COST ACCOUNTING (THEORIES)
MULTIPLE CHOICE QUESTIONS
JOB ORDER COSTING
1. Which of the following costing methods of valuation are acceptable in
a job order costing system?
Actual Standard Actual Predetermined
Material Material Labor Overhead
Cost Cost Cost Cost
a. yes yes no yes
b. yes no yes no
c. no yes yes yes
d. yes yes yes yes
ANSWER: d
2. Which of the following costing systems allows management to quickly
recognize materials, labs, and overhead variances and take measures to
correct them?
Actual Cost System Normal Cost System
a. yes yes
b. yes no
c. no yes
d. no no
ANSWER: d
3. In a normal cost system, debits to Work in Process Inventory would not
be made for
a. actual overhead.
b. applied overhead.
c. actual direct material.
d. actual direct labor.
ANSWER: a
4. Which of the following are drawbacks to applying actual overhead to
production?
a. A delay occurs in assigning costs to jobs or products.
b. Fluctuations in quantities produced during a period could cause
varying per-unit charges for fixed overhead.
c. Seasonality of overhead costs may cause distortions in job or
product costs.
d. All of the above.
ANSWER: d
,5. Job order costing and process costing have which of the following
characteristics?
Job Order Costing Process Costing
a. homogeneous products heterogeneous products
and large quantities and small quantities
b. homogeneous products heterogeneous products
and small quantities and large quantities
c. heterogeneous products homogeneous products
and large quantities and small quantities
d. heterogeneous products homogeneous products
and small quantities and large quantities
ANSWER: d
6. A credit to Work in Process Inventory represents
a. work still in process.
b. raw material put into production.
c. the application of overhead to production.
d. the transfer of completed items to Finished Goods Inventory.
ANSWER: d
7. Additional accounts that comprise the balance of a single general
account is a
a. worksheet.
b. journal.
c. subsidiary ledger.
d. book of original entry.
ANSWER: c
8. In a job order costing system, the dollar amount of the entry that
debits Finished Goods Inventory and credits Work in Process Inventory
is the sum of the costs charged to all jobs
a. started in process during the period.
b. in process during the period.
c. completed and sold during the period.
d. completed during the period.
ANSWER: d
9. Total manufacturing costs for the year plus beginning Work in Process
Inventory cost equals
a. cost of goods manufactured in the year.
b. ending Work in Process Inventory.
c. total manufacturing costs to account for.
d. cost of goods available for sale.
, ANSWER: c
10. Which of the following would be least likely to be supported by
subsidiary accounts or ledgers in a company that employs a job order
costing system?
a. Work in Process Inventory
b. Raw Material Inventory
c. Accounts Payable
d. Supplies Inventory
ANSWER: d
11. A journal entry includes a debit to Work in Process Inventory and a
credit to Raw Material Inventory. The explanation for this would be
that
a. indirect material was placed into production.
b. raw material was purchased on account.
c. direct material was placed into production.
d. direct labor was utilized for production.
ANSWER: c
12. The source document that records the amount of raw material that has
been requested by production is the
a. job order cost sheet.
b. bill of lading.
c. interoffice memo.
d. material requisition.
ANSWER: d
13. A material requisition form should show all of the following
information except
a. job number.
b. quantity required.
c. unit cost.
d. purchase order number.
ANSWER: d
14. Which of the following statements about job order cost sheets is true?
a. All job order cost sheets serve as the general ledger control
account for Work in Process Inventory.
b. Job order cost sheets can serve as subsidiary ledger information
for both Work in Process Inventory and Finished Goods Inventory.
c. If material requisition forms are used, job order cost sheets do
not need to be maintained.
d. Job order cost sheets show costs for direct material and direct
labor, but not for manufacturing overhead since it is an applied
amount.
ANSWER: b
, 15. Clyde Jenkins is an auditor for the General Accounting Office. Clyde
is investigating invoices sent by Proper Paper Products charging the
Army $30 per roll for toilet paper. Proper Paper uses a job order
costing system. Where should Clyde look to find total production costs
related to the toilet paper?
a. material requisition form
b. bill of materials
c. sales invoice
d. job order cost sheet
ANSWER: d
16. The primary accounting document in a job order costing system is a(n)
a. bill of materials.
b. job order cost sheet.
c. employee time sheet.
d. materials requisition.
ANSWER: b
17. The cost sheets for incomplete jobs at the end of the period comprise
the subsidiary ledger for
a. Finished Goods Inventory.
b. Raw Material Inventory.
c. Work in Process Inventory.
d. Supplies Inventory.
ANSWER: c
18. The __________ provides management with an historical summation of
total costs for a given product.
a. job order cost sheet
b. employee time sheet
c. material requisition form
d. bill of lading
ANSWER: a
19. Which of the following journal entries records the accrual of the cost
of indirect labor used in production?
a. debit Work in Process Inventory, credit Wages Payable
b. debit Work in Process Inventory, credit Manufacturing Overhead
c. debit Manufacturing Overhead, credit Work in Process Inventory
d. debit Manufacturing Overhead, credit Wages Payable
ANSWER: d
20. In job order costing, payroll taxes paid by the employer for factory
employees are commonly accounted for as
a. direct labor cost.
b. manufacturing overhead cost.
c. indirect labor cost.
d. administrative cost.
