Chapter 15

A cost accounting system: (Check all that apply.) Multiple select question. is used to control costs of manufacturing activities. helps managers' determine selling prices. is used only with a perpetual inventory system. provides general information used by investors.

is used to control costs of manufacturing activities. helps managers' determine selling prices.

Producing products that are individually designed to meet the needs of a specific customer where each customized product is manufactured separately is the definition of: process production mass production job order production service production

job order production

Companies use job cost sheets to track the costs of: Multiple choice question. labor, overhead, and marketing costs of a job materials, labor, and overhead costs of a job materials, labor, and selling prices of a job labor, marketing, and operating costs of a job

materials, labor, and overhead costs of a job

The journal entry to record indirect materials costs used in production includes a debit to factory ________.

overhead

Click and drag on elements in order List the following documents in the order in which they are used when recording direct materials costs in job order cost accounting, with the first document on top. Instructions Choice 1 of 4. Materials requisitions Choice 2 of 4. Materials ledger cards Choice 3 of 4. Receiving reports Choice 4 of 4. Job cost sheets

1. Receiving Reports 2. Materials Ledger Cards 3. Materials Requisitions 4. Job Cost Sheet

List the following documents in the order in which they are used when recording indirect materials costs in job order cost accounting, with the first document on top. Instructions Choice 1 of 4. Materials ledger cards Choice 2 of 4. Receiving reports Choice 3 of 4. Factory overhead ledger Choice 4 of 4. Materials requisitions

1. Receiving reports 2. Materials ledger cards 3. Materials requisitions 4. Factory overhead ledger

List the following documents in the order in which they are used when recording indirect labor costs in job order costing, with the first document on top. Instructions Choice 1 of 3. Time tickets toggle Choice 2 of 3. Allocated to specific jobs through factory overhead Choice 3 of 3. Factory overhead ledger

1. Time Tickets 2. Factory Overhead Ledger 3. Allocated to specific jobs through factory overhead

Click and drag on elements in order List the following documents in the order in which they are used when recording direct labor costs in job order costing, with the first document on top. Instructions Choice 1 of 3. Time tickets Choice 2 of 3. Factory wages payable Choice 3 of 3. Job cost sheets

1. Time Tickets 2. Job Cost Sheets 3. Factory Wages Payable.

A company uses direct labor hours as its allocation base. Management estimates the company will have 10,000 hours of direct labor during the year and total overhead costs of $120,000. The predetermined overhead rate will be $ per hour.

12 Predetermined Overhead Rate= Estimated Overhead Cost/Estimated Activity Base

A company uses direct labor costs as its allocation base. Management estimates the company will incur $150,000 of direct labor cost during the year and total overhead costs of $200,000. What is their predetermined overhead rate? Multiple choice question. 75% 133% 1.33% 50%

133%

A tax accounting firm pays tax preparers $44 per hour. The firm has a predetermined overhead rate of $24 per labor hour. The Jones tax return required 2.5 hours to complete. The total cost of this job is $.

170= 44+44+22+24+24+12

A consulting firm has a predetermined overhead rate of $120 per labor hour. The Smith job required 5 hours to compete. The overhead cost applied to this job is $.

600= 120*5

The Factory Overhead account is (debited/credited) for applied overhead costs.

Credited

Match: Custom orders Job Order operations TO: Mass production Process operations

Custom Orders -> Job Order Operations Mass Production -> Process Operations

Match the following overhead activities to the correct time period.

Calculate the predetermined overhead rate At the start of the accounting period Allocate overhead to jobs During the accounting period Adjust overhead account for over- or underapplied overhead At the end of the accounting period

Job cost sheets can be used to: (Check all that apply.) Multiple select question. provide a record for the Cost of Goods Sold account. monitor costs incurred and to predict costs for each job. provide a subsidiary ledger for the Raw Materials Inventory account. provide a subsidiary ledger for the Finished Goods Inventory account.

provide a record for the Cost of Goods Sold account. monitor costs incurred and to predict costs for each job. provide a subsidiary ledger for the Finished Goods Inventory account.

One important difference between service companies and manufacturing companies is that: Multiple choice question. service companies do not have direct labor service companies do not have raw materials inventory service companies do not have overhead

service companies do not have raw materials inventory

If the factory overhead is overapplied, then: (Check all that apply.) Multiple select question. the Factory Overhead account has a credit balance. actual overhead cost > applied overhead costs. applied overhead costs > actual overhead costs. the Factory Overhead account has a debit balance.

the Factory Overhead account has a credit balance. applied overhead costs > actual overhead costs.

If the factory overhead is underapplied, then: (Check all that apply.) Multiple select question. the Factory Overhead account has a debit balance. actual overhead cost > applied overhead costs. applied overhead costs > actual overhead costs. the Factory Overhead account has a credit balance.

the Factory Overhead account has a debit balance. actual overhead cost > applied overhead costs.

