6th edition
Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
Chapter 02
Job-Order Costing
True / False Questions
1. Theuse!!of!!predetermined !!overhead rates in a job-order cost system F F F F F F F
makes it possible to estimate the total cost of a given job as soon as
F F F F F F F F F F F F F F F
production is completed. F F
True False
2. A job cost sheet is used to accumulate costs charged to a job.
F F F F F F F F F F F F
True False
3. The following journal entry would be made to apply overhead cost to jobs in
F F F F F F F F F F F F F F
a job-order costing system:
F F F
True False
4. Under a job-order cost system the Work in Process account is debited with
F F F F F F F F F F F F F
the cost of materials purchased.
F F F F
True False
5. The process of assigning overhead cost to jobs is known as overhead
F F F F F F F F F F F F
application.
True False
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
6. The cost of a completed job in a job-order costing system typically consists
F F F F F F F F F F F F F
of the actual direct materials cost of the job, the actual direct labor cost
F F F F F F F F F F F F F F
of the job, and the actual manufacturing overhead cost of the job.
F F F F F F F F F F F
True False
7. A debit balance in the Manufacturing Overhead account at the end of the
F F F F F F F F F F F F F
year means that manufacturing overhead is overapplied.
F F F F F F
True False
8. Period costs are expensed as incurred, rather than going into the Work in
F F F F F F F F F F F F F
Process account. F
True False
9. Advertising costs should be charged to the Manufacturing Overhead
F F F F F F F F F
account.
True False
10 When a job has been completed, the goods are transferred from the
F F F F F F F F F F F
. production department to the finished goods warehouse and the journal
F F F F F F F F F F
entry would include a credit to Work in Process.
F F F F F F F F
True False
11 Underapplied or overapplied manufacturing overhead represents the F F F F F F
. difference between actual overhead costs and applied overhead costs.
F F F F F F F F
True False
12 Top management salaries should not go into the Manufacturing Overhead
F F F F F F F F F
. account.
True False
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
13 If manufacturing overhead applied exceeds the actual manufacturing
F F F F F F F
. overhead costs of the period, then manufacturing overhead is
F F F F F F F F F
overapplied.
True False
Multiple Choice Questions
F F
14 In computing its predetermined overhead rate, Marple Company
F F F F F F F
. inadvertently left its indirect labor costs out of the computation. This
F F F F F F F F F F F
oversight will cause: F F
A. Manufacturing Overhead to be F F F F
overapplied.
B. the Cost of Goods Manufactured to be
F F F F F F
understated.
C. the debits to the Manufacturing Overhead account to be
F F F F F F F F F
understated.
D. the ending balance in Work in Process to be
F F F F F F F F
overstated.
15 Which of the following is the correct formula to compute the
F F F F F F F F F F
. predetermined overhead rate? F F
A. Estimated total units in the allocation base divided by estimated total
F F F F F F F F F F F
manufacturing overhead costs. F F
B. Estimated total manufacturing overhead costs divided by estimated
F F F F F F F
total units in the allocation base.
F F F F F
C. Actual total manufacturing overhead costs divided by estimated total
F F F F F F F F F
units in the allocation base.
F F F F
D. Estimated total manufacturing overhead costs divided by actual total
F F F F F F F F
units in the allocation base.
F F F F
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
16 Which of the following would probably be the least appropriate allocation
F F F F F F F F F F
. base for allocating overhead in a highly automated manufacturer of
F F F F F F F F F F
specialty valves? F
A. machine- F
hours
B. power
consumption
C. direct labor- F F
hours
D. machine
setups
17 What document is used to determine the actual amount of direct labor to
F F F F F F F F F F F F
. record on a job cost sheet?
F F F F F
A. time
ticket
B. payroll F
register
C. production
order
D. wages payable F F
account
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
18 A proper journal entry to close overapplied manufacturing overhead to
F F F F F F F F F
. Cost of Goods Sold would be:
F F F F F
A. Option
A F
B. Option
B
C. Option
C F
D. Option
D
19 In a job-order costing system, direct labor cost is ordinarily debited to:
F F F F F F F F F F F
.
A. Manufacturing F
Overhead.
B. Cost of Goods F F
Sold.
C. Finished
Goods.F
D. Work in F
Process.
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
20 In a job-order costing system, the use of direct materials that have been
F F F F F F F F F F F F
. previously purchased is recorded as a debit to:
F F F F F F F
A. Raw Materials F F
inventory.
B. Work in Process F F
inventory.
C. Finished Goods F F
inventory.
D. Manufacturing
Overhead.
