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Chapter 2 – Job Order Costing
1. True / False
Cost accounting systems measure, record, and report product costs.
a. True
b. False
ANSWER: True
DIFFICULTY: Bloom’s: Remembering
Easy
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 – Managerial Accounting Features/Costs
ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
2. A manufacturer may employ a job order cost system for some of its products and a process cost system for others.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
3. A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that
passes through the factory.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
Chapter 2 – Job Order Costing
4. A process cost accounting system provides for a separate record of the cost of each particular quantity of product that
passes through the factory.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.ACBSP.APC.35 – Process Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
5. A process cost accounting system provides product costs for each of the departments or processes within the factory.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.ACBSP.APC.35 – Process Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
6. A process cost accounting system is best used by manufacturers of like units of product that are not distinguishable
from each other during a continuous production process.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.ACBSP.APC.35 – Process Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
Chapter 2 – Job Order Costing
7. The process cost system is appropriate where few products are manufactured and each product is made to customers’
specifications.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.ACBSP.APC.35 – Process Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
8. A job order cost system would be appropriate for a crude oil refining business.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
9. Perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work in process, and
finished goods in job order costing systems.
a. True
b. False
ANSWER: True
DIFFICULTY: Bloom’s: Remembering
Easy
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
10. When the goods are sold, their costs are transferred from Work in Process to Finished Goods.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
Chapter 2 – Job Order Costing
11. The materials requisition serves as the source document for debiting the accounts in the materials ledger.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
12. Materials are transferred from the storeroom to the factory in response to materials requisitions.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
13. The document that serves as the basis for recording direct labor on a job cost sheet is the clock card.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
14. The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
Chapter 2 – Job Order Costing
15. Depreciation expense on factory equipment is part of factory overhead cost.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
16. Factory overhead is applied to production using a predetermined overhead rate.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
17. If factory overhead applied exceeds the actual costs, the factory overhead account will have a credit balance.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
18. If factory overhead applied exceeds the actual costs, overhead is said to be underapplied.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
Chapter 2 – Job Order Costing
19. If the underapplied factory overhead amount is immaterial, it is transferred to Cost of Goods Sold at the end of the
fiscal year.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
20. Each account in the work in process subsidiary ledger in a job order costing system is called a job cost sheet.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
21. In the job order costing system, the finished goods account is the controlling account for the factory overhead ledger.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
22. The inventory accounts generally maintained by a manufacturing firm are only finished goods and materials.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
Chapter 2 – Job Order Costing
23. Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
24. Activity-based costing is a method of accumulating and allocating costs by department.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 – Managerial Accounting Features/Costs
ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
25. Interim financial statements for a manufacturing business would report overapplied factory overhead as a deferred
item on the balance sheet.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
26. The debit to factory overhead for the cost of indirect materials is obtained from the summary of the materials
requisitions.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
Chapter 2 – Job Order Costing
27. In a factory with several processing departments, a single factory overhead rate may not provide accurate product
costs and effective cost control.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
28. Nonmanufacturing costs are generally classified into two categories: selling and administrative.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
29. The current year’s advertising costs are normally considered period costs.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 – Managerial Accounting Features/Costs
ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
30. Direct labor cost is an example of a period cost.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 – Managerial Accounting Features/Costs
ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
Chapter 2 – Job Order Costing
31. A manufacturing business reports just two types of inventory on its balance sheet: work in process inventory and
finished goods inventory.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
32. On the balance sheet for a manufacturing business, the cost of direct materials, direct labor, and factory overhead,
which have entered into the manufacturing process but are associated with products that have not been finished, are
reported as direct materials inventory.
a. True
b. False
ANSWER: False
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
33. As product costs are incurred in the manufacturing process, they are accounted for as assets and reported on the
balance sheet as inventory.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
Chapter 2 – Job Order Costing
34. A receiving report is prepared when purchased materials are first received by the manufacturing department.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 – Managerial Accounting Features/Costs
ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
35. Period costs are costs that are incurred for the production requirements of a certain period.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 – Managerial Accounting Features/Costs
ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
36. Job order cost systems can be used to compare unit costs of similar jobs to determine if costs are staying within
expected ranges.
