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Chapter 02 – Job Order Costing and Analysis
2-1
Chapter 02
Job Order Costing and Analysis
True / False Questions
[Question]
1. A manufacturing company that uses a cost accounting system normally has only two inventory
accounts: Finished Goods Inventory and Goods in Process Inventory.
Answer: False
Blooms Taxonomy: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-C1
Topic: Cost Accounting System
[Question]
2. Cost accounting systems accumulate costs and then assign them to products or services.
Answer: True
Blooms Taxonomy: Understand
AACSB: Communication
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C1
Topic: Cost Accounting System
[Question]
3. There are two basic types of cost accounting systems: job order costing and periodic costing.
Answer: False
Blooms Taxonomy: Understand
AACSB: Communication
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C1
Topic: Job Order Costing
Topic: Process Costing
[Question]
4. A manufacturing firm that produces large numbers of standardized units would normally use a
job order cost accounting system.
Answer: False
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-C1
Chapter 02 – Job Order Costing and Analysis
2-2
Topic: Job Order Costing
[Question]
5. Job order manufacturing systems would be appropriate for companies that produce custom
homes, specialized equipment, and special computer systems.
Answer: True
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-C1
Topic: Job Order Costing
[Question]
6. Job order manufacturing systems would be appropriate for companies that produce compact
disks or disposable cameras.
Answer: False
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-C1
Topic: Job Order Costing
[Question]
7. A job order cost accounting system would be appropriate for a manufacturer of automobile
tires.
Answer: False
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-C1
Topic: Job Order Costing
[Question]
8. Job order manufacturing systems would be appropriate for companies that produce training
films for a specific customer.
Answer: True
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-C1
Topic: Job Order Costing
Chapter 02 – Job Order Costing and Analysis
2-3
[Question]
9. A company’s file of job cost sheets for finished but unsold jobs equals the balance in the
Finished Goods Inventory account.
Answer: True
Blooms Taxonomy: Understand
AACSB: Communication
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C2
Topic: Job Cost Sheets
[Question]
10. The raw materials section of a job cost sheet shows the materials costs assigned to a job, but
the direct labor section shows only the total hours of labor exerted by employees on the job.
Answer: False
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C2
Topic: Job Cost Sheets
[Question]
11. In a job order cost accounting system, the total balances of all of the job cost sheets for
unfinished jobs equal the balance in the Goods in Process Inventory account.
Answer: True
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C2
Topic: Job Cost Sheets
[Question]
12. A job cost sheet is useful for developing financial accounting numbers but does not contain
information that is useful for managing the manufacturing process.
Answer: False
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C2
Topic: Job Order Costing
Chapter 02 – Job Order Costing and Analysis
2-4
[Question]
13. Job cost sheets are used to track all of the costs assigned to a job, including direct materials,
direct labor, overhead, and all selling and administrative costs.
Answer: False
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-C2
Topic: Job Cost Sheets
[Question]
14. When a job is finished, its job cost sheet is completed and moved from the file of jobs in
process to the file of finished jobs that are yet to be delivered to customers.
Answer: True
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C2
Topic: Job Cost Sheets
[Question]
15. The file of job cost sheets for completed but undelivered jobs equals the balance in the Goods
in Process Inventory account.
Answer: False
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C2
Topic: Job Cost Sheets
[Question]
16. Job order costing is applicable to manufacturing firms only and not service firms.
Answer: False
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: 1 Easy
Learning Objective: 02-A1
Topic: Job Order Costing
[Question]
Chapter 02 – Job Order Costing and Analysis
2-5
17. Service firms, unlike manufacturing firms, should only use actual costs when determining a
selling price for their services.
Answer: False
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: 1 Easy
Learning Objective: 02-A1
Topic: Job Order Costing
[Question]
18. As direct materials are used on a job, their cost is debited to the Finished Goods Inventory
account.
Answer: False
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-P1
Topic: Debit
Topic: Credit
Topic: Direct Materials
Topic: Finished Goods Inventory
[Question]
19. When materials are used as indirect materials, their cost is debited to the Factory Overhead
account.
Answer: True
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-P1
Topic: Indirect Materials
Topic: Debit
Topic: Credit
[Question]
20. A materials requisition is a source document used by production managers to request
materials for manufacturing and also used to assign materials costs to specific jobs or to
overhead.
Answer: True
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-P1
Chapter 02 – Job Order Costing and Analysis
2-6
Topic: Materials Requisition
[Question]
21. A materials requisition is a source document used by materials managers of a manufacturing
company to order raw materials from suppliers; it serves the same purpose as a purchase order in
a merchandising company.
