Chapter 7

Study online at quizlet.com/_4j1a1a

1. actual If a company multiplies its actual overhead 7. factory overhead In a traditional job order costing
costing. rate by the actual activity level of its control. system, the issue of indirect
allocation base, it is using: materials to a production
standard costing. department increases: (CPA
normal costing. adapted)
actual costing. work-in-Process control.
budget costing. factory overhead applied.
stores control.
2. the balances The balance in the Work-in-Process account
factory overhead control.
on the job equals:
cost sheets the balances on the job cost sheets of 8. greater than the Underapplied overhead occurs
of uncompleted jobs. balance in the when the balance in the
uncompleted the balance in the Cost of Goods Sold Applied Manufacturing Overhead Control
jobs. account. Manufacturing account is:
the balance in the Finished Goods inventory Overhead account. equal to the balance in the Applied
account. Manufacturing Overhead account.
the balance in the Manufacturing Overhead less than the balance in the Finished
account. Goods Inventory account.
greater than the balance in the
3. completed In a job costing system, the dollar amount in
Applied Manufacturing Overhead
during the the journal entry that transfers the costs of
account.
period. jobs from Work-in-Process Inventory to
less than the balance in the Applied
Finished Goods Inventory is the sum of the
Manufacturing Overhead account.
costs charged to all jobs:
in process during the period. 9. Identical units are Which of the following is not a
started in process during the period. produced on an characteristic of job costing?
completed during the period. ongoing basis. Job cost data are used for setting
sold during the period. prices and bids.
Each job is distinguishable from
4. Cost of What are the transfers-out from the Finished
other jobs.
Goods Sold. Goods Inventory called?
It is possible to compare actual
Cost of Goods Completed.
costs with estimated costs.
Cost of Goods Manufactured.
Identical units are produced on an
Cost of Goods Available.
ongoing basis.
Cost of Goods Sold.
10. Manufacturing Which of the following accounts is
5. credit, actual Which terms will make the following
Overhead Control. used to accumulate the actual
statement true? When manufacturing
manufacturing overhead costs
overhead is overapplied, the Manufacturing
incurred during a period?
Overhead account has a __________ balance and
Cost of Goods Sold.
applied manufacturing overhead is greater
Manufacturing Overhead Control.
than __________ manufacturing overhead.
Work-in-Process Inventory.
debit, actual
Applied Manufacturing Overhead.
debit, estimated
credit, actual 11. Materials requisition. Which of the following documents is
credit, estimated used as the basis for posting to the
direct materials section of the job
6. direct It is possible that the total cost of a job
cost sheet?
material started in April and completed in May will not
Materials requisition.
purchased in include:
Purchase requisition.
May. applied overhead in April.
Purchase order.
direct labor added in May.
Receiving report.
direct material purchased in May.
direct material added in April.
12. Normal costing. Which of the following approaches allocates overhead by multiplying a predetermined overhead rate × actual
activity?
Actual costing.
Normal costing.
Standard costing.
Regression costing.
13. normal costing. If a company multiplies its predetermined overhead rate by the actual activity level of its allocation base, it is
using:
normal costing.
actual costing.
budget costing.
standard costing.
14. Option D The journal entry to record the completion of a job in a job costing system is:

A. Finished Goods Inventory xxx

Materials Inventory xxx

B. Work-In-Process Inventory xxx

Applied Manufacturing Overhead xxx

C. Manufacturing Overhead Control xxx

Finished Goods Inventory xxx

D. Finished Goods Inventory xxx

Work-In-Process Inventory xxx

Option A
Option B
Option C
Option D
15. Work-in- Which of the following accounts is debited when direct labor is recorded?
Process. Manufacturing overhead.
Salaries and wages expense.
Work-in-Process.
Salaries and wages payable.