I. The basic parts of a joborder costing system are the:
A. Cost______________ and _________________ procedures.
B. ____________________ documents.
C. Accountsthat a company uses when it incurs costs for direct ____________,direct ________________, and ___________________.
II. Accounting for materialsrequires three types of entries.
A. With the ______________ of materials,debit Materials Inventory and credit Accounts Payable.
B. With the _______________ of directmaterials to ________________, debit Work in Process Inventory andcredit Materials Inventory.
C. With the transfer of__________________ materials to production, debit Overhead andcredit Materials Inventory.
III. Accounting for labor requirestwo types of entries.
A. For payroll costs incurred for_____________ labor, debit Work in Process Inventory and creditPayroll Payable.
B. For payroll costs incurred for_______________ labor, debit Overhead and credit PayrollPayable.
IV. Accounting for other overhead requires twotypes of entries.
A. Other overhead includes plant____________, property _____________, insurance, and_______________.
B. To record _____________ overhead costs,debit Overhead and credit Cash or Accumulated Depreciation.
C. To record _____________ overheadcosts, debit Work in Process Inventory and credit Overhead.
D. The actual (debits) and estimated(credits) overhead costs are ________________ at the end of theperiod to determine the accuracy of overhead costrecognition.
V. To recordthe transfer of ________________ units, debit Finished GoodsInventory and credit Work in Process Inventory.
VI. When a companyuses a perpetual inventory system, two accounting entries are madewhen products are sold.
A. To record the sold productâs________________, debit Accounts Receivable (or Cash) and creditSales.
B. To record the sold productâsassociated ____________, debit Cost of Goods Sold and creditFinished Goods Inventory.
VII. Each job in production has a job order_________________.
A. Hasspace for direct materials, direct labor, and overhead costs.
B. Includesthe job order number, product specifications, customer name, dateof order, projected completion date, and a cost summary.
C. Forincomplete jobs, they make up the _______________ ledger for theWork in Process Inventory account.
D. When ajob is completed, the costs are totaled on the_____________________.
1. Unit cost is computed to_____________ items in inventory.
2. Product ___________Cost = Total Costs for Job ÷ Number of Good Units Produced
VIII. Job order costing systems are also used in______________ organizations.
A. Job ordercost cards track ________________ contracts.
IX. Overhead costs are allocated in foursteps.
A. Step 1: _____________ the overheadrate.
1. A ________________ overheadrate is calculated as estimated overhead costs divided by estimatedcost driver activity.
B. Step 2:______________ the overhead rate.
1. Costs are assigned by multiplyingthe actual cost _____________ activity by the predeterminedoverhead rate.
C. Step 3:Record ________________ overhead costs
D. Step 4:_________________ applied and actual overhead amounts
1. Ifover- or underapplied amounts are minimal, credit or debit_________________.
2. Ifover- or underapplied amounts are material, adjustments should bemade to the inventory accounts affected.
X. The__________________ approach to applying overhead costs is to use asingle plantwide rate.
XI. The moreaccurate _____________________ approach to applying overhead costscreates many smaller activity pools and establishes separate ratesfor each pool.
I. The basic parts of a joborder costing system are the:
A. Cost______________ and _________________ procedures.
B. ____________________ documents.
C. Accountsthat a company uses when it incurs costs for direct ____________,direct ________________, and ___________________.
II. Accounting for materialsrequires three types of entries.
A. With the ______________ of materials,debit Materials Inventory and credit Accounts Payable.
B. With the _______________ of directmaterials to ________________, debit Work in Process Inventory andcredit Materials Inventory.
C. With the transfer of__________________ materials to production, debit Overhead andcredit Materials Inventory.
III. Accounting for labor requirestwo types of entries.
A. For payroll costs incurred for_____________ labor, debit Work in Process Inventory and creditPayroll Payable.
B. For payroll costs incurred for_______________ labor, debit Overhead and credit PayrollPayable.
IV. Accounting for other overhead requires twotypes of entries.
A. Other overhead includes plant____________, property _____________, insurance, and_______________.
B. To record _____________ overhead costs,debit Overhead and credit Cash or Accumulated Depreciation.
C. To record _____________ overheadcosts, debit Work in Process Inventory and credit Overhead.
D. The actual (debits) and estimated(credits) overhead costs are ________________ at the end of theperiod to determine the accuracy of overhead costrecognition.
V. To recordthe transfer of ________________ units, debit Finished GoodsInventory and credit Work in Process Inventory.
VI. When a companyuses a perpetual inventory system, two accounting entries are madewhen products are sold.
A. To record the sold productâs________________, debit Accounts Receivable (or Cash) and creditSales.
B. To record the sold productâsassociated ____________, debit Cost of Goods Sold and creditFinished Goods Inventory.
VII. Each job in production has a job order_________________.
A. Hasspace for direct materials, direct labor, and overhead costs.
B. Includesthe job order number, product specifications, customer name, dateof order, projected completion date, and a cost summary.
C. Forincomplete jobs, they make up the _______________ ledger for theWork in Process Inventory account.
D. When ajob is completed, the costs are totaled on the_____________________.
1. Unit cost is computed to_____________ items in inventory.
2. Product ___________Cost = Total Costs for Job ÷ Number of Good Units Produced
VIII. Job order costing systems are also used in______________ organizations.
A. Job ordercost cards track ________________ contracts.
IX. Overhead costs are allocated in foursteps.
A. Step 1: _____________ the overheadrate.
1. A ________________ overheadrate is calculated as estimated overhead costs divided by estimatedcost driver activity.
B. Step 2:______________ the overhead rate.
1. Costs are assigned by multiplyingthe actual cost _____________ activity by the predeterminedoverhead rate.
C. Step 3:Record ________________ overhead costs
D. Step 4:_________________ applied and actual overhead amounts
1. Ifover- or underapplied amounts are minimal, credit or debit_________________.
2. Ifover- or underapplied amounts are material, adjustments should bemade to the inventory accounts affected.
X. The__________________ approach to applying overhead costs is to use asingle plantwide rate.
XI. The moreaccurate _____________________ approach to applying overhead costscreates many smaller activity pools and establishes separate ratesfor each pool.