21 The journal entry to record the incurrence of indirect labor costs is:
F F F F F F F F F F F
.
A. Option
A F
B. Option
B
C. Option
C F
D. Option
D
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
22 Which of the following accounts is debited when direct labor is recorded?
F F F F F F F F F F F
.
A. Work in F F
process
B. Salaries and wages F F
expense
C. Salaries and wages F F F
payable
D. Manufacturing
overhead
23 The balance in the Work in Process account equals:
F F F F F F F F
.
A. the balance in the Finished Goods inventory
F F F F F F F
account.
B. the balance in the Cost of Goods Sold
F F F F F F F
account.
C. the balances on the job cost sheets of
F F F F F F F F
uncompleted jobs. F
D. the balance in the Manufacturing Overhead
F F F F F
account.
24 In a job-order costing system, indirect materials that have been previously
F F F F F F F F F F
. purchased and that are used in production are recorded as a debit to:
F F F F F F F F F F F F
A. Work in Process F F F
inventory.
B. Manufacturing
Overhead.
C. Finished Goods F F
inventory.
D. Raw Materials F
inventory.
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
25 Martinez Aerospace Company uses a job-order costing system. The direct
F F F F F F F F F
. materials for Job #045391 were purchased in July and put into production in
F F F F F F F F F F F F F
August. The job was not completed by the end of August. At the end of
F F F F F F F F F F F F F F F
August, in what account would the direct material cost assigned to Job
F F F F F F F F F F F F
#045391 be located? F F
A. raw materials
F F
inventory
B. work in process
F F
inventory
C. finished goods F F
inventory
D. cost of goods
F F
manufactured
26 Which terms will make the following statement true? When manufacturing
F F F F F F F F F
. overhead is overapplied, the Manufacturing Overhead account has a
F F F F F F F F
balance and applied manufacturing overhead is greater than F F F F F F F
manufacturing overhead. F
A. debit, F
actual
B. credit,
actual
C. debit,
estimated
D. credit, F
estimated
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
27 Overapplied manufacturing overhead occurs when:
F F F F
.
A. applied overhead exceeds actual
F F F F
overhead.
B. applied overhead exceeds estimated
F F F
overhead.
C. actual overhead exceeds estimated
F F F F
overhead.
D. budgeted overhead exceeds actual F F F
overhead.
28 Daguio Corporation uses direct labor-hours in its predetermined overhead
F F F F F F F F
. rate. At the beginning of the year, the total estimated manufacturing
F F F F F F F F F F F
overhead was $224,580. At the end of the year, actual direct labor-hours for
F F F F F F F F F F F F F
the year were 18,200 hours, manufacturing overhead for the year was
F F F F F F F F F F F
underapplied by $12,100, and the actual manufacturing overhead was
F F F F F F F F
$219,580. The predetermined overhead rate for the year must have been
F F F F F F F F F F F
closest to: F
A. $11.40 per machine- F F F
hour
B. $12.34 per machine- F F
hour
C. $12.06 per machine- F F F
hour
D. $10.53 per machine- F F
hour
, Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
29 Wert Corporation uses a predetermined overhead rate based on direct
F F F F F F F F F
. labor cost to apply manufacturing overhead to jobs. Last year, the
F F F F F F F F F F F
company's estimated manufacturing overhead was $1,200,000 and its
F F F F F F F F
estimated level of activity was 50,000 direct labor-hours. The company's
F F F F F F F F F F
direct labor wage rate is $12 per hour. Actual manufacturing overhead
F F F F F F F F F F F
amounted to $1,240,000, with actual direct labor cost of $650,000. For
F F F F F F F F F F F
the year, manufacturing overhead was:
F F F F
A. overapplied by F
$60,000
B. underapplied by F
$60,000
C. overapplied by F
$40,000
D. underapplied by F
$44,000
30 Crinks Corporation uses direct labor-hours in its predetermined overhead
F F F F F F F F
. rate. At the beginning of the year, the estimated direct labor-hours were
F F F F F F F F F F F F
11,200 hours and the total estimated manufacturing overhead was
F F F F F F F F
$259,840. At the end of the year, actual direct labor-hours for the year
F F F F F F F F F F F F F
were 10,800 hours and the actual manufacturing overhead for the year
F F F F F F F F F F F
was $254,840. Overhead at the end of the year was:
F F F F F F F F F
A. $4,280
overapplied
B. $9,280
overapplied
C. $9,280
underapplied
D. $4,280
underapplied
Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
Chapter 02
Job-Order Costing
True / False Questions
1. Theuse!!of!!predetermined !!overhead rates in a job-order cost system F F F F F F F
makes it possible to estimate the total cost of a given job as soon as
F F F F F F F F F F F F F F F
production is completed. F F
True False
2. A job cost sheet is used to accumulate costs charged to a job.
F F F F F F F F F F F F
True False
3. The following journal entry would be made to apply overhead cost to jobs in
F F F F F F F F F F F F F F
a job-order costing system:
F F F
True False
4. Under a job-order cost system the Work in Process account is debited with
F F F F F F F F F F F F F
the cost of materials purchased.
