Question

Choose the best answer. Please write the correct letters in the blank provided.

____________1. Raw materials are assigned to a job when: (a) the job is sold. (b) the materials are purchased. (c) the materials are received from the vendor. (d) the materials are issued by the materials storeroom

____________2. The source of information for assigning costs to job cost sheets are: (a) invoices, time tickets, and the predetermined overhead rate. (b) materials requisition slips, time tickets, and the actual overhead costs. (c) materials requisition slips, payroll register, and the predetermined overhead rate. (d) materials requisition slips, time tickets, and the predetermined overhead rate.

____________3. In recording the issuance of raw materials in a job order cost system, it would be incorrect to: (a) debit Work in Process Inventory. (b) debit Finished Goods Inventory. (c) debit Manufacturing Overhead. (d) credit Raw Materials Inventory.

____________4. The entry when direct factory labor is assigned to jobs is a debit to: (a) Work in Process Inventory and a credit to Factory Labor. (b) Manufacturing Overhead and a credit to Factory Labor. (c) Factory Labor and a credit to Manufacturing Overhead. (d) Factory Labor and a credit to Work in Process Inventory.

____________5. The formula for computing the predetermined manufacturing overhead rate is estimated annual overhead costs divided by an expected annual operating activity, expressed as: (a) direct labor cost. (c) machine hours. (b) direct labor hours. (d) Any of the above.

­­____________6. Cost accounting involves the measuring, recording, and reporting of: (a) product costs. (b) future costs. (c) manufacturing processes. (d) managerial accounting decisions.

____________7. A company is more likely to use a job order cost system if: (a) it manufactures a large volume of similar products. (b) its production is continuous. (c) it manufactures products with unique characteristics. (d) it uses a periodic inventory system.

____________8. In accumulating raw materials costs, companies debit the cost of raw materials purchased in a perpetual system to: (a) Raw Materials Purchases. (b) Raw Materials Inventory. (c) Purchases. (d) Work in Process.

____________9. When incurred, factory labor costs are debited to: (a) Work in Process. (b) Factory Wages Expense. (c) Factory Labor. (d) Factory Wages Payable.

____________10. The flow of costs in job order costing: (a) begins with work in process inventory and ends with finished goods inventory. (b) begins as soon as a sale occurs. (c) parallels the physical flow of materials as they are converted into finished goods. (d) is necessary to prepare the cost of goods manufactured schedule.

Answer 1

Answer -

Correct letter	No.	Explanation
(d)	1.	Raw materials are assigned to a job when the materials are issued by the materials storeroom.
(d)	2.	The source of information for assigning costs to job cost sheets are materials requisition slips, time tickets, and the predetermined overhead rate.
(b)	3.	In recording the issuance of raw materials in a job order cost system, it would be incorrect to debit Finished Goods Inventory.
(a)	4.	The entry when direct factory labor is assigned to jobs is a debit to work in Process Inventory and a credit to Factory Labor.
(d)	5.	The formula for computing the predetermined manufacturing overhead rate is estimated annual overhead costs divided by an expected annual operating activity, expressed as any of the above.
(a)	6.	Cost accounting involves the measuring, recording, and reporting of product costs.
(c)	7.	A company is more likely to use a job order cost system if it manufactures products with unique characteristics.
(b)	8.	In accumulating raw materials costs, companies debit the cost of raw materials purchased in a perpetual system to raw materials inventory.
(c)	9.	When incurred, factory labor costs are debited to factory labor.
(c)	10.	The flow of costs in job order costing parallels the physical flow of materials as they are converted into finished goods.