1. Which of the following statements is true? a. Job-order costing is used only in manufacturing firms....

Question:

1. Which of the following statements is true?

a. Job-order costing is used only in manufacturing firms.

b. The job cost sheet is subsidiary to the work-in-process account.

c. Job-order costing is simpler to use than process costing because the recordkeeping requirements are less.

d. Process costing is used only for services.

e. All of the above are true.


2. The ending balance of which of the following accounts is calculated by summing the totals of the open (unfinished) job-order cost sheets?

a. Raw Materials

b. Work in Process

c. Finished Goods

d. Cost of Goods Sold

e. Overhead Control


3. In a normal costing system, the cost of a job includes

a. Actual direct materials, actual direct labor, and actual overhead.

b. Estimated direct materials, estimated direct labor, and estimated overhead.

c. Actual direct materials, actual direct labor, actual overhead, and actual selling cost.

d. Actual direct materials, actual direct labor, and estimated (applied) overhead.

e. None of the above. Job-order costing requires the use of actual, not normal, costing.


4. The predetermined overhead rate is

a. Calculated at the end of each month.

b. Calculated at the end of the year.

c. Equal to actual overhead divided by actual activity level for a period.

d. Equal to estimated overhead divided by actual activity level for a period.

e. Calculated at the beginning of the year.


5. The predetermined overhead rate equals

a. Actual overhead divided by actual activity level for a period.

b. Estimated overhead divided by estimated activity level for a period.

c. Actual overhead minus estimated overhead.

d. Actual overhead multiplied by actual activity level for a period.

e. One-twelfth of estimated overhead.


6. Applied overhead is

a. An important part of normal costing.

b. Never used in normal costing.

c. An important part of actual costing.

d. The predetermined overhead rate multiplied by estimated activity level.

e. The predetermined overhead rate multiplied by estimated activity level for the month.


7. The overhead variance is overapplied if

a. Actual overhead is less than applied overhead.

b. Actual overhead is more than applied overhead.

c. Applied overhead is less than actual overhead.

d. Estimated overhead is less than applied overhead.

e. Estimated overhead is more than applied overhead.


8. Which of the following is typically a job-order costing firm?

a. Paint manufacturer

b. Pharmaceutical manufacturer

c. Large regional medical center

d. Cement manufacturer

e. Cleaning products manufacturer


9. Which of the following is typically a process-costing firm?

a. Paint manufacturer

b. Custom cabinetmaker

c. Large regional medical center

d. Law office

e. Custom framing shop


10. When materials are requisitioned for use in production in a job-order costing firm, the cost of materials is added to the

a. Raw materials account.

b. Work-in-process account.

c. Finished goods account.

d. Accounts payable account.

e. Cost of goods sold account.


11. When a job is completed, the total cost of the job is

a. Subtracted from the raw materials account.

b. Subtracted from the work-in-process account.

c. Subtracted from the finished goods account.

d. Added to the accounts payable account.

e. Subtracted from the cost of goods sold account.


Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...
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