Chapter 4 ob Costing Quiz

Which of the following products or services is least appropriate for a job costing system?

• Furniture

• Soft drinks

• Medical services

• Interior design consultations

Which of the following is not included as a production cost in a job order costing system?

• Production machine maintenance

• Marketing

• Indirect materials

• Factory utilities

All of the following are reasons why companies are likely to use applied, rather than actual, overhead for job costing EXCEPT:

• Companies have difficulty tracing supervisor labor costs.

• Companies have significant amounts of indirect costs.

• Companies face a delay when gathering indirect cost data.

• Companies decide not to trace certain materials costs.

Correcting an overapplication of overhead will result in increased:

• finished goods inventory.

• work-in-process inventory.

• cost of goods sold.

• net income.

Nature Meadow Company analyzes indirect costs and determines that 85% of its costs are related to machine maintenance and depreciation. Which of the following is the most appropriate application base?

• Direct labor hours

• Direct labor costs

• kWh (kilowatt hours) consumed

• Machine hours

Job costing is most likely to be used by companies that produce:

• jewelry.

• paint.

• bottled water.

• breakfast cereals.

In job costing, costs are accumulated by a specific cost object. Which of the following is not a cost object in job costing?

• An individual client

• A customized order

• An individualized service

Which of the following information is not contained on a job cost sheet?

• Direct labor hours

• Amount of direct materials purchased

• Direct labor rates

• Applied overhead rates

Which of the following represents a credit to the manufacturing overhead account?

• The application of overhead

• The use of indirect materials

• The use direct labor

• The use of supervisor labor

Snack Mart uses a normal costing system and applies overhead at a rate of $10 per direct labor hour. During the year, the company had the following data: Actual Direct Labor costs: $80,000 Actual Direct Labor hours: 3,000 hours Estimated Direct Labor hours: 3,500 hours Actual Direct Materials: $30,000 Actual Manufacturing Overhead: $25,000 Prior to any adjusting entries to manufacturing overhead, what are the total production costs for Snack Mart for the year?

• $135,000

• $140,000

• $145,000

• $150,000