ACCT 2020 - Chapter 2 - Smart Book Practice

The basic formula for process costing is Blank______. Multiple choice question. -total cost = actual direct materials + actual direct labor + applied overhead -average unit cost = total manufacturing cost ÷ total units produced -average unit cost = total units produced ÷ total manufacturing costs

average unit cost = total manufacturing cost ÷ total units produced

The formula for a predetermined overhead rate is Blank______. Multiple choice question. actual total cost driver ÷ actual total manufacturing overhead cost estimated total manufacturing overhead cost ÷ estimated total cost driver estimated total cost driver ÷ estimated total manufacturing overhead cost actual total manufacturing overhead cost ÷ actual total cost driver

estimated total manufacturing overhead cost ÷ estimated total cost driver

Ideally an allocation base should ______. Multiple choice question. be calculated using a predetermined overhead rate should not be a cost driver explain or influence the amount of overhead incurred be a cost associated with producing the firm's goods

explain or influence the amount of overhead incurred

Labor costs Blank______. Multiple select question. may be direct or indirect are always recorded directly into Work in Process are recorded in basically the same way as material costs are determined from the job cost sheets

may be direct or indirect are recorded in basically the same way as material costs

Costs are transferred out of Finished Goods inventory Blank______. Multiple choice question. when goods are sold when a customer places an order to purchase the goods at the end of the accounting period when goods are completed

when goods are sold

Given the following, compute the cost of goods manufactured. Direct material cost: $40,000, Direct labor cost: $100,000, Applied overhead: $120,000, Actual overhead: $130,000; Beginning work in process inventory: $30,000 Ending work in process inventory: $12,000. Multiple choice question. $278,000 $288,000 $260,000 $242,000

$278,000 Reason: $30,000 + $40,000 + $100,000 + $120,000 - $12,000 = $278,000

Which of the following statements are true? Multiple select question. -Raw Materials Inventory represents the cost of materials not yet used in production. -Raw Materials Inventory only includes the cost of direct materials. -Direct labor costs flow through the Raw materials inventory account. -When materials are purchased they are recorded in the Raw Materials Inventory account.

-Raw Materials Inventory represents the cost of materials not yet used in production. -When materials are purchased they are recorded in the Raw Materials Inventory account.

The first step in assigning manufacturing overhead is to determine the _________ ______________ or Cost Driver.

Allocation Base

On the job cost sheet and work in process accounts, the Blank______ manufacturing overhead is recorded. Multiple choice question. applied budgeted actual

Applied

Which of the following items are included on a cost of goods manufactured report? Multiple select question. Applied manufacturing overhead Beginning and ending finished goods inventory Actual manufacturing overhead Beginning and ending raw materials inventory Beginning and ending work in process inventory

Applied manufacturing overhead Beginning and ending raw materials inventory Beginning and ending work in process inventory

When is the predetermined overhead rate calculated? Multiple choice question. As soon as actual overhead is known Before the period begins Throughout the year After the period is over

Before the period begins

When is the predetermined overhead rate calculated? Multiple choice question. As soon as actual overhead is known Throughout the year After the period is over Before the period begins

Before the period begins

Job-order costing would most likely be used in a(n) Blank______. Multiple choice question. construction company Dairy farm that produces raw milk Oil refinery Soda bottling factory Construction Company

Construction Company

A direct labor____________ _____________ is a document used to record how long workers spend on each job and task.

Time Ticket

Which of the following statements are true? Multiple select question. Raw Materials Inventory only includes the cost of direct materials. When materials are purchased they are recorded in the Raw Materials Inventory account. Direct labor costs flow through the Raw materials inventory account. Raw Materials Inventory represents the cost of materials not yet used in production.

When materials are purchased they are recorded in the Raw Materials Inventory account. Raw Materials Inventory represents the cost of materials not yet used in production.

