QUIZZER

1. The source document that records the amount of raw material that has been requested by production is the
a. job order cost sheet b. bill of lading c. inter-office memo d. material requisition

2. A material requisition form should show all of the following information except
a. job number b. quantity required c. unit cost d. purchase order number

3. Which of the following statements about job order cost sheets is true?
a. All job order cost sheets serve as the general ledger control account for Work in Process Inventory.
b. Job order cost sheets can serve as subsidiary ledger information for both Work in Process Inventory and
Finished Goods Inventory.
c. If material requisition forms are used, job order cost sheets do not need to be maintained.
d. Job order cost sheets show costs for direct material and direct labor, but not for manufacturing overhead
since it is an applied amount.

4. The primary accounting document in a job order costing system is a(n)

a. bill of materials b. job order cost sheet c. employee time sheet d. materials requisition

5. The cost sheets for incomplete jobs at the end of the period comprise the subsidiary ledger for
a. Finished Goods Inventory c. Work in Process Inventory
b. Raw Material Inventory d. Supplies Inventory

6. The __________ provides management with an historical summation of total costs for a given product.
a. job order cost sheet c. material requisition form
b. employee time sheet d. bill of lading

7. Manufacturing overhead application

a. rates are applied within a range of 35 to 60 percent of direct labor.
b. is performed at the beginning of the period.
c. rates fluctuate during the period with changes in production quantities.
d. rates are calculated by dividing budgeted overhead by a budgeted quantity of some cost driver.

8. The source document that records the amount of time an employee worked on a job and his/her pay rate is the
a. job order cost sheet b. employee time sheet c. interoffice memo d. labor requisition form

9. Overhead is applied to jobs in a job order costing system

a. at the end of a period.
b. as jobs are completed.
c. at the end of a period or as jobs are completed, whichever is earlier.
d. at the end of a period or as jobs are completed, whichever is later.

10. In a job order costing system,
cost sheets.
b. job order cost sheets for all
c. job order cost sheets for all
d. job order cost sheets for all
the subsidiary ledger for Finished Goods Inventory is comprised of a. all job order
uncompleted jobs.
completed jobs not yet sold.
ordered, uncompleted, and completed jobs.

11. Underapplied overhead resulting from unanticipated and immaterial price increases for overhead items should be
written off by
a. decreasing Cost of Goods Sold.
b. increasing Cost of Goods Sold.
c. decreasing Cost of Goods Sold, Work in Process Inventory, and Finished Goods Inventory.
d. increasing Cost of Goods Sold, Work in Process Inventory, and Finished Goods Inventory.

12. Which of the following organizations would be most likely to use a job order costing system?
a. the loan department of a bank c. a manufacturer of processed cheese food
b. the check clearing department of a bank d. a manufacturer of video cassette tapes

13. In a job order costing system,

a. standards cannot be used.
b. an average cost per unit within a job cannot be computed.
c. costs are accumulated by departments and averaged among all jobs.
d. overhead is typically assigned to jobs on the basis of some cost driver.
 14. When job order costing is used, the primary focal point of cost accumulation is the
a. department b. supervisor c. item d. job
15. What is the best cost accumulation procedure to use when many batches, each differing as to product specifications,
are produced?
a. job order b. process c. actual d. standard

16. The use of standard material or labor costs in job order costing
a. is similar to the use of predetermined overhead rates in a normal costing system.
b. will keep actual costs of jobs from fluctuating due to changes in component costs.
c. is appropriate for any company making a units to customer specification.
d. all of the above.

17. After the completion of production, standard and actual costs are compared to determine the ______ of the
production process
a. effectiveness b. complexity c. homogeneity d. efficiency

18. A service organization would be most likely to use a predetermined overhead rate based on
a. machine hours c. direct labor
b. standard material cost d. number of complaints

19. By knowing specific job costs, managers are better able to

a. estimate costs of future jobs. c. evaluate job performance.
b. establish realistic job selling prices. d. all of the above.

20. As product variety increases,

a. job order costing becomes less useful.
b. production lot sizes decrease.
c. standard costs in job order costing systems cannot be used.
d. all of the above.

21. A job order costing system is likely to provide better (1) Inventory valuations for financial statements.
(2) Control over inventory.
(3) Information about ability to accept additional production work.

(1) (2) (3)

a. yes no no
b. no yes yes
c. no no no
d. yes yes yes

22. In a production environment that manufactures goods to customer specifications, a job order costing system
a. can be used only if standard costs are used for materials and labor.
b. will provide reasonable product cost information only when all jobs utilize approximately the same quantities
of material and labor.
c. may be maintained using either actual or predetermined overhead rates.
d. emphasizes that large customers create the most costs even though they also provide the most revenues.

