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Financial and Managerial Accounting: The Basis for Business Decisions, 12/e

Jan R. Williams, University of Tennessee
Susan F. Haka, Michigan State University
Mark S. Bettner, Bucknell University
Robert F. Meigs

Accounting Systems for Measuring Costs

Multiple Choice Quiz

Please answer all questions


1	A job cost sheet can be used to determine:
		A)	Whether overhead was under- or overapplied to a particular job.
		B)	The total cost of materials purchased for a particular job.
		C)	The per-unit cost figure for a particular job.
		D)	The actual amount of overhead costs incurred in completing a particular job.


2	In a job order cost system, a credit balance remaining in the Manufacturing Overhead account at the end of a period:
		A)	Indicates that actual overhead was larger than applied overhead.
		B)	Indicates that an error occurred in the cost system.
		C)	Indicates that applied overhead was larger than actual overhead.
		D)	Should be closed to Income Summary


3	Which of the following would likely be the most appropriate cost driver of machinery power costs?
		A)	Direct labor hours.
		B)	Repair work orders.
		C)	Machine hours.
		D)	Production run set-ups.

Use the following data for questions 4 through 7.

Sayure Praire Aircraft Corporation uses a job order cost system and applies overhead based on a percentage of direct labor cost. Cost flows through the Work in Process Inventory account during September are given below:

<a onClick="window.open('/olcweb/cgi/pluginpop.cgi?it=jpg:: ::/sites/dl/free/0072396881/23712/mcch17.jpg','popWin', 'width=582,height=184,resizable,scrollbars');" href="#"><img valign="absmiddle" height="16" width="16" border="0" src="/olcweb/styles/shared/linkicons/image.gif"> (16.0K)</a> Only Job #302 was still in process at the end of September and this job had been charged with $3,000 in direct materials cost.


4	Refer to the information above. The amount of direct materials cost charged to completed jobs during September was:
		A)	$20,000.
		B)	$17,000.
		C)	$5,000.
		D)	$3,000.


5	Refer to the information above. The predetermined overhead application rate at Sayure Praire is what percentage of direct labor costs?
		A)	50%.
		B)	100%.
		C)	150%.
		D)	200%.


6	Refer to the information above. The amount of overhead costs applied to Job #302 during September were:
		A)	$12,000.
		B)	$8,000.
		C)	$6,000.
		D)	$4,000.


7	Refer to the information above. The journal entry which accounts for the $95,000 transferred out of work in process includes a debit of $95,000 to:
		A)	Finished Goods
		B)	Cost of Goods Sold
		C)	Accounts Receivable
		D)	Sales.

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