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Chapter 17(2): Job Order Costing
64.
At the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing
over/under
applied overhead into Cost of Goods Sold would cause net income to
a.
increase by $1,700,000
b.
decrease by $1,700,000
c.
increase by $3,400,000
d.
decrease by $3,400,000
65.
Which of the following is a period cost?
a.
depreciation on factory lunchroom furniture
b.
salary of telephone receptionist in the sales office
c.
salary of a security guard for the factory parking lot
d.
computer chips used by a computer manufacturer
66.
Which of the following is a product cost?
a.
salary of a sales manager
b.
advertising for a particular product
c.
drill bits for a drill press used in the plant assembly area
d.
salary of the company receptionist
67.
The document authorizing the issuance of materials from the storeroom is a
a.
materials requisition
b.
purchase requisition
c.
receiving report
d.
purchase order
68.
The source document for the data for debiting Work in Process for direct materials is a
a.
purchase order
b.
purchase requisition
c.
materials requisition
d.
receiving report
69.
In a job order cost accounting system, the entry to record the flow of direct materials into production is
a.
to debit Work in Process, and credit Materials
b.
to debit Materials, and credit Work in Process
c.
to debit Factory Overhead, and credit Materials
d.
to debit Work in Process, and credit Supplies
70.
A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of
the
materials from the controlling account in the general ledger to the controlling accounts for
a.
Work in Process and Cost of Goods Sold
b.
Work in Process and Factory Overhead
c.
Finished Goods and Cost of Goods Sold
d.
Work in Process and Finished Goods
71.
In a job order cost accounting system, when goods that have been ordered are received, the receiving department
personnel count, inspect the goods, and complete a
a.
purchase order
b.
sales invoice
c.
receiving report
d.
purchase requisition
72.
The amount of time spent by an employee on an individual job are recorded on
a.
pay stubs
b.
in-and-out cards
c.
time tickets
d.
employees' earnings records
73.
The amount of time spent by an employee in the factory is usually recorded on
a.
time tickets
b.
job order cost sheets
c.
employees' earnings records
d.
statement of owners’ equity
74.
The basis for recording direct and indirect labor costs incurred is a summary of the period's
a.
job order cost sheets
b.
time tickets
c.
employees' earnings records
d.
clock cards
75.
The entry to record the flow of direct labor costs into production in a job order cost accounting system is
a.
debit Factory Overhead, credit Work in Process
b.
debit Finished Goods, credit Wages Payable
c.
debit Work in Process, credit Wages Payable
d.
debit Factory Overhead, credit Wages Payable
76.
At the end of July, the first month of the current fiscal year, the factory overhead account had a debit balance.
Which
of the following describes the nature of this balance and how it would be reported on the interim balance
sheet?
a.
Over applied, deferred credit
b.
Under applied, deferred debit
c.
Under applied, deferred credit
d.
Over applied, deferred debit
77.
At the end of the fiscal year, the balance in Factory Overhead is small. The balance would be
a.
transferred to Work in Process
b.
transferred to Cost of Goods Sold
c.
transferred to Finished Goods
d.
allocated between Work in Process and Finished Goods
78.
The details concerning the costs incurred on each job order are accumulated in a work in process account and
supported by a
a.
stock ledger
b.
materials ledger
c.
cost ledger
d.
creditors ledger
79.
Each document in the cost ledger is called a
a.
finished goods sheet
b.
stock record
c.
materials requisition
d.
job cost sheet
80.
Selected accounts with amounts omitted are as follows
Work in Process
Aug. 1
Balance
275,000
Aug. 31
Goods finished
1,030,000
31
Direct materials
X
31
Direct labor
450,000
31
Factory overhead
X
Factory Overhead
Aug. 1–31
Costs incurred
145,000
Aug. 1
Balance
15,000
31
Applied
(30% of direct labor cost)
X
If the balance of Work in Process at August 31 is $220,000, what was the amount debited to Work in Process for
direct materials in August?
a. $390,000
b. $170,000
c. $525,000
d. $580,000
81.
Selected accounts with some amounts omitted are as follows
Work in Process
Aug.
1
Balance
275,000
Aug.
31
Goods finished
1,030,000
31
Direct materials
X
31
Direct labor
450,000
31
Factory overhead
X
Factory Overhead
Aug. 1–31
Costs incurred
145,000
Aug.