The basic formula for process costing is Blank______. Multiple choice question. average unit cost = total manufacturing cost ÷ total units produced average unit cost = total units produced ÷ total manufacturing costs total cost = actual direct materials + actual direct labor + applied overhead

average unit cost = total manufacturing cost ÷ total units produced

Because service firms tend to be labor-intensive, the primary driver used to assign cost is ___________ ____________ .

billable hours

The most common driver used to assign costs in a service firm is Blank______. Multiple choice question. billable hours machine hours number of clients labor dollars

billable hours

Finished Goods Inventory Blank______. Multiple choice question. is the same as cost of goods manufactured consists of goods that have been sold to customers during the period consists of completed, unsold goods consists of goods that require additional processing before being sold

consists of completed, unsold goods

Underapplied or overapplied overhead is the Blank______. Multiple choice question. total overhead applied to work in process sum of overhead applied to jobs and actual overhead difference between overhead applied to jobs and actual overhead same as actual overhead

difference between overhead applied to jobs and actual overhead

The document used to record the time workers spend on each job and task is a Blank______. Multiple choice question. job cost sheet materials requisition form direct labor time ticket production order

direct labor time ticket

When materials are requisitioned into production, ______. Multiple select question. direct materials are recorded in Work in Process indirect materials are recorded as a separate line item on the job cost sheet indirect materials are recorded in Work in Process direct materials are recorded on the job cost sheet

direct materials are recorded in Work in Process direct materials are recorded on the job cost sheet

To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the Blank______. Multiple choice question. estimated units of production estimated total direct labor hours estimated total cost driver actual total manufacturing overhead

estimated total cost driver

A predetermined overhead rate is calculated by dividing the ______ total manufacturing overhead by the ______ total cost driver.

estimated; estimated

The cost of jobs that have been completed but not yet sold are contained in _____________ ________________ Inventory.

finished goods

Companies that use job-order costing Blank______.

make unique products

Cost of goods ____________ is the total cost of jobs completed during the period.

manufactured

Cost of goods sold ________________ is the total cost of jobs completed during the period

manufactured

The flow of manufacturing costs from Raw Materials to Work in Process Inventory and into Finished Goods is summarized on the cost of goods _____________ report.

manufactured

Factory labor charges that cannot be easily traced to a job are treated as ______. Multiple choice question. nonmanufacturing costs direct labor manufacturing overhead

manufacturing overhead

Categories of manufacturing costs include ______. Multiple select question. manufacturing overhead direct labor administrative expenses direct materials selling expenses

manufacturing overhead direct labor direct materials

Categories of manufacturing costs include ______. Select all that apply administrative expenses manufacturing overhead direct labor direct materials selling expenses

manufacturing overhead direct labor direct materials

Labor costs Blank______. Multiple select question. may be direct or indirect are determined from the job cost sheets are always recorded directly into Work in Process are recorded in basically the same way as material costs

may be direct or indirect are recorded in basically the same way as material costs

An allocation base is a(n) Blank______. Multiple choice question. activity that causes overhead costs to change measure used to assign all manufacturing costs to products and services measure of activity used to assign overhead costs to products and services

measure of activity used to assign overhead costs to products and services

Nonmanufacturing costs incurred during a period are treated as Blank______. Multiple choice question. assets period expenses product costs liabilities

period expenses

Materials requisition forms are used to Blank______. Multiple select question. record the cost of raw materials in the accounting system control the flow of materials from inventory into production specify the cost of materials to be ordered summarize the cost of a job

record the cost of raw materials in the accounting system control the flow of materials from inventory into production

The major difference between job order and process costing is Blank______. whether the products produced are similar or different whether the products produced are hand made or machine made job order costing is used for products and process costing is used for services

whether the products produced are similar or different

Raw materials inventory was $5,000 at the beginning of the year and $12,000 at the end of the year. During the year, a total of $27,000 in raw materials were purchased. The purchases included $4,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. Multiple choice question. $16,000 $30,000 $24,000 $20,000

$16,000 Reason: Cost of direct materials = Beginning Inventory + Purchases - Indirect Materials - Ending Inventory ($5,000 + $27,000 - $12,000 - $4,000 = $16,000)

True or false: The cost of each individual unit is tracked to products under both job order and process costing.

False - Because each unit is the same, there is no reason to track the costs of each unit individually under process costing.

