Test Bank for Introduction to Managerial Accounting 6th Edition Brewer, Garrison, Noreen

Test Bank for Introduction to Managerial Accounting 6th Edition Brewer, Garrison, Noreen Chapter 02 Job-Order Costing True / False Questions 1. The use of predetermined overhead rates in a job-order cost system makes it possible to estimate the total cost of a given job as soon as production is completed. True False 2. A job cost sheet is used to accumulate costs charged to a job. True False 3. The following journal entry would be made to apply overhead cost to jobs in a job-order costing system: True False 4. Under a job-order cost system the Work in Process account is debited with the cost of materials purchased. True False 5. The process of assigning overhead cost to jobs is known as overhead application. True False 6. The cost of a completed job in a job-order costing system typically consists of the actual direct materials cost of the job, the actual direct labor cost of the job, and the actual manufacturing overhead cost of the job. True False 7. A debit balance in the Manufacturing Overhead account at the end of the year means that manufacturing overhead is overapplied. True False 8. Period costs are expensed as incurred, rather than going into the Work in Process account. True False 9. Advertising costs should be charged to the Manufacturing Overhead account. True False 10 When a job has been completed, the goods are transferred from the . production department to the finished goods warehouse and the journal entry would include a credit to Work in Process. True False 11 Underapplied or overapplied manufacturing overhead represents the . difference between actual overhead costs and applied overhead costs. True False 12 Top management salaries should not go into the Manufacturing Overhead . account. True False 13 If manufacturing overhead applied exceeds the actual manufacturing . overhead costs of the period, then manufacturing overhead is overapplied. True False Multiple Choice Questions 14 In computing its predetermined overhead rate, Marple Company . inadvertently left its indirect labor costs out of the computation. This oversight will cause: A. Manufacturing Overhead to be overapplied. B. the Cost of Goods Manufactured to be understated. C. the debits to the Manufacturing Overhead account to be understated. D. the ending balance in Work in Process to be overstated. 15 Which of the following is the correct formula to compute the . predetermined overhead rate? A. Estimated total units in the allocation base divided by estimated total manufacturing overhead costs. B. Estimated total manufacturing overhead costs divided by estimated total units in the allocation base. C. Actual total manufacturing overhead costs divided by estimated total units in the allocation base. D. Estimated total manufacturing overhead costs divided by actual total units in the allocation base. 16 Which of the following would probably be the least appropriate allocation . base for allocating overhead in a highly automated manufacturer of specialty valves? A. machine- hours B. power consumption C. direct labor- hours D. machine setups 17 What document is used to determine the actual amount of direct labor to . record on a job cost sheet? A. time ticket B. payroll register C. production order D. wages payable account 18 A proper journal entry to close overapplied manufacturing overhead to . Cost of Goods Sold would be: A. Option A B. Option B C. Option C D. Option D 19 In a job-order costing system, direct labor cost is ordinarily debited to: . A. Manufacturing Overhead. B. Cost of Goods Sold. C. Finished Goods. D. Work in Process. 20 In a job-order costing system, the use of direct materials that have been . previously purchased is recorded as a debit to: A. Raw Materials inventory. B. Work in Process inventory. C. Finished Goods inventory. D. Manufacturing Overhead. 21 The journal entry to record the incurrence of indirect labor costs is: . A. Option A B. Option B C. Option C D. Option D 22 Which of the following accounts is debited when direct labor is recorded? . A. Work in process B. Salaries and wages expense C. Salaries and wages payable D. Manufacturing overhead 23 The balance in the Work in Process account equals: . A. the balance in the Finished Goods inventory account. B. the balance in the Cost of Goods Sold account. C. the balances on the job cost sheets of uncompleted jobs. D. the balance in the Manufacturing Overhead account. 24 In a job-order costing system, indirect materials that have been previously . purchased and that are used in production are recorded as a debit to: A. Work in Process inventory. B. Manufacturing Overhead. C. Finished Goods inventory. D. Raw Materials inventory. 25 Martinez Aerospace Company uses a job-order costing system. The direct . materials for Job # were purchased in July and put into production in August. The job was not completed by the end of August. At the end of August, in what account would the direct material cost assigned to Job # be located? A. raw materials inventory B. work in process inventory C. finished goods inventory D. cost of goods manufactured 26 Which terms will make the following statement true? When manufacturing . overhead is overapplied, the Manufacturing Overhead account has a balance and applied manufacturing overhead is greater than manufacturing overhead. A. debit, actual B. credit, actual C. debit, estimated D. credit, estimated