5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

Custom Search

Menu

Find

HOME EXPLANATIONS EXERCISES PROBLEMS QUIZZES CALCULATORS

Job order costing system

 Multiple choice questions (MCQs)

 Posted in: Job order costing system (quizzes)

Facebook 2 Twitter Email Pinterest More 37

Results

13 of 22 questions answered correctly

Your time: 00:48:21

You have reached 13 of 22 points, (59.09%)

Restart quiz View questions

The companies that produce many different products or services usually use:

process costing

job order costing

both process costing and job order costing

none of the above

CORRECT

https://www.accountingformanagement.org/jocs-mcqs/ 1/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

Awesome! Your answer is correct.

Which of the following costs is recorded on the job cost sheet?

Direct materials cost

Direct labor cost

Manufacturing overhead cost

All of the above

CORRECT

Awesome! Your answer is correct.

Which of the following journal entries is correct for the issuance of direct materials to production?

Materials Dr. & Work in process Cr. Direct Material + Production

Impact on: 1. WIP 2. Materials

Work in process Dr. & Materials Cr.

Work in process Dr. & Accounts payable Cr.

Materials Dr. & Accounts payable Cr.

CORRECT

Awesome! Your answer is correct.

The GSM company uses job order costing system and provides you the following data for the current period:
Direct materials issued to production: $180,000
Indirect materials issued to production: $16,000
Direct labor cost: $214,000
Manufacturing overhead cost – applied: $226,000
Manufacturing overhead cost – actual: $250,000

There was no beginning and ending work in process and finished goods inventory. The company uses a
predetermined overhead rate to apply manufacturing overhead to work in process (WIP) inventory.

Based on the above information, what is the cost of goods manufactured of GSM Company?

$660,000

$644,000

$620,000

$604,000

https://www.accountingformanagement.org/jocs-mcqs/ 2/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

INCORRECT

Your answer is incorrect. The correct answer is “$620,000” (option 3).

Computation:

The SK manufacturing company computes predetermined overhead rate on the basis of machine hours in the
machining department and direct labor cost in the assembly department. The following estimates were made at the
beginning of the year:

Based on the above information, what are the predetermined overhead rates for machining department and assembly
department?

$5 and 100%

$5 and 200%

$6 and 200%

$5 and 50%

CORRECT

Awesome! Your answer is correct.

Computation:

Machining department:

Estimated manufacturing overhead cost/Estimated machine hours

= $15,000/3,000 hours
= $5 per machine hour

Assembly department:

https://www.accountingformanagement.org/jocs-mcqs/ 3/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

Estimated manufacturing overhead cost/Estimated direct labor cost

= $20,000/$10,000
= 200%

Which of the following is a correct journal entry to record direct labor cost?

Production Dr. & Direct labor Cr.

Direct Labor
Work in process Dr. & Direct labor Cr. 1. WIP 2. Wages Payable

Wages payable Dr. & Work in process Cr.

Work in process Dr. & Wages payable Cr.

INCORRECT

Your answer is incorrect. The correct answer is “Work in process Dr. & Wages payable Cr.” (option 4).

The ABC company has the following estimated costs for the next year:
Direct materials: $15,000
Indirect materials: $5,000
Direct labor: $55,000
Salary of production supervisor: $35,000
Rent on factory equipment: $16,000
Sales commission: $75,000
Advertising expenses: $11,000

It is estimated that 53,000 machine hours and 8,000 direct labor hours will be worked during the next year. What will
be the predetermined overhead rate if company applies manufacturing overhead cost to jobs on the basis of direct
labor hours.

$15

$14

$7

$17 Predetermined FOG=Total Indirect Cost/No. of Base Units

INCORRECT

Your answer is incorrect. The correct answer is “$7” (option 3).

Computation:

($5,000 + $16,000 + $35,000)/8,000 hours

= $7 per direct labor hour

https://www.accountingformanagement.org/jocs-mcqs/ 4/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

Under job order costing system, which of the following costs would be recorded as debit to manufacturing overhead
account?

Direct materials cost

Indirect materials cost

Direct labor cost

None of the above

CORRECT

Awesome! Your answer is correct.

In a job order costing system, which of the following costs is not an example of manufacturing overhead cost?

Indirect labor cost

Fuel used in factory

Salary of production manager

Sales commission

CORRECT

Awesome! Your answer is correct.

Which of the following is a correct journal entry to apply manufacturing overhead cost to jobs?

Work in process Dr. & Manufacturing overhead Cr. FOH

Manufacturing overhead Dr. & Work in process Cr. 1. WIP 2. FOH

Finished goods Dr. & Manufacturing overhead Cr.

Work in process Dr. & Finished goods Cr.

INCORRECT

Your answer is incorrect. The correct answer is “work in process Dr. & manufacturing overhead Cr.” (option 1).

