JOB COSTING - CHAPTER 4 JOB COSTING TRUE/FALSE 1. Quality...

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CHAPTER 4 JOB COSTING TRUE/FALSE 1. Quality control costs may be a direct cost of the Manufacturing Department, but an indirect cost of an individual job. Answer: True/False 2. A company may use job costing to assign costs to different product lines and then use process costing to calculate unit costs within each product line. Answer: True/False 3. If indirect-cost rates were based on actual short-term usage, periods of lower demand would result in higher costs per unit. Answer: True/False 4. Indirect manufacturing costs should be allocated equally to each job. Answer: True/False 5. Each cost pool may have multiple cost allocation bases. Answer: True/False 6. A job-cost record is a source document, but individual items of the job-cost record may also have source documents. Answer: True/False 7. To smooth fluctuating levels of output, separate indirect-cost rates should be calculated for each month. Answer: True/False 8. Grounds-maintenance costs incurred during the summer months will distort indirect-cost rates that are computed monthly. Answer: True/False 9. One reason for using longer time periods to calculate indirect-cost rates is seasonal cost fluctuations. 4-1
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Answer: True/False 10. Companies typically wait for accurate information regarding actual manufacturing overhead costs before pricing a job. Answer: True/False 11. Direct costs are traced the same way for actual costing and normal costing. Answer: True/False 12. The Work-in-Process Control account tracks job costs from the time jobs are started until they are completed. Answer: True/False 13. In a job-cost system, each indirect-cost pool has its own account in the general ledger. Answer: True/False 14. The Finished Goods Control account consists of actual manufacturing overhead costs rather than allocated manufacturing overhead costs. Answer: True/False 15. For external reporting purposes, it is acceptable to allocate marketing costs to individual jobs. Answer: True/False 16. Overhead costs allocated each month are expected to equal actual overhead costs incurred each month. Answer: True/False 17. One reason indirect costs may be underapplied is if actual indirect costs exceed budgeted indirect costs. Answer: True/False 18. The proration approach to allocating overapplied or underapplied overhead adjusts individual job-cost records. Answer: True/False 4-2
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19. Underallocated indirect costs occur when the allocated amount of indirect costs is greater than the amount incurred for that period. Answer: True/False 20. In some variations of normal costing, organizations use budgeted rates to assign direct costs as well as indirect costs to jobs. Answer: True/False MULTIPLE CHOICE 1. An updated costing system should: a. be installed even if the costs outweigh the additional benefits b. be tailored to fit the underlying operations rather than the current cost system c. focus specifically on the costing needs of the CFO d. provide all information for management decision needs 2.
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JOB COSTING - CHAPTER 4 JOB COSTING TRUE/FALSE 1. Quality...

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