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1. Job-order costing would be more likely to be used than process costing in situations where many different products or services are produced each period to customer specifications.
True False
2. In a job-order costing system, costs are traced to departments and then allocated to units of product using an average process.
True False
3. Job-order costing is used in those situations where units of a product are homogeneous, such as in the manufacture of sugar.
True False
4. Job-order costing is usually not used in service organizations such as hospitals and law firms.
True False
5. The three cost categories appearing on a job cost sheet are: selling expense, manufacturing expense, and administrative expense.
True False
6. The labor time ticket contains the details of how much time an employee takes on each task throughout the day.
True False
7. In order to improve the accuracy of unit costs, most companies recompute the predetermined overhead rate each month.
True False
8. Use of a single, plantwide overhead rate is generally appropriate only for very large manufacturing companies.
True False
9. Predetermined overhead rates are based on actual cost and activity data.
True False
10. The following journal entry would be made to apply overhead cost to jobs in a job-order costing system:
True False
11. When completed goods are sold, the transaction is recorded as a debit to Cost of Goods Sold and a credit to Work in Process.
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