Test-Bank-for-Introduction-to-Managerial-Accounting-5th-Edition-Brewer,-Garrison,-Noreen
2-1
,Test-Bank-for-Introduction-to-Managerial-Accounting-5th-Edition-Brewer,-Garrison,-Noreen
Chapter 02
Systems Design: Job-Order Costing
True / False Questions
1. Joborder!!costing!!would!!be!!more!!likely!!to!!be!!used!!than!!process!!costing!!in!!situations!!whe
re!many!!different!!products!!or!!services!!are!!produced!!each!!period!!to!!customer!!specifications.
!!True False
2. In!!a!!joborder!!costing!!system, !!costs!!are!!traced!!to!!departments!!and!!then!!allocated!!to!!units!!
of!product!!using!!an!!average!!process.
True False
3. Joborder!!costing!!is!!used!!in!!those!!situations!!where!!units!!of!!a!!product!!are!!homogeneou
s,!such!!as!!in!!the!!manufacture!!of!!sugar.
True False
4. Joborder!!costing!!is!!usually!!not!!used!!in!!service!!organizations!!such!!as!!hospitals!!and!!la
w!firms.
True False
5. The!!three!!cost!!categories!!appearing!!on!!a!!job!!cost!!sheet!!are:!!selling!!expense,!!manufacturi
ng!expense,!!and!!administrative!!expense.
True False
6. The!!labor!!time!!ticket!!contains!!the!!details!!of!!how!!much!!time!!an!!employee!!takes!!on!!each!!t
ask!throughout!!the!!day.
True False
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,Test-Bank-for-Introduction-to-Managerial-Accounting-5th-Edition-Brewer,-Garrison,-Noreen
7. In!!order!!to!!improve!!the!!accuracy!!of!!unit !!costs,!!most!!companies!!recompute!!
the!predetermined!!overhead!!rate!!each!!month.
True False
8. Use!!of!!a!!single,!!plantwide!!overhead!!rate!!is!!generally!!appropriate!!only!!for!!very!!lar
ge!manufacturing!!companies.
True False
9. Predetermined!!overhead!!rates!!are!!based!!on!!actual!!cost!!and!!activity!!da
ta.!True False
10. The!!following!!journal!!entry!!would!!be!!made!!to!!apply!!overhead!!cost!!to!!jobs!!in!!a!!job-
order!costing!!system:
True False
11. When!!completed!!goods!!are!!sold,!!the!!transaction!!is!!recorded!!as!!a!!debit!!to!!Cost!!of!!Go
ods!Sold!!and!!a!!credit!!to!!Work!!in!!Process.
True False
12. When!!the!!predetermined!!overhead!!rate!!is!!based!!on!!direct!!labor-
hours,!!the!!amount!!of!!overhead!!applied!!to!!a!!job!!is!!proportional!!to!!the!!amount!!of!!actual!!di
rect!!labor-hours!!incurred!on!!the!!job.
True False
13. Actual!!manufacturing!!overhead!!costs!!are!!traced!!to!!specific!!jo
bs.!True False
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, Test-Bank-for-Introduction-to-Managerial-Accounting-5th-Edition-Brewer,-Garrison,-Noreen
14. A!!credit!!balance!! in!!the!!Manufacturing!!Overhead!!account!!at!!the!!end!!of!!the!!year!! means!!t
hat!overhead!!was!!underapplied.
True False
15. The!!sum!!of!!all!!amounts!!transferred!!from!!the!!Work!!in!!Process!!account!!and!!into!!t
he!Finished!!Goods!!account!!represents!!the!!Cost!!of!!Goods!!Manufactured!!for!!the!!peri
od.!!True False
16. The!!most!!common!!accounting!!treatment!!of!!underapplied!!manufacturing!!overhead!!is!
!to!t ransfer!!it !!to !!the!!Manufacturing !!Overhead!!control!!account.
True False
Multiple!!Choice!!Questions
17. Which!!of!!the!!following!!companies!!would!!be!!most!!likely!!to!!use!!a!!job-
order!!costing!!system!rather!!than!!a!!process!!costing!!system?
A. fast!!food!!restaurant
B. shipbuilding
C. crude!!oil!!refining
D. candy!!making
18. Computing!!unit!!product!!costs!!involves!!averaging!!in:
A. A
B. B
C. C
D. D
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,Test-Bank-for-Introduction-to-Managerial-Accounting-5th-Edition-Brewer,-Garrison,-Noreen
Chapter 02
Systems Design: Job-Order Costing
True / False Questions
1. Joborder!!costing!!would!!be!!more!!likely!!to!!be!!used!!than!!process!!costing!!in!!situations!!whe
re!many!!different!!products!!or!!services!!are!!produced!!each!!period!!to!!customer!!specifications.
!!True False
2. In!!a!!joborder!!costing!!system, !!costs!!are!!traced!!to!!departments!!and!!then!!allocated!!to!!units!!
of!product!!using!!an!!average!!process.
True False
3. Joborder!!costing!!is!!used!!in!!those!!situations!!where!!units!!of!!a!!product!!are!!homogeneou
s,!such!!as!!in!!the!!manufacture!!of!!sugar.
True False
4. Joborder!!costing!!is!!usually!!not!!used!!in!!service!!organizations!!such!!as!!hospitals!!and!!la
w!firms.
True False
5. The!!three!!cost!!categories!!appearing!!on!!a!!job!!cost!!sheet!!are:!!selling!!expense,!!manufacturi
ng!expense,!!and!!administrative!!expense.
True False
6. The!!labor!!time!!ticket!!contains!!the!!details!!of!!how!!much!!time!!an!!employee!!takes!!on!!each!!t
ask!throughout!!the!!day.
True False
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,Test-Bank-for-Introduction-to-Managerial-Accounting-5th-Edition-Brewer,-Garrison,-Noreen
7. In!!order!!to!!improve!!the!!accuracy!!of!!unit !!costs,!!most!!companies!!recompute!!
the!predetermined!!overhead!!rate!!each!!month.
True False
8. Use!!of!!a!!single,!!plantwide!!overhead!!rate!!is!!generally!!appropriate!!only!!for!!very!!lar
ge!manufacturing!!companies.
True False
9. Predetermined!!overhead!!rates!!are!!based!!on!!actual!!cost!!and!!activity!!da
ta.!True False
10. The!!following!!journal!!entry!!would!!be!!made!!to!!apply!!overhead!!cost!!to!!jobs!!in!!a!!job-
order!costing!!system:
True False
11. When!!completed!!goods!!are!!sold,!!the!!transaction!!is!!recorded!!as!!a!!debit!!to!!Cost!!of!!Go
ods!Sold!!and!!a!!credit!!to!!Work!!in!!Process.
True False
12. When!!the!!predetermined!!overhead!!rate!!is!!based!!on!!direct!!labor-
hours,!!the!!amount!!of!!overhead!!applied!!to!!a!!job!!is!!proportional!!to!!the!!amount!!of!!actual!!di
rect!!labor-hours!!incurred!on!!the!!job.
True False
13. Actual!!manufacturing!!overhead!!costs!!are!!traced!!to!!specific!!jo
bs.!True False
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, Test-Bank-for-Introduction-to-Managerial-Accounting-5th-Edition-Brewer,-Garrison,-Noreen
14. A!!credit!!balance!! in!!the!!Manufacturing!!Overhead!!account!!at!!the!!end!!of!!the!!year!! means!!t
hat!overhead!!was!!underapplied.
True False
15. The!!sum!!of!!all!!amounts!!transferred!!from!!the!!Work!!in!!Process!!account!!and!!into!!t
he!Finished!!Goods!!account!!represents!!the!!Cost!!of!!Goods!!Manufactured!!for!!the!!peri
od.!!True False
16. The!!most!!common!!accounting!!treatment!!of!!underapplied!!manufacturing!!overhead!!is!
!to!t ransfer!!it !!to !!the!!Manufacturing !!Overhead!!control!!account.
True False
Multiple!!Choice!!Questions
17. Which!!of!!the!!following!!companies!!would!!be!!most!!likely!!to!!use!!a!!job-
order!!costing!!system!rather!!than!!a!!process!!costing!!system?
A. fast!!food!!restaurant
B. shipbuilding
C. crude!!oil!!refining
D. candy!!making
18. Computing!!unit!!product!!costs!!involves!!averaging!!in:
A. A
B. B
C. C
D. D
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