23. Which of the following could not be used in job order costing?
a. standards
b. an average cost per unit for all jobs
c. normal costing
d. overhead allocation based on the job’s direct labor hours

24. C Co. uses a job order costing system. During April 2015, the following costs appeared in the Work in Process
Inventory account:
Beginning balance P 24,000
Direct material used 70,000
Direct labor incurred 60,000
Applied overhead 48,000
Cost of goods manufactured 185,000

C Co. applies overhead on the basis of direct labor cost. There was only one job left in WIP Inventory at the end of April
which contained P5,600 of overhead. What amount of direct material was included in this job?
a. P4,400 b. P4,480 c. P6,920 d. P8,000
 25. Q Co. is a print shop that produces jobs to customer specifications. During January 2015, Job #1253 was worked on
and the following information is available:
Direct material used P2,500
Direct labor hours worked 15 Machine time
used 6 Direct labor rate per hour P7
Overhead application rate per
hour of machine time P18

What was the total cost of Job #1253 for January?

a. P3,025 b. P2,812 c. P2,770 d. P2,713

Use the following information for questions 26–28.

Ark Co. uses a job order costing system. At the beginning of January, the company had 2 jobs in process with the
following costs:
Direct Material Direct Labor Overhead
Job #456 P3,400 P510 P255
Job #461 1,100 289 ?

Ark pays its workers P8.50 per hour and applies overhead on a direct labor hour basis.

26. What is the overhead application rate per direct labor hour?
a. P0.50 b. P2.00 c. P4.25 d. P30.00

27. How much overhead was included in the cost of Job #461 at the beginning of January?
a. P144.50 b. P153.00 c. P2,200.00 d. P2,456.50

28. During January, Ark employees worked on Job #479. At the end of the month, P714 of overhead had been applied to
this job. Total Work in Process Inventory at the end of the month was P6,800 and all other jobs had a total cost of
P3,981. What amount of direct material is included in Job #479?
a. P677 b. P1,391 c. P2,142 d. P4,658

29. Black Corp. manufactures products on a job order basis. The job cost sheet for Job #329 shows the following for
March:
Direct material P5,000
Direct labor (100 hours @ P7.25) P725
Machine hours incurred 40
Predetermined overhead rate per
machine hour P26

At the end of March, what total cost appears on the job cost sheet for Job #329?
a. P5,725 b. P5,765 c. P6,765 d. P8,325

30. Products at Green Manufacturing are sent through two production departments: Fabricating and Finishing. Overhead
is applied to products in the Fabricating Dept. based on 150 percent of direct labor cost and P18 per machine hour in
Finishing. The following information is available about Job #639:

Fabricating Finishing
Direct material P1,590 P580
Direct labor cost ? 48
Direct labor hours 22 6
Machine hours 5 15
Overhead applied 429 ?

What is the total cost of Job #639?

a. P2,647 b. P3,005 c. P3,093 d. P3,203

31. Carolina Co. applies overhead to jobs at the rate of 40 percent of direct labor cost. Direct material of P1,250 and
direct labor of P1,400 were expended on Job #44 during June. At May 31, the balance of Job #44 was P2,800. The
June 30th balance is
a. P3,210 b. P4,760 c. P5,450 d. P6,010
 Use the following information for questions 32–37:

Adams Co. uses a job order costing system and the following information is available from its records. The company
has 3 jobs in process: #5, #8, and #12.
Raw material used P 120,000
Direct labor per hour 8.50 Overhead applied
based on direct labor cost 120% Direct material was requisitioned as
follows for each job respectively: 30 percent, 25 percent, and 25 percent; the balance of the
requisitions was considered indirect. Direct labor hours per job are 2,500; 3,100; and 4,200;
respectively. Indirect labor is P33,000. Other actual overhead costs totaled P36,000.

