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WorksheetsCost Accounting Quiz
Total questions: 80
Worksheet time: 50mins
Cost accounting is primarily concerned with accumulating information about product costs.
True
False
A job order cost system is most appropriate when a large volume of uniform products is produced.
True
False
A process cost system is appropriate for similar products that are continuously mass produced.
True
False
The perpetual inventory method cannot be used in a job order cost system.
True
False
A job order cost system and a process cost system are two alternative methods for accumulating product costs.
True
False
A job order cost system identifies costs with a particular job rather than with a set time period.
True
False
A company may use either a job order cost system or a process cost system, but not both.
True
False
Raw Materials Inventory, Factory Labor, and Manufacturing Overhead are all control accounts in the general ledger when a job order cost accounting system is used.
True
False
Accumulating and assigning manufacturing costs are two important activities in a job order cost system.
True
False
Recording the acquisition cost of raw materials is a part of accumulating manufacturing costs.
True
False
Manufacturing costs are generally incurred in one period and recorded in a subsequent period.
True
False
The Purchases account is credited for all returns and allowances of raw materials purchases.
True
False
When raw materials are received, there is no effort at this point to associate the cost of materials with specific jobs.
True
False
When raw materials are purchased, the Work in Process Inventory account is debited.
True
False
Factory labor should be assigned to selling and administrative expenses on a proportionate basis.
True
False
Benefits and payroll taxes associated with factory workers should be accumulated as a part of Factory Labor.
True
False
Job order cost sheets constitute the subsidiary ledger of the control account Work in Process Inventory.
True
False
In a job order cost system, each entry to the Work in Process Inventory account should be accompanied by a posting to one or more job cost sheets.
True
False
Direct materials requisitioned from the storeroom should be charged to the Work in Process Inventory account and the job cost sheets for the individual jobs on which the materials were used.
True
False
Manufacturing overhead is the only product cost that can be assigned to jobs as soon as the costs are incurred.
True
False
There should be a separate job cost sheet for each job.
True
False
Actual manufacturing overhead costs are assigned to each job by tracing each overhead cost to a specific job.
True
False
The calculation for the predetermined overhead rate is estimated annual overhead costs divided by an estimated volume of annual operating activity.
True
False
Actual manufacturing overhead costs should be charged to the Work in Process Inventory account as they are incurred.
True
False
Finished Goods Inventory is decreased for the cost of jobs completed during a period.
True
False
Finished Goods Inventory is charged for the cost of jobs completed during a period.
True
False
When goods are sold, the Cost of Goods Sold account is debited and Work in Process Inventory account is credited.
True
False
Total manufacturing costs for a period consists of the cost of direct materials used, the cost of direct labor incurred, and the manufacturing overhead applied during the period.
True
False
Overapplied overhead means that actual manufacturing overhead costs were greater than the manufacturing overhead costs applied to jobs.
True
False
At the end of the year, the amount of the overapplied overhead is usually credited to Cost of Goods Sold.
True
False
A cost accounting system consists of manufacturing cost accounts that are fully integrated into the general ledger of a company.
True
False
The cost of raw materials purchased is credited to Raw Materials Inventory when materials are received.
True
False
Requisitions for direct materials are posted daily to the individual job cost sheets.
True
False
The predetermined overhead rate is based on the relationship between the estimated annual overhead costs and the estimated annual operating activity expressed in terms of a common activity base.
True
False
At the end of the year, underapplied overhead is usually credited to Cost of Goods Sold.
True
False
Which of the following is one of the purposes of cost accounting?
It involves measuring product costs.
It involves the determination of company profits.
It requires GAAP to be applied.
It requires cost minimizing principles.
A major purpose of cost accounting is to
classify all costs as operating or nonoperating.
measure, record, and report period costs.
provide information to stockholders for investment decisions.
measure, record, and report product costs.
The two basic types of cost accounting systems are
job order cost and job cost accumulation systems.
job order cost and process cost systems.
process cost and batch cost systems.
job order cost and batch cost systems.
A process cost system would most likely be used by a company that makes
music videos.
repairs to electric bicycles.
ramen noodles.
college graduation announcements.
Which of the following would be accounted for using a job order cost system?
the production of computer docking stations
the production of electric cars
the refining of petroleum
the construction of a new campus dormitory
Process costing is used when
the production process is continuous.
production is aimed at filling a specific customer order.
dissimilar products are involved.
costs are to be assigned to specific jobs.
Process costing is NOT used when
similar goods are being produced.
large volumes are produced.
jobs have distinguishing characteristics.
a series of connected manufacturing processes is necessary.
An important feature of a job order cost system is that each job
must be similar to previous jobs completed.
has its own distinguishing characteristics.
must be completed before a new job is accepted.
consists of one unit of output.