1
Balance
15,000
31
Applied
X
If the balance of Work in Process at August 31 is $220,000, what was the amount debited to Work in Process for
factory overhead in August, assuming a factory overhead rate of 30% of direct labor costs?
a. $135,000
b. $10,000
c. $120,000
d. $70,000
82.
Selected accounts with some amounts omitted are as follows
Work in Process
Oct. 1
Balance
20,000
Oct. 31
Goods finished
X
31
Direct materials
96,700
31
Direct labor
201,000
31
Factory overhead
X
Finished Goods
Oct. 1
Balance
52,000
31
Goods finished
360,000
If the balance of Work in Process at October 31 is $21,000, what was the amount of factory overhead applied in
October?
a. $63,300
b. $21,300
c. $42,300
d. $11,300
83. Selected accounts with a credit amount omitted are as follows
Work in Process
Apr. 1
Balance
7,000
Apr. 30
Goods finished
X
30
Direct materials
78,400
30
Direct labor
195,000
30
Factory overhead
136,500
Finished Goods
Apr. 1
Balance
42,000
30
Goods finished
387,000
What was the balance of Work in Process as of April 30?
a.
$8,100
b.
$35,000
c.
$29,900
d.
$22,900
84.
If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will
have a
a.
debit balance and be under applied
b.
credit balance and be under applied
c.
credit balance and be over applied
d.
debit balance and be over applied
85.
The recording of the factory labor incurred for general factory use would include a debit to
a.
Factory Overhead
b.
Wages Payable
c.
Wages Expense
d.
Cost of Goods Sold
86.
The recording of the application of factory overhead costs to jobs would include a credit to
a.
Factory Overhead
b.
Wages Payable
c.
Work in Process
d.
Cost of Goods Sold
87.
The recording of the jobs completed would include a debit to
a.
Factory Overhead
b.
Finished Goods
c.
Work in Process
d.
Cost of Goods Sold
88.
Recording jobs completed would include a credit to
a.
Factory Overhead
b.
Finished Goods
c.
Work in Process
d.
Cost of Goods Sold
89.
Recording jobs shipped and customers billed would include a debit to
a.
Accounts Payable
b.
Cash
c.
Finished Goods
d.
Cost of Goods Sold
90.
Recording jobs shipped and customers billed would include a credit to
a.
Accounts Payable
b.
Cash
c.
Finished Goods
d.
Cost of Goods Sold
91.
The finished goods account is the controlling account for the
a.
cost ledger
b.
materials ledger
c.
work in process ledger
d.
stock ledger
92.
The controlling account for the cost ledger is
a.
Finished Goods
b.
Materials
c.
Work in Process
d.
Cost of Goods Sold
93.
Reynolds Manufacturers Inc. has estimated total factory overhead costs of $95,000 and expected direct labor hours
of
9,500 for the current fiscal year. If job number 117 incurred 2,300 direct labor hours, Work in Process will be
debited
and Factory Overhead will be credited for
a. $21,850
b. $2,300
c. $95,000
d. $23,000
94.
A widely used activity base for developing factory overhead rates in highly automated settings is
a.
direct labor hours
b.
direct labor dollars
c.
direct materials
d.
machine hours
95.
When Job 117 was completed, direct materials totaled $4,400; direct labor, $5,600; and factory overhead, $2,400. A
total of 1,000 units were produced at a per-unit cost of
a. $12,400
b. $1,240
c. $124
d. $12.40
96.
The entries to record cost and sale of a finished good on account is
a.
debit Cost of Goods Sold, credit Finished Goods
b.
debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales
c.
debit Sales Expense, credit Finished Goods, credit Cash, credit Accounts Receivable
d.
debit Work in Process, credit Finished Goods, debit Accounts Receivable, credit Sales
97.
All of the following are examples of activity bases except
a.
salaries of supervisors
b.
quality inspections of products
c.
number of machine setups
d.
raw materials storage
98.
Materials purchased on account during the month totaled $190,000. Materials requisitioned and placed in production
totaled $165,000. The journal entry to record the material purchase on account is
a. Materials
Accounts Payable
165,000
165,000
b. Materials
Accounts Payable
190,000
190,000
c. Materials
Cash
190,000
190,000
d. Accounts Payable
Materials
190,000
190,000
99.