32. What is the prime cost of Job #5?

a. P42,250 b. P57,250 c. P73,250 d. P82,750

33. What is the total amount of overhead applied to Job #8?

a. P18,250 b. P26,350 c. P30,000 d. P31,620

34. What is the total amount of actual overhead?

a. P36,000 b. P69,000 c. P93,000 d. P99,960

35. How much overhead is applied to Work in Process?

a. P69,000 b. P99,960 c. P132,960 d. P144,000

36. If Job #12 is completed and transferred, what is the balance in Work in Process Inventory at the end of the period if
overhead is applied at the end of the period?
a. P96,700 b. P99,020 c. P170,720 d. P139,540

37. Assume the balance in Work in Process Inventory was P18,500 on June 1 and P25,297 on June 30. The balance on
June 30 represents one job that contains direct material of P11,250. How many direct labor hours have been worked
on this job (rounded to the nearest hour)?
a. 751 b. 1,324 c. 1,653 d. 2,976

Use the following information for questions 38–41.

The following information pertains to XYZ Co. for September 2014.

Direct Material Direct Labor Overhead

Job #123 P3,200 P4,500 ?
Job #125 ? 5,000 ?
Job #201 5,670 ? P5,550

XYZ Co. applies overhead for Job #123 at 140 percent of direct labor cost and at 150 percent of direct labor cost for
Jobs #125 and #201. The total cost of Jobs #123 and #125 is identical.

38. What amount of overhead is applied to Job #123?

a. P4,800 b. P5,550 c. P6,300 d. P7,500

39. What amount of overhead is applied to Job #125?

a. P8,325 b. P7,500 c. P7,000 d. P5,000

40. What is the amount of direct material for to Job #125?

a. P1,950 b. P1,500 c. P3,700 d. P7,500

41. Assume that Jobs #123 and #201 are incomplete at the end of September. What is the balance in Work in Process
Inventory at that time?
a. P18,920 b. P22,620 c. P28,920 d. P30,120

Use the following information for questions 42–44.

 Baker Co. has two departments (Processing and Packaging) and uses a job order costing system. Baker applies
overhead in Processing based on machine hours and on direct labor cost in Packaging. The following information is
available for July:
Processing Packaging
Machine hours 2,500 1,000
Direct labor cost P44,500 P23,000
Applied overhead P55,000 P51,750
42. What is the overhead application rate per machine hour for Processing?
a. P22.00 b. P1.24 c. P17.80 d. P0.81

43. What is the overhead application rate for Packaging?

a. P23.00 b. P51.75 c. P2.25 d. P0.44

44. Which of the following conclusions would be reasonable to draw from the Baker Co.’s overhead application system?
a. The Processing Department has many unskilled workers.
b. The Processing Department is highly automated.
c. The Packaging Department is more cost-efficient than the Processing Department.
d. The Packaging Department would be a good candidate for downsizing.

Use the following information for questions 45 and 46:

Zew Co. has a job order costing system and an overhead application rate of 120 percent of direct labor cost. Job
#33 is charged with direct material of P12,000 and overhead of P7,200. Job #34 has direct material of P2,000 and
direct labor of P9,000.

45. What amount of direct labor cost has been charged to Job #33?

a. P6,000 b. P8,640 c. P7,200 d. P14,400

46. What is the total cost of Job #34?

a. P30,200 b. P21,800 c. P11,000 d. P10,800

Use the following information for questions 47 and 48.

Kool Co. uses a job order costing system. Assume that Job #101 is the only one in process. The following
information is available:
Budgeted direct labor hours 65,000 Budgeted machine hours 9,000
Budgeted overhead P 350,000 Direct material P 110,500 Direct labor cost
70,000

47. What is the overhead application rate if Kool uses a predetermined overhead application rate based on direct labor
hours (rounded to the nearest whole peso)?
a. P0.20 b. P5.00 c. P5.38 d. P38.89

48. What is the total cost of Job #101 assuming that overhead is applied at the rate of 135 percent of direct labor cost
(rounded to the nearest whole peso)?
a. P192,650 b. P268,250 c. P275,000 d. P329,675

49. At the end of the last fiscal year, Bare Company had the following account balances:
Overapplied overhead P 6,000
Cost of Goods Sold 980,000
Work in Process Inventory 38,000
Finished Goods Inventory 82,000

If the most common treatment of assigning overapplied overhead was used, the final balance in Cost of Goods Sold
would have been
a. P985,340 b. P974,660 c. P974,000 d. P986,000

50. Carley Products has no Work in Process or Finished Goods inventories at the close of business on December 31,
2014. The balances of Carley’s accounts as of December 31, 2015, are as follows:
Cost of goods sold P 2,040,000
Selling & administrative expenses 900,000
 Sales 3,600,000
Manufacturing overhead control 700,000
Manufacturing overhead applied 648,000

Carley Products’ pretax income for 2015 is

a. P608,000
b. P660,000
c. P712,000
d. undeterminable from the information given.