Exam 1

Chapter 1

a

Overhead application is the process of ______

assigning manufacturing overhead cost to jobs

Predetermined overhead rates are ______. 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

Major inputs such as lumber and fixtures that can be easily traced to a specific job are called ____ ____.

Direct materials

When a job is completed, its costs are transferred into: Cost of goods sold Finished goods Raw materials Work in process

Finished goods

what is directly charged to the income statement?

-administrative costs -selling costs

Decision-making:

-requires up-to-date information -uses feedback from other managerial processes

when the allocation method is used to close out the underapplied or overapplied balance remaining in Manufacturing Overhead, which accounts are affected?

-work in process -finished goods -cost of goods sold

Units of product that are only partially complete are contained in the (1) (2) (3) inventory. (Enter only one word per blank.)

1. work 2. in 3. process

What methods can be used to dispose of underpaid or overspilled manufacturing overhead?

1.Allocate it to work in progress, finished goods, and cost of goods sold 2. make a direct adjustment to cost of goods sold

Direct Materials costs are recorded on the job cost sheet when the

Materials are issued to the job

Wholesalers and retailers are both types of ____ companies.

Merchandising

The predeterminded overhead rate is calculated

before the period begins

Finished goods ______

consists of completed, unsold goods

The ___ side of the manufacturing overhead account is always used to record manufacturing overhead applied to production and the ___ side is always used to record the actual manufacturing costs incurred.

credit; debit

if overapplied overhead is closed out to Cost of Goods Sold, the Cost of Goods sold account will be [increased/decreased]

decreased

The adjustment for overapplied overhead:

decreases cost of goods sold and increases net income

A journal entry that debits Depreciation Expense and credits Accumulated depreciation records:

depreciation on office equipment

a journal entry that debits depreciation expense and credits accumulated depreciation records:

depreciation on office equipment

planning

determine tactics that management will use to achieve objectives is part of ________

The first step in assigning manufacturing overhead costs using a predetermined overhead rate is to ______.

determine the cost driver

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

determine the cost driver

relevant cost has to

differ between the various alternatives the manager is conceiving

Underapplied or overapplied overhead is the ______.

difference between overhead applied to jobs and actual overhead

conversion costs

direct labor + manufacturing overhead

A journal entry debiting Cost of goods sold and crediting Finished Goods Inventory is made when

goods are sold

A journal entry debiting Cost of goods sold and crediting Finished goods is made when:

goods are sold

__ cost will not influence a decision.

irrelevant

Under FIFO costing, the cost of beginning inventory ______

is automatically transferred out of Work in Process Inventory with units completed

The two most commonly used methods for determining unit product costs are ______-______ and ______ costing.

job-order, process

Manufacturing costs can be divided into three categories: direct materials, direct __ and __ __

labor manufacturing overhead

Operations costing is similar to process costing because ______.

labor and overhead costs are accumulated by operation or department

A SERVICE firm that would most likely use job-order costing is a ______. Multiple choice question.

law practice

the schedule of cost of goods ____ summarizes costs that remain in Work in process inventory and that have been transferred from Work in Process to Finished Goods Inventory

manufactured

Manufacturing overhead consists of all ______.

manufacturing costs other than direct labor and direct materials

Job-order costing is used for:

many different products with unique production requirements

relevant cost must

occur in the future

Which of the following would be considered direct materials in a service firm that uses job order costing?

paperwork at a law firm

The continuous, ongoing cycle of management functions include ______. planning, implementing, and controlling planning, reporting, and controlling planning, recording, and summarizing recording, analysis, and implementation

planning, implementing, and controlling

Inventoriable costs is another term for __ costs

product

A journal entry that debits Raw Materials and credits Accounts Payable is recording the ______.

purchase of materials

The journal entry to record the purchase of materials debits ______.

raw materials

Costs that are moved from one production process to another are called __________ costs

transferred in

-people -planet -profit

triple bottom line

The activity in a processing department is performed ______.

uniformly on all units

Cost of goods manufactured is the ______. value of all jobs transferred from Work in Process to Finished Goods value of all jobs in Finished Goods at the end of a period average value of the Work in Process account value of all jobs transferred from Finished Goods to Cost of Goods Sold

value of all jobs transferred from Work in Process to Finished Goods

Costs that remain constant on a per unit basis are called __ costs.

variable

Which type of cost changes in total, in direct proportion to changes in activity level?

variable

In the formula Y = a + bX, b represents the estimated ______.

variable manufacturing overhead cost per unit

The average manufacturing overhead cost per unit tends to

vary from one period to the next

The average manufacturing overhead cost per unit tends to ______.

vary from one period to the next

Methods to calculate departmental unit costs include ______.

weighted average and FIFO

Equivalent units of production equals the number of units transferred to the next department (or finished goods) plus equivalent units in ending work in process under which method(s) of costing?

