ACCT 202 Chapter 15

Cost accounting involves the measuring, recording, and reporting of: a. product and service costs b. future cost c. manufacturing processes d. managerial accounting decisions

A company is more likely to use a job order cost system if: a. it manufactures a large volume of similar products b. its production is continuous c. it manufactures products with unique characteristics d. is uses a periodic inventory system

In accumulating raw materials costs, companies debit the cost of raw materials purchased in a perpetual system to: a. raw materials purchased b. raw materials inventory c. purchases d. work in process

When incurred, factory labor costs are debited to: a. work in process b. factory wages expense c. factory labor d. factory wages payable

The flow of costs in job order costing: a. begins with work in process inventory and ends with finished goods inventory b. begins as soon as a sale occurs c. parallels the physical flow of materials as they are converted into finished goods and then sold d. is necessary to prepare the cost of goods manufactured scheduled

Raw materials are assigned to a job when: a. the job is sold b. the materials are purchased c. the materials are received from the vendor d. the materials are issued by the materials showroom

The source of information for assigning costs to job cost sheets are: a. invoices, time tickets, and the predetermined overhead rate b. materials requisition slips, time tickets, and the actual overhead cost c. materials requisition slips, payroll register, and the predetermined overhead rates d. materials requisition slips, time tickets, and the predetermined overhead rate.

In recording the issuance of raw materials in a job order cost system it would be incorrect to: a. debit work in process inventory b. debit finished goods inventory c. debit Manufacturing overhead d. credit raw materials inventory

The entry when direct factory labor is assigned to jobs is a debit to: a. work in process inventory and a credit to factory labor b. Manufacturing overhead and a credit to factory labor c. Factory labor and a credit to manufacturing overhead d. factory labor and a credit to work in process inventory

The formula for computing the predetermined manufacturing overhead rate is estimated annual overhead costs divided by estimated annual operating activity, expressed as: a. direct labor cost b. direct labor hours c. machine hours d. any of the above

In Crawford company, the predetermined overhead rate is 80% of direct labor cost. During the month, Crawford incurs $210,000 of factory labor lost, of which $180,000 is direct labor and $30,000 is indirect labor. Actual overhead incurred was $200,000. The amount of overhead debited to work in process inventory should be: a. $200,000 b. $144,000 c. $168,000 d. $160,000

Mynex Company completes Job No. 26 at a cost of $4,500 and later sells it for $7,000 cash. A correct entry is: a. debit finished goods inventory $7,000 and credit work in process inventory $7,000 b. debit Cost of goods sold $7,000 and credit finished goods inventory $7,000 c. debit finished goods inventory $4,500 and credit work in process inventory $4,500 d. debit accounts recievale $7,000 and credit sales revenue $7,000

At the end of an accounting period, a company using a job order cost system calculates the cost of goods manufactured: a. from the job cost sheet b. from the work in process inventory account c. by adding direct materials used, direct labor incurred, and manufacturing overhead incurred d. from the cost of goods sold account

Which of the following statements is true? a. Job order costing requires less data entry than process costing b. allocation of overhead is easier under job order costing than process costing c. job order costing provides more precise costing for custom jobs than process costing d. the use of job order costing has declined because more companies have adopted automated accounting systems

At the end of the year, a company has a $1,200 debit balance in manufacturing overhead. The company: a. makes an adjusting entry by debiting manufacturing overhead applied for $1,200 and crediting manufacturing overhead for $1,200 b. makes an adjusting entry by debiting manufacturing overhead expense for $1,200 and crediting manufacturing overhead for $1,200 c. makes an adjusting entry by debiting cost of goods sold for $1,200 and crediting manufacturing overhead for $1,200 d. makes no adjusting entry because differences between actual overhead and the amount applied are a normal part of job order costing and will average out over the next year

Manufacturing overhead is underapplied if: a. actual overhead is less than applied b. actual overhead is greater than applied c. the predetermined rate equals the actual rate d. actual overhead equals applied overhead

A process cost system would be used for all of the following except the a. production of automobiles b.manufacture of cereal c. refining of petroleum d. printing of wedding invitations

True/False The two major steps in the job order cost flow are accumulating the manufacturing costs incurred and assigning the accumulated cost to the work done.

True/False Labor cost are debited to Work in Process Inventory when they are incurred.

Sound company reported the following amounts for may: Raw materials purchased $254,000 Beginning raw materials inventory 12,000 Ending raw materials inventory 7,900 Direct labor incurred 51,000 Indirect materials requisitioned and used 4,000 Actual manufacturing overhead costs 36,800 Beginning work-in-process inventory 15,100 Ending work-in-process inventory 12,000 How much is the cost of direct materials used in production?

