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MULTIPLE CHOICE
ANSWER: d EASY
ANSWER: d EASY
a. actual overhead.
b. applied overhead.
c. actual direct material.
d. actual direct labor.
ANSWER: a EASY
51
52 Chapter 5 Job Order Costing
ANSWER: d EASY
5. Job order costing and process costing have which of the following
characteristics?
ANSWER: d EASY
ANSWER: d EASY
a. worksheet.
b. journal.
c. subsidiary ledger.
d. book of original entry.
ANSWER: c EASY
Chapter 5 Job Order Costing 53
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
ANSWER: d EASY
9. Total manufacturing costs for the year plus beginning Work in Process
Inventory cost equals
ANSWER: c EASY
ANSWER: d EASY
ANSWER: c EASY
54 Chapter 5 Job Order Costing
12. The source document that records the amount of raw material that
has been requested by production is the
ANSWER: d EASY
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 EASY
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 EASY
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?
ANSWER: d EASY
Chapter 5 Job Order Costing 55
56 Chapter 5 Job Order Costing
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 EASY
17. The cost sheets for incomplete jobs at the end of the period comprise
the subsidiary ledger for
ANSWER: c EASY
ANSWER: a EASY
19. Which of the following journal entries records the accrual of the cost of
indirect labor used in production?
ANSWER: d EASY
Chapter 5 Job Order Costing 57
20. In job order costing, payroll taxes paid by the employer for factory
employees are commonly accounted for as
ANSWER: b EASY
ANSWER: c EASY
ANSWER: b EASY
ANSWER: c EASY
58 Chapter 5 Job Order Costing
24. In a job order costing system, the use of indirect material would
usually be reflected in the general ledger as an increase in
a. stores control.
b. work in process control.
c. manufacturing overhead applied.
d. manufacturing overhead control.
ANSWER: d EASY
ANSWER: d EASY
ANSWER: c EASY
27. The journal entry to record the incurrence and payment of overhead
costs for factory insurance requires a debit to
ANSWER: c EASY
Chapter 5 Job Order Costing 59
28. The source document that records the amount of time an employee
worked on a job and his/her pay rate is the
ANSWER: b EASY
ANSWER: c EASY
30. In a job order costing system, the subsidiary ledger for Finished Goods
Inventory is comprised of
ANSWER: c EASY
ANSWER: b EASY
510 Chapter 5 Job Order Costing
ANSWER: b EASY
ANSWER: b EASY
ANSWER: b EASY
35. Which of the following organizations would be most likely to use a job
order costing system?
ANSWER: a MEDIUM
Chapter 5 Job Order Costing 511
36. Which of the following organizations would most likely not use a job
order costing system?
a. Avondale Shipbuilders
b. Pickle and Weymann, Attorneys-at-Law
c. Atlantic City Saltwater Taffy
d. Century City Construction Company
ANSWER: c EASY
ANSWER: d EASY
38. When job order costing is used, the primary focal point of cost
accumulation is the
a. department.
b. supervisor.
c. item.
d. job.
ANSWER: d EASY
39. What is the best cost accumulation procedure to use when many
batches, each differing as to product specifications, are produced?
a. job order
b. process
c. actual
d. standard
ANSWER: a EASY
512 Chapter 5 Job Order Costing
40. Which of the following could not be used in job order costing?
a. standards
b. an average cost per unit for all jobs
c. normal costing
d. overhead allocation based on the jobs direct labor hours
ANSWER: b EASY
a. assignment.
b. origination.
c. identification.
d. measurement.
ANSWER: b EASY
ANSWER: b EASY
Chapter 5 Job Order Costing 513
43. C Co. uses a job order costing system. During April 2001, the following
costs appeared in the Work in Process Inventory account:
C Co. applies overhead on the basis of direct labor cost. There was
only one job left in WIP Inventory at the end of April which contained
$5,600 of overhead. What amount of direct material was included in
this job?
a. $4,400
b. $4,480
c. $6,920
d. $8,000
ANSWER: a MEDIUM
a. $3,025
b. $2,812
c. $2,770
d. $2,713
ANSWER: d EASY
514 Chapter 5 Job Order Costing
Ark Co. uses a job order costing system. At the beginning of January, the
company had 2 jobs in process with the following costs:
Ark pays its workers $8.50 per hour and applies overhead on a direct
labor hour basis.
