Job-Order Costing
1 Which of the following are important source documents found in a job-order costing system?
Job cost sheets.
Materials requisition forms.
Department production reports.
Employee time tickets.
2 Which of the following represent reasons that many companies use a predetermined overhead rate to charge overhead costs to products?
Because overhead is an indirect product cost, it must be allocated to the product in some manner.
A predetermined overhead rate allows a company to assign an accurate amount of overhead to each product.
A predetermined overhead rate allows a company to determine the cost of completed jobs without waiting for the end of the accounting period.
The predetermined overhead rate allows companies to smooth out the effects of seasonal fluctuations in overhead costs.
3 The allocation base used in establishing a predetermined overhead rate should meet which of the following criteria?
It should be a strong cause of overhead costs.
It should be common to all the company's products.
If the company assigns overhead in each production department, the allocation base used for each department should be the same.
It should be related to direct labor (e.g., direct labor costs or direct labor hours).
4 Predetermined overhead rates can be used in which of the following types of product costing systems?
Job-order costing systems only.
Process costing systems only.
Both job-order and process costing systems.
5 If a manufacturing company uses a predetermined overhead rate, which general ledger account will be debited when manufacturing overhead costs are actually incurred?
Work in Process.
Manufacturing Overhead.
Indirect labor expense.
Cost of Goods Sold.
6 At the end of the accounting period, a company that uses a predetermined overhead rate for applying overhead finds that its manufacturing overhead account has a $10,000 debit balance that the controller considers to be immaterial in amount. Which of the following statements is true.
Overhead is overapplied, and the balance should be closed out by debiting Cost of Goods Sold.
Overhead is overapplied, and the balance should be closed out by crediting Cost of Goods Sold.
Overhead is underapplied, and the balance should be closed out by debiting Cost of Goods Sold.
Overhead is underapplied, and the balance should be closed out by crediting Cost of Goods Sold.
7 When a manufacturing company that uses a predetermined overhead rate incurs salary costs for sales people, these costs would be debited to which of the following accounts?
Work in Process.
Manufacturing Overhead.
Cost of Goods Sold.
Salaries Expense.
8 Which of the following statements is true regarding the accounting for units of product when they are completed in a job-order costing system?
The costs of the completed units are determined from their job costs sheets, and these costs are debited to Finished Goods.
The costs of the completed units are determined from their job costs sheets, and these costs are debited to Cost of Goods Sold.
The costs of the completed units are determined from their job cost sheets, and these costs are credited to Work in Process.
The costs of the completed units are determined from their job cost sheets, and these costs are debited to Work in Process.
9 A "job" in a job-order costing system can be comprised of which of the following?
A single unit of product.
A batch of units of product that all differ from one another .
A batch of units of product that are all alike.
10 Which of the following costs are assigned to products under absorption costing?
Direct materials.
Direct labor.
Variable manufacturing overhead.
Fixed manufacturing overhead.
11 Questions 11 through 13 are based on this information. Glass Industries predetermined overhead rate for the assembly department is
$500.
$200.
$125.
$50.
12 Questions 11 through 13 are based on this information. Glass Industries molding department overhead applied to Job No. 7-29 is
$108,000.
$100,000.
$60,000.
$50,000.
13 Questions 11 through 13 are based on this information. Glass Industries total cost of Job No. 7-29 is
$235,500.
$193,000.
$187,500.
$145,000.
14 Questions 14 through 16 are based on this information. Alana's cost of goods sold for September would be
$0.
$170,000.
$130,000.
$344,000.
15 Questions 14 through 16 are based on this information. Alana's ending finished goods inventory for September would be
$414,000.
$334,000.
$174,000.
$142,000.
16 Questions 14 through 16 are based on this information. Alana's ending work in process inventory for September would be
$240,000.
$192,000.
$176,000.
$0.