As of December 31, 2027, Stand Still Industries had $2,500 of raw materials inventory. At the beginning of 2027, there was $2,000 of materials on hand. During the year, the company purchased $375,000 of materials; however, it paid for only $312,500. How much inventory was requisitioned for use on jobs during 2027?
$312,000
$374,500
$375,500
$313,000
The flow of costs in a job order cost system
involves accumulating manufacturing costs incurred and assigning the accumulated cost to work done.
cannot be measured until all jobs are complete.
measures product costs for a set time period.
generally follows a LIFO cost flow assumption.
In a job order cost system, the Work in Process Inventory account is
an expense.
a control account.
not used.
a period cost.
When a job is completed and all costs have been accumulated on a job cost sheet, the journal entry that should be made is
Finished Goods Inventory Direct Materials Direct Labor Manufacturing Overhead
Work in Process Inventory Direct Materials Direct Labor Manufacturing Overhead
Raw Materials Inventory Work in Process Inventory
Finished Goods Inventory Work in Process Inventory
The two major steps in the flow of costs are
allocating and assigning.
acquiring and accumulating.
accumulating and assigning.
accumulating and amortizing.
The Raw Materials Inventory account is
a subsidiary account.
debited for invoice costs and freight costs charged to the purchaser.
debited for purchase discounts taken.
debited for purchase returns and allowances.
Records of individual items of raw materials would not be maintained
electronically.
manually.
on stores ledger cards.
in the Raw Materials Inventory account.
The cost of raw materials is debited to Raw Materials Inventory when the
materials are ordered.
materials are received.
materials are put into production.
bill for the materials is paid.
Which of the following is NOT included in factory labor costs?
gross earnings
employer payroll taxes
employee benefits
All of these are included in factory labor costs.
All of the following would be entries in assigning accumulated costs to the Work in Process Inventory EXCEPT
the purchase of raw materials.
raw materials are used.
overhead is applied.
factory labor is used.
Factory labor costs
are accumulated in a control account.
do not include pension costs.
include vacation pay.
are based on workers' net pay.
Factory Labor is a(n)
expense account.
control account.
subsidiary account.
temporary account.
Kline Manufacturing has the following labor costs: Factory—Gross wages: $500,000 Factory—Net wages: $420,000 Employer Payroll Taxes Payable: $50,000 The entry to record the cost of factory labor and the associated payroll tax expense will include a debit to Factory Labor for
$550,000.
$500,000.
$470,000.
$450,000.
Factory labor costs
accumulate in advance of utilization.
accumulate in a control account.
include sick pay earned by factory workers.
accumulate in the Factory Labor Expense account.
Which of the following is NOT a control account?
Finished Goods Inventory
Raw Materials Inventory
Work in Process Inventory
All of these are control accounts.
Manufacturing Overhead does NOT include amounts paid for
factory utilities.
property taxes on the manufacturing facility.
supervisor labor costs.
the CEO's salary.
The entry to record the acquisition of raw materials on account is
Manufacturing Overhead
Accounts Payable
Work in Process Inventory
Accounts Payable
Raw Materials Inventory
Which one of the following best describes a job cost sheet?
A) 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.
B) It is used to track manufacturing overhead costs to specific jobs.
C) It is used by management to understand how direct costs affect profitability.
D) It is a daily form that management uses for tracking worker productivity on which employee raises are based.
Job cost sheets constitute the subsidiary ledger for the
A) Finished Goods Inventory account.
B) Cost of Goods Sold account.
C) Work in Process Inventory account.
D) Cost of Goods Manufactured account.
A materials requisition slip shows that direct materials requisitioned were $66,000 and indirect materials requisitioned were $9,000. The entry to record the transfer of materials from the storeroom is
Work in Process Inventory 66,000
Manufacturing Overhead 9,000
Raw Materials Inventory 75,000
Work in Process Inventory 66,000
Raw Materials Inventory 66,000
The job cost sheet does NOT show
costs chargeable to a specific job.
the total costs of a completed job.
the unit cost of a completed job.
the cost of goods sold.
Minton Company provided the following information from its accounting records for 2027:
Estimated production 60,000 labor hours
Actual production 56,000 labor hours
Estimated overhead $1,800,000
Actual overhead $1,740,000
What is the predetermined overhead application rate if Minton Company bases it on direct labor hours (rounded to the nearest cent)?
A) $30.00 per hour
B) $29.00 per hour
C) $32.14 per hour
D) $31.07 per hour
The labor costs that have been identified as indirect labor should be charged to
A) manufacturing overhead.
B) direct labor.
C) the individual jobs worked on.
D) salary expense
Annual overhead costs are estimated to be $750,000 and direct labor costs are estimated to be $1,000,000. If the activity base is direct labor costs
A) $1.33 is the predetermined overhead rate.
B) for every dollar of manufacturing overhead, 75 cents of direct labor cost will be assigned.