Answer: False
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-P1
Topic: Materials Requisition
[Question]
22. Materials requisitions and time tickets are cost accounting source documents.
Answer: True
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-P1
Learning Objective: 02-P2
Topic: Materials Requisition
Topic: Time Tickets
[Question]
23. A clock card is a source document that an employee uses to report how much time was spent
working on a job or on overhead and that is used to determine the amount of direct labor to
charge to the job or to determine the amount of indirect labor to charge to factory overhead.
Answer: False
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-P2
Topic: Clock Card
[Question]
24. A time ticket is a source document used by an employee to record the number of hours
worked on a particular job during the work day.
Answer: True
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Chapter 02 – Job Order Costing and Analysis
2-7
Learning Objective: 02-P2
Topic: Time Ticket
[Question]
25. A time ticket is a source document an employee uses to record the number of hours at work
and that is used each pay period to determine the total labor cost.
Answer: False
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-P2
Topic: Time Ticket
[Question]
26. A clock card is a source document used by an employee to record the total number of hours
worked during the pay period.
Answer: True
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-P2
Topic: Clock Card
[Question]
27. When time ticket information is entered into the accounting system, the journal entry is a
debit to Factory Payroll and a credit to Goods in Process Inventory.
Answer: False
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-P2
Topic: Debit
Topic: Credit
Topic: Time Ticket
[Question]
28. Factory overhead is often collected and summarized in a factory overhead ledger.
Answer: True
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-P3
Chapter 02 – Job Order Costing and Analysis
2-8
Topic: Factory Overhead Ledger
[Question]
29. The predetermined overhead allocation rate is used to apply overhead cost to products.
Answer: True
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: 1 Easy
Learning Objective: 02-P3
Topic: Predetermined Overhead Rate
[Question]
30. Predetermined overhead rates are necessary because cost accountants use periodic inventory
systems.
Answer: False
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: 2 Medium
Learning Objective: 02-P3
Topic: Predetermined Overhead Rate
[Question]
31. The predetermined overhead allocation rate based on direct labor cost is the ratio of
estimated overhead cost for the period to estimated direct labor cost for the period.
Answer: True
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-P3
Topic: Predetermined Overhead Rate
[Question]
32. The balance of the Factory Overhead account appears on the income statement.
Answer: False
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-P3
Topic: Factory Overhead
[Question]
Chapter 02 – Job Order Costing and Analysis
2-9
33. In a job order cost accounting system, indirect labor costs are debited to the Factory
Overhead account.
Answer: True
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-P3
Topic: Indirect Labor
[Question]
34. Since a predetermined overhead allocation rate is established before a period begins, this rate
is revised many times during the period to compensate for inaccurate estimates previously made.
Answer: False
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Measurement
Difficulty: 2 Medium
Learning Objective: 02-P3
Topic: Predetermined Overhead Rate
[Question]
35. Under a job order cost accounting system, individual jobs are always charged with actual
overhead costs when they are transferred to finished goods.
Answer: False
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-P3
Topic: Factory Overhead
Topic: Job Order Costing
[Question]
36. Overapplied overhead is the amount by which actual overhead cost exceeds the overhead
applied to products during the period.
Answer: False
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-P4
Topic: Overapplied Overhead
[Question]
Chapter 02 – Job Order Costing and Analysis
2-10
37. In a job order cost accounting system, any immaterial underapplied overhead at the end of
the period can be charged entirely to Cost of Goods Sold.
Answer: True
Blooms Taxonomy: Applied
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-P4
Topic: Underapplied Overhead
[Question]
38. If actual overhead incurred during a period exceeds applied overhead, the difference will be a
credit balance in the Factory Overhead account at the end of the period.
Answer: False
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-P4
Topic: Underapplied Overhead
Topic: Debit
Topic: Credit
[Question]
39. The Factory Overhead account will have a credit balance at the end of a period if overhead
applied during the period is greater than the overhead incurred.
Answer: True
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-P4
Topic: Overapplied Overhead
Topic: Debit
Topic: Credit
[Question]
40. Any material amount of under- or overapplied factory overhead must always be closed to
Cost of Goods Sold at the end of an accounting period.
Answer: False
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-P4
Topic: Overapplied Overhead
Topic: Underapplied Overhead
Chapter 02 – Job Order Costing and Analysis
2-11
[Question]
41. Underapplied overhead is the amount by which overhead applied to jobs using the
predetermined overhead allocation rate exceeds the overhead incurred during a period.