45. What is the overhead application rate per direct labor hour?
a. $0.50
b. $2.00
c. $4.25
d. $30.00
ANSWER: c EASY
46. How much overhead was included in the cost of Job #461 at the
beginning of January?
a. $144.50
b. $153.00
c. $2,200.00
d. $2,456.50
ANSWER: a EASY
47. During January, Ark employees worked on Job #479. At the end of the
month, $714 of overhead had been applied to this job. Total Work in
Process Inventory at the end of the month was $6,800 and all other
jobs had a total cost of $3,981. What amount of direct material is
included in Job #479?
a. $677
b. $1,391
c. $2,142
d. $4,658
ANSWER: a MEDIUM
Chapter 5 Job Order Costing 515
48. Black Corp. manufactures products on a job order basis. The job cost
sheet for Job #329 shows the following for March:
At the end of March, what total cost appears on the job cost sheet for
Job #329?
a. $5,725
b. $5,765
c. $6,765
d. $8,325
ANSWER: c EASY
Fabricating Finishing
Direct material $1,590 $580
Direct labor cost ? 48
Direct labor hours 22 6
Machine hours 5 15
Overhead applied 429 ?
a. $2,647
b. $3,005
c. $3,093
d. $3,203
ANSWER: d MEDIUM
516 Chapter 5 Job Order Costing
a. $3,210.
b. $4,760.
c. $5,450.
d. $6,010.
ANSWER: d EASY
Adams Co. uses a job order costing system and the following information is
available from its records. The company has 3 jobs in process: #5, #8, and
#12.
a. $42,250
b. $57,250
c. $73,250
d. $82,750
ANSWER: b MEDIUM
a. $18,250
b. $26,350
c. $30,000
d. $31,620
ANSWER: d MEDIUM
Chapter 5 Job Order Costing 517
518 Chapter 5 Job Order Costing
a. $36,000
b. $69,000
c. $93,000
d. $99,960
ANSWER: c MEDIUM
a. $69,000
b. $99,960
c. $132,960
d. $144,000
ANSWER: b MEDIUM
55. If Job #12 is completed and transferred, what is the balance in Work in
Process Inventory at the end of the period if overhead is applied at the
end of the period?
a. $96,700
b. $99,020
c. $170,720
d. $139,540
ANSWER: c DIFFICULT
56. Assume the balance in Work in Process Inventory was $18,500 on June
1 and $25,297 on June 30. The balance on June 30 represents one job
that contains direct material of $11,250. How many direct labor hours
have been worked on this job (rounded to the nearest hour)?
a. 751
b. 1,324
c. 1,653
d. 2,976
ANSWER: a MEDIUM
Chapter 5 Job Order Costing 519
XYZ Co. applies overhead for Job #123 at 140 percent of direct labor cost
and at 150 percent of direct labor cost for Jobs #125 and #201. The total
cost of Jobs #123 and #125 is identical.
a. $4,800
b. $5,550
c. $6,300
d. $7,500
ANSWER: c EASY
a. $8,325
b. $7,500
c. $7,000
d. $5,000
ANSWER: b EASY
a. $1,950
b. $1,500
c. $3,700
d. $7,500
ANSWER: b MEDIUM
520 Chapter 5 Job Order Costing
60. Assume that Jobs #123 and #201 are incomplete at the end of
September. What is the balance in Work in Process Inventory at that
time?
a. $18,920
b. $22,620
c. $28,920
d. $30,120
ANSWER: c MEDIUM
Baker Co. has two departments (Processing and Packaging) and uses a job
order costing system. Baker applies overhead in Processing based on
machine hours and on direct labor cost in Packaging. The following
information is available for July:
Processing Packaging
Machine hours 2,500 1,000
Direct labor cost $44,500 $23,000
Applied overhead $55,000 $51,750
61. What is the overhead application rate per machine hour for
Processing?
a. $22.00
b. $1.24
c. $17.80
d. $0.81
ANSWER: a EASY
a. $23.00
b. $51.75
c. $2.25
d. $0.44
ANSWER: c EASY
Chapter 5 Job Order Costing 521
ANSWER: b EASY
Zew Co. has a job order costing system and an overhead application rate of
120 percent of direct labor cost. Job #33 is charged with direct material of
$12,000 and overhead of $7,200. Job #34 has direct material of $2,000 and
direct labor of $9,000.
64. What amount of direct labor cost has been charged to Job #33?
a. $6,000
b. $8,640
c. $7,200
d. $14,400
ANSWER: a EASY
a. $30,200
b. $21,800
c. $11,000
d. $10,800
ANSWER: b EASY
522 Chapter 5 Job Order Costing
Kool Co. uses a job order costing system. Assume that Job #101 is the only
one in process. The following information is available:
a. $0.20
b. $5.00
c. $5.38
d. $38.89
ANSWER: c EASY
67. What is the total cost of Job #101 assuming that overhead is applied
at the rate of 135 percent of direct labor cost (rounded to the nearest
whole dollar)?
a. $192,650
b. $268,250
c. $275,000
d. $329,675
ANSWER: c EASY
68. At the end of the last fiscal year, Baehr Company had the following
account balances:
a. $985,340.
b. $974,660.
c. $974,000.