The correct order of cost flows in a job order costing system is: Multiple choice question. work in process; finished goods, cost of goods sold cost of goods sold, work in process, finished goods finished goods, work in process; cost of goods sold cost of goods sold, finished goods, work in process

work in process; finished goods, cost of goods sold

The journal entry to record the allocation of factory overhead is: Multiple choice question. Debit Factory Overhead and credit Work in Process Inventory Debit Work in Process Inventory and credit Factory Overhead Debit Raw Materials Inventory and credit Factory Overhead Debit Finished Goods and credit Factory Overhead

Debit Work in Process Inventory and credit Factory Overhead

The three types of manufacturing costs in a job order costing system include: Multiple select question. direct labor overhead direct materials finished goods work in process

Direct Labor, Overhead, Direct Materials

A Schedule of Cost of Goods Manufactured includes all of the following costs: Multiple select question. factory overhead applied work in process inventory finished goods inventory direct labor used actual factory overhead direct materials used

Direct Materials used Direct Labor Used Factory Overhead Applied Work in progress inventory

A cost accounting system includes which of the following? It accumulates production costs and assigns them to products and services. It is used to record costs of selling activities. It is used with periodic inventory systems.

It accumulates production costs and assigns them to products and services.

All of the following are manufacturing costs except: Multiple choice question. direct materials office salaries overhead costs direct labor

Office Salaries

Manufacturing of products in a repetitive manner is referred to as (process/job order) operations while manufacturing custom products is referred to as (process/job order) operations.

Process, Job Order

True or false: The principle of customization is applicable to both service and manufacturing companies. True false question.

True

Manufacturing costs include direct materials, direct labor, and Multiple choice question. applied overhead costs. actual overhead costs. accumulated overhead costs. identified overhead costs.

applied overhead costs.

A Schedule of Cost of Goods Manufactured includes all of the following costs except: Multiple choice question. direct labor direct materials used factory overhead applied cost of goods sold work in process

cost of goods sold

If the factory overhead is underapplied, then the adjusting journal entry to close the factory overhead account includes a: (Check all that apply.) Multiple select question. credit to Factory Overhead. credit to Cost of Goods Sold. debit to Factory Overhead. debit to Cost of Goods Sold.

credit to Factory Overhead. debit to Cost of Goods Sold.

Job order production is most likely used by companies that produce: Multiple choice question. customized wedding cakes cake pans cookie sheets chocolate chip cookies

customized wedding cakes

The journal entry to record indirect materials in production is to: Multiple choice question. debit Work in Process Inventory and credit Factory Overhead debit Factory Overhead and credit Raw Materials Inventory debit Raw Materials Inventory and credit Work in Process Inventory debit Work in Process Inventory and credit Raw Materials Inventory

debit Factory Overhead and credit Raw Materials Inventory

The journal entry to record the allocation of factory overhead to work in process is: Multiple choice question. debit Work in Process Inventory and credit Factory Overhead debit Work in Process Inventory and credit Cash debit Cash and credit Factory Overhead debit Factory Overhead and credit Work in Process Inventory

debit Work in Process Inventory and credit Factory Overhead

If the factory overhead is overapplied, then the adjusting journal entry to close the factory overhead account includes a: (Check all that apply.) Multiple select question. debit to Cost of Goods Sold. credit to Factory Overhead. debit to Factory Overhead. credit to Cost of Goods Sold.

debit to Factory Overhead. credit to Cost of Goods Sold.

Both service companies and manufacturing companies have: (Check all that apply). Multiple select question. direct materials direct labor finished goods inventory overhead

direct labor overhead

Matching Question Match the following activities to their effect on the general ledger accounts. Instructions Allocate indirect labor Pay factory property tax Purchase materials Use direct materials Complete job Sold job Credit Factory Wages Payable Credit Finished Goods Inventory Debit Finished Goods Inventory Debit Raw Materials Inventory Credit Raw Materials Inventory Debit Factory Overhead

Allocate indirect labor-Credit Factory Wages Payable Pay factory property tax-Debit Factory Overhead Purchase materials-Debit Raw Materials Inventory Use direct materials- Credit Raw Materials Inventory Complete job- Debit Finished Goods Inventory Sold Jobs -Credit Finished Goods Inventory

Match the following activities to their effect on the general ledger accounts.

Allocate overhead costs to jobs-Credit Factory Overhead Pay factory utilities-Debit Factory Overhead Purchase indirect materials-Debit Raw Materials Inventory Use indirect materials-Credit Raw Materials Inventory Direct labor used- Debit Work in Process Inventory

After adjusting for over- or underapplied overhead, the balance in the Factory Overhead account will be $.

Blank 1: 0 or zero

Managers use a predetermined overhead rate for which of the following reasons? (Check all that apply.) Multiple select question. Total job costs are not needed until the end of the accounting period, so predetermined rates are not needed. To estimate total job costs before the job is completed Predetermined costs are more accurate than using actual costs To assist in setting prices for jobs

To estimate total job costs before the job is completed To assist in setting prices for jobs

All of the following are inventory accounts for a manufacturer except: Multiple choice question. work in process inventory raw materials inventory indirect materials inventory finished goods inventory

indirect materials inventory