18. With the job order cost system, a credit balance in the Factory Overhead account at the end of an accounting period would indicate: a. That an error in the job cost system has occurred. b. That the company lost money during the period. c. The presence of underapplied overhead. d. The presence of overapplied overhead. Answer D) 19. The theoretically correct method of allocating under- or overapplied overhead is to: a. Allocate the amount to cost of goods sold. b. Allocate the amount to finished goods. c. Allocate the amount to work in process and finished goods. d. Allocate the amount among work in process, finished goods, and cost of goods sold. Answer D)

03 Job Costing Quiz 3 Answers

20. Jensen Manufacturing uses a job order cost system. Overhead is applied at the rate of $20 per direct labor hour. Job #777 includes $2,000 of direct labor cost and 150 direct labor hours. Indirect labor cost of $1,500 was actually incurred. The proper journal entry to record the wage related cost is: a. Debit Work in Process, $3,500; credit Wages Payable, $3,500. b. Debit Wage Expense, $3,500; credit Wages Payable, $3,500. c. Debit Work in Process, $2,000; debit Factory Overhead, $1,500; credit Wages Payable, $3,500. d. Debit Work in Process, $3,500; credit Factory Overhead, $1,500; credit Wage Expense, $2,000. Answer C) 21. The appropriate journal entry to record the application of overhead in a job costing system involves a debit to Work in Process and a credit to: a. Cost of Goods Sold b. Factory Overhead c. Cash d. Income Summary Answer B) 22. Which of the following statements concerning job costing systems is incorrect? a. Cost drivers are those items which cause actual overhead to exceed applied overhead. b. Job costing systems are appropriate to both manufacturing and service businesses. c. Traditionally, direct labor has been a very popular overhead application base. d. In a service business, indirect costs of providing a service are treated as overhead and applied in a manner similar to that for factory overhead. Answer A)...