When a job is completed, its costs are transferred into Blank______. Multiple choice question. Cost of Goods Sold Finished Goods Work in Process Sales Revenue

Finished Goods

What document specifies the type and quantity of direct materials used on a specific job? Multiple choice question. Bill of materials form Materials requisition form Direct labor time ticket Job cost sheet

Materials requisition form

When materials are purchased they are first recorded in the ______ account. Multiple choice question. Finished Goods Inventory Manufacturing Overhead Raw Materials Inventory Work in Process Inventory

Raw Materials Inventory

The total cost transferred out of Work in Process inventory into Finished Goods inventory is ______. Multiple choice question. net operating income cost of goods manufactured gross profit cost of goods sold

cost of goods manufactured

Direct materials used for the period cost $66,000; Direct labor cost $80,000; Applied overhead was $60,000; Actual overhead was $50,000; Beginning work in process inventory was $27,000; and Ending work in process inventory was $25,000. Calculate the cost of goods manufactured. Multiple choice question. $206,000 $198,000 $208,000 $258,000

$208,000 Reason: $27,000 + ($66,000 + $80,000 + $60,000) - $25,000 = $208,000

Raw materials inventory was $27,000 at the beginning of the year and $25,000 at the end of the year. During the year, $100,000 in raw materials were purchased. The purchases included $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. Multiple choice question. $70,000 $102,000 $74,000 $130,000

$74,000 Reason: Cost of direct materials = Beginning Inventory + Purchases - Indirect Materials - Ending Inventory ($27,000 + $100,000 - $28,000 - $25,000 = $74,000)

When a job is completed, its costs are transferred out of Blank______. Multiple choice question. Manufacturing Overhead Cost of Goods Sold Finished Goods Work in Process

Work in Process

When a job is completed, its costs are transferred out of Blank______. Multiple choice question. Work in Process Cost of Goods Sold Finished Goods Manufacturing Overhead

Work in Process

On the job cost sheet and work in process accounts, the Blank______ manufacturing overhead is recorded. Multiple choice question. applied budgeted actual

applied

Predetermined overhead rates are ______. Multiple choice question. based on some secondary allocation measure generally calculated for each month of the year calculated using estimated costs and actual cost driver usage used to assign both direct and indirect manufacturing costs to jobs

based on some secondary allocation measure

When goods are sold to customers, Blank______. Multiple choice question. costs are transferred from Work in Process to Finished Goods costs are transferred from Finished Goods to Cost of Goods Sold costs are transferred from Finished Goods to Sales Revenue the inventory accounts are not affected

costs are transferred from Finished Goods to Cost of Goods Sold

he first step in assigning manufacturing overhead costs using a predetermined overhead rate is to Blank______. Multiple choice question. calculate the predetermined overhead rate determine the cost driver assign manufacturing overhead

determine the cost driver

The first step in assigning manufacturing overhead costs using a predetermined overhead rate is to Blank______. Multiple choice question. calculate the predetermined overhead rate assign manufacturing overhead determine the cost driver

determine the cost driver - Step 1 calculate the predetermined overhead rate - Step 2 assign manufacturing overhead - Step 3

To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the Blank______. Multiple choice question. estimated units of production actual total manufacturing overhead estimated total cost driver estimated total direct labor hours

estimated total cost driver Reason: Estimated manufacturing overhead is divided by estimated units of production only if units of production is the allocation base. Reason: Estimated manufacturing overhead is divided by estimated direct labor hours only if direct labor hours is the allocation base.

