Q&A Hero

Q: Materials purchased on account during the month amounted to $190,000. Materials requisitioned and placed in production totaled $156,000. The journal entry for the transaction for materials requisitioned by the production department isa. Materials 156,000Work in Process 156,000b. Work in Process 190,000Materials 190,000c. Work in Process 156,000Materials 156,000d. Work in Process 156,000Cash 156,000

Q: The recording of the factory labor incurred for general factory use would include a debit to a. Factory Overhead b. Wages Payable c. Wages Expense d. Cost of Goods Sold

Q: 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

Q: During the period, labor costs incurred amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. Factory overhead applied to production was $32,000. The journal entry for the actual factory overhead costs incurred is a. Accounts Payable 25,000 Factory Overhead 25,000 b. Factory Overhead 32,000 Accounts Payable 32,000 c. Work in Process 25,000 Wages Payable 25,000 d. Factory Overhead 25,000 Wages Payable 25,000

Q: The source document for debiting Work in Process for direct materials is a a. purchase order b. purchase requisition c. materials requisition d. receiving report

Q: In a job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead? a. materials b. direct labor c. indirect labor d. supplies

Q: The controlling account for the cost ledger is a. Finished Goods b. Materials c. Work in Process d. Cost of Goods Sold

Q: Recording jobs completed would include a debit to a. Factory Overhead b. Finished Goods c. Work in Process d. Cost of Goods Sold

Q: 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. overapplied, deferred credit b. underapplied, deferred debit c. underapplied, deferred credit d. overapplied, deferred debit

Q: 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

Q: Selected accounts with some amounts omitted are as follows:Work in ProcessAug. 1 Balance275,000 Aug. 31 Goods finished1,030,000 31 Direct materialsX 31 Direct labor 450,000 31 Factory overheadX Factory OverheadAug. 1–31 Costs incurred145,000Aug. 1 Balance15,000 ​ 31 AppliedXIf the balance of Work in Process on August 31 is $220,000, what was the amount debited to Work in Process for factory overhead in August, assuming a factory overhead rate of 30% of direct labor costs?a. $10,000b. $70,000c. $120,000d. $135,000

Q: 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

Q: A separate account for each material is found in a a. general ledger b. materials ledger c. receiving report d. job cost sheet

Q: The basis for recording direct labor costs incurred is a summary of the period's a. job cost sheets b. time tickets c. employees' earnings records d. clock cards

Q: 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

Q: Costs that are incurred in generating revenues during the period, but are not involved in the manufacturing process, are referred to as a. period costs b. conversion costs c. factory overhead costs d. product costs

Q: Which of the following is not a reason a firm would use a job order cost system? a. to help control costs b. to determine product pricing c. to determine department costs within the firm d. to determine profit

Q: A summary of the materials requisitions completed during a period serves as the basis for transferring the cost of the materials from the materials 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

Q: Selected accounts with a credit amount omitted are as follows:Work in ProcessApr. 1Balance7,000 Apr. 30Goods finishedX 30Direct materials78,400 30Direct labor195,000 30Factory overhead136,500 Finished GoodsApr. 1Balance42,000 30Goods finished387,000 What was the balance of Work in Process as of April 30?a. $8,100b. $35,000c. $29,900d. $22,900

Q: Which of the following represents the factory overhead applied to a product? a. predetermined factory overhead rate times estimated activity base b. actual factory overhead rate times estimated activity base c. predetermined factory overhead rate times actual activity base d. actual factory overhead rate times actual activity base

Q: Which of the following are controlling accounts for a manufacturing business, each with its own subsidiary ledger a. Finished Goods, Work in Process, and Cost of Goods Sold b. Materials, Work in Process, and Cost of Goods Sold c. Materials, Work in Process, and Finished Goods d. Materials, Finished Goods, and Cost of Goods Sold

Q: Which of the following would be most likely to use a process cost system? a. custom furniture manufacturer b. auto body repair shop c. law firm d. lawn fertilizer manufacturer

Q: 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

Q: A difference in quantity of materials used on two comparable jobs may be caused by a. inadequately trained employees b. poor quality materials c. improperly maintained tools d. All of these choices

Q: If the amount of factory overhead cost incurred exceeds the amount applied, the factory overhead account will have a a. debit balance and be underapplied b. credit balance and be underapplied c. credit balance and be overapplied d. debit balance and be overapplied

Q: The direct labor and overhead costs of providing services to clients are accumulated ina. Finished Services Expenseb. Work in Processc. Administrative Salaries Expensed. Overhead

Q: Which of the following products would be manufactured using a job order cost system?a. cell phoneb. highlighter penc. graduation invitationd. recliner