Answer: False
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-P4
Topic: Underapplied Overhead
[Question]
42. Overapplied overhead is the amount by which overhead applied to jobs using the
predetermined overhead allocation rate exceeds the overhead incurred during a period.
Answer: True
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-P4
Topic: Overapplied Overhead
[Question]
43. Overapplied or underapplied overhead should be removed from the Factory Overhead
account at the end of each accounting period.
Answer: True
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-P4
Topic: Overapplied Overhead
Topic: Underapplied Overhead
Multiple Choice Questions
[Question]
44. Cost accounting systems used by manufacturing companies are based on the:
A. Periodic inventory system.
B. Perpetual inventory system.
Chapter 02 – Job Order Costing and Analysis
2-12
C. Finished goods inventories.
D. Weighted average inventories.
E. LIFO inventory system
Answer: B
Blooms Taxonomy: Understand
AACSB: Communications
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C1
Topic: Cost Accounting System
[Question]
45. A system of accounting for manufacturing operations that produces timely information about
inventories and manufacturing costs per unit of product is a:
A. Finished goods accounting system.
B. General accounting system.
C. Manufacturing accounting system.
D. Cost accounting system.
E. Production accounting system.
Answer: D
Blooms Taxonomy: Remember
AACSB: Communication
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-C1
Topic: Cost Accounting System
[Question]
46. Job order costing systems normally use:
A. Periodic inventory systems.
B. Perpetual inventory systems.
C. Real inventory systems.
D. General inventory systems.
E. All of the above.
Answer: B
Blooms Taxonomy: Understand
AACSB: Communication
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C1
Topic: Job Order Costing
[Question]
47. In comparison to a general accounting system for a manufacturing company, a cost
accounting system places an emphasis on:
A. Periodic inventory counts.
Chapter 02 – Job Order Costing and Analysis
2-13
B. Total costs.
C. Unit costs and cost control.
D. Products and average costs.
E. Large volume operations involving standardized products.
Answer: C
Blooms Taxonomy: Understand
AACSB: Communication
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C1
Topic: Cost Accounting System
[Question]
48. The production activities for a customized product represent a(n):
A. Operation.
B. Job.
C. Unit.
D. Pool.
E. Process.
Answer: B
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-C1
Topic: Job
[Question]
49. A job order cost accounting system would best fit the needs of a company that makes:
A. Shoes and apparel.
B. Paint.
C. Cement.
D. Custom machinery.
E. Pencils and erasers.
Answer: D
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-C1
Topic: Job Order Costing
[Question]
50. A type of manufacturing that produces customized products or services for each customer is
called:
A. Customer orientation manufacturing.
Chapter 02 – Job Order Costing and Analysis
2-14
B. Job order manufacturing.
C. Just-in-time manufacturing.
D. Job lot manufacturing.
E. Process manufacturing.
Answer: B
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-C1
Topic: Job Order Manufacturing
[Question]
51. Job order manufacturing is also known as:
A. Mass production manufacturing.
B. Process manufacturing.
C. Unit manufacturing.
D. Customized production.
E. Standard costing.
Answer: D
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-C1
Topic: Job Order Manufacturing
[Question]
52. Dell Builders manufactures each house to customer specifications. It most likely would use:
A. Capital process costing.
B. A periodic inventory system.
C. Unique costing.
D. Job order costing.
E. Activity-based costing.
Answer: D
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-C1
Topic: Job Order Costing
[Question]
53. A job order manufacturing system would be appropriate for a company that produces which
one of the following items?
A. A landscaping design for a new hospital.
Chapter 02 – Job Order Costing and Analysis
2-15
B. Seedlings for sale in a nursery.
C. Sacks of yard fertilizer.
D. Packets of flower seeds.
E. Small gardening tools, including rakes, shovels, and hoes.
Answer: A
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-C1
Topic: Job Order Costing
[Question]
54. Large aircraft manufacturers such as McDonnell Douglas normally use:
A. Job order costing.
B. Process costing.
C. Mixed costing.
D. Full costing.
E. Simple costing.
Answer: A
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-C1
Topic: Job Order Costing
[Question]
55. A document in a job order cost accounting system that is used to record the costs of
producing a job is a(n):
A. Job cost sheet.
B. Job lot.
C. Finished goods summary.
D. Process cost system.
E. Units-of-production sheet.
Answer: A
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-C2
Topic: Job Cost Sheets
[Question]