Dougan, Inc. allocates overhead based on a predetermined overhead rate of $2.40 per direct labor hour. Employees are paid $12.00 per hour. Job 24 requires 4.2 pounds of direct materials at a cost of $15.00 per pound. Employees worked a total of 17.5 hours to complete the job. Actual manufacturing overhead costs totaled $80,000 for the year for the company. How much is the cost of Job 24?

During the current year, Carlisle Manufacturing expected Job No. 16 to cost $450,000 of overhead, $750,000 of materials, and $300,000 in labor. Carlisle applied overhead based on direct labor cost. Actual production required an overhead cost of $420,000, $825,000 in materials used, and $330,000 in labor. All of the goods were completed. What is the amount of over- or under-applied overhead? a.$30,000 overapplied. b.$75,000 underapplied. c.$75,000 overapplied. d.$30,000 underapplied.

In the current year, Mitchell Manufacturing expected Job No. 13 to cost $600,000 of overhead, $650,000 of materials, and $400,000 of labor. Mitchell applied overhead based on direct labor cost. Actual production required an overhead cost of $420,000, $750,000 of materials used, and $300,000 of labor. All of the goods were completed. What amount was transferred from Work in Process to Finished Goods? a.$1,650,000. b.$1,470,000. c.$1,670,000. d.$1,500,000.

Which of the following statements is correct regarding job order and process costing systems? You got it wrong : A A job order cost system is most appropriate when a large volume of uniform products are produced. B All of the choices are correct. This is correct answer : C A process cost accounting system is appropriate for similar products that are continuously mass produced. D The perpetual inventory method cannot be used in a job order cost system.

A company that manufactures ________ would NOT use job order costing. A bridges B homes You got it correct : C cereal D motion pictures

If Hawkins Manufacturing purchased $13,000 in metal, $6,000 in cloth, and $2,000 in cleaning supplies, the Raw Materials Inventory would have This is correct answer : A debits equaling $19,000. B credits equaling $21,000. You got it wrong : C debits equaling $21,000. D credits equaling $19,000.

In the month of October, Tran Incorporated had salaries of $15,000 for factory managers, $18,000 for financial managers, and $42,000 for company executives. They also had wages of $98,000 for factory workers and $64,000 for office workers. How much would the balance of the Factory Labor account change between October 1 and October 31? A increase by $237,000 You got it correct : B increase by $113,000 C decrease by $83,000 D increase by $195,000

The purchase of raw materials should be recorded as a debit to ________ in a job order cost system. A Finished Goods Inventory B Work in Process and Manufacturing Overhead C Work in Process Inventory D Raw Materials Inventory

Stephanie's company uses a job order cost system. Stephanie just made a $15,000 debit to the Work in Process Inventory account for raw materials assigned to job 1074. Which of the following steps does Stephanie also need to complete? A Posting a $15,000 decrease in raw materials to the subsidiary ledger for job 1074. B Posting a $15,000 increase in direct materials to the job cost sheet for job 1074. C Posting a $15,000 decrease in direct labor to the subsidiary ledger for job 1074. D Posting a $15,000 increase in direct labor to the job cost sheet for job 1074.

Susan needs 20 lbs. of flour to add to the cake mixing machine. Which of the following will she need to obtain the flour from storage? A subsidiary ledger B job cost sheet C materials requisition slip D time ticket

How are time tickets and materials requisition slips similar? A Cost associated with both must be credited to Work in Process Inventory. B Costs associated with both must be recorded in the general ledger and job cost sheets. C Costs associated with both must be debited to Manufacturing Overhead. D Costs associated with both must be recorded as Direct Materials or Labor rather than Indirect Materials or Labor.

How are indirect labor costs recognized in the ledger under job order costing? A debit to Work in Process Inventory B debit to Finished Goods Inventory C debit to Manufacturing Overhead D debit to Accrued Payroll

What is the basic form to accumulate the cost of each job under job order costing? A job cost sheet B finished goods inventory record C cost of goods sold record D materials inventory record

When indirect materials are used in production, job order costing requires a A debit to Raw Materials Inventory. B credit to Raw Materials Inventory. C debit to Work in Process Inventory. D credit to Manufacturing Overhead.

Which of the following would NOT be included in the Manufacturing Overhead account? A depreciation expense on factory machinery B indirect labor You got it correct : C direct labor D factory utilities

The predetermined overhead rate for Neutronics, Inc. is 70% of direct labor cost. The company incurs $250,000 of factory labor costs during the month and $180,000 of that cost is direct labor and $70,000 is indirect labor. Actual overhead incurred was $130,000. What should be the amount of overhead debited to Work in Process Inventory? A $175,000 B $126,000 C $180,000 D $130,000

Tektron Industries applies overhead on the basis of 200% of direct labor cost. Job No. 275 is charged with $30,000 of direct materials costs and $40,000 of manufacturing overhead. What are the total manufacturing costs for Job No. 275? A $90,000 ] B $70,000 C $100,000 D $110,000

Wilder, Inc. applies overhead to production at a predetermined rate of 90% based on direct labor cost. Job No. 305, the only job still in process at the end of August, has been charged with manufacturing overhead of $2,250. Assuming the balance in Work in Process Inventory is $9,000, the amount of direct materials charged to Job 305 is A $4,250. B $9,000. C $2,500. D $2,250.