Chapter 5 Job Order Costing 523
d. $986,000.
ANSWER: c EASY
524 Chapter 5 Job Order Costing
a. $608,000.
b. $660,000.
c. $712,000.
d. undeterminable from the information given.
ANSWER: a MEDIUM
ANSWER: b EASY
71. As data input functions are automated, Intranet data becomes more
a. complicated to access.
b. manufacturing, but not accounting, oriented.
c. real-time accessible.
d. expensive to install, but easier to use.
ANSWER: c EASY
ANSWER: a MEDIUM
526 Chapter 5 Job Order Costing
73. The use of standard material or labor costs in job order costing
ANSWER: a EASY
74. After the completion of production, standard and actual costs are
compared to determine the ______ of the production process.
a. effectiveness
b. complexity
c. homogeneity
d. efficiency
ANSWER: d EASY
a. furniture
b. NFL-logo jackets
c. picture frames
d. none of the above
ANSWER: b MEDIUM
a. mattresses
b. picture frames
c. floral arrangements
d. stained-glass windows
ANSWER: a MEDIUM
Chapter 5 Job Order Costing 527
a. machine hours.
b. standard material cost.
c. direct labor.
d. number of complaints.
ANSWER: c EASY
ANSWER: d EASY
ANSWER: b MEDIUM
ANSWER: d DIFFICULT
528 Chapter 5 Job Order Costing
a. can be used only if standard costs are used for materials and
labor.
b. will provide reasonable product cost information only when all
jobs utilize approximately the same quantities of material and
labor.
c. may be maintained using either actual or predetermined
overhead rates.
d. emphasizes that large customers create the most costs even
though they also provide the most revenues.
ANSWER: c DIFFICULT
82. Kauai Mfg. Co. produces beach chairs. Chair frames are all the same
size, but can be made from plastic, wood, or aluminum. Regardless of
frame choice, the same sailcloth is used for the seat on all chairs.
Kauai has set a standard for sailcloth of $9.90 per square yard and
each chair requires 1 square yard of material. Kauai produced 500
plastic chairs, 100 wooden chairs, and 250 aluminum chairs during
June. The total cost for 1,000 square yards of sailcloth during the
month was $10,000. At the end of the month, 50 square yards of
sailcloth remained in inventory. The unfavorable material price
variance for sailcloth purchases for the month was
a. $100.
b. $495.
c. $1,090.
d. $1,585.
ANSWER: a MEDIUM
83. Use the information from #13. Assuming that there was no sailcloth in
inventory at the beginning of June, the unfavorable material quantity
variance for the month was
a. $495.
b. $500.
c. $990.
d. $1,000.
ANSWER: c MEDIUM
Chapter 5 Job Order Costing 529
84. Use the information from #13. Kauai Mfg. Co. could set a standard
cost for which of the following?
ANSWER: d DIFFICULT
SHORT ANSWER/PROBLEMS
MEDIUM
MEDIUM
530 Chapter 5 Job Order Costing
MEDIUM
MEDIUM
ANSWER: The forms used in a job order costing system include (1) a
job order cost sheet which records all the financial and significant
production data (actual or standard, and possibly budgeted) relating
to a particular job; (2) a material requisition form which records the
costs and quantities of material that has been requisitioned for a
particular job; and (3) an employee time sheet which records the jobs
worked on by an employee and the amount of time spent on each job.
MEDIUM
Chapter 5 Job Order Costing 531
ANSWER:
MEDIUM
532 Chapter 5 Job Order Costing
Glass Co. uses a job order costing system and develops its predetermined
overhead rate based on machine hours. The company has two jobs in
process at the end of the cycle, Jobs #17 and #19.
EASY
EASY
EASY
10. Labor cost was split 25 percent and 70 percent, respectively, between
Jobs #17 and #19 for direct labor. The remainder was indirect labor
cost. What are the total costs of Jobs #17 and #19?
MEDIUM
534 Chapter 5 Job Order Costing
11. Can standard costing be used in job order costing? If so, what
conditions must exist? If not, explain why.
ANSWER: Yes. Firms that use job order costing can also base their
costs on standards. Each job must be fairly similar to each other job.
Standards may be used for the prices of material and labor if the jobs
use basically the same kind of material and labor. If jobs are
homogeneous enough, standards can also be used for materials and
labor quantities. Some companies may choose to only use price
standards, others only quantity standards, and others may use both
price and quantity standards.
