Cost Accounting Quiz

A cost driver is a factor, such as machine-hours, beds occupied, computer time, or flight-hours, that causes direct costs.

• True

• False

Job-order costing systems often use allocation bases that do not reflect how jobs actually use overhead resources.

• True

• False

An employee time ticket is an hour-by-hour summary of the employee's activities throughout the day.

• True

• False

The formula for computing the predetermined overhead rate is: Predetermined overhead rate = Estimated total amount of the allocation base ÷ Estimated total manufacturing overhead cost.

• True

• False

Generally speaking, when going through the process of computing a predetermined overhead rate, the estimated total manufacturing overhead cost is determined before estimating the amount of the allocation base.

• True

• False

If a job is not completed at year end, then no manufacturing overhead cost would be applied to that job when a predetermined overhead rate is used.

• True

• False

Actual overhead costs are not assigned to jobs in a job costing system.

• True

• False

The amount of overhead applied to a particular job equals the actual amount of overhead caused by the job.

• True

• False

Job cost sheets contain entries for actual direct material, actual direct labor, and actual manufacturing overhead cost incurred in completing a job.

• True

• False

A job cost sheet is used to record how much a customer pays for the job once the job is completed.

• True

• False