Q: In a job order cost accounting system, the journal entry for the flow of direct materials into production is to a. debit Work in Process, credit Materials b. debit Materials, credit Work in Process c. debit Factory Overhead, credit Materials d. debit Work in Process, credit Supplies

Q: Selected accounts with some amounts omitted are as follows:Work in ProcessOct. 1Balance20,000 Oct. 31Goods finishedX 31Direct materials96,700 31Direct labor201,000 31Factory overheadX Finished GoodsOct. 1Balance52,000 31Goods finished360,000 If the balance of Work in Process on October 31 is $21,000, what was the amount of factory overhead applied in October?a. $63,300b. $21,300c. $42,300d. $11,300

Q: 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

Q: At the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing over/underapplied overhead into Cost of Goods Sold would cause net income to a. increase by $1,700,000 b. decrease by $1,700,000 c. increase by $3,400,000 d. decrease by $3,400,000

Q: The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had production costs of $375,000. The journal entry for the transfer of costs from finished goods to cost of goods sold is a. Finished Goods 540,000 Cost of Goods Sold 540,000 b. Finished Goods 375,000 Cost of Goods Sold 375,000 c. Cost of Goods Sold 375,000 Finished Goods 375,000 d. Cost of Goods Sold 540,000 Finished Goods 540,000

Q: Which of the following would not be found in the accounting system of a service provider? a. cost ledger b. finished goods ledger c. deferred revenue account d. job cost sheets

Q: The recording of the application of factory overhead costs to jobs would include a credit to a. Factory Overhead b. Wages Payable c. Work in Process d. Cost of Goods Sold

Q: The journal entry for the purchase of $45,000 of raw materials is a. Materials 45,000 Accounts Receivable 45,000 b. Materials 45,000 Accounts Payable 45,000 c. Inventory 45,000 Accounts Receivable 45,000 d. Inventory 45,000 Cash 45,000

Q: The document authorizing the issuance of materials from the storeroom is aa. materials requisitionb. purchase requisitionc. receiving reportd. purchase order

Q: All of the following are examples of activity bases except a. salaries of supervisors b. quality inspections of products c. number of machine setups d. direct labor hours

Q: Which of the following is not a characteristic of a job order cost 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.

Q: Each document in the cost ledger is called a a. finished goods sheet b. stock record c. materials requisition d. job cost sheet

Q: Period costs are a. found on the balance sheet b. not involved in the production process c. classified as direct labor, direct material, or factory overhead d. found on the job cost sheets

Q: The period costs of a textbook printer would include a. wages of a press operator b. factory insurance costs c. CEO salary d. paper costs

Q: The amount of time spent by an employee on an individual job is recorded on a. pay stubs b. in-and-out cards c. time tickets d. employees' earnings records

Q: The materials requisition is used to a. release materials from the storeroom to production b. release finished goods to the shipping department c. record the acquisition of materials from a vendor d. record and electronically transmit materials data in place of a receiving report

Q: Materials purchased on account during the month totaled $190,000. Materials requisitioned and placed in production totaled $165,000. The journal entry for the materials purchased on account is a. Materials 165,000 Accounts Payable 165,000 b. Materials 190,000 Accounts Payable 190,000 c. Materials 190,000 Cash 190,000 d. Accounts Payable 190,000 Materials 190,000

Q: For which of the following businesses would the process cost system be appropriate? a. custom cabinet maker b. landscaper c. paper mill d. catering firm

Q: Which of the following entries would not be found on the books of a service provider? a. a debit to Work in Process and a credit to Materials b. a debit to Work in Process and a credit to Wages Payable c. a debit to Work in Process and a credit to Overhead d. a debit to Cost of Services and a credit to Work in Process

Q: 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

Q: A widely used activity base for developing factory overhead rates in highly automated settings is a. direct labor hours b. direct labor dollars c. direct materials d. machine hours

Q: When Job 117 was completed, direct materials totaled $4,400; direct labor, $5,600; and factory overhead, $2,400. A total of 1,000 units were produced at a per-unit cost of a. $12,400 b. $1,240 c. $124 d. $12.40

Q: Winston Company estimates that the total factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year were 54,300. The actual factory overhead costs for the year were $1,375,000. Determine the over- or underapplied amount for the year. a. $17,500 overapplied b. $17,500 underapplied c. $118,250 overapplied d. $118,250 underapplied

Q: Which of the following would most likely use a job order cost system? a. paper mill b. swimming pool installer c. company that manufactures chlorine for swimming pools d. oil refinery

Q: All of the following are true regarding product costs except a. product costs are found on the balance sheet until inventory is sold b. product costs consist of direct labor, direct materials, and factory overhead c. product costs can be found in three accounts on the balance sheet d. product costs include sales and administrative expenses

