 In this presentation, we will take a look at multiple choice questions related to a job cost system. First question, a source document to report how much time was spent working on a job. Either A, payroll register, B, W2, C, general ledger, D, time ticket, or E, wages payable. Let's go through this again using the process of elimination. A source document to report how much time was spent working on a job, A, payroll register. That might sound familiar if we're dealing with payroll, so I'll keep that for now. B says W2, and that probably sounds familiar, but that's going to report the wages not for a job, but for all, you know, individuals, employees, wages, and withholdings and what not. So it's not B. C says the general ledger and the general ledger. Support a counting instruction by clicking the link below, giving you a free month membership to all of the content on our website, broken out by category, further broken out by course. 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And this might be a source document for the tax returns for the employee by the way, but for making it from the company, it's not a source document. It's what's the result of the data is being reported. And then E says wages payable. And that doesn't seem right. That's part of a journal entry. It doesn't seem like that's a source document. So let's go through this again. We're left with A and D. A source document to report how much time was spent working on a job is either the payroll register or a time ticket. Now the payroll register is where we're going to track basically all the time for all employees. It's not really the source document. It's where we might use it from the source document, which is the time ticket. The time ticket is going to have to tell us which job people have worked on. So we know to apply that time and the cost of the labor to the specific job. So final answer source document to report how much time was spent working on a job is D time ticket. Next question. Direct labor cost example. A supervisor salary, B, CEO salary, C, janitor wages, D, assembler wages, E, sales commission. Let's go through this again using the process of elimination. Direct labor cost example. Now if we think about these, we have a list of folks here that we're going to be paying. We're looking for the direct labor. That's going to be the type of labor that we can apply directly to a specific job. So which of these is going to be things that we can apply to the job, apply to the job sheet and therefore put their labor directly into the working process supported by the job sheet. Either A, supervisor salary, I'll keep that for now, B, the CEO salary, a CEO is probably not in the warehouse. So probably not working on specific jobs too often. So we're going to say that's not it. And then C says the janitor's wages. Again, the janitor might be in the factory, but we don't know which job, they're just cleaning up the factory, which is beneficial to the entire process of making inventory. So we will apply it to the inventory, but it's going to have to go to overhead and then be applied out. And then the assembler wages, and you can't really get much more direct than that, right? If we're making guitars, they're the ones making the guitars. So you would think that one has to be the one because they're making the guitar as direct as you can be. And then E says sales commission. And this one you might think, well, that seems kind of direct too, because they're selling at the cost of selling a particular job, which is true, but it's not part of production. It's not going to go on the cost side of things. That's part of the sales side of things. It's not going to go on the job cost sheet because the sales commission has nothing to do with the cost of the inventory. It's a period cost. It's a sales cost. So it's not going to be that. So between A and D, direct labor cost example, either supervisor salary or the assembler wages. Now, typically the supervisor kind of walks around and supervisors every all the jobs, right? So you can imagine them looking into all the jobs and making sure everything's processing properly. And so again, we don't know exactly which job they're working on, or at least not as specifically as we certainly would with the assembler. Typically, we would know who's assembling what if it's a job cost system and we have this differentiation of products. So and again, remember, it's a process when we're talking about a job cost system, it's not like the assembler is just putting together one part in an assembly line because they're custom products. So we would know we would be taking time to put together a custom product, they'd have to tell us which product we're working on because they are custom in a job cost system. So final answer, direct labor cost example, D, assembler wages. Next question, the rate established prior to the beginning of a period that is used to assign overhead cost to jobs is the A predetermined overhead rate, B overhead allocation rate, C estimated direct labor rate, D estimated direct material rate, or E job overhead rate. Let's go through this again using the process of elimination. The rate established prior to the beginning of a period that is used to assign overhead costs to jobs is the A predetermined overhead rate. That sounds familiar. I'll keep that for now. B says overhead allocation rate. That sounds less familiar, but kind of appropriate. You would think we're allocating overhead to the jobs. So I'll keep that for now. C says estimated direct labor rate. Now, the reason that might sound familiar is because we typically might use direct labor to help us determine what this rate is. So, but it's really not an estimated direct labor rate. It's we're estimating the overhead. So it's not C. D says estimated direct materials rate. And that might sound less familiar. But again, we could use materials to calculate what this rate will be because we're trying to use a ratio to see how big a job is. So it's not, but it's not D. And then E says job overhead rate. And again, that's what we're applying, really. So you might think that sounds, you know, that sounds kind of reasonable. So let's go through this again. You can see if we can narrow this down further. So the rate established prior to the beginning of a period that is used to assign overhead costs to jobs is the either a predetermined overhead rate, the overhead allocation rate or E job overhead rate. Now, again, they all sound like we're, you know, we're applying overhead here. But if you know, the one that should ring most true that sounds familiar should be the predetermined overhead rate. So that's what the actual term is going to be. These sound like kind of plausible terms. Overhead allocation rate sounds plausible, but that's not what they called it. You know, we are allocating the overhead. So you could call it that. And again, you could make an argument. That's what we're doing. That's exactly what we're doing. But but that's not like the term that we're going to use. So you're probably not going to pick up credit on that. And then the job overhead rate, again, that's kind of kind of what it is description it, but it's been named. They've labeled it the predetermined overhead rate. So final answer, the rate established prior to the beginning of a period that is used to assign overhead cost to jobs is the a predetermined overhead rate.