Student name:
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) A cost driver is a factor, such as machine-hours, beds occupied, computer time, or
flight- hours, that causes direct costs.
⊚ true
⊚ false
2) Job-order costing systems often use allocation bases that do not reflect how jobs
actually use overhead resources.
⊚ true
⊚ false
3) An employee time ticket is an hour-by-hour summary of the employee’s
activities throughout the day.
⊚ true
⊚ false
4) The formula for computing the predetermined overhead rate is:Predetermined overhead
rate = Estimated total amount of the allocation base÷ Estimated total manufacturing overhead
cost
⊚ true
⊚ false
Version 1 1
,5) Generally speaking, when going through the process of computing a predetermined
overhead rate, the estimated total manufacturing overhead cost is determined before
estimating the amount of the allocation base.
⊚ true
⊚ false
6) If a job is not completed at year end, then no manufacturing overhead cost would
be applied to that job when a predetermined overhead rate is used.
⊚ true
⊚ false
7) Actual overhead costs are not assigned to jobs in a job costing system.
⊚ true
⊚ false
8) The amount of overhead applied to a particular job equals the actual amount of
overhead caused by the job.
⊚ true
⊚ false
Version 1 2
,9) If the overhead rate is computed annually based on the actual costs and activity for the
year, the manufacturing overhead assigned to any particular job can be computed as soon as
the job is completed.
⊚ true
⊚ false
10) Job cost sheets contain entries for actual direct material, actual direct labor, and
actual manufacturing overhead cost incurred in completing a job.
⊚ true
⊚ false
11) In a job-order cost system, indirect labor is assigned to a job using information from
the employee time ticket.
⊚ true
⊚ false
12) If the allocation base in the predetermined overhead rate does not drive overhead costs, it
will nevertheless provide reasonably accurate unit product costs because of the averaging
process.
⊚ true
⊚ false
Version 1 3
, 13) A job cost sheet is used to record how much a customer pays for the job once the job
is completed.
⊚ true
⊚ false
14) In a job-order costing system, costs are traced to individual units of product. The
sum total of such traced costs is called the unit product cost.
⊚ true
⊚ false
15) The fact that one department may be labor intensive while another department is
machine intensive explains in part why multiple predetermined overhead rates are often used in
larger companies.
⊚ true
⊚ false
16) A company will improve job cost accuracy by using multiple overhead rates even if
it cannot identify more than one overhead cost driver.
⊚ true
⊚ false
Version 1 4
TRUE/FALSE - Write 'T' if the statement is true and 'F' if the statement is false.
1) A cost driver is a factor, such as machine-hours, beds occupied, computer time, or
flight- hours, that causes direct costs.
⊚ true
⊚ false
2) Job-order costing systems often use allocation bases that do not reflect how jobs
actually use overhead resources.
⊚ true
⊚ false
3) An employee time ticket is an hour-by-hour summary of the employee’s
activities throughout the day.
⊚ true
⊚ false
4) The formula for computing the predetermined overhead rate is:Predetermined overhead
rate = Estimated total amount of the allocation base÷ Estimated total manufacturing overhead
cost
⊚ true
⊚ false
Version 1 1
,5) Generally speaking, when going through the process of computing a predetermined
overhead rate, the estimated total manufacturing overhead cost is determined before
estimating the amount of the allocation base.
⊚ true
⊚ false
6) If a job is not completed at year end, then no manufacturing overhead cost would
be applied to that job when a predetermined overhead rate is used.
⊚ true
⊚ false
7) Actual overhead costs are not assigned to jobs in a job costing system.
⊚ true
⊚ false
8) The amount of overhead applied to a particular job equals the actual amount of
overhead caused by the job.
⊚ true
⊚ false
Version 1 2
,9) If the overhead rate is computed annually based on the actual costs and activity for the
year, the manufacturing overhead assigned to any particular job can be computed as soon as
the job is completed.
⊚ true
⊚ false
10) Job cost sheets contain entries for actual direct material, actual direct labor, and
actual manufacturing overhead cost incurred in completing a job.
⊚ true
⊚ false
11) In a job-order cost system, indirect labor is assigned to a job using information from
the employee time ticket.
⊚ true
⊚ false
12) If the allocation base in the predetermined overhead rate does not drive overhead costs, it
will nevertheless provide reasonably accurate unit product costs because of the averaging
process.
⊚ true
⊚ false
Version 1 3
, 13) A job cost sheet is used to record how much a customer pays for the job once the job
is completed.
⊚ true
⊚ false
14) In a job-order costing system, costs are traced to individual units of product. The
sum total of such traced costs is called the unit product cost.
⊚ true
⊚ false
15) The fact that one department may be labor intensive while another department is
machine intensive explains in part why multiple predetermined overhead rates are often used in
larger companies.
⊚ true
⊚ false
16) A company will improve job cost accuracy by using multiple overhead rates even if
it cannot identify more than one overhead cost driver.
⊚ true
⊚ false
Version 1 4