How is the Work in Process Inventory account related to the Finished Goods Inventory account? A Debits to Work in Process Inventory should equal credits to Finished Goods Inventory. You got it wrong : B Credits to Work in Process Inventory should equal credits to Finished Goods Inventory. C Debits to Work in Process Inventory should equal debits to Finished Goods Inventory. This is correct answer : D Credits to Work in Process Inventory should equal debits to Finished Goods Inventory.

What will the journal entry include when a job is finished? A credit to Finished Goods Inventory B debit to Manufacturing Overhead C debit to Work in Process Inventory D debit to Finished Goods Inventory

What will the journal entry include when the units are sold? A credit to Cost of Goods Sold B credit to Finished Goods Inventory C debit to Work in Process Inventory D debit to Manufacturing Overhead

At the end of the year, Ferguson Furniture has a Manufacturing Overhead account balance of $4,329 (cr.). This means that Ferguson ________ overhead costs to manufacturing jobs. A underapplied B did not apply C overapplied D correctly applied

If manufacturing overhead is underapplied, what effect does this have on the Cost of Goods Sold account at the end of the period? A It increases Cost of Goods Sold through an adjusting debit. B It decreases Cost of Goods Sold through an adjusting debit. C It decreases Cost of Goods Sold through an adjusting credit. D It increases Cost of Goods Sold through an adjusting credit.

Assigning manufacturing costs to work in process results in credits to all of the following except A.manufacturing overhead. B.finished goods inventory. C.raw materials inventory. D.factory labor.

Sheridan Manufacturing thinks that the best activity base for its manufacturing overhead is machine hours. The estimate of annual overhead costs is $660000. The company used 1000 hours of processing for Job A15 during the period and incurred actual overhead costs of $690000. The budgeted machine hours for the year totaled 20000. What amount of manufacturing overhead should be applied to Job A15? Entry field with correct answer A.$33000. B.$690. C.$34500. D.$660.

During June, Sheffield, Inc. produced a job consisting of 112 widgets with a job cost of $2464. Which of the following is one effect that occurs when the company sells half of the products for $1564? A.Work in Process Inventory decreases. B.Finished Goods Inventory increases. C.Raw Materials inventory decreases. D.Cost of Goods Sold increases.

Waterway Company applies manufacturing overhead based on direct labor hours. Information concerning manufacturing overhead and labor for the year as follows: Actual manufacturing overhead $169900 Estimated manufacturing overhead $166400 Direct labor incurred 2500 hours @ $24 = $60000 Direct labor estimated 2600 hours @ $23 = $59800 How much is over or underapplied overhead at year end? Entry field with correct answer A.$6796 underapplied. B.$3500 overapplied. C.$9900 underapplied. D.$6400 underapplied.

A company is more likely to use a job costing system if it manufactures products with unique characteristics. A company is more likely to use a job costing system if Entry field with correct answer A.its production is continuous. B.it manufactures a large volume of similar products. C.it manufactures products with unique characteristics. D.it uses a periodic inventory system.

The Work in Process account decreases and the Finished Goods Inventory account increases. Which account is credited when a job is completed? Entry field with correct answer A.Work in Process Inventory. B.Finished Goods Inventory. C.Sales Revenue. D.Cost of Goods Sold.

Manufacturing overhead is underapplied if actual overhead is greater than applied overhead. Manufacturing overhead is underapplied if Entry field with correct answer A.actual overhead equals applied overhead. B.actual overhead is less than applied. C.the predetermined rate equals the actual rate. D.actual overhead is greater than applied.

In a perpetual system, purchases of raw materials are debited to Raw Materials Inventory. In accumulating raw materials costs, the cost of raw materials purchased in a perpetual system is debited to Entry field with correct answer A.work in process. B.purchases. C.raw materials purchases. D.raw materials inventory.

The flow of costs in job order costing parallels the physical flow of materials as they are converted into finished goods. The flow of costs in job order costing Entry field with correct answer A.parallels the physical flow of materials as they are converted into finished goods. B.begins with work in process inventory and ends with finished goods inventory. C.begins as soon as a sale occurs. D.is necessary to prepare the cost of goods manufactured schedule.