Question 1 Important Feature Job Order Cost System Each Job

Published by James Muriuki on

1. An important feature of a job order cost system is that each job

A. must be completed before a new job is accepted. 

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B. consists of one unit of output. 

C. must be similar to previous jobs completed. 

D. has its own distinguishing characteristics.

Answer: has its own distinguishing characteristics.

2. Which of the following is not used in assigning manufacturing costs to work in process inventory?

a. Predetermined overhead rate 

b. Actual manufacturing overhead 

c. Time tickets

d. Materials requisitions

Answer: Actual manufacturing overhead 

3. During 2013, Durham Manufacturing expected Job No. 51 to cost $300,000 of overhead, $500,000 of materials, and $200,000 in labor. Durham applied overhead based on direct labor cost. Actual production required an overhead cost of $290,000, $550,000 in materials used, and $220,000 in labor. All of the goods were completed. What amount was transferred to Finished Goods?

a. $1,070,000 

b. $1,000,000 

c. $1,100,000   

d. $1,060,000

Answer: $1,100,000   

4. The predetermined overhead rate is

A. determined on a moving average basis throughout the year. 

B. not calculated until actual overhead costs are incurred. 

C. determined at the beginning of the year. 

D. determined at the end of the current year

Answer: determined at the beginning of the year. 

5. As of December 31, 2017, Nilsen Industries had $2,000 of raw materials inventory. At the beginning of 2017, there was $1,600 of materials on hand. During the year, the company purchased $324,000 of materials; however it paid for only $314,000. How much inventory was requisitioned for use on jobs during 2017?

a. $354,400

b. $344,400

c. $343,600

d. $353,600

Answer:$353,600

6. Spencer Inc. applies overhead to production at a predetermined rate of 80% based on direct labor cost. Job No. 130, the only job still in process at the end of August, has been charged with manufacturing overhead of $5,000. What was the amount of direct materials charged to Job 130 assuming the balance in Work in Process inventory is $20,000?

A. $8,750.  

B. $20,000. 

C. $5,000. 

D. $6,250.

Answer: $5,000. 

7. Cost of goods sold is obtained from

A. the work in process inventory records. 

B. the finished goods inventory records. 

C. the Raw Materials Inventory control account. 

D. analysis of all the control accounts in the cost system.

Answer: analysis of all the control accounts in the cost system.

8. Process costing is not used when

A. a series of connected manufacturing processes is necessary. 

B. jobs have distinguishing characteristics. 

C. similar goods are being produced. 

D. large volumes are produced.

Answer: similar goods are being produced. 

9. The two basic types of cost accounting systems are

A. job order and job accumulation systems. 

B. job order and process cost systems. 

C. job order and batch systems. 

D. process cost and batch systems

Answer: job order and process cost systems. 

10. If the manufacturing overhead costs applied to jobs worked on were greater than the actual manufacturing costs incurred during a period, overhead is said to be

A. overapplied. 

B. prepaid. 

C. underapplied. 

D. in error.

Answer: overapplied. 

11. If Manufacturing Overhead has a debit balance at the end of the period, then

A. the overhead assigned to Work in Process Inventory is more than the overhead incurred. 

B. overhead has been overapplied. 

C. management must take corrective action. 

D. overhead has been underapplied.

Answer:overhead has been overapplied. 

12. A time ticket does not indicate the

A. job number. 

B. account to be charged. 

C. employee’s name. 

D. number of personal exemptions claimed by the employee

Answer:number of personal exemptions claimed by the employee

13. Which one of the following best describes a job cost sheet?

A. It is used by management to understand how direct costs affect profitability. 

B. It is a daily form that management uses for tracking worker productivity on which employee raises are based. 

C. It is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job. 

D. It is used to track manufacturing overhead costs to specific jobs.

Answer:It is a form used to record the costs chargeable to a specific job and to determine the total and unit costs of the completed job. 

14. Factory Labor is a(n)

A. control account. 

B. temporary account. 

C. expense account. 

D. subsidiary account.

Answer: temporary account. 

15 . Which of the following is not included in factory labor costs?

A. Employer payroll taxes. 

B. Fringe benefits. 

C. Gross earnings. 

D. Net earnings.

Answer:Gross earnings. 

Related answered questions on Bibl 104 Quiz 2

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