F F F F
True False
5. The process of assigning overhead cost to jobs is known as overhead
F F F F F F F F F F F F
application.
True False
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
6. The cost of a completed job in a job-order costing system typically consists
F F F F F F F F F F F F F
of the actual direct materials cost of the job, the actual direct labor cost
F F F F F F F F F F F F F F
of the job, and the actual manufacturing overhead cost of the job.
F F F F F F F F F F F
True False
7. A debit balance in the Manufacturing Overhead account at the end of the
F F F F F F F F F F F F F
year means that manufacturing overhead is overapplied.
F F F F F F
True False
8. Period costs are expensed as incurred, rather than going into the Work in
F F F F F F F F F F F F F
Process account. F
True False
9. Advertising costs should be charged to the Manufacturing Overhead
F F F F F F F F F
account.
True False
10 When a job has been completed, the goods are transferred from the
F F F F F F F F F F F
. production department to the finished goods warehouse and the journal
F F F F F F F F F F
entry would include a credit to Work in Process.
F F F F F F F F
True False
11 Underapplied or overapplied manufacturing overhead represents the F F F F F F
. difference between actual overhead costs and applied overhead costs.
F F F F F F F F
True False
12 Top management salaries should not go into the Manufacturing Overhead
F F F F F F F F F
. account.
True False
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
13 If manufacturing overhead applied exceeds the actual manufacturing
F F F F F F F
. overhead costs of the period, then manufacturing overhead is
F F F F F F F F F
overapplied.
True False
Multiple Choice Questions
F F
14 In computing its predetermined overhead rate, Marple Company
F F F F F F F
. inadvertently left its indirect labor costs out of the computation. This
F F F F F F F F F F F
oversight will cause: F F
A. Manufacturing Overhead to be F F F F
overapplied.
B. the Cost of Goods Manufactured to be
F F F F F F
understated.
C. the debits to the Manufacturing Overhead account to be
F F F F F F F F F
understated.
D. the ending balance in Work in Process to be
F F F F F F F F
overstated.
15 Which of the following is the correct formula to compute the
F F F F F F F F F F
. predetermined overhead rate? F F
A. Estimated total units in the allocation base divided by estimated total
F F F F F F F F F F F
manufacturing overhead costs. F F
B. Estimated total manufacturing overhead costs divided by estimated
F F F F F F F
total units in the allocation base.
F F F F F
C. Actual total manufacturing overhead costs divided by estimated total
F F F F F F F F F
units in the allocation base.
F F F F
D. Estimated total manufacturing overhead costs divided by actual total
F F F F F F F F
units in the allocation base.
F F F F
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
16 Which of the following would probably be the least appropriate allocation
F F F F F F F F F F
. base for allocating overhead in a highly automated manufacturer of
F F F F F F F F F F
specialty valves? F
A. machine- F
hours
B. power
consumption
C. direct labor- F F
hours
D. machine
setups
17 What document is used to determine the actual amount of direct labor to
F F F F F F F F F F F F
. record on a job cost sheet?
F F F F F
A. time
ticket
B. payroll F
register
C. production
order
D. wages payable F F
account
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
18 A proper journal entry to close overapplied manufacturing overhead to
F F F F F F F F F
. Cost of Goods Sold would be:
F F F F F
A. Option
A F
B. Option
B
C. Option
C F
D. Option
D
19 In a job-order costing system, direct labor cost is ordinarily debited to:
F F F F F F F F F F F
.
A. Manufacturing F
Overhead.
B. Cost of Goods F F
Sold.
C. Finished
Goods.F
D. Work in F
Process.
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
20 In a job-order costing system, the use of direct materials that have been
F F F F F F F F F F F F
. previously purchased is recorded as a debit to:
F F F F F F F
A. Raw Materials F F
inventory.
B. Work in Process F F
inventory.
C. Finished Goods F F
inventory.
D. Manufacturing
Overhead.
21 The journal entry to record the incurrence of indirect labor costs is:
F F F F F F F F F F F
.
