Question

Enter a T or an F in the blank to indicate whether the

statement is true or false.

___ 1. A company producing many different kinds

of furniture would probably use a job-order cost sys-

tem.

___ 2. Process costing systems are used in situa-

tions where output is homogeneous—the company

makes a single product for long periods of time.

___ 3. Most factory overhead costs are direct

costs and can be easily identified with specific jobs.

___ 4. The predetermined overhead rate is com-

puted using estimates of overhead cost and the amount

of the allocation base.

___ 5. The predetermined overhead rate is gener-

ally computed on a monthly basis rather than on an

annual basis to increase the accuracy of unit costs.

___ 6. The cost of indirect materials used in pro-

duction is added to the Manufacturing Overhead ac-

count rather than added directly to Work in Process.

___ 7. The job cost sheet is used to accumulate

the costs charged to a particular job.

___ 8. Actual manufacturing overhead costs are

charged directly to the Work in Process account as the

costs are incurred.

___ 9. Selling and administrative expenses are

charged to the Manufacturing Overhead account.

___ 10. If more overhead is applied to Work in

Process than is actually incurred, then overhead cost

will be overapplied.

Answer 1