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Job Order Practice

This document contains a job order with 20 multiple choice questions testing knowledge of key concepts in cost accounting, including cost objects, direct and indirect costs, cost pools, cost tracing, cost assignment, and cost allocation. It defines terms like cost pools, cost tracing, cost assignment, and cost allocation. Questions cover calculating overhead rates, assigning costs to cost objects, and identifying which costs are direct vs indirect.

Uploaded by

Anna Mae Sanchez
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© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
196 views

Job Order Practice

This document contains a job order with 20 multiple choice questions testing knowledge of key concepts in cost accounting, including cost objects, direct and indirect costs, cost pools, cost tracing, cost assignment, and cost allocation. It defines terms like cost pools, cost tracing, cost assignment, and cost allocation. Questions cover calculating overhead rates, assigning costs to cost objects, and identifying which costs are direct vs indirect.

Uploaded by

Anna Mae Sanchez
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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JOB ORDER

1) Job costing information is used:


A) to develop strategies
B) to make pricing decisions
C) for external financial reporting
D) All of these answers are correct.

2) Product costing information is used by managers:


A) to make decisions and strategy
B) for planning and control
C) for cost management
D) All of these answers are correct.

3) A ________ is a grouping of individual indirect cost items.


A) cost allocation base
B) cost assignment
C) cost pool
D) job-costing system

4) Each indirect-cost pool of a manufacturing firm:


A) utilizes a separate cost-allocation rate
B) is a subset of total indirect costs
C) relates to one cost object
D) All of these answers are correct.

5) Direct costs
A) are anything for which a measurement of costs is desired.
B) are costs related to a particular cost object that can be traced to that cost object in an economically
feasible (cost-effective) way
C) focus specifically on the costing needs of the CFO
D) provide all information for management decision needs

6) In a costing system:
A) cost tracing allocates indirect costs
B) cost allocation assigns direct costs
C) a cost-allocation base can be either financial or nonfinancial
D) a cost object should be a product and not a department or a geographic territory

7) Assigning direct costs to a cost object is called:


A) cost allocation
B) cost assignment
C) cost pooling
D) cost tracing

8) ________ is the process of distributing indirect costs to products.


A) Cost allocation
B) Job cost recording
C) Cost pooling
D) Cost tracing

9) A ________ links an indirect cost to a cost object.


A) cost-allocation base
B) cost pool
C) cost assignment
D) cost tracing

10) Which of the following includes both traced direct costs and allocated indirect costs?
A) cost tracing
B) cost pools
C) cost assignments
D) cost allocations

11) The cost allocation base


A) is a grouping of individual indirect cost items.
B) are costs related to a particular cost object that cannot be traced to that cost object in an
economically feasible way.
C) is anything for which a measurement of costs is desired.
D) is a systematic way to link an indirect cost or group of indirect costs to cost objects.

True or False.
12) Direct costs are allocated to the cost object using a cost-allocation method. - FALSE

13) A cost object is anything for which a measurement of costs is desired. - TRUE

14) Direct costs of a cost object are costs related to a particular cost object that can be allocated to that
cost object in an economically feasible (cost-effective) way. - FALSE

15) The cost-allocation base is a systematic way to link an indirect cost or group of indirect costs to cost
objects. - TRUE

Problem Solving.
16) Stewart Company's actual manufacturing overhead is $2,800,000. Overhead is allocated on the
basis of direct labor hours. The direct labor hours were 50,000 for the period. What is the
manufacturing overhead rate?
A) $47.00
B) $56.00
C) $75.00
D) None of the above are correct.

17) O'Reilly Enterprises manufactures digital video equipment. For each unit $2,950 of direct material is
used and there is $2,000 of direct manufacturing labor at $20 per hour. Manufacturing overhead is
applied at $35 per direct manufacturing labor hour. Calculate the cost of each unit.
A) $4,950
B) $9,950
C) $8,450
D) $11,950

18) An example of a numerator reason for calculating annual indirect-cost rates includes:
A) fewer production workdays in a month
B) payment of estimated taxes four times a year
C) higher snow-removal costs during the winter
D) Both B and C are correct.

19) In a job-costing system, a manufacturing firm typically uses an indirect-cost rate to estimate the
________ allocated to a job.
A) direct materials
B) direct labor
C) manufacturing overhead costs
D) total costs

20) A job-cost sheet details the:


A) direct materials purchased and paid
B) direct labor costs incurred
C) indirect labor costs incurred
D) actual indirect overhead costs incurred

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