a. True
b. False
ANSWER: True
DIFFICULTY: Bloom’s: Remembering
Moderate
LEARNING OBJECTIVES: MANG.WARD.18.02-03 – 02-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
Chapter 2 – Job Order Costing
37. Job cost sheets can provide information to managers on unit cost trends, the cost impact of continuous improvement in
the manufacturing process, the cost impact of materials changes, and the cost impact of direct materials price or direct
labor rate changes over time.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-03 – 02-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
38. Job order cost accounting systems may be used to evaluate a company’s efficiency.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-03 – 02-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
39. Information about costs developed through a job order cost system cannot be used to evaluate an organization’s cost
performance.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-03 – 02-03
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
40. Job order cost accounting systems may be used for planning and controlling a service business.
a. True
b. False
ANSWER: True
DIFFICULTY: Bloom’s: Remembering
Easy
LEARNING OBJECTIVES: MANG.WARD.18.02-04 – 02-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
41. The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-04 – 02-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
42. The job order costing system is not used by service organizations.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-04 – 02-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
43. A law firm would use a job order cost system to accumulate all of the costs associated with a particular client
engagement, such as lawyer time, copying charges, filing fees, and overhead.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-04 – 02-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
44. Job order cost accounting systems can be used only for companies that manufacture a product.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-04 – 02-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
45. The direct labor and overhead costs of providing services to clients are accumulated in a work in process account.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-04 – 02-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
46. In a job order cost accounting system for a service business, materials costs are normally included as part of overhead.
a. True
b. False
ANSWER: True
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-04 – 02-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
47. A service organization will not use the job order costing method because it has no direct materials.
a. True
b. False
ANSWER: False
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-04 – 02-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
48. Using the job order cost system, service organizations are able to bill customers on a weekly or monthly basis, even
when the job has not been completed.
a. True
b. False
ANSWER: True
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-04 – 02-04
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
49. Which of the following are the two main types of cost accounting systems for manufacturing operations?
a. process cost and general accounting systems
b. job order cost and process cost systems
c. job order and general accounting systems
d. process cost and replacement cost systems
ANSWER: b
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 – Managerial Accounting Features/Costs
ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
50. Which of the following would most likely use a job order costing system?
a. a paper mill
b. a swimming pool installer
c. a company that manufactures chlorine for swimming pools
d. an oil refinery
ANSWER: b
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
51. Which of the following would be most likely to use process costing?
a. a custom furniture manufacturer
b. an auto body repair shop
c. a law firm
d. a lawn fertilizer manufacturer
ANSWER: d
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.ACBSP.APC.35 – Process Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
52. Which of the following systems provides for a separate record of the cost of each particular quantity of product that
passes through the factory?
a. job order cost system
b. general cost system
c. replacement cost system
d. process cost system
ANSWER: a
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
53. For which of the following businesses would the job order cost system be appropriate?
a. canned soup processor
b. oil refinery
c. lumber mill
d. hospital
ANSWER: d
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
54. For which of the following businesses would the process cost system be appropriate?
a. a custom cabinet maker
b. a landscaper
c. a paper mill
d. a catering firm
ANSWER: c
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.ACBSP.APC.35 – Process Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
55. Which of the following is not a characteristic of a job order costing system?
a. It accumulates cost for each department within the factory.
b. It provides a separate record for the cost of each quantity of product that passes through the factory.
c. It is best suited for industries that manufacture custom goods.
d. It uses only one work in process account.
ANSWER: a
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
56. Which of the following products would be manufactured using a job order costing system?
a. a cell phone
b. a highlighter pen
c. a graduation invitation
d. a recliner
ANSWER: c
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
57. Job order costing and process costing are
a. pricing systems
b. cost accounting systems
c. cost flow systems
d. inventory tracking systems
ANSWER: b
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 – Managerial Accounting Features/Costs
ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
58. Which of the following is not a reason a service firm would use a job order costing system?
a. to help control costs
b. to determine client billing
c. to determine department costs within the firm
d. to determine profit
ANSWER: c
DIFFICULTY: Moderate
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-01 – 02-01
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
59. Which of the following costs are not included in finished goods inventory?
a. direct labor
b. factory overhead
c. chief financial officer’s salary
d. direct materials
ANSWER: c
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.27 – Managerial Accounting Features/Costs
ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
60. Which of the following is the correct flow of manufacturing costs?
a. raw materials, work in process, finished goods, cost of goods sold
b. raw materials, finished goods, cost of goods sold, work in process
c. work in process, finished goods, raw materials, cost of goods sold
d. cost of goods sold, raw materials, work in process, finished goods
ANSWER: a
DIFFICULTY: Easy
Bloom’s: Remembering
LEARNING OBJECTIVES: MANG.WARD.18.02-02 – 02-02
ACCREDITING STANDARDS: ACCT.ACBSP.APC.34 – Job Order Costing
ACCT.IMA.07 – Cost Management
BUSPROG: Analytic