56. A job cost sheet shows information about each of the following items except:
A. The direct labor costs assigned to the job.
Chapter 02 – Job Order Costing and Analysis
2-16
B. The name of the customer.
C. The costs incurred by the marketing department in selling the job.
D. The overhead costs assigned to the job.
E. The direct materials costs assigned to the job.
Answer: C
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C2
Topic: Job Cost Sheets
[Question]
57. The job order cost sheets used by Garza Company revealed the following:
Job. No. Bal. May 1 May Production
Costs
124 $1,700 $—-
125 1,200 300
126 —- 900
Job No. 125 was completed during May and Jobs No. 124 and 125 were shipped to customers in
May. What was the company’s cost of goods sold for May and the goods in process inventory on
May 31?
A. $3,200; $900
B. $2,900; $1,200
C. $1,200; $2,900
D. $1,700; $1,200
E. $4,100; $ 0
Answer: A
Feedback:
Cost of Goods Sold = Job 124 [$1,700] and Job 125 [$1,200 + $300] = $3,200
Goods in Process = Job 126 $900
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-C2
Topic: Job Cost Sheets
[Question]
58. A job cost sheet includes:
A. Direct materials, direct labor, operating costs.
B. Direct materials, overhead, administrative costs.
C. Direct labor, overhead, selling costs.
Chapter 02 – Job Order Costing and Analysis
2-17
D. Direct material, direct labor, overhead.
E. Direct materials, direct labor, selling costs.
Answer: D
Blooms Taxonomy: Understand
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 2 Medium
Learning Objective: 02-C2
Topic: Job Cost Sheets
[Question]
59. A perpetual record of a raw materials item that records data on the quantity and cost of units
purchased, units issued for use in production, and units that remain in the raw materials
inventory is called a(n):
A. Materials ledger card.
B. Materials requisition.
C. Purchase order.
D. Materials voucher.
E. Purchase ledger.
Answer: A
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-P1
Topic: Materials Ledger Card
[Question]
60. A source document that production managers use to request materials for manufacturing and
that is used to assign materials costs to specific jobs or to overhead is a:
A. Job cost sheet.
B. Production order.
C. Materials requisition.
D. Materials purchase order.
E. Receiving report.
Answer: C
Chapter 02 – Job Order Costing and Analysis
2-18
Blooms Taxonomy: Remember
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 1 Easy
Learning Objective: 02-P1
Topic: Materials Requisition
[Question]
61. The Goods in Process Inventory account for the AB Corp. follows:
Goods in Process Inventory
Beginning balance 4,500
Direct materials 47,100
Direct labor 29,600 ? Finished goods
Applied overhead 15,800
Ending balance 8,900
The cost of units transferred to finished goods is:
A. $97,000
B. $105,900
C. $88,100
D. $95,200
E. $92,500
Answer: C
Feedback:
Beg Bal + Direct Materials + Direct Labor + Applied Overhead – Ending Bal = COG
Manufactured
$4,500 + $47,100 + $29,600 + $15,800 – $8,900 = $88,100
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-P1
Learning Objective: 02-P2
Learning Objective: 02-P3
Topic: Direct Materials
Topic: Direct Labor
Topic: Factory Overhead
Topic: Cost Of Goods Manufactured
Topic: Debit
Topic: Credit
[Question]
62. The Goods in Process Inventory Account for XYZ Inc. follows:
Goods in Process Inventory
Beginning balance $4,750
Direct materials 17,925 ? COG Manufactured
Chapter 02 – Job Order Costing and Analysis
2-19
Direct labor 24,750
Applied overhead ?
Ending balance $10,400
If the overhead is applied at the rate of 80% of direct labor cost, what is the amount of Cost of
Goods Manufactured?
A. $19,800
B. $56,825
C. $61,775
D. $51,365
E. $37,025
Answer: B
Feedback:
Applied Overhead = $24,750 * .8 = $19,800
Beg Bal + Direct Materials + Direct Labor + Applied Overhead – Ending Bal = COG
Manufactured
$4,750 + $17,925 + $24,750 + $19,800 – $10,400 = $56,825
Blooms Taxonomy: Apply
AACSB: Analytic
AICPA BB: Industry
AICPA FN: Reporting
Difficulty: 3 Hard
Learning Objective: 02-P1
Learning Objective: 02-P2
Learning Objective: 02-P3
Topic: Direct Materials
Topic: Direct Labor
Topic: Factory Overhead
Topic: Cost Of Goods Manufactured
Topic: Debit
Topic: Credit