Process costing Blank______. Multiple select question. is used for mass production uses job cost sheets accumulates costs by customer is used for homogeneous products

is used for mass production is used for homogeneous products

Actual manufacturing overhead consists of all Blank______. Multiple choice question. manufacturing costs other than direct labor and direct materials indirect costs costs other than direct labor and direct materials manufacturing costs

manufacturing costs other than direct labor and direct materials

An allocation base is a(n) Blank______. Multiple choice question. measure used to assign all manufacturing costs to products and services measure of activity used to assign overhead costs to products and services activity that causes overhead costs to change

measure of activity used to assign overhead costs to products and services

The difference between overhead applied to jobs and actual overhead is Blank______. Multiple choice question. cost of goods sold cost of goods manufactured overapplied or underapplied overhead ending work in process inventory

overapplied or underapplied overhead

Materials requisition forms are used to Blank______. Select all that apply record the cost of raw materials in the accounting system control the flow of materials from inventory into production summarize the cost of a job specify the cost of materials to be ordered

record the cost of raw materials in the accounting system control the flow of materials from inventory into production

The balance of work in process inventory may be calculated by Blank______. Multiple choice question. subtracting the cost of finished goods inventory from the sum of all manufacturing costs summing the costs of all jobs in process summing the sales value of all jobs in process subtracting the cost of goods sold from the sum of all manufacturing costs

summing the costs of all jobs in process

In a job-order costing system costs flow first to ______. Multiple choice question. cost of goods manufactured and then to the inventory accounts the income statement and then to the inventory accounts the inventory accounts and then to the Finished Goods account the inventory accounts and then to cost of goods sold

the inventory accounts and then to cost of goods sold

When actual manufacturing overhead costs are incurred, Blank______. Multiple choice question. the manufacturing overhead cost is debited work in process inventory is debited the manufacturing overhead cost is credited work in process inventory is credited

the manufacturing overhead cost is debited

Overhead costs are debited to Work in Process when Blank______. Multiple choice question. the actual costs are incurred the job is sold the job is started they are applied to jobs

they are applied to jobs

Overhead costs are debited to Work in Process when Blank______. Multiple choice question. the actual costs are incurred the job is started they are applied to jobs the job is sold

they are applied to jobs Reason: Actual incurred overhead costs are debited to Manufacturing Overhead.

Costs of partially completed units are accounted for in Blank______. Multiple choice question. work in process inventory raw materials inventory finished goods inventory cost of goods manufactured

work in process inventory

Jonas Corporation used $20,000 of direct materials, incurred $40,000 of direct labor cost, and applied $30,000 of manufacturing overhead to jobs this period. No jobs were incomplete at the beginning of the period, but at the end of the period, jobs with a total cost of $25,000 were unfinished. What was the cost of goods manufactured for this period? Multiple choice question. $65,000 $115,000 $90,000 $25,000

$65,000 Reason: ($20,000 + $40,000 + $30,000) + $0 - $25,000 = $65,000

Process costing Blank______. Multiple select question. accumulates costs by customer is used for homogeneous products is used for mass production uses job cost sheets

is used for homogeneous products is used for mass production

All materials that will be used in future production are first recorded in the _________________ ___________________ Inventory account.

Raw materials

The cost of goods manufactured report includes Blank______ manufacturing overhead costs. Multiple choice question. actual applied

applied

Predetermined overhead rates are ______. Multiple choice question. used to assign both direct and indirect manufacturing costs to jobs calculated using estimated costs and actual cost driver usage based on some secondary allocation measure generally calculated for each month of the year

based on some secondary allocation measure Reason: A predetermined overhead rate is used for indirect costs only. Reason: A predetermined overhead rate is calculated using estimated costs and cost driver usage. Reason: Overhead rates are generally calculated for the entire year to avoid seasonal fluctuations.

Nonmanufacturing costs increase Blank______. Multiple choice question. various asset and liability accounts the Cost of Goods sold account the Selling, General & Administrative expense accounts the Manufacturing Overhead account

the Selling, General & Administrative expense accounts

Which of the following is not a manufacturing cost category? Multiple choice question. Direct materials Manufacturing overhead Selling & administrative costs Direct labor

Selling & administrative costs

The formula for a predetermined overhead rate is Blank______. Multiple choice question. actual total manufacturing overhead cost ÷ actual total cost driver actual total cost driver ÷ actual total manufacturing overhead cost estimated total manufacturing overhead cost ÷ estimated total cost driver estimated total cost driver ÷ estimated total manufacturing overhead cost

estimated total manufacturing overhead cost ÷ estimated total cost driver