Chapter 15A Review

Cost accounting involves the measuring, recording, and reporting of:

• product and service costs

• future costs

• payroll processes

• financial accounting decisions

A company is more likely to use a job order cost system if:

• it manufactures a large volume of similar products

• its production is continuous

• it manufactures products with unique characteristics

• it uses a periodic inventory system

In accumulating raw materials costs, companies add the cost of raw materials purchased to:

• Raw Materials Inventory

• Purchases

• Work In Process

• Finished Goods

When incurred, factory labor costs are added to:

• Work in Process

• Factory Wages Expense

• Factory Labor

• Finished Goods

When a good or service is sold, the cost assigned to that good is moved from Finished Goods to which account?

• Work In Process

• Finished Goods

• Cost of Goods Manufactured

• Cost of Goods Sold Expense

When a good or service is completed, the cost assigned to that good is moved from Work in Process to which account?

• Raw Materials Inventory

• Finished Goods

• Cost of Goods Sold Expense

• Factory Labor

The sources of information for assigning costs to job cost sheets are:

• materials requisition slips, time tickets, and the actual overhead costs

• materials requisition slips, payroll register, and the predetermined overhead rate

• materials requisition slips, time tickets, and the predetermined overhead rate

• invoices, time tickets, and the predetermined overhead rate

The formula for computing the predetermined overhead rate is estimated annual overhead divided by estimated annual operating activity, expressed as:

• direct labor hours

• direct labor costs

• machine hours

• Any of the answer choices are correct

Manufacturing overhead is underapplied if:

• actual overhead is less than applied (negative number)

• actual overhead is greater than applied (positive number)

• the predetermined overhead rate equals the actual rate

• actual overhead equals applied overhead

What form is used to record the costs chargeable to a specific job and determines the total and unit cost of the completed job?

• Work Order Sheet

• Inventory Sheet

• Job Cost Sheet

• Subsidiary Ledger