MULTIPLE CHOICE QUESTIONS
JOB ORDER COSTING
1. Which of the following costing methods of valuation are acceptable in
a job order costing system?
Actual Standard Actual Predetermined
Material Material Labor Overhead
Cost Cost Cost Cost
a. yes yes no yes
b. yes no yes no
c. no yes yes yes
d. yes yes yes yes
ANSWER: d
2. Which of the following costing systems allows management to quickly
recognize materials, labs, and overhead variances and take measures to
correct them?
Actual Cost System Normal Cost System
a. yes yes
b. yes no
c. no yes
d. no no
ANSWER: d
3. In a normal cost system, debits to Work in Process Inventory would not
be made for
a. actual overhead.
b. applied overhead.
c. actual direct material.
d. actual direct labor.
ANSWER: a
4. Which of the following are drawbacks to applying actual overhead to
production?
a. A delay occurs in assigning costs to jobs or products.
b. Fluctuations in quantities produced during a period could cause
varying per-unit charges for fixed overhead.
c. Seasonality of overhead costs may cause distortions in job or
product costs.
d. All of the above.
ANSWER: d
,5. Job order costing and process costing have which of the following
characteristics?
Job Order Costing Process Costing
a. homogeneous products heterogeneous products
and large quantities and small quantities
b. homogeneous products heterogeneous products
and small quantities and large quantities
c. heterogeneous products homogeneous products
and large quantities and small quantities
d. heterogeneous products homogeneous products
and small quantities and large quantities
ANSWER: d
6. A credit to Work in Process Inventory represents
a. work still in process.
b. raw material put into production.
c. the application of overhead to production.
d. the transfer of completed items to Finished Goods Inventory.
ANSWER: d
7. Additional accounts that comprise the balance of a single general
account is a
a. worksheet.
b. journal.
c. subsidiary ledger.
d. book of original entry.
ANSWER: c
8. In a job order costing system, the dollar amount of the entry that
debits Finished Goods Inventory and credits Work in Process Inventory
is the sum of the costs charged to all jobs
a. started in process during the period.
b. in process during the period.
c. completed and sold during the period.
d. completed during the period.
ANSWER: d
9. Total manufacturing costs for the year plus beginning Work in Process
Inventory cost equals
a. cost of goods manufactured in the year.
b. ending Work in Process Inventory.
c. total manufacturing costs to account for.
d. cost of goods available for sale.
, ANSWER: c
10. Which of the following would be least likely to be supported by
subsidiary accounts or ledgers in a company that employs a job order
costing system?
a. Work in Process Inventory
b. Raw Material Inventory
c. Accounts Payable
d. Supplies Inventory
ANSWER: d
11. A journal entry includes a debit to Work in Process Inventory and a
credit to Raw Material Inventory. The explanation for this would be
that
a. indirect material was placed into production.
b. raw material was purchased on account.
c. direct material was placed into production.
d. direct labor was utilized for production.
ANSWER: c
12. The source document that records the amount of raw material that has
been requested by production is the
a. job order cost sheet.
b. bill of lading.
c. interoffice memo.
d. material requisition.
ANSWER: d
13. A material requisition form should show all of the following
information except
a. job number.
b. quantity required.
c. unit cost.
d. purchase order number.
ANSWER: d
14. Which of the following statements about job order cost sheets is true?
a. All job order cost sheets serve as the general ledger control
account for Work in Process Inventory.
b. Job order cost sheets can serve as subsidiary ledger information
for both Work in Process Inventory and Finished Goods Inventory.
c. If material requisition forms are used, job order cost sheets do
not need to be maintained.
d. Job order cost sheets show costs for direct material and direct
labor, but not for manufacturing overhead since it is an applied
amount.
ANSWER: b
, 15. Clyde Jenkins is an auditor for the General Accounting Office. Clyde
is investigating invoices sent by Proper Paper Products charging the
Army $30 per roll for toilet paper. Proper Paper uses a job order
costing system. Where should Clyde look to find total production costs
related to the toilet paper?
a. material requisition form
b. bill of materials
c. sales invoice
d. job order cost sheet
ANSWER: d
16. The primary accounting document in a job order costing system is a(n)
a. bill of materials.
b. job order cost sheet.
c. employee time sheet.
d. materials requisition.
ANSWER: b
17. The cost sheets for incomplete jobs at the end of the period comprise
the subsidiary ledger for
a. Finished Goods Inventory.
b. Raw Material Inventory.
c. Work in Process Inventory.
d. Supplies Inventory.
ANSWER: c
18. The __________ provides management with an historical summation of
total costs for a given product.
a. job order cost sheet
b. employee time sheet
c. material requisition form
d. bill of lading
ANSWER: a
19. Which of the following journal entries records the accrual of the cost
of indirect labor used in production?
a. debit Work in Process Inventory, credit Wages Payable
b. debit Work in Process Inventory, credit Manufacturing Overhead
c. debit Manufacturing Overhead, credit Work in Process Inventory
d. debit Manufacturing Overhead, credit Wages Payable
ANSWER: d
20. In job order costing, payroll taxes paid by the employer for factory
employees are commonly accounted for as
a. direct labor cost.
b. manufacturing overhead cost.
c. indirect labor cost.
d. administrative cost.
