Question 1

A job order cost system provides for a separate record of the costs for each particular quantity of product that is manufactured.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is not a period cost?

Accepted Answer

A)   CEO salary
B)   Depreciation on office equipment
C)   Sales commissions
D)   Wages of an assembly workerE) None of the above
F) A) and C)

Question 3

Depreciation expense on factory equipment is part of factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 4

Service companies can effectively use activity-based costing to compute product (service) costs.

Accepted Answer

A) True 
 B)False

Question 5

Sales commission is an example of factory overhead cost.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following statements is true of managerial accounting?

Accepted Answer

A)   Reporting under managerial accounting is constrained by rules such as generally accepted accounting principles.
B)   Managerial accounting is required to be reported annually, also may be reported monthly or quarterly.
C)   Managerial accounting provides information to the external stakeholders of the company.
D)   Managerial accounting is primarily concerned with generating information for use by managers.E) A) and B)
F) A) and C)

Question 7

Hudson, Inc. has estimated total factory overhead costs of $400,000 and 20,000 direct labor hours for the current fiscal year. If direct labor hours for the year totals 18,000 and actual factory overhead totals $350,000, what is the amount of overapplied or underapplied overhead for the year?

Accepted Answer

A)   $10,000 overapplied
B)   $10,000 underapplied
C)   $50,000 underapplied
D)   $50,000 overappliedE) A) and B)
F) C) and D)

Question 8

The basis for recording direct and indirect labor costs incurred is a summary of the period's:

Accepted Answer

A)   job order cost sheets.
B)   time tickets.
C)   employees' earnings records.
D)   clock cards.E) A) and B)
F) A) and C)

Question 9

If the actual overhead incurred is less than the applied factory overhead, it is called overapplied factory overhead.

Accepted Answer

A) True 
 B)False

Question 10

Indirect labor is included in factory overhead.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following is considered a part of factory overhead cost?

Accepted Answer

A)   Sales commissions
B)   Depreciation of factory buildings
C)   Depreciation of office equipment
D)   Direct materials usedE) None of the above
F) A) and D)

Question 12

At the end of the fiscal year, if the balance in Factory Overhead is small, it would normally be:

Accepted Answer

A)   transferred to Work-in-Process.
B)   transferred to Cost of Goods Sold.
C)   transferred to Finished Goods.
D)   allocated between Work-in-Process and Finished Goods.E) A) and B)
F) B) and C)

Question 13

In job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

Accepted Answer

A)   Materials
B)   Direct labor
C)   Rent
D)   SuppliesE) None of the above
F) A) and B)

Question 14

Materials inventory consists of the costs of direct and indirect materials that have not yet entered the manufacturing process.

Accepted Answer

A) True 
 B)False

Question 15

The direct labor and overhead costs of providing services to clients are accumulated in a Work-in-Process account.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following costs is not included in the finished goods inventory?

Accepted Answer

A)   Hourly wages of an assembly worker
B)   Depreciation on factory plant and equipment
C)   Company president's salary
D)   Electronic components of a computerE) A) and B)
F) A) and C)

Question 17

The document authorizing the issuance of materials from the storeroom for use in manufacturing is called:

Accepted Answer

A)   materials requisition.
B)   purchase requisition.
C)   receiving report.
D)   purchase order.E) None of the above
F) All of the above

Question 18

Which of the following is an example of direct materials cost for an automobile manufacturer?

Accepted Answer

A)   Cost of oil lubricants for factory machinery
B)   Cost of wages of assembly worker
C)   Varnish for coating
D)   Cost of interior upholsteryE) B) and D)
F) A) and B)

Question 19

Product cost consists of factory overhead.

Accepted Answer

A) True 
 B)False

Question 20

Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).

Accepted Answer

A) True 
 B)False

Exam 10: Accounting Systems for Manufacturing Businesses

The direct labor and overhead costs of providing services to clients are accumulated in a Work-in-Process account.

Correct AnswerverifiedShow Answer

Product cost consists of factory overhead.

Correct AnswerverifiedShow Answer

Which of the following is an example of direct materials cost for an automobile manufacturer?

Correct AnswerverifiedShow Answer

Indirect labor is included in factory overhead.

Correct AnswerverifiedShow Answer

At the end of the fiscal year, if the balance in Factory Overhead is small, it would normally be:

Correct AnswerverifiedShow Answer

The basis for recording direct and indirect labor costs incurred is a summary of the period's:

Correct AnswerverifiedShow Answer

Sales commission is an example of factory overhead cost.

Correct AnswerverifiedShow Answer

Reporting under managerial accounting is not restricted by specific rules such as generally accepted accounting principles (GAAP).

Correct AnswerverifiedShow Answer

A job order cost system provides for a separate record of the costs for each particular quantity of product that is manufactured.

Correct AnswerverifiedShow Answer

Depreciation expense on factory equipment is part of factory overhead cost.

Correct AnswerverifiedShow Answer

If the actual overhead incurred is less than the applied factory overhead, it is called overapplied factory overhead.

Correct AnswerverifiedShow Answer

The document authorizing the issuance of materials from the storeroom for use in manufacturing is called:

Correct AnswerverifiedShow Answer

Materials inventory consists of the costs of direct and indirect materials that have not yet entered the manufacturing process.

Correct AnswerverifiedShow Answer

Which of the following is not a period cost?

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Which of the following statements is true of managerial accounting?

Correct AnswerverifiedShow Answer

In job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

Correct AnswerverifiedShow Answer

Hudson, Inc. has estimated total factory overhead costs of $400,000 and 20,000 direct labor hours for the current fiscal year. If direct labor hours for the year totals 18,000 and actual factory overhead totals $350,000, what is the amount of overapplied or underapplied overhead for the year?

Correct AnswerverifiedShow Answer

Which of the following costs is not included in the finished goods inventory?

Correct AnswerverifiedShow Answer

Which of the following is considered a part of factory overhead cost?

Correct AnswerverifiedShow Answer

Service companies can effectively use activity-based costing to compute product (service) costs.

Correct AnswerverifiedShow Answer

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