Related questions
1. Azucar, Inc. has six processing departments for refining sugarâAffination, Carbonation, Decolorization, Boiling, Recovery, and Packaging. Conversion costs are added evenly throughout each process. Data from August for the Decolorization Department are as follows:
| â | Metric Tons |
| Beginning Work-in-Process Inventory | 0 |
| Transferred in | 13,500 |
| Completed and transferred out to Boiling in August | 5500 |
| Ending Work-in-Process Inventory | 8000 |
| â | Costs |
| Beginning Work-in-Process Inventory | $0 |
| Costs added during August | â |
| Direct materials | 3,000,000 |
| Direct labor | 1,100,000 |
| Manufacturing overhead | 625,000 |
| Total costs added during August | $4,725,000 |
The ending Work-in-Process Inventory is 100% and 75% complete with respect to direct materials and conversion costs, respectively. The weighted-average method is used. Compute the cost per equivalent unit for direct materials and conversion costs. (Round any intermediate calculations and your final answer to two decimal places.)
| A | $81.48 per metric ton for direct materials; $200.00 per metric ton for conversion costs | |
| B | $200.00 per metric ton for direct materials; $81.48 per metric ton for conversion costs | |
| C | $222.22 per metric ton for direct materials; $150.00 per metric ton for conversion costs | |
| D | $222.22 per metric ton for direct materials; $222.22 per metric ton for conversion costs |
2. Martinez Manufacturing incurred $4000 for indirect labor in Department III. The journal entry to record indirect labor utilized, but not paid is ________. Process costing is used.
| A | debit Manufacturing Overhead, $4000; credit Wages Payable, $4000 | |
| B | debit Wages Payable, $4000; credit Manufacturing Overhead, $4000 | |
| C | debit Accounts Payable, $4000; credit Manufacturing Overhead, $4000 | |
| D | debit Manufacturing Overhead, $4000; credit Accounts Payable, $4000 |
3. The managerial role that involves the day-to-day running of the business is the ________.
| A strategic planning function | ||
| B directing function | ||
| C planning function | ||
| D controlling function |
4. Manufacturing costs flow from Work-in-Process Inventory to Cost of Goods Sold to Finished Goods Inventory.
A True
B False
5. Payton Corporation provided the following information for the year:
| Beginning BalanceâWork-in-Process Inventory | $26,000 |
| Ending BalanceâWork-in-Process Inventory | 55,000 |
| Beginning Balanceâ Direct Materials | 81,000 |
| Ending Balanceâ Direct Materials | 59,000 |
| Purchases â Direct Materials | 360,000 |
| Direct Labor | 471,000 |
| Indirect Labor | 19,000 |
| Depreciation on Factory Plant and Equipment | 24,000 |
| Plant Utilities and Insurance | 268,000 |
What was the amount of the cost of goods manufactured for the year?
| A | $1,363,000 | |
| B | $1,164,000 | |
| C | $1,193,000 | |
| D | $1,135,000 |
1.) When products held in inventory are sold:
A.)Cost of Goods Sold is credited.
B.)Work in Process Inventory is credited.
C.)Finished Goods Inventory is credited.
D.)Finished Goods Inventory is debited.
2.)Since manufacturing costs (direct materials, direct labor,and overhead) are incurred in the process of manufacturing units ofproduct, these costs are credited t
| A.) | The Direct Materials Inventory, Direct Labor, and ManufacturingOverhead accounts respectively. |
| B.) | Liability accounts. |
| C.) | The Work in Process Inventory account. |
| D.) | The Cost of Goods Sold account. |
3.)Management accounting systems are designed to assistorganizations in the performance of all of the following functionsexcept:
| A.) | The assignment of decision-making authority over companyassets. |
| B.) | Planning and decision-making. |
| C.) | Monitoring, evaluating, and rewarding performance. |
| D.) | The preparation of income tax returns. |
4.)In a schedule of cost of finished goods manufactured, thefigure for total manufacturing costs:
| A.) May be less than the cost of direct materials used. | |
| B.) May be less than the direct labor costs assigned toproduction. | |
| C.) May be less than the manufacturing overhead applied toproduction. | |
| D.) May be less than the cost of finished goodsmanufactured. |
5.) When a manufacturing company purchases raw materials orcomponent parts to be used in manufacturing finished goods, thesecosts are initially debited to:
| A.) Expense accounts. | |
| B.) Raw Materials Inventory. | |
| C.) Finished Goods Inventory. | |
| D.) Manufacturing Overhead. |
6.) The wages paid to employees working directly on a company'sproducts would be shown as a:
| A.) Credit to Direct Labor. | |
| B.) Debit to Direct Labor. | |
| C.) Credit to Work in Process. | |
| D.) Debit to Manufacturing Overhead. |
7.) Amounts credited to the Work in Process inventory accountmay best be described as:
| A.) The cost of finished goods manufactured. | |
| B.) Total manufacturing costs charged to production. | |
| C.) The cost of goods sold. | |
| D.) Direct materials purchased, direct labor costs paid, andpayments for items classified as manufacturing overhead. |