Q: When a job is completed in a service organization, the job costs are transferred to the a. work in process account b. cost of services account c. finished goods account d. cost of goods sold account

Q: A job order cost accounting system accumulates and records product costs by jobs. The resulting total and unit product costs can be used to do all of the following except a. make cost comparisons across similar jobs b. analyze cost trends over time c. compare actual costs to expected costs d. create customer profiles for the sales staff

Q: Which of the following is the formula to compute the predetermined factory overhead rate? a. estimated total factory overhead costs divided by estimated activity base b. actual total factory overhead costs divided by estimated activity base c. estimated total factory overhead costs divided by actual activity base d. actual total factory overhead costs divided by actual activity base

Q: Reynolds Manufacturers Inc. has estimated total factory overhead costs of $95,000 and expected direct labor hours of 9,500 for the current fiscal year. If Job 117 incurs 2,300 direct labor hours, Work in Process will be debited and Factory Overhead will be credited for a. $21,850 b. $2,300 c. $95,000 d. $23,000

Q: Cavy Company estimates that the total factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. The machine hours for the month of April for all of the jobs were 4,780. If the actual factory overhead totaled $141,800, determine the over- or underapplied amount for the month. a. $7,575 underapplied b. $35,220 underapplied c. $7,575 overapplied d. $35,220 overapplied

Q: Sanders Inc. has applied $567,988 of overhead to jobs in the cost ledger. Actual overhead at the end of the year is $575,000. The adjustment for over- or underapplied overhead is a. $7,012 overapplied, increase Cost of Goods Sold b. $7,012 underapplied, increase Cost of Goods Sold c. $7,012 overapplied, decrease Cost of Goods Sold d. $7,012 underapplied, decrease Cost of Goods Sold

Q: On which of the following would the labor costs for an individual job be recorded? a. clock cards b. in-and-out cards c. time tickets d. payroll register

Q: Which of the following are the two main types of cost accounting systems for manufacturing operations? a. process cost and general accounting systems b. job order cost and process cost systems c. job order and general accounting systems d. process cost and replacement cost systems

Q: Recording jobs shipped and customers billed would include a credit to a. Accounts Payable b. Cash c. Finished Goods d. Cost of Goods Sold

Q: The journal entries for the cost and sale of a finished good on account would a. debit Cost of Goods Sold and credit Finished Goods b. debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, and credit Sales c. debit Sales Expense, credit Finished Goods, credit Cash, and credit Accounts Receivable d. debit Work in Process, credit Finished Goods, debit Accounts Receivable, and credit Sales

Q: In a job order cost system, when goods that have been ordered are received, the quantity received and the condition of the goods are entered on a a. purchase order b. sales invoice c. receiving report d. purchase requisition

Q: The finished goods account is the controlling account for thea. cost ledgerb. materials ledgerc. work in process ledgerd. stock ledger

Q: Recording jobs completed would include a credit to a. Factory Overhead b. Finished Goods c. Work in Process d. Cost of Goods Sold

Q: If factory overhead is applied based on direct labor hours, the amount of overhead to be applied is a. $180,000 b. $171,580 c. $172,500 d. $184,000

Q: Indicate the answer choice that best completes the statement or answers the questionFor a manufacturing business, products that are in the process of being manufactured are referred to asa. supplies inventoryb. work in process inventoryc. finished goods inventoryd. materials inventory

Q: Period costs are costs that are incurred for the production requirements of a certain period.a. Trueb. False.

Q: A service organization will not use job order costing because it has no direct materials. a. True b. False

Q: The storeroom releases materials for use in manufacturing when a receiving report is received. a. True b. False

Q: Job order cost accounting systems may be used for evaluating and controlling costs in a service business. a. True b. False

Q: Direct labor cost is an example of a period cost. a. True b. False

Q: Materials are transferred from the storeroom to the factory in response to materials requisitions. a. True b. False

Q: A manufacturing business reports just two types of inventory on its balance sheet: work in process inventory and finished goods inventory. a. True b. False

Q: Job order cost accounting systems can be used only for companies that manufacture a product. a. True b. False

Q: The process cost system is appropriate where few products are manufactured and each product is made to customers' specifications. a. True b. False

Q: Using the job order cost system, service organizations are able to bill customers on a weekly or monthly basis, even when the job has not been completed. a. True b. False

Q: Depreciation expense on factory equipment is part of factory overhead cost. a. True b. False

Q: The current year's advertising costs are normally considered period costs. a. True b. False

Q: The job order cost system is not used by service organizations. a. True b. False