Cost Accounting- Guerrero
Job Costing- Theory
1. Least likely to be an objective of a cost accounting system. -
Product costing and inventory valuation
2. In cost terminology, conversion costs consists of:
Direct labor and factory overhead
3. Cost is the amount measured by he current monetary value of economic resources given up or to be given up in
obtaining goods and services. Costs may be classified as unexpired or expired. What costs is not always considered to be
expired immediately upon being recognized?
Cost of Good Sold
4. What is the best description of traditional cost accounting?
The accounts used to determine the costs of good sold by an entity.
5. In a retailing enterprise, the statement of comprehensive income includes cost of goods sold. Cost of Good Sold is, in
effect, purchases adjusted for change in inventor. In a manufacturing company, the purchases account is replaced by
which account?
Cost of Goods Manufactured
6. The information contained in a cost of goods manufactured budget most directly relates to the:
Materials used, direct labor, overhead applied, and work in process inventories budgets.
7. All cost related to the manufacturing function in a computer are:
Product Cost
8. .
9. The wages of the factory janitorial staff should be classified as
Factory overhead cost
10. Job-order cost accounting systems and process-cost accounting system differ in the way:
Orders are taken and the number of units in the orders.
11. Two basic costing systems for assigning costs to products or services are job costing and process costing. These two
costing systems are usually viewed as being on opposite ends of a spectrum. The fundamental criterion employed to
determine whether job costing or process costing should be employed is:
The nature and amount of the product or service brought to the market place for customer consumption.
12. A company services office equipment. Some customers bring their equipment to the company’s service shop; other
customers prefer to have the company’s service personnel come to their offices to repair their equipment. Th most
appropriate costing method for the company is:
A job-order costing system
13. A company experienced a machinery breakdown on one of its production lines. As a consequence of the breakdown,
manufacturing fell behind schedule, and a decision was made to schedule overtime to return manufacturing to schedule.
What method is the proper way to account for the overtime paid to the direct laborers.
The overtime hours times the sum of the straight-time wages and overtime premium would be treated as
direct labor.
14. In, job-order costing, the basic document to accumulate the cost of each order is the
Job-cost Sheet
15. Company characterized by the production of heterogeneous products will most likely use what methods for the
purpose of averaging costs and providing management with unit cost data?
Process Costing
16. A new advertising agency serves a wide range of clients including manufacturers, restaurants, service businesses,
department stores, and other retail establishments. The accounting system the advertising agency has most likely adopted
for its record keeping in accumulating costs is:
Job-order Costing
17. The work in process account is?
An inventory account including the beginning and ending inventory of goods being processed.
18. Many companies recognize three major categories of costs of manufacturing a product. These are direct materials,
direct labor, and overhead. What is an overhead cost in the production of an automobile?
The delivery costs for the tires on each automobile.
19. Many firms use two overhead accounts: factory overhead control and factory overhead applied. During the period,
Which account receives numerous debits and credits?
Factory overhead control
20. In a job-order costing system, the use of direct materials previously purchased usually is recorded as an increase in:
Work-in-process account
21. In traditional job order cost system, the issue of indirect materials to a production department increases:
Work in process account
22. What items is not included in (charged to) factory overhead?
Costs of marketing departments
23. How does a job-order cost accounting system differ from a process cost accounting system?
Both the timing and nature of entries to transfer cost from the work-in-process account to the finished goods
inventory account are different.
24. In a job-order cost system, direct labor costs usually are recorded initially as an increase in:
Work-in-process control
25. In job-order cost system, the application of factory overhead is usually reflected in the general ledger as an increase in
Work-in-process control
26. In job-order system, factory (manufacturing) overhead is:
An indirect cost of jobs and a necessary element of production.
27. A non-manufacturing organization may use:
Job-order costing but not process costing.
28. The debits in work-in-process are BWIP, direct labor, direct materials, and factory overhead. The account should be
credited for production that is completed and sent to finished goods in inventory. The balance is.
EWIP (debit)
29. When the amount of overapplied factory overhead is significant, the entry to close overapplied factory overhead will
most likely require:
A credit to cost of goods sold.
30. Under a job-order system of cost accounting, the peso amount of the general ledger entry involved in the transfer of
inventory from work-in-process to finished goods is the sum of the costs charged to all jobs:
Completed during the period.
