Job-Order Costing

Question 1

In ______ costing, the manufacturing costs, both fixed and variable, are assigned to units of products wherein units are said to FULLY ABSORB manufacturing costs.

Answer 1

Absorption

Question 2

Under absorption costing, product costs include all _________ costs.

Answer 2

manufacturing

Question 3

This is used in situations where many DIFFERENT products are produced each period.

Answer 3

Job-Order Costing

Question 4

To arrive at an AVERAGE COST PER UNIT in job-order costing, the costs of the job are _______ by the number of units in the job.

Answer 4

divided

Question 5

Is job-order costing used in manufacturing or service businesses or both?

Answer 5

Both

Question 6

A ________ ___ ________ is a document that lists the type and quantity of each type of direct material needed to complete a unit of product.

Answer 6

Bill of Materials

Question 7

This is issued when an agreement has been reached with the consumer concerning the quantities, prices, and shipment date for the order.

Answer 7

Production Order

Question 8

A _________ __________ ________ is a document that specifies the type and quantity of materials to be drawn from the storeroom and identifies the job that will be charged for the cost of materials.

Answer 8

Materials Requisition Form

Question 9

This form is used to control the flow of materials into production and also for making entries in the accounting record.

Answer 9

Materials Requisition Form

Question 10

A ______ ______ ______ records the material, labor, and manufacturing overhead costs charged to that job.

Answer 10

Job Cost Sheet

Question 11

This is an hour by hour summary of the employee’s activities throughout the day.

Answer 11

Time Ticket

Question 12

Where does manufacturing overhead need to be recorded?
a. materials requisition form
b. job cost sheet
c. bill of materials

Answer 12

b. Job Cost Sheet

Question 13

Because of the fixed costs in manufacturing overhead, total manufacturing overhead costs tend to ___________ (remain constant/relatively change) from one period to the next, despite the number of units produced fluctuating widely.

Answer 13

remain constant

Question 14

A________ is used to assign overhead costs to products.

Answer 14

Allocation

Question 15

A/an _______ ________ is a measure such as direct labor hours or machine hours that is used to assign overhead costs to products and services.

Answer 15

Allocation Base

Question 16

This is computed by dividing the:

total estimated manufacturing overhead cost for the period and

total estimated amount of the allocation base

Answer 16

Pre-determined overhead rate

Question 17

Steps in Finding the POHR:

1. Total estimated amount of ___________
2. Total _________ MOH cost FOR THE COMING PERIOD
   and Total ___________ MOH cost per unit of the allocation base
3. Use the formula: _________
4. Compute the POHR

Answer 17

1. allocation base
2. variable, fixed
3. Y = a + bX

Question 18

The process of assigning overhead costs to jobs is called __________ application.

Answer 18

overhead application

Question 19

a factor such as machine-hours, beds occupied, computer time, or flight-hours, that causes overhead costs

Answer 19

cost-driver

Question 20

Include any materials that go into the Work in Process inventory account as direct materials

Answer 20

Raw Materials

Question 21

consists of units of products that are only partially complete and will require further work before they are ready for sale to the customer

Answer 21

Work in Process

Question 22

Direct Labor Costs are added directly to ___________.

Answer 22

Work in Process

Question 23

Consists of completed units of products not yet sold to the customers

Answer 23

Finished Goods

Question 24

The amount transferred from Work in Process to Finished Goods is referred to as the _____________.

Answer 24

Cost of Goods Manufactured

Question 25

Period costs flow through inventories on the balance sheet and are not deemed as expenses. TRUE OR FALSE

Answer 25

FALSE; not recorded in inventories but recorded as expense

Question 26

True or False: Actual overhead costs are NOT charged to jobs

Answer 26

True

Question 27

True or False: Actual overhead costs appear on the job cost sheet and Work in Process account.

Answer 27

False, they do not appear on the job cost sheet and work in process account.

Question 28

True or False: Only the applied overhead cost, based on the predetermined overhead rate, appears on the job cost sheet and in the work in process account

Answer 28

True

Question 29

True or False: Actual MOH are recorded as CREDITS to the MOH account

while AMOUNT of MOH applied to all jobs using the POHR is on the CREDIT Side of the MOH account

Answer 29

False: Actual manufacturing overhead costs are recorded as DEBIT to the MOH account

Question 30

True or False: Non-manufacturing costs should NOT go into MOH.

Answer 30

True

Question 31

The schedule of cost of goods ___________- contains three elements of product costs: direct materials, direct labor, and manufacturing overhead and summarizes portions of costs that remain in ending Work in Process Inventory and are transferred into finished goods

Answer 31

Manufactured

Question 32

The schedule of cost of goods ___________- contains three elements of product costs: direct materials, direct labor, and manufacturing overhead and summarizes portions of costs that remain in ending Finished Goods Inventory.

Answer 32

Sold

Question 33

The difference between the overhead cost applied to Work in Process and then the Actual overhead costs of a period is called either _______ or _________ overhead

Answer 33

underapplied or overapplied

Question 34

If there is a DEBIT balance on the MOH account of X dollars, then the overhead is (underapplied/overhead).

Answer 34

Underapplied

Question 35

If there is a CREDIT balance on the MOH account of X dollars, then the overhead is (underapplied/overhead).

Answer 35

Overhead