C) for every dollar of direct labor cost, 75 cents of manufacturing overhead will be assigned.
D) a predetermined overhead rate cannot be determined.
Simmons Inc. applies overhead to production at a predetermined rate of 90% of direct labor cost. Job No. 250, the only job still in process at the end of August, has been charged with manufacturing overhead of $8,100. What was the amount of direct materials charged to Job 250 if the balance in Work in Process Inventory is $30,000?
A) $8,100
B) $9,000
C) $12,900
D) $14,610
Spencer Inc. applies overhead to production at a predetermined rate of 80% of direct labor cost. Job No. 130, the only job still in process at the end of August, has been charged with manufacturing overhead of $6,400. What was the amount of direct materials charged to Job 130 if the balance in Work in Process Inventory is $20,000?
A) $7,000
B) $6,400
C) $5,600
D) $8.480
For Jacobs Company, the predetermined overhead rate is 70% of direct labor cost. During the month, $600,000 of factory labor costs are incurred of which $140,000 is indirect labor. Actual overhead incurred was $320,000. The amount of overhead debited to Work in Process Inventory should be
A) $322,000.
B) $320,000.
C) $420,000.
D) $460,000.
Simpson Company applies overhead on the basis of 200% of direct labor cost. Job No. 305 is charged with $180,000 of direct materials costs and $200,000 of manufacturing overhead. The total manufacturing cost for Job No. 305 is
A) $380,000.
B) $480,000.
C) $560,000.
D) $580,000.
For Wilton Company, the predetermined overhead rate is 70% of direct labor cost. During the month, $720,000 of factory labor costs are incurred of which $200,000 is indirect labor. Actual overhead incurred was $360,000. The amount of overhead charged to Work in Process Inventory is
A) $364,000.
B) $360,000.
C) $504,000.
D) $520,000.
At the beginning of the year, Monroe Company estimates annual overhead costs to be $2,400,000 and that 300,000 machine hours will be operated. Machine hours is the overhead allocation base. What is the amount of overhead applied during the year if actual machine hours for the year was 315,000 hours?
A) $2,400,000
B) $2,285,714
C) $1,680,000
D) $2,520,000
Cost of goods sold is obtained from
A) analysis of all the control accounts in the cost system.
B) the Finished Goods Inventory records.
C) the Work in Process Inventory records.
D) the Raw Materials Inventory control account.
During 2027, Cotte Manufacturing expected Job No. 59 to incur $300,000 of overhead cost, $500,000 of direct materials cost, and $200,000 in direct labor cost. Cotte applied overhead based on direct labor cost. Actual production required overhead cost of $295,000, $570,000 in direct materials used, and $220,000 in direct labor. All of the goods were completed. What is the amount of over- or underapplied overhead?
A) $5,000 underapplied
B) $5,000 overapplied
C) $35,000 underapplied
D) $35,000 overapplied
Kimble Company applies overhead on the basis of machine hours. Given the following data, what is the overhead applied and the under- or overapplication of overhead for the period?
Estimated annual overhead cost $1,600,000
Actual annual overhead cost $1,575,000
Estimated machine hours 400,000
Actual machine hours 390,000
A) $1,560,000 applied and $15,000 overapplied
B) $1,600,000 applied and $15,000 overapplied
C) $1,560,000 applied and $15,000 underapplied
D) $1,575,000 applied and neither under-nor overapplied
Barnes Company applies overhead on the basis of machine hours. Given the following data, what is the overhead applied and the under- or overapplication of overhead for the period?
Estimated annual overhead cost $3,000,000
Actual annual overhead cost $2,970,000
Estimated machine hours 300,000
Actual machine hours 295,000
A) $2,950,000 applied and $20,000 overapplied
B) $3,000,000 applied and $20,000 overapplied
C) $2,950,000 applied and $20,000 underapplied
D) $2,970,000 applied and neither under- nor overapplied
The Manufacturing Overhead account shows debits of $30,000, $24,000, and $28,000 and a credit for $86,000. Based on this information, manufacturing overhead
A) has been overapplied.
B) has been underapplied
C) has not been applied.
D) shows a zero balance.
The existence of under- or overapplied overhead at the end of the year usually
A) requires an adjustment to Cost of Goods Sold.
B) indicates that an error has been made.
C) requires a retroactive adjustment to the cost of all jobs completed.
D) is written off as a bad estimate expense.
Which of the following statements about under- or overapplied manufacturing overhead is correct?
A) After the entry to transfer over- or underapplied overhead to Cost of Goods Sold is posted, Manufacturing Overhead will have a zero balance.
B) When Manufacturing Overhead has a credit balance, overhead is said to be under-applied.
C) At the end of the year, under- or overapplied overhead is eliminated by a closing entry
D) When year-end financial statements are prepared, overapplied overhead is reported in current liabilities.