MEDIUM
Chapter 5 Job Order Costing 535
To explain the missing job number, Lisa informed Julie that Job
#668 had been completed in April. She also told her that Job #667
was the only job in process at the beginning of May. At that time, the
job had been assigned $4,300 for direct material and $900 for direct
labor. At the end of May, Job #671 had not been completed; all others
had. Lisa asked Julie several questions to determine whether she
understood the job order system.
c. What was total prime cost incurred for the month of May?
ANSWER:
b. DM $4,300
DL 900
FOH 1,035 ($900 115%)
$6,235
EASY
Chapter 5 Job Order Costing 537
13. James Co. uses a job order costing system and has the following
information for the first week of June 2002:
Required:
c. Calculate the cost of the work in process at the end of the week.
538 Chapter 5 Job Order Costing
ANSWER:
EASY
Chapter 5 Job Order Costing 539
Direct Direct
Job No. Units Material labor cost labor hours
101 $4,000 $6,000 3,000
10,000
102 3,600 5,400 2,700
8,800
103 7,000 9,000 4,500
16,000
104 3,200 4,800 2,400
8,000
105 8,000 3,600 1,800
20,000
Variable $18,500
Fixed 15,000
a. Material inventory
ANSWER:
MEDIUM
Chapter 5 Job Order Costing 541
15. You are asked to bring the following incomplete accounts of Ticker
Printing Inc. up to date through January 31, 2001. Consider the data
that appear in the T-accounts as well as additional information given in
items (a) through (i).
Tickers job order costing system has two direct cost categories (direct
material and direct manufacturing labor) and one indirect cost pool
(manufacturing overhead, which is allocated using direct
manufacturing labor costs).
Manufacturing
Department
Work in Process Inventory Control Overhead
Control
January 2001
Charges 57,000
Manufacturing
Overhead Control
Additional Information:
a. Manufacturing department overhead is allocated using a
budgeted rate set every December. Management forecasts next
years overhead and next years direct manufacturing labor
costs. The budget for 2001 is $400,000 of direct manufacturing
labor and $600,000 of manufacturing overhead.
b. The only job unfinished on January 31, 2001 is No. 419, on which
direct manufacturing labor costs are $2,000 (125 direct
manufacturing labor hours) and direct material costs are $8,000.
542 Chapter 5 Job Order Costing
Required:
a. Material purchased during January
b. Cost of Goods Sold during January
c. Direct Manufacturing Labor Costs incurred during January
d. Manufacturing Overhead Allocated during January
e. Balance, Wages Payable Control, December 31, 2000
f. Balance, Work in Process Inventory Control, January 31, 2001
g. Balance, Work in Process Inventory Control, December 31, 2000
h. Balance, Finished Goods Inventory Control, January 31, 2001
i. Manufacturing Overhead underapplied or overapplied for
January
ANSWER
i. APPLIED$60,000
ACTUAL 57,000
$ 3,000 overapplied
DIFFICULT
544 Chapter 5 Job Order Costing
Job No.
405 406
Direct material $ 5,000 $ 8,000
Direct labor 4,000 3,000
Overhead 4,400 3,300
Total $13,400 $14,300
JOB
407 408 409
Direct materials $3,000 $10,00 $ 7,000
0
Direct labor 5,000 4,000
6,000
* Job $405 and Job #406 were completed after incurring additional
direct labor costs of $2,000 and $4,000, respectively
* Wages paid to production employees during January totaled
$25,000.
* Depreciation for the month of January totaled $10,000.
* Utilities bills in the amount of $10,000 were paid for December
2000 operations.
* Utilities bills totaling $12,000 were received for January
operations.
* Supplies costing $2,000 were used.
* Miscellaneous overhead expenses totaled $24,000 for January.
Required:
ANSWER:
MEDIUM
546 Chapter 5 Job Order Costing
17. Fred Company employs a job order costing system. Only three jobs
Job #105, Job #106, and Job #107were worked on during November
and December. Job #105 was completed December 10; the other two
jobs were still in production on December 31, the end of the
companys operating year. Job cost sheets on the three jobs follow:
Job Cost
Sheet
Job Job Job
#105 #106 #107
November costs incurred:
Direct material $16,50 $ $
0 9,300
Direct labor 13,00 7,00
0 0
Manufacturing overhead 20,80 11,20
0 0
Required:
ANSWER:
3. MOH CONTROL19,000
A/P 19,000
d. FG INV 60,700
WIP INV 60,700
106 = $51,300
MEDIUM