Job Costing

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Question 1
Free
Multiple Choice

A cost is considered direct if it can be traced to a particular cost object in a cost effective way which means it can be

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A

traced easily with the aid of technology

B

traced in a manner that is accurate

C

traced in an economically feasible way

D

possibly traced accurately with an investment in hardware and software

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Question 2
Free
Multiple Choice

A ________ is anything for which a measurement of costs is desired.

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A

cost-allocation base

B

cost pool

C

cost object

D

cost-application base

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Question 3
Free
Multiple Choice

A ________ is a grouping of individual indirect cost items.

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A

cost-allocation base

B

cost assignment

C

cost pool

D

job-costing system

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Question 4
Free
Multiple Choice

A manufacturer utilizes three separate indirect cost pools. Which of the following is true?

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A

Each indirect cost pool utilizes a separate cost-allocation rate

B

Each indirect cost pool is a subset of total direct costs

C

Each indirect cost pool relates to multiple cost centers

D

Each indirect cost pool utilizes the same cost-allocation rate for all costs incurred

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Question 5
Free
Multiple Choice

Direct costs ________ .

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A

are anything for which a measurement of costs is desired

B

are costs related to a particular cost object that can be traced to that cost object in an economically feasible manner

C

focus specifically on the costing needs of the CFO

D

are costs related to a particular cost object that cannot be traced to that cost object in a cost-effective manner

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Question 6
Multiple Choice

In a costing system, ________ .

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A
cost tracing allocates indirect costs
B
cost allocation assigns direct costs
C
a cost-allocation base can be either financial or nonfinancial
D
a cost object should be a product and not a department or a geographic territory
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Question 7
Multiple Choice

Assigning direct costs to a cost object is called ________ .

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A
cost allocation
B
cost assignment
C
cost pooling
D
cost tracing
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Question 8
Multiple Choice

________ is the process of assigning indirect costs to products.

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A
Cost allocation
B
Job cost recording
C
Cost pooling
D
Cost tracing
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Question 9
Multiple Choice

Allocating indirect costs to departments based on the relative revenue earned by those departments is done based on which of the following criterion?

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A
direct hours utilized
B
benefits received
C
material resources used
D
cause-and-effect relationships
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Question 10
Multiple Choice

Which of the following includes both traced direct costs and allocated indirect costs?

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A
cost tracing
B
cost pools
C
cost assignments
D
cost allocations
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Question 11
Multiple Choice

The cost allocation base ________ .

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A
is a grouping of individual indirect cost items
B
are costs related to a particular cost object that cannot be traced to that cost object in an economically feasible way
C
is anything for which a measurement of costs is desired
D
is a systematic way to link an indirect cost or group of indirect costs to cost objects
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Question 12
True/False

Direct costs are allocated to the cost object using a cost-allocation method.

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True
False
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Question 13
True/False

A cost object is anything for which a measurement of costs is desired.

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True
False
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Question 14
True/False

Direct costs of a cost object are costs related to a particular cost object that can be allocated to that cost object in an economically feasible (cost-effective) way.

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True
False
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Question 15
True/False

The cost-allocation base is a systematic way to link an indirect cost or group of indirect costs to cost objects.

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True
False
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Question 16
True/False

Cost objects may be jobs, products, or customers.

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True
False
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Question 17
True/False

When an organization allocated indirect costs to departments by relative size of the budgets, it is based on the criterion of benefits received.

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True
False
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Question 18
Essay

For each item below indicate the source documents that would most likely authorize the journal entry in a job-costing system.
Required:
a.direct materials purchased
b.direct materials used
c.direct manufacturing labor
d.indirect manufacturing labor
e.finished goods control
f.cost of goods sold

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Question 19
Essay

Differentiate between a cost pool and a cost-allocation base.

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Question 20
Multiple Choice

Process costing is ________ .

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A
used to enhance employees' job satisfaction
B
used by businesses to price unique products or identical products produced in batches
C
used by businesses to price identical products
D
used by businesses when manufacturing goods above normal capacity
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