$1.$ A cost$-$allocation base:

a$.$ links indirect costs to cost objects.

b$.$ traces the direct costs and pools them.

c$.$ serves as a base for determining the period costs.

d$.$ assigns direct costs to cost objects.

$2.$ Which of the following is true of a job$-$costing system?

a$.$ It is mostly suitable for companies that produce identical products.

b$.$ Job$-$costing systems accumulate costs separately for each product or service.

c$.$ It calculates the per$-$unit cost as the average unit cost that applies to all units produced.

d$.$ It is not considered suitable for service organizations.

Questions $3$ to $5$ are based on the following data:

Assume that a company uses a job$-$costing system with direct materials, direct manufacturing labor, and one manufacturing overhead cost pool. The company allocates the manufacturing overhead costs using direct manufacturing labor hours.

The following information is available for the year $2012$:

Budgeted

Actual

Direct material costs

$$5,000$

$$4,800$

Direct manufacturing labor costs

$$3,500$

$$3,400$

Manufacturing overhead costs

$$4,200$

$$4,100$

Direct manufacturing labor hours

$200$

$180$

$3.$ What is the budgeted manufacturing overhead rate of the year $2012?$

a$.$ $$21\mathrm{.}00$

b$.$ $$22\mathrm{.}78$

c$.$ $$23\mathrm{.}20$

d$.$ $$20\mathrm{.}20$

$4.$ What is the actual manufacturing overhead rate of the year $2012?$

a$.$ $$21\mathrm{.}00$

b$.$ $$22\mathrm{.}78$

c$.$ $$23\mathrm{.}20$

d$.$ $$20\mathrm{.}20$

$5.$ If the actual direct manufacturing labor hours were $40$ hours, calculate the total manufacturing costs of the job as per normal costing.

a$.$ $$12,300$

b$.$ $$8,500$

c$.$ $$9,340$

d$.$ $$9,311$

$6.$ Which of the following companies is most likely to require the use of job costing?

a$.$ A soda manufacturer

b$.$ An oil refinery

c$.$ A glass manufacturer

d$.$ An audit firm

$7.$ Which of the following is true of under allocated indirect costs?

a$.$ They are calculated by subtracting indirect cost allocated from actual direct costs incurred.

b$.$ They occur when the allocated amount of indirect costs in an accounting period is greater than the incurred amount.

c$.$ They cannot be adjusted by using the writeoff to work$-$in$-$process approach.

d$.$ They occur when the actual manufacturing overhead costs are greater than the allocated amount.

$8.$ The overallocated overhead according to the proration approach is:

a$.$ spread among ending work$-$in$-$process inventory, finished goods inventory, and cost of goods sold.

b$.$ added to the cost of goods sold of the current year.

c$.$ restated in the general ledger and job$-$cost records to represent actual cost rates rather than budgeted cost rates.

d$.$ included in the materials inventory as the manufacturing overhead costs include material inventory.

$9.$ The manufacturing overhead allocated to job X$210$ was $$30,000.$ However, the actual manufacturing overhead at the end of the year was determined to be $$25,000.$ By how much percent is the job cost under allocated or overallocated?

a$.16\mathrm{.}00\%$; under allocated

b$.20\mathrm{.}00\%$; under allocated

c$.16\mathrm{.}67\%$; overallocated

d$.20\mathrm{.}00\%$; overallocated

$10.$ Face$-$off cosmetic clinic budgets total direct$-$labor costs of $$2,500,$ total indirect costs of $$1,800,$ and total direct labor$-$hours of $150.$ Calculate the budgeted indirect$-$cost rate for the service company if it uses direct labor costs as the allocation base.

a$.$ $$0\mathrm{.}72$

b$.$ $$1\mathrm{.}39$

c$.$ $$0\mathrm{.}08$

d$.$ $$0\mathrm{.}21$Questions $3$ to $5$ are based on the following data:

Assume that a company uses a job$-$costing system with direct materials, direct manufacturing labor, and one

manufacturing overhead cost pool. The company allocates the manufacturing overhead costs using direct

manufacturing labor hours.

The following information is available for the year $2012$: