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Chapter 10
102. Which of the following information is provided by job cost sheets?
a.
Cost of depreciation on office computers
b.
Managerial salary
c.
Cost of utilities
d.
Cost impact of materials changes
103. Predetermined Factory Overhead Rate is calculated as:
a.
Estimated Total Factory Overhead Costs + Estimated Activity Base.
b.
Estimated Total Factory Overhead Costs – Estimated Activity Base.
c.
Estimated Total Factory Overhead Costs × Estimated Activity Base.
d.
Estimated Total Factory Overhead Costs ÷ Estimated Activity Base.
Chapter 10
104. When a job is completed and the client is billed, the costs are transferred to an account called the _____.
a.
work in process account
b.
cost of services account
c.
expenses account
d.
applied overhead account
105. In job order cost accounting system used by a service business, which of the following items would normally not be
included as part of overhead?
a.
Materials
b.
Direct labor
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c.
Rent
d.
Supplies
106. The direct labor and overhead costs of providing services to clients are accumulated in:
a.
finished services expense.
b.
work in process.
c.
administrative salaries expense.
d.
overhead.
Chapter 10
107. One of the ways in which just-in-time processing is accomplished in manufacturing and non-manufacturing
processes is by:
a.
moving a product from process to process as each function is completed.
b.
combining processing functions into work centers and cross-training workers to perform more than one
function.
c.
having production supervisors attempt to enter enough materials into manufacturing to keep all manufacturing
departments operating.
d.
having workers typically perform one function on a continuous basis.
108. Which of the following is true of just-in-time processing?
a.
In just-in-time processing, supervisors enter materials into manufacturing so as to keep all the manufacturing
departments (processes) operating.
b.
In just-in-time processing, a worker typically performs only one function.
c.
It assigns service activities to centralized service departments.
d.
It is a management approach that focuses on reducing time and cost and eliminating poor quality.
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109. Which of the following statements is true of a traditional production process?
a.
It focuses on reducing time and cost and eliminating poor quality.
b.
It emphasizes on continually improving the manufacturing process and product quality.
c.
In a traditional production process, supervisors enter materials into manufacturing so as to keep all the
manufacturing departments (processes) operating.
d.
In a traditional production process, service activities may be assigned to individual work centers, rather than to
centralized service departments.
110. Which of the following techniques is used by just-in-time manufacturing?
a.
It provides specialized training so that employees only do one task and work individually to improve
efficiencies in the department.
b.
It organizes the plant in such a way as to reduce product movement from station to station.
c.
It encourages management to make all operating decisions regarding the manufacturing process rather than the
line employees in order to streamline the process.
d.
It emphasizes push manufacturing.
Chapter 10
111. An activity-based costing system allocates factory overhead rates to products or services using:
a.
a single plantwide overhead rate.
b.
the cost of activities based on an activity rate times the number of activity-based usage quantities.
c.
an allocation of budgeted revenues produced by a product or service.
d.
an end-of-year allocation of costs to products or services.
112. Heedy Winery accumulates the costs incurred in the labeling process in an activity cost pool. Costs for the labeling
process are estimated to be $320,000, and the winery expects to generate 640,000 labels for the coming year. Production
for its top-selling wine is estimated at 160,000 bottles. How much overhead from the labeling process will be allocated to
this particular variety of wine?
a.
$40,000
b.
$80,000
c.
$160,000
d.
$320,000
Chapter 10
113. Indicate whether each of the following costs of a cabinet manufacturer would be classified as direct materials cost,
direct labor cost, factory overhead cost, or period cost.
a. Plant manager's salary
b. Office administrative assistant's salary
c. Depreciation on factory equipment
d. Rent on office building
e. Varieties of wood
f. Varnish for coating cabinets
g. Utilities cost on the factory
h. Cabinet assembly worker's salary
i. Advertising costs
j. Screws and glue used in assembly process
Chapter 10
114. Use the correct number to designate each item below:
1) direct materials
2) selling and administrative expenses
3) factory overhead
4) direct labor
a)
rent expense on factory building
b)
sales supplies used
c)
factory supplies used
d)
indirect materials used
e)
wages of assembly line personnel
f)
depreciation on office equipment
g)
rent on office facilities
h)
insurance expired on factory equipment
i)
cost of primary material used to assemble product
Chapter 10
115. KCT Printing Company uses a job order cost system.
(a)
Indicate the source of the data for increasing Work in Process for each of the
following:
(1)
Direct materials requisitioned
(2)
Direct labor used
(b)
Indicate the source of the data for decreasing Work in Process for jobs
completed.
(c)
Present a list of the three controlling accounts used in the general ledger to
record the inventories and, in each case, indicate the related subsidiary ledger.
116. The following information is available for the first month of operations of Diacox Inc., a manufacturer of sports
apparel:
Sales
$2,050,000
Gross profit
490,000
Indirect labor
152,000
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Indirect materials
45,000
Other factory overhead
515,000
Materials purchased
801,000
Total manufacturing costs for the period
1,710,000
Materials inventory, end of period
36,800
Using the given information, determine the following:
a. Cost of goods sold
b. Direct materials cost
c. Direct labor cost
117. Illustrate the effects on the accounts and financial statements of each of the following transactions for a company
using a job order cost system:
(a)
Materials purchased on account
$186,000
(b)
Materials requisitioned:
For production orders
161,500
For general factory use
8,700
(c)
Factory labor used:
On production orders
139,800
For general factory purposes
9,000
(d)
Depreciation on factory equipment
40,000
(e)
Factory overhead applied, based on machine hours
97,650
(f)
Jobs finished
406,000
(g)
Jobs shipped to customers: cost, $394,000; selling price
580,000
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118. Matt, Inc., a toy manufacturing company uses job order cost system. The time tickets from September jobs are
summarized below.
Job 100
$3,500
Job 101
1,800
Job 102
1,200
Job 103
2,800
Factory supervision
1,700
Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $25 per direct labor hour. The direct
labor rate is $30 per hour.
a. Determine the total factory labor costs transferred to Work in Process and Factory Overhead for September.
b. Determine the amount of factory overhead applied to production for September.
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