Materials purchased on account during the month amounted to $190,000. Materials requisitioned and placed in
production totaled $156,000. The entry to record the transaction for materials requisitioned by the production
department is
a. Materials
Work in Process
156,000
156,000
b. Work in Process
Materials
190,000
190,000
c. Work in Process
Materials
156,000
156,000
d. Work in Process
Cash
156,000
156,000
100.
During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders
and $25,000 for general factory use. In addition, factory overhead charged to production was $32,000. The entry to
record the direct labor costs is
a. Work in Process
Wages Payable
150,000
150,000
b. Work in Process
Wages Payable
175,000
175,000
c. Wages Payable
Work in Process
175,000
175,000
d. Wages Payable
Work in Process
150,000
150,000
101.
During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders
and $25,000 for general factory use. Factory overhead applied to production was $32,000. The entry to record the
actual factory overhead costs incurred is
a. Accounts Payable
Factory Overhead
25,000
25,000
b. Factory Overhead
Accounts Payable
32,000
32,000
c. Work in Process
Wages
Payable
25,000
25,000
d. Factory Overhead
Wages
Payable
25,000
25,000
102.
During the period, labor costs incurred on account amounted to $175,000, including $150,000 for production orders
and $25,000 for general factory use. Factory overhead applied to production was $23,000. The entry to record the
factory overhead applied to production is
a. Work in Process
Factory
Overhead
25,000
25,000
b. Factory Overhead
Work
in Process
23,000
23,000
c. Work in Process
Factory
Overhead
23,000
23,000
d. Factory Overhead
Accounts Payable
25,000
25,000
103.
The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished
products shipped to customers had total production costs of $375,000. The entry to record the transfer of costs
from
work in process to finished goods is
a. Finished Goods
Work
in Process
375,000
375,000
b. Finished Goods
Work
in Process
540,000
540,000
c. Work in Process
Finished Goods
540,000
540,000
d. Work in Process
Finished Goods
375,000
375,000
104.
The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished
products shipped to customers had production costs of $375,000. The entry to record the transfer of costs from
finished goods to cost of goods sold is
a. Finished Goods
Cost of Goods Sold
540,000
540,000
b. Finished Goods
Cost of Goods Sold
375,000
375,000
c. Cost of Goods Sold
Finished Goods
375,000
375,000
d. Cost of Goods Sold
Finished Goods
540,000
540,000
105.
Costs that are incurred in generating revenues during the period, but are not involved in the manufacturing process
are referred to as
a.
period costs
b.
conversion costs
c.
factory overhead costs
d.
product costs
106.
Costs that are treated as assets until the product is sold are
a.
product costs
b.
period costs
c.
conversion costs
d.
selling expenses
107.
The period costs of a textbook printer would include
a.
wages of a press operator
b.
factory insurance costs
c.
CEO salary expense
d.
paper costs
108.
Which types of inventories does a manufacturing business report on the balance sheet?
a.
finished goods inventory and work in process inventory only
b.
direct materials inventory and work in process inventory only
c.
direct materials inventory, work in process inventory, and finished goods inventory
d.
direct materials inventory and finished goods inventory only
109.
For a manufacturing business, products that are in the process of being manufactured are referred to as
a.
supplies inventory
b.
work in process inventory
c.
finished goods inventory
d.
direct materials inventory
110.
The journal entry to record the purchase of $45,000 of raw materials is
a. Materials
Accounts Receivable
45,000
45,000
b. Materials
Accounts Payable
45,000
45,000
c. Inventory
Accounts Receivable
45,000
30,000
d. Inventory
Cash
45,000
45,000
111.
The journal entry to record the transfer of 1,600 units of part number 1177 with a value of $2.50 each, to work in
process is
a. Materials
Work in Process
4,000
4,000
b. Work in Process
Factory Overhead
4,000
4,000
c. Work in Process
Materials
4,000
4,000
d. Work in Process
Cash
4,000
4,000
112.
Which of the following represents the factory overhead applied to a product?
a.
predetermined factory overhead rate times estimated activity base
b.
actual factory overhead rate times estimated activity base
c.
predetermined factory overhead rate times actual activity base
d.
actual factory overhead rate times actual activity base
113.
Which of the following is the formula to calculate the predetermined factory overhead rate?
a.
estimated total factory overhead costs divided by estimated activity base
b.
actual total factory overhead costs divided by estimated activity base
c.
estimated total factory overhead costs divided by actual activity base
d.
actual total factory overhead costs divided by actual activity base
