True or False :

number.

Write True if the statement is true, and False if is false at the blank before the

_________ 1. Product cost are historical figures and therefore are of title use to the manager.
_________ 2. A company producing furniture would probably use a job-order costing system.
_________ 3. Both job-order and process costing system utilize averaging concepts in computing
unit costs.
_________ 4. Most factory overhead costs are direct costs and therefore can be easily identified
with specific jobs.
_________ 5. The predetermined overhead rate is computed using estimates of cost and activity.
_________ 6. The cost of indirect materials used in production is added to the MFG Oh account
rather than added directly to work in Process.
_________ 7. Actual manufacturing overhead costs are charged directly to the Work in Process
account as the cost incur
_________ 8. Selling and admin expenses should be added to the Manufacturing overhead
account.
_________ 9. If more overhead is applied to work in process than is actually incurred, then
overhead will be over applied.
_________ 10. All of the raw material purchased during a period are included in the cost of goods
manufactured figure.
_________ 11. Any balance in the work in process account at the end of a period should be close
to CGS.
_________ 12. If a job is not completed at year end, then no overhead cost should be applied to
that job.
_________ 13. Once production is completed, the job cost sheet can be discarded.
_________ 14. In a job order cost system, depreciation of factory equipment should be charged
directly to WIP.
_________ 15. A job cost sheet is the support documents of materials.
_________ 16. A job order cost system identifies cost with a particular job rather than a set time
period.
_________ 17. Manufacturing cost generally incurred in one period and recorded in a subsequent
period.
_________ 18. A job order cost system is most appropriate when a large volume of uniform
products are produced
_________ 19. Job order cost sheet constitute the subsidiary ledger of the control account WIP
inventory.
_________ 20. When raw materials are purchased, the work in process inventory account is
debited.
Multiple choice:
wrong.

chose the letter that corresponds your answer. Show your solution no solution

Material Inventory
Dr.
Cr.
Beg.

15,000
10,000
Purch 35,000
40,000

Work in Process
Dr.
Cr.
Bal.
CofGS 20,000
Mat.

CofGM

20,000

Dr.

Finished Goods
Cr.

40,000

Bal.
CofGM

Labor ?
OH
?
Additional information:
a. There were 5,500 direct labor hours at the rate of P8 per direct labor hour
b. Overhead is applied at the rate of P4 per direct labor hour.
1. The January 31 of materials inventory should be
a. P20,000 b. P25,000 c. P30,000 d. P50,000 e. None of the above
2. The total overhead that have been charged to work in process during January
a. P17,000 b. P22,000 c. P33,000 d. P40,000 e. none of the above
3. The January31 balance of work in process account
a. P46,000 b. P75,000 c. P76,000 d. P82,000 e. None of the above
4. The January 31 balance of the Finished Goods inventory account
a. P6,000 b. P10,000 c. P20,000 d. P30,000 e. None of the above
5. Total manufacturing overhead cost incurred during the month of January were P24,000.
The amount debited to Factory overhead control account for January.
a. P17,000 b. P24,000 c. P33,000 d. P41,000 e. None of the above
6. Cost of Goods Sold during January was

a. P10,000 b. P20,000 c. P30,000 d. P40,000 e. None of the above

7. The amount of under applied or over applied overhead cost for January is
a. P1,000 over applied
b. P2,000 over applied
c. P1,000 under applied d.
P2,000 under applied
8. What is the best accumulation procedure to use when many branches, each differing as to
product specification are produced?
a. Job order b. process c. actual
d. standard e. none of the above
9. In a job order costing system, indirect labor used should be debited to:
a. Payroll liability b. work in process control c. finished goods control d. factory
overhead
10.Under job cost system, purchases of direct materials are debited to:
a. Purchases
b. Work in process c. Factory overhead
d. none of the
above