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Accounting Principles , Tenth Edition

Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

Chapter 20

Job Order Costing - all with Video Answers

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Chapter Questions

Problem 1

Cost accounting involves the measuring, recording. and reporting of:
a. product costs.
b. future costs.
c. manufacturing processes.
d. managerial accounting decisions.

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Problem 2

A company is more likely to use a job costing system if:
a. it manufactures a large volume of similar products.
b. its production is continuous.
c. it manufactures products with unique characteristics.
d. it uses a periodic inventory system.

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Problem 3

In accumulating raw materials costs, the cost of raw materials purchased in a perpetual system is debited to:
a. Raw Materials Purchases.
b. Raw Materials Inveatory.
c. Purchases.
d. Work in Process.

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Problem 4

When incurred, factory labor costs are debited to:
a. Work in Process.
b. Factory Wages Expense.
c. Factory Labor.
d. Factory Wages Payable.

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Problem 5

The flow of costs in job order costing:
a. begins with work in process inventory and ends with finished goods inventory.
b. begins as soon as a sale occurs.
c. parallels the physical flow of materials as they are converted into finished goods.
d. is necessary to prepare the cost of goods manufactured schedule.

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Problem 6

Raw materials are assigned to a job when:
a. the job is sold.
b. the materials are purchased.
c. the materials are received from the vendor.
d. the materials are issued by the materials storeroom.

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Problem 7

The source documents for assigning costs to job cost sheets are:
a. invoices, time tickets, and the predetermined overhead rate.
b. materials requisition dips, time tickets, and the actual overhead costs.
c. materials requisition slips, payroll register, and the predetermined overhead rate.
d. materials requisition slips, time tickets, and the predetermined overhead rate.

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Problem 8

In recording the issuance of raw materials in a job order cost system, it would be incorrect to:
a debit Work in Process Inventory.
b. debit Finished Goods Inventory.
c. debit Manufacturing Overbead.
d. credit Raw Materials Inventory.

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Problem 9

The entry when direct factory labor is assigned to jobs is a debit to:
a. Work in Process Inventory and a credit to Factory Labor.
b. Manufacturing Overhead and a credit to Factory Labor.
c. Factory Labor and a credit to Manufacturing Overhead.
d. Factory Labor and a credit to Work in Process Inventory.

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Problem 10

The formula for computing the predetermined manufacturing overhead rate is estimated annual overhead costs divided by an expected annual operating activity, expressed as:
a. direct labor cost.
c. machine hours.
b. direct labor hours.
d. Any of the above.

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Problem 11

In Crawford Company, the predetermined overhead rate is $$80 \%$$ of direct labor cost. During the month, $$\$ 210,000$$ of factory labor costs are incurred, of which $$\$ 180,000$$ is direct labor and $$\$ 30,000$$ is indirect labor. Actual overhead incurred was $$\$ 200,000$$. The amount of overhead debited to Work in Process Inventory should be:
a. $$\$ 120,000$$.
c. $$\$ 168,000$$.
b. $$\$ 144,000$$.
d. $$\$ 160,000$$.

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Problem 12

In Mynex Company, Job No. 26 is completed at a cost of $$\$ 4,500$$ and later sold for $$\$ 7,000$$ cash. A correct entry is:
a. Debit Finished Goods Inventory $$\$ 7.000$$ and credit Work in Process Inventory $$\$7,000$$.
b. Debit Cost of Goods Sold $$\$ 7,000$$ and credit Finished Goods Inventory $$\$ 7,000$$.
c. Debit Finished Goods Inventory $$\$4, \$$ $$00$$ and credit Work in Process Inventory $$\$4,500$$
d. Debit Accounts Receivable $$\$ 7,000$$ and credit Sales $$\$7.0004$$.

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Problem 13

At the end of an accounting period, a company using a job costing system prepares the cost of goods manufactured schedule:
a. from the job cost sheet.
b. from the Work in Process Inventory account.
c. by adding direct materials used, direct labor incurred, and manufacturing overhead incurred.
d. from the Cost of Goods Sold account.

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Problem 14

At end of the year, a company has a $$\$ 1,200$$ debit balance in Manufacturing Overhead. The company:
a. makes an adjusting entry by debiting Manufacturing Overhead Applied for $$\$ 1,200$$ and crediting Manufacturing Overhead for $$\$ 1,200$$.
b. makes an adjusting entry by debiting Manufacturing Overhead Expense for $$\$ 1,200$$ and crediting Manufacturing Overhcad for $$\$ 1,200$$.
c. makes an adjusting entry by debiting Cost of Goods Sold for $$\$ 1,200$$ and crediting Manufacturing Overhead for $$\$ 1,200$$.
d. makes no adjusting entry because differences between actual overhead and the amount applied are a normal part of job costing and will average out over the next year.

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Problem 15

Manufacturing overhead is underapplied if:
a. actual overhead is less than applied.
b. actual overhead is greater than applied.
c. the predetermined rate equals the actual rate.
d. actual overhead equals applied overhead.

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