Test Bank for Introduction to Managerial Accounting
6th Edition Brewer, Garrison, Noreen
Chapter 02
Job-Order Costing
True / False Questions
1. The use of predetermined overhead rates in a job-order cost system
makes it possible to estimate the total cost of a given job as soon as
production is completed.
True False
2. A job cost sheet is used to accumulate costs charged to a job.
True False
3. The following journal entry would be made to apply overhead cost to jobs
in a job-order costing system:
True False
4. Under a job-order cost system the Work in Process account is debited with
the cost of materials purchased.
True False
5. The process of assigning overhead cost to jobs is known as overhead
application.
True False
, Test Bank for Introduction to Managerial Accounting
6th Edition Brewer, Garrison, Noreen
6. The cost of a completed job in a job-order costing system typically
consists of the actual direct materials cost of the job, the actual direct
labor cost of the job, and the actual manufacturing overhead cost of the
job.
True False
7. A debit balance in the Manufacturing Overhead account at the end of the
year means that manufacturing overhead is overapplied.
True False
8. Period costs are expensed as incurred, rather than going into the Work in
Process account.
True False
9. Advertising costs should be charged to the Manufacturing Overhead
account.
True False
10 When a job has been completed, the goods are transferred from the
. production department to the finished goods warehouse and the journal
entry would include a credit to Work in Process.
True False
11 Underapplied or overapplied manufacturing overhead represents the
. difference between actual overhead costs and applied overhead costs.
True False
12 Top management salaries should not go into the Manufacturing Overhead
. account.
True False
, Test Bank for Introduction to Managerial Accounting
6th Edition Brewer, Garrison, Noreen
13 If manufacturing overhead applied exceeds the actual manufacturing
. overhead costs of the period, then manufacturing overhead is
overapplied.
True False
Multiple Choice Questions
14 In computing its predetermined overhead rate, Marple Company
. inadvertently left its indirect labor costs out of the computation. This
oversight will cause:
A. Manufacturing Overhead to be
overapplied.
B. the Cost of Goods Manufactured to be
understated.
C. the debits to the Manufacturing Overhead account to be
understated.
D. the ending balance in Work in Process to be
overstated.
15 Which of the following is the correct formula to compute the
. predetermined overhead rate?
A. Estimated total units in the allocation base divided by estimated total
manufacturing overhead costs.
B. Estimated total manufacturing overhead costs divided by estimated
total units in the allocation base.
C. Actual total manufacturing overhead costs divided by estimated total
units in the allocation base.
D. Estimated total manufacturing overhead costs divided by actual total
units in the allocation base.
, Test Bank for Introduction to Managerial Accounting
6th Edition Brewer, Garrison, Noreen
16 Which of the following would probably be the least appropriate allocation
. base for allocating overhead in a highly automated manufacturer of
specialty valves?
A. machine-
hours
B. power
consumption
C. direct labor-
hours
D. machine
setups
17 What document is used to determine the actual amount of direct labor to
. record on a job cost sheet?
A. time
ticket
B. payroll
register
C. production
order
D. wages payable
account
6th Edition Brewer, Garrison, Noreen
Chapter 02
Job-Order Costing
True / False Questions
1. The use of predetermined overhead rates in a job-order cost system
makes it possible to estimate the total cost of a given job as soon as
production is completed.
True False
2. A job cost sheet is used to accumulate costs charged to a job.
True False
3. The following journal entry would be made to apply overhead cost to jobs
in a job-order costing system:
True False
4. Under a job-order cost system the Work in Process account is debited with
the cost of materials purchased.
True False
5. The process of assigning overhead cost to jobs is known as overhead
application.
True False
, Test Bank for Introduction to Managerial Accounting
6th Edition Brewer, Garrison, Noreen
6. The cost of a completed job in a job-order costing system typically
consists of the actual direct materials cost of the job, the actual direct
labor cost of the job, and the actual manufacturing overhead cost of the
job.
True False
7. A debit balance in the Manufacturing Overhead account at the end of the
year means that manufacturing overhead is overapplied.
True False
8. Period costs are expensed as incurred, rather than going into the Work in
Process account.
True False
9. Advertising costs should be charged to the Manufacturing Overhead
account.
True False
10 When a job has been completed, the goods are transferred from the
. production department to the finished goods warehouse and the journal
entry would include a credit to Work in Process.
True False
11 Underapplied or overapplied manufacturing overhead represents the
. difference between actual overhead costs and applied overhead costs.
True False
12 Top management salaries should not go into the Manufacturing Overhead
. account.
True False
, Test Bank for Introduction to Managerial Accounting
6th Edition Brewer, Garrison, Noreen
13 If manufacturing overhead applied exceeds the actual manufacturing
. overhead costs of the period, then manufacturing overhead is
overapplied.
True False
Multiple Choice Questions
14 In computing its predetermined overhead rate, Marple Company
. inadvertently left its indirect labor costs out of the computation. This
oversight will cause:
A. Manufacturing Overhead to be
overapplied.
B. the Cost of Goods Manufactured to be
understated.
C. the debits to the Manufacturing Overhead account to be
understated.
D. the ending balance in Work in Process to be
overstated.
15 Which of the following is the correct formula to compute the
. predetermined overhead rate?
A. Estimated total units in the allocation base divided by estimated total
manufacturing overhead costs.
B. Estimated total manufacturing overhead costs divided by estimated
total units in the allocation base.
C. Actual total manufacturing overhead costs divided by estimated total
units in the allocation base.
D. Estimated total manufacturing overhead costs divided by actual total
units in the allocation base.
, Test Bank for Introduction to Managerial Accounting
6th Edition Brewer, Garrison, Noreen
16 Which of the following would probably be the least appropriate allocation
. base for allocating overhead in a highly automated manufacturer of
specialty valves?
A. machine-
hours
B. power
consumption
C. direct labor-
hours
D. machine
setups
17 What document is used to determine the actual amount of direct labor to
. record on a job cost sheet?
A. time
ticket
B. payroll
register
C. production
order
D. wages payable
account