weighted average only

The ______-______ method combines units and costs from both prior and current periods, while the ______ method includes equivalent units and unit costs for the work done during the period.

weighted average, FIFO

In the ______-______ method, equivalent units of production are the number of units transferred to the next department or to finished goods plus equivalent units in ending WIP.

weighted-average

-Volume -Variety -Velocity

what are the V's of big data?

sustainability

when applied to business, ________ means a company can meet todays needs without sacrificing future generations from meeting their own needs

Costs are transferred out of finished goods inventory:

when goods are sold

Costs of partially completed units are accounted for in ______

work in process

Costs of partially completed units are accounted for in ______. cost of goods manufactured finished goods work in process raw materials

work in process

When a job is completed, the job costs are transferred OUT OF ______.

work in process

Carlisle, Inc. had Sales revenue of $500,000, Unadjusted cost of goods sold of $395,000, Underapplied manufacturing overhead of $5,000, and Selling and administrative expenses of $50,000. Calculate gross profit. $100,000 $110,000 $50,000 $105,000

$100,000

Find the Predetermined Overhead Rate per hour. Estimated MOH 300,000$ Estimated DL hours 2,500 Actual MOH 370,000$ Actual DL hours 3,000

$120 per DL hour = $300,000 ÷ 2,500 POHR = est.MOH ÷ est.Cost Driver

Job #4260 consisted of 1,000 units at a total cost of $200,000. The cost transferred to Cost of Goods Sold for the sale of 600 of the units is ______.

$120,000

Job #4260 consisted of 1,000 units at a total cost of $200,000. The cost transferred to Cost of Goods Sold for the sale of 600 of the units is ______.

$120,000 ($200,000 ÷ 1,000 × 600 = $120,000)

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, including $4,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.

$16,000

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, including $4,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. $30,000 $20,000 $16,000 $24,000

$16,000

Place the steps in order as needed to prepare a production report using the weighted-average method.

1.Reconcile the number of physical units. 2.Convert physical units into equivalent units. 3.Calculate cost per equivalent unit. 4.Reconcile the total cost of Work in Process Inventory. 5.Prepare the report.

Put the steps from the schedule of Cost of Goods Manufactured (COGM) in the order in which they appear

1.Total Current Manufacturing Costs 2.Plus: Beginning Work-in-Process Inventory 3.Less: Ending Work-in-Process Inventory 4.(Equals) Cost of Goods Manufactured

Given 100 units in beginning inventory, 1,500 units started, and 200 units in ending inventory, the number of units completed equals ______

100 + 1,500 - 200 = 1,400

If WIP contains 300 units that are 40% complete the number of equivalent units is:

120

If ending work in process contains 300 units that are 40% complete the number of equivalent units is ______.

120 = 300 x 0.4

There are _______ equivalent units in work process when work in process contains 500 units that are 34% completed.

170

When ending WIP contains 500 units that are 34% completed there are ______ equivalent units.

170

When ending work in process contains 500 units that are 34% completed, there are ____ equivalent units.

170=500x.34

A FIFO costing process had 400 units in beginning inventory. If 2,000 units were started and 600 units are in ending inventory, ________ units were completed during the period.

1800

A processing department transferred 2,000 units to the next department. Ending WIP contained 100 units that were 40% complete with regard to materials and 25% complete with regard to conversion costs. Using the weighted average, the equivalent units of production for materials is ______.

2,040

The Sarbanes-Oxley Act increased the maximum jail sentence for fraudulent reporting to ____ years.

20

The Sarbanes-Oxley Act increased the maximum jail sentence for fraudulent reporting to__years.

20

Which of the following statements is true? Managers need more detailed information than financial reports can capture. It is important that managerial accounting reports be objective and reliable. Financial accounting reports are prepared as needed. Managerial accounting reports provide information for the company as a whole.

Managers need more detailed information than financial reports can capture.

Cost of goods *blank* is the total cost of jobs completed during the period

Manufactured

The formula for a predetermined overhead rate is:

Estimated manufacturing overhead cost divided by estimated allocation base

Overhead allocated to a job that used 300 direct labor hours is

Estimated manufacturing overhead/estimated direct labor hours = direct labor hours ($) X direct labor hours used = #

____ refers to standards of conduct for judging right from wrong.

Ethics

Which method calculates cost per equivalent unit using only costs incurred by the processing department in the current period?

FIFO

Which method is used when equivalent units and unit costs relate only to work done during the current period?

FIFO

Which of the following costs are classified as manufacturing overhead? Assembly wages Marketing costs Factory rent Factory utilities Factory maintenance wages

Factory rent Factory utilities Factory maintenance wages

The following costs would be classified as MOH:

Factory utilities, Factory maintenance wages, Factory rent

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

False

True or false: A predetermined overhead rate of $50 per direct labor hour means that the total cost of direct labor and indirect cost equals $50 per hour.