A. Option
A F
B. Option
B
C. Option
C F
D. Option
D
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
22 Which of the following accounts is debited when direct labor is recorded?
F F F F F F F F F F F
.
A. Work in F F
process
B. Salaries and wages F F
expense
C. Salaries and wages F F F
payable
D. Manufacturing
overhead
23 The balance in the Work in Process account equals:
F F F F F F F F
.
A. the balance in the Finished Goods inventory
F F F F F F F
account.
B. the balance in the Cost of Goods Sold
F F F F F F F
account.
C. the balances on the job cost sheets of
F F F F F F F F
uncompleted jobs. F
D. the balance in the Manufacturing Overhead
F F F F F
account.
24 In a job-order costing system, indirect materials that have been previously
F F F F F F F F F F
. purchased and that are used in production are recorded as a debit to:
F F F F F F F F F F F F
A. Work in Process F F F
inventory.
B. Manufacturing
Overhead.
C. Finished Goods F F
inventory.
D. Raw Materials F
inventory.
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
25 Martinez Aerospace Company uses a job-order costing system. The direct
F F F F F F F F F
. materials for Job #045391 were purchased in July and put into production in
F F F F F F F F F F F F F
August. The job was not completed by the end of August. At the end of
F F F F F F F F F F F F F F F
August, in what account would the direct material cost assigned to Job
F F F F F F F F F F F F
#045391 be located? F F
A. raw materials
F F
inventory
B. work in process
F F
inventory
C. finished goods F F
inventory
D. cost of goods
F F
manufactured
26 Which terms will make the following statement true? When manufacturing
F F F F F F F F F
. overhead is overapplied, the Manufacturing Overhead account has a
F F F F F F F F
balance and applied manufacturing overhead is greater than F F F F F F F
manufacturing overhead. F
A. debit, F
actual
B. credit,
actual
C. debit,
estimated
D. credit, F
estimated
,Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
27 Overapplied manufacturing overhead occurs when:
F F F F
.
A. applied overhead exceeds actual
F F F F
overhead.
B. applied overhead exceeds estimated
F F F
overhead.
C. actual overhead exceeds estimated
F F F F
overhead.
D. budgeted overhead exceeds actual F F F
overhead.
28 Daguio Corporation uses direct labor-hours in its predetermined overhead
F F F F F F F F
. rate. At the beginning of the year, the total estimated manufacturing
F F F F F F F F F F F
overhead was $224,580. At the end of the year, actual direct labor-hours for
F F F F F F F F F F F F F
the year were 18,200 hours, manufacturing overhead for the year was
F F F F F F F F F F F
underapplied by $12,100, and the actual manufacturing overhead was
F F F F F F F F
$219,580. The predetermined overhead rate for the year must have been
F F F F F F F F F F F
closest to: F
A. $11.40 per machine- F F F
hour
B. $12.34 per machine- F F
hour
C. $12.06 per machine- F F F
hour
D. $10.53 per machine- F F
hour
, Ful file at http://testbankscafe.eu/Test-Bank-for-Introduction-to-Managerial-Accounting-6th-Edition-Brewer,-Garrison,-Noreen
F
29 Wert Corporation uses a predetermined overhead rate based on direct
F F F F F F F F F
. labor cost to apply manufacturing overhead to jobs. Last year, the
F F F F F F F F F F F
company's estimated manufacturing overhead was $1,200,000 and its
F F F F F F F F
estimated level of activity was 50,000 direct labor-hours. The company's
F F F F F F F F F F
direct labor wage rate is $12 per hour. Actual manufacturing overhead
F F F F F F F F F F F
amounted to $1,240,000, with actual direct labor cost of $650,000. For
F F F F F F F F F F F
the year, manufacturing overhead was:
F F F F
A. overapplied by F
$60,000
B. underapplied by F
$60,000
C. overapplied by F
$40,000
D. underapplied by F
$44,000
30 Crinks Corporation uses direct labor-hours in its predetermined overhead
F F F F F F F F
. rate. At the beginning of the year, the estimated direct labor-hours were
F F F F F F F F F F F F
11,200 hours and the total estimated manufacturing overhead was
F F F F F F F F
$259,840. At the end of the year, actual direct labor-hours for the year
F F F F F F F F F F F F F
were 10,800 hours and the actual manufacturing overhead for the year
F F F F F F F F F F F
was $254,840. Overhead at the end of the year was:
F F F F F F F F F
A. $4,280
overapplied
B. $9,280
overapplied
C. $9,280
underapplied
D. $4,280
underapplied
