Question 1: For which of the following businesses would the job order cost system be appropriate?
a) Meat processor
b) Automobile manufacturer
c) Oil refinery
d) Construction contractor
Question 2. Which of the following costs are NOT included in finished goods inventory?
a) Direct labor
b) Factory overhead
c) Company president's salary
d) Direct materials
Question 3. At the end of the year, overhead applied was $2,800,000. Actual overhead was $2,000,000. Closing over/under applied overhead into cost of goods sold would cause net income to increase/decrease by?
a) Increase by $800,000
b) Decrease by $800,000
c) Not effect net income
d) Decrease net income by $200,000