False

True or false: At the end of the accounting period, a balance in the Manufacturing Overhead account always means that overhead was underapplied. True False

False

True or false: Converting partially computed units into equivalent units is done for manufacturing purposes but has no impact on the financial statements.

False

True or false: Job-order costing can only be used in manufacturing firms.

False

True or false: Materials purchases are initially recorded in Raw Materials and then all materials used are transferred to Work in Process.

False

True or false: Monitoring metrics that are important to various areas of operations is part of implementing the plan.

False

True or false: Preparing a budget is part of the controlling process.

False

True or false: Taking actions that carry out the company's plan is a key part of the control process.

False

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

False

True or false: Virtually all accounting and business problems have clear right or wrong answers. True False

False

True or false: When faced with an ethical dilemma, it is only important to identify those who may be harmed by the decision.

False

True or False: Job order costing can only be used in manufactering firms

False (Also used extensively in service industries.)

When a job is completed, its costs are transferred into ______.

Finished Goods

When production is completed in the last processing department, the units are transferred to the _________ ________ Inventory account.

Finished Goods

____ ____ inventory consists of completed units that have not yet been sold.

Finished Goods

When a job is completed, which account is debited?

Finished Goods Inventory

The Cost of Goods ____ is the sum of all amounts transferred from Work in Process to Finished Goods during a period.

Manufactured

Factory costs such as cleaning supplies, taxes, insurance, and janitor wages are classified as:

Manufacturing overhead

Which account is credited when manufacturing overhead is applied?

Manufacturing overhead

The journal entry to record the transfer of completed units to finished goods is debit ______.

Finished Goods Inventory and credit Work in Process Inventory

George Corporation recognized $1,000 of accrued property taxes on its manufacturing facility. The journal entry to record this debits ______.

Manufacturing overhead $1,000 and credits Property taxes payable $1,000

Factory labor charges that cannot be easily traced to a job are treated as:

Manufacturing overhead (MOH)

The journal entry to record accrued property taxes for a factory building debits ______.

Manufacturing overhead and credits Property taxes payable

Which methods can be used to dispose of underapplied or overapplied manufacturing overhead?

Make a direct adjustment to Cost of Goods Sold Allocate it to Work in Process, Finished Goods, and Cost of Goods Sold

What is the most common method for disposing of the balance in Manufacturing Overhead?

Making a direct adjustment to Cost of Goods Sold

What is the primary difference between managerial and financial accounting?

Managerial accounting provides information for internal use, and financial accounting provides information for external users

controlling

Managers keep track of how they are doing and determine if adjustments are needed during the _______ phase

Actual overhead costs may not be proportional to the actual amount of the allocation base used because:

Many actual overhead costs are fixed OR overhead spending may not be under control

What document specifies the type and quantity of direct materials used on a specific job?

Materials requisition form

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

Materials requisition form

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

Materials requisition form

Both process costing and job-order costing assign which of the following costs to products?

Materials, Manufacturing Overhead, Labor

Controlling involves:

Measuring actual results

False; controlling

Monitoring metrics that are important to various areas of operations is part of implementing the plan.

Select all that apply Which of the following statements are true? Most public companies now issue corporate social responsibility (CSR) reports. The triple bottom line is a component of sustainability accounting. The sole focus of most business strategies is achieving financial results. Most managers today are driven primarily by economic results.

Most public companies now issue corporate social responsibility (CSR) reports. The triple bottom line is a component of sustainability accounting. Most managers today are driven primarily by economic results.

The overhead applied to Job ABC using multiple predetermined overhead rate is $

Multiply departmenta A & B's predeterminded overhead rate per direct labor hours X's the direct labor hours worked on job ABC. Then add them up together

Nonprofit organizations:

Must make decisions that use managerial accounting information

Which of the following would most likely NOT be classified as a direct material? Nails and screws Laptop keyboard Drywall Automobile engine

Nails and screws

Net operating income (formula)

Net Op Inc = Gross Margin - SG & A

Gross Profit minus Selling and Administrative Expenses equals:

Net Operating Income

Which of the following would NOT be charged to the Manufacturing overhead account? Factory rent Supervisor's salary Depreciation on factory equipment Nonmanufacturing costs

Nonmanufacturing costs

Which of the following would not be charged to the Manufacturing overhead account?

Nonmanufacturing costs

Which of the following statements is true? Nonmanufacturing firms are increasing as a proportion of the marketplace. Managerial accountants focus much of their efforts on preparing reports of costs incurred to produce physical products. The focus of managerial accounting is the same, regardless of type of organization.

Nonmanufacturing firms are increasing as a proportion of the marketplace.