Estimated manufacturing overhead cost at the beginning of the year: $100,000

Estimated direct labor hours at the beginning of the year: 10,000
Actual manufacturing overhead cost incurred during the year: $118,000
Actual direct labor hours worked during the year: 11,000

Based on the above information, the cost record of the company will show:

https://www.accountingformanagement.org/jocs-mcqs/ 5/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

overapplied overhead of $8,000

underapplied overhead of $8,000

overapplied overhead of $18,000

underapplied overhead of $18,000

INCORRECT

Your answer is incorrect. The correct answer is “underapplied overhead of $8,000” (option 2).

The following information belongs to Delta Company which uses job order costing system:
Overapplied balance of manufacturing overhead account: $22,000
Work in process inventory account – ending balance: $10,000
Finished goods inventory account – ending balance: $15,000
Cost of goods sold account – ending balance: $25,000

On the basis of ending balances, which of the following is a correct allocation of overapplied overhead balance
among work in process, finished goods and cost of goods sold?

$7,333, $7,333, $7,333

$4,400, $6,600, $11,000

$10,000, $15,000, $25,000

None of the above

INCORRECT

Your answer is incorrect. The correct answer is “$4,400, $6,600, $11,000” (option 2).

Computation:

Total ending balances:

$10,000 + $15,000 + $25,000 = $50,000

The proportion of ending balances to total ending balance:

Work in process: $10,000/$50,000 = 20%
Finished goods: $15,000/$50,000 = 30%
Cost of goods sold: $25,000/$50,000 = 50%

The allocation of overapplied balance of manufacturing overhead account:

Work in process: $22,000 × 0.2 = $4,400
Finished goods: $22,000 × 0.3 = $6,600
Cost of goods sold: $22,000 × 0.5 = $11,000

https://www.accountingformanagement.org/jocs-mcqs/ 6/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

The Robert Company uses a job order costing system and computes its predetermined overhead rate at the
beginning of each period on the basis of direct labor cost. At the end of current period, the only job in process is the
job number 555B. The cost sheet related to job number 555B shows that the following direct materials and direct
labor costs were incurred during the period:
Direct materials cost: $800
Direct labor cost: $1,200

The work in process inventory account shows a balance of $2,600 at the end of current period.

One the basis of above information, what is the predetermined overhead rate as a percentage of direct labor cost?

100%

200%

50%

75%

INCORRECT

Your answer is incorrect. The correct answer is “50%” (option 3).

Computations:

Manufacturing overhead applied to job number 555B:

Work in process account balance – (Direct materials cost + Direct labor cost)
= $2,600 – ($800 + $1,200)
= $600

Predetermined overhead rate as a percentage of direct labor cost:

Manufacturing overhead applied/Direct labor cost

= $600/$1,200
= 50%

Manufacturing overhead would be overapplied if:

actual overhead < applied overhead

actual overhead > applied overhead

actual overhead = applied overhead

applied overhead > direct materials cost + direct labor cost

CORRECT

Awesome! Your answer is correct.

https://www.accountingformanagement.org/jocs-mcqs/ 7/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

The Fine Company uses a job order costing system. The following information belongs to current period:
Estimated manufacturing overhead at the beginning of the period: $440,000
Actual manufacturing overhead incurred during the period: $400,000
Manufacturing overhead underapplied: $16,000
Predetermined overhead rate: $20 per direct labor hour

On the basis of above information, how many direct labor hours were worked during the current period?

20,800 hours

20,000 hours

19,200 hours

22,000 hours

INCORRECT

Your answer is incorrect. The correct answer is “19,200 hours” (option 3).

Computations:

Manufacturing overhead applied:

Actual manufacturing overhead – Underapplied manufacturing overhead

= $400,000 – $16,000
= $384,000

Direct labor hours worked during the period:

Manufacturing overhead applied/Predetermined overhead rate

= $384,000/$20
= 19,200 hours

The following cost data relates to job 355C:

Direct materials: $27,400
Direct labor cost: $9,600
Manufacturing overhead cost – applied: $4,000 (160 machine hours @ $25/machine hour)
Selling and shipping cost: $14,000

The job 355C consists of 2,000 units and has been completed. What is the cost of goods sold per unit of job 355C?

$20.5

$27.5

$26

$25.5

https://www.accountingformanagement.org/jocs-mcqs/ 8/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

CORRECT

Awesome! Your answer is correct.

Computations:

Cost of goods sold per unit

($27,400 + $9,600 + $4,000)/2,000 units

= 20.5 per unit

Selling and shipping cost is an operating cost. It is not a component of cost of goods sold (COGS) and has therefore
been ignored.

The total cost assigned to job 777C is $24,000 which includes direct materials cost of $6,000. The factory overhead is
applied to work in process @ 150% of direct labor cost. What is the amount of direct labor cost charged and factory
overhead applied to job 777C?

$9,600 and $14,400, respectively

$6,000 and $12,000, respectively

$7,200 and $10,800, respectively

$4,800 and $72,200, respectively

CORRECT

Awesome! Your answer is correct.

Computations:

Total of direct labor cost and manufacturing overhead cost = Total cost – Direct materials cost
= $24,000 – $6,000
= $18,000

Suppose, direct labor cost = Y

Manufacturing overhead is applied @ 150% of direct labor cost. Therefore, it must be 1.5Y.

Direct labor cost + Manufacturing overhead cost applied = $18,000

or
Y + 1.5 Y = $18,000
2.5Y = $18,000
Y = $18,000/2.5
Y = $7,200

Direct labor cost is $7,200 & manufacturing overhead cost applied is $10,800 ($7,200 × 1.5).

Which of the following is a correct journal entry to record the transfer of finished goods from production department to
finished goods store room? Production + FG Storeroom

1. WIP 2. Finished Goods

https://www.accountingformanagement.org/jocs-mcqs/ 9/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

Work in process Dr. & Finished goods Cr.

Finished goods Dr. & Work in process Cr.

Finished goods Dr. & Cost of goods sold Cr.

Finished goods Dr. & Store room Cr.

CORRECT

Awesome! Your answer is correct.

Which of the following is a correct journal entry to record the shipment of a completed job to to customer?

Accounts receivable Dr. & Sales Cr.

Accounts receivable Dr. & Finished goods Cr.

Accounts receivable Dr. & Cost of goods sold Cr.

Cost of goods sold Dr. & Accounts receivable Cr.

INCORRECT

Your answer is incorrect. The correct answer is “Accounts receivable Dr. & Sales Cr.” (option 1).

Which of the following journal entries correctly records the cost of the job shipped to a customer?

Accounts receivable Dr. & Work in process Cr.

Finished goods Dr. & Cost of goods sold Cr.

Cost of goods sold Dr. & Finished goods Cr.

Accounts receivable Dr. & Finished goods Cr.

CORRECT

Awesome! Your answer is correct.

The correct journal entry to dispose off an underapplied manufacturing overhead balance to cost of goods sold
account is:

Manufacturing overhead Dr. & Cost of goods sold Cr.

Cost of goods sold Dr. & Manufacturing overhead Cr.

Manufacturing overhead Dr. & Work in process Cr.

Cost of goods sold Dr. & Work in process Cr.

https://www.accountingformanagement.org/jocs-mcqs/ 10/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

CORRECT

Awesome! Your answer is correct.

Which of the following source documents is used to record the amount of direct materials on the job cost sheet?

Production order

Bill of materials

Materials requisition form

Materials purchase order

CORRECT

Awesome! Your answer is correct.

 Back to: Job order costing system (quizzes)

ADVERTISEMENT

SHOW YOUR LOVE FOR US BY SHARING OUR CONTENTS.

Facebook 2 Twitter Email Pinterest More 37

7 COMMENTS ON
Job order costing system
 Multiple choice questions (MCQs)

FEROLYN

need the multiple choice

REPLY

https://www.accountingformanagement.org/jocs-mcqs/ 11/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

WAQAR

Thanks for this useful MCQs.

REPLY

WAQAR

I couldn’t find separate article and MCQs for Process Costing. Isn’t there any write up for that?

REPLY

ACCOUNTING FOR MANAGEMENT

Yes we don’t have articles and MCQs on process costing. We shall add them soon. Please check back in a
month.

REPLY

WAQAR

My exam is on 1st Nov, 2018 it would be nice if you add that in few days. Thanks.

REPLY

JOHNSON OLADIPUPO

Hi guys
My name is Johnson Joseph, based in Nigeria, I have been lecturing Cost Accounting and performance management
for over 10 years. i can join your team to make questions on certain/selected topics available

https://www.accountingformanagement.org/jocs-mcqs/ 12/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

REPLY

ACCOUNTING FOR MANAGEMENT

Sure, please send us an email using our contact us form.

REPLY

Leave a comment

Your name

Your email

Submit

ADVERTISEMENT

https://www.accountingformanagement.org/jocs-mcqs/ 13/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

RECENTLY ADDED ARTICLES

What are non-trading concerns?

Treatment of specific items used in accounts of non-trading concerns
Receipts and payments account
Income and expenditure account
Balance sheet of non-trading concerns

TRY OUT TANG PINEAPPLE LASSI!

UNDEFINED IN | AN : AN : AN

Quiz: 1 point

The difference in cost of two alternatives is known as what?

Differential cost

Opportunity cost

Sunk cost

Direct cost

powered by

You have 0 points

Earn 1000 more points to receive a $10 gift card.

https://www.accountingformanagement.org/jocs-mcqs/ 14/15
5/18/2019 Job order costing system - multiple choice questions (MCQs) | Accounting for Management

TRY OUT TANG PINEAPPLE LASSI!

UNDEFINED IN | AN : AN : AN

PLEASE LIKE OUR FACEBOOK PAGE

Accounting For Management

7,273 likes

Like Page Send Message

Be the first of your friends to like this

Contact us Privacy policy Helpful sites

Copyright  2012 - 2019. Accounting For Management

https://www.accountingformanagement.org/jocs-mcqs/ 15/15