Accounting 202 ch.19-20 handout

27 October 2022
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question
1. In process cost accounting, the costs of direct materials and direct labor are charged directly to a. service departments b. processing departments c. customer accounts receivable d. job orders
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b. processing departments
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2. The two categories of cost comprising conversion costs are a. direct labor and indirect labor b. direct labor and factory overhead c. factory overhead and direct materials d. direct labor and direct materials
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b. direct labor and factory overhead
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3. In a process cost system, the cost of completed production in Department A is transferred to Department B by which of the following entries? a. debit Work in Process—Dept. B; credit Work in Process—Dept. A b. debit Work in Process—Dept. B; credit Finished Goods—Dept. A c. debit Work in Process—Dept. B; credit Cost of Goods Sold—Dept. A d. debit Finished Goods; credit Work in Process—Dept. B
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a. debit Work in Process—Dept. B; credit Work in Process—Dept. A
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4. The three categories of manufacturing costs comprising the total cost of work in process are direct labor, direct materials, and a. selling expenses b. direct expenses c. accounting salaries expense d. factory overhead
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d. factory overhead
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5. A process cost system be appropriate for a a. natural gas refinery b. jet airplane builder c. catering business d. custom cabinet builder
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a. natural gas refinery
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6. All of the following are characteristics of a process cost system except a. the system may use several work in process inventory accounts b. manufacturing costs are grouped by department rather than by jobs c. the system accumulates costs per job d. the system emphasizes time periods rather than the time it takes to complete a job
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c. the system accumulates costs per job
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7. Which of the following would use a process costing system? a. a custom home builder b. a custom furniture manufacturer c. a wedding dress designer d. a lumber mill
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d. a lumber mill
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8. Which of the following is not a characteristic of a process cost system? a. manufacturing costs are grouped by departments b. the system may use several work in process accounts c. the system measures costs for each completed job d. the system allocates costs between completed and partially completed units within a department
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c. the system measures costs for each completed job
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9. If a company uses a process costing system to account for the costs in its five production departments, how many work in process accounts will it use? a. 6 b. 5 c. 4 d. 2
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b. 5
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10. The four steps necessary to complete a cost of production report in a process cost system are 1. allocate costs to transferred and partially completed units 2. determine the units to be assigned costs 3. determine the cost per equivalent unit 4. calculate equivalent units of production 5. The correct ordering of the steps is a. 2, 4, 3, 1 b. 4, 2, 3, 1 c. 2, 3, 4, 1 d. 2, 3, 1, 4
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a. 2, 4, 3, 1
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11. Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs? a. accounting department costs b. raw lumber c. assembly labor's wages d. administrative salaries
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c. assembly labor's wages
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12. Which of the following costs incurred by a tool manufacturer would not be included in conversion costs? a. factory supervisor's salary b. machine operator's wages c. raw steel d. factory maintenance personnel supplies
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c. raw
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1. Which of the following would be most likely to use process costing? a. a custom furniture manufacturer b. an auto body repair shop c. a law firm d. a lawn fertilizer manufacturer
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d. a lawn fertilizer manufacturer
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2. Which of the following systems provides for a separate record of the cost of each particular quantity of product that passes through the factory? a. job order cost system b. general cost system c. replacement cost system d. process cost system
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a. job order cost system
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3. For which of the following businesses would the job order cost system be appropriate? a. canned soup processor b. oil refinery c. lumber mill d. hospital
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d. hospital
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4. For which of the following businesses would the process cost system be appropriate? a. a custom cabinet maker b. a landscaper c. a paper mill d. a catering firm
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c. a paper mill
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5. Which of the following is not a characteristic of a job order costing system? a. It accumulates cost for each department within the factory. b. It provides a separate record for the cost of each quantity of product that passes through the factory. c. It is best suited for industries that manufacture custom goods. d. It uses only one work in process account
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a. It accumulates cost for each department within the factory.
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6. Which of the following products would be manufactured using a job order costing system? a. a cell phone b. a highlighter pen c. a graduation invitation d. a recliner
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c. a graduation invitation
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7. Job order costing and process costing are a. pricing systems b. cost accounting systems c. cost flow systems d. inventory tracking systems
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b. cost accounting systems
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8. Which of the following is not a reason a service firm would use a job order costing system? a. to help control costs b. to determine client billing c. to determine department costs within the firm d. to determine profit
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c. to determine department costs within the firm
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9. Which of the following costs are not included in finished goods inventory? a. direct labor b. factory overhead c. chief financial officer's salary d. direct materials
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c. chief financial officer's salary
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10. Which of the following is the correct flow of manufacturing costs? a. raw materials, work in process, finished goods, cost of goods sold b. raw materials, finished goods, cost of goods sold, work in process c. work in process, finished goods, raw materials, cost of goods sold d. cost of goods sold, raw materials, work in process, finished goods
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a. raw materials, work in process, finished goods, cost of goods sold
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11. Which of the following would record the labor costs to an individual job? a. clock cards b. in-and-out cards c. time tickets d. a payroll register
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c. time tickets
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15. Which of the following is a period cost? a. depreciation on factory lunchroom furniture b. salary of telephone receptionist in the sales office c. salary of a security guard for the factory parking lot d. computer chips used by a computer manufacturer
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b. salary of telephone receptionist in the sales office
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16. Which of the following is a product cost? a. salary of a sales manager b. advertising for a particular product c. drill bits for a drill press used in the plant assembly area d. salary of the company receptionist
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c. drill bits for a drill press used in the plant assembly area
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17. The document authorizing the issuance of materials from the storeroom is a a. materials requisition b. purchase requisition c. receiving report d. purchase order
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a. materials requisition
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18. The source document for the data for debiting Work in Process for direct materials is a a. purchase order b. purchase requisition c. materials requisition d. receiving report
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c. materials requisition
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19. In a job order cost accounting system, the entry to record the flow of direct materials into production is a. to debit Work in Process, and credit Materials b. to debit Materials, and credit Work in Process c. to debit Factory Overhead, and credit Materials d. to debit Work in Process, and credit Supplies
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a. to debit Work in Process, and credit Materials
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20. A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the controlling account in the general ledger to the controlling accounts for a. Work in Process and Cost of Goods Sold b. Work in Process and Factory Overhead c. Finished Goods and Cost of Goods Sold d. Work in Process and Finished Goods
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b. Work in Process and Factory Overhead
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21. In a job order cost accounting system, when goods that have been ordered are received, the receiving department personnel count, inspect the goods, and complete a a. purchase order b. sales invoice c. receiving report d. purchase requisition
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c. receiving report
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22. The amount of time spent by an employee on an individual job are recorded on a. pay stubs b. in-and-out cards c. time tickets d. employees' earnings records
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c. time tickets
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23. The amount of time spent by an employee in the factory is usually recorded on a. time tickets b. job order cost sheets c. employees' earnings records d. statement of owners' equity
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a. time tickets
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24. The basis for recording direct and indirect labor costs incurred is a summary of the period's a. job order cost sheets b. time tickets c. employees' earnings records d. clock cards
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b. time tickets
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25. The entry to record the flow of direct labor costs into production in a job order cost accounting system is a. debit Factory Overhead, credit Work in Process b. debit Finished Goods, credit Wages Payable c. debit Work in Process, credit Wages Payable d. debit Factory Overhead, credit Wages Payable
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c. debit Work in Process, credit Wages Payable
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26. At the end of July, the first month of the current fiscal year, the factory overhead account had a debit balance. Which of the following describes the nature of this balance and how it would be reported on the interim balance sheet? a. Over applied, deferred credit b. Under applied, deferred debit c. Under applied, deferred credit d. Over applied, deferred debit
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b. Under applied, deferred debit
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27. At the end of the fiscal year, the balance in Factory Overhead is small. The balance would be a. transferred to Work in Process b. transferred to Cost of Goods Sold c. transferred to Finished Goods d. allocated between Work in Process and Finished Goods
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b. transferred to Cost of Goods Sold
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28. The details concerning the costs incurred on each job order are accumulated in a work in process account and supported by a a. stock ledger b. materials ledger c. cost ledger d. creditors ledger
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c. cost ledger
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29. Each document in the cost ledger is called a a. finished goods sheet b. stock record c. materials requisition d. job cost sheet
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d. job cost sheet
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30. If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a. debit balance and be under applied b. credit balance and be under applied c. credit balance and be over applied d. debit balance and be over applied
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a. debit balance and be under applied