____ costs are expensed when incurred; ____ costs become part of inventory.

Period, Inventoriable

Tactics that management will use to achieve objectives is part of:

Planning

The first step in ____ is to establish goals or objectives and tactics to achieve them.

Planning

Which of the following is NOT a component of the triple bottom line? Profit Planning People Planet

Planning

The continuous, ongoing cycle of management functions include:

Planning, Implementing, and Controlling

When all overhead is assigned using direct labor hours, the company has chosen to use a ________ predetermined overhead rate

Plantwide rate - a single predetermined overhead rate is called

The formula for applying overhead to a specific job is

Predetermined overhead rate X Amount of allocation base incurred by job

What is the formula for applying overhead to a specific job?

Predetermined overhead rate × the actual cost driver usage for the specific job

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

Selling & administrative costs

Which of the following is not a manufacturing cost category

Selling and administrative costs

JVL Inc. adds all direct materials at the start of the production process. For a given period they had 100 units in beginning inventory that were 60% complete as to conversion costs. During the period, 1,500 units were started and completed. Ending inventory contained 200 units that were 30% complete as to conversion costs. Compute the equivalent units for conversion costs using the FIFO method.

Since the beginning inventory is 60% complete, 40% is required to finish it. (100 × 40%) 40 in beginning inventory + 1,500 started and completed + (200 × 30%) 60 in ending inventory = 1,600

The schedule of cost of goods_________ summarizes costs that remain in Finished goods inventory and that have been transferred to Cost of goods sold.

Sold

Which of the following statements is true?

Some firms operate as more than one type of organization- manufacturer, merchandiser, and/or service company

A predetermined overhead rate of $20 per direct labor hours means that ______. for each direct labor hour, $20 is added to cover indirect costs the total cost of direct and indirect labor is $20 per hour employees who directly work on the job are paid $20 per hour

for each direct labor hour, $20 is added to cover indirect costs

Reconciling the total cost of Work in Process Inventory is the ______ step in preparing a production report using the weighted-average method.

fourth

General and Administrative Expenses include

general management salaries rent and utilities for corporate headquarters, corporate service functions such as accounting, payroll, and legal departments

General and administrative expenses include ______. factory maintenance workers' wages and factory supervisors' salaries shipping costs and sales commissions general management salaries and legal department sales commissions and factory supervisors' salaries

general management salaries and legal department

In process costing, manufacturing overhead costs are ______.

generally applied using a predetermined overhead rate

Select all that apply Companies with strong ethical cultures ______. have higher productivity than those without such cultures have higher levels of customer satisfaction have adopted a code of ethics that ensures managers will act ethically do not need to create tip lines to protect whistleblowers

have higher productivity than those without such cultures have higher levels of customer satisfaction

implementation

hiring workers, dealing with suppliers and serving customers are all a part of ______

implementation

hiring workers, dealing with suppliers and serving customers are all part of _______

Process costing produces ______ units.;

homogeneous

A processing department produces ______ units

homogeneous identical

In a processing department, all units of output are

homogeneous OR identical OR uniform OR indistinguishable OR equivalent

the difference between product and primes costs determines

how and when the cost will be matched up against revenue on the income statement

If cost data will be used for decision making, it is important to consider

how costs will behave or change

If cost data will be used for decision making, it is important to consider ______. what costs are under the decision maker's direct control how costs will behave or change whether or not the rules of GAAP are being followed

how costs will behave or change

If cost data will be used for decision making, it is important to consider ______. what costs are under the decision maker's direct control whether or not the rules of GAAP are being followed how costs will behave or change

how costs will behave or change

Select all that apply When faced with an ethical dilemma ______. choose the alternative that is most legal and lawful identify and evaluate the alternative courses of action identify the parties that will be affected by the situation

identify and evaluate the alternative courses of action identify the parties that will be affected by the situation

control

identifying a problem and taking corrective action is part of the _______ process

how costs will behave or change

if cost data will be used for decision making, it is important to consider ____________

Decisions made during the __ phase are sometimes called operational decisions.

implementation

Decisions made during the__phase are sometimes called operational decisions.

implementation

Decisions such as deciding how many employees to hire, salary schedules, and training policies are made during the ______ phase of the management process. controlling implementation planning

implementation

Hiring workers, dealing with suppliers and serving customers are all part of ______. planning controlling implementation

implementation

-all managers -external auditors -board of directors

in an attempt to reduce the opportunities for error and fraud, SOX places additional responsibilities on __________

The key difference between the weighted-average method and the FIFO method is how they deal with units and costs ______

in beginning Work in Process Inventory

The key difference between the weighted-average method and the FIFO method is how they deal with units and costs ______.

in beginning Work in Process Inventory

Select all that apply Manufacturing overhead costs ______. include some materials and labor must be manufacturing costs are indirect costs must be traceable to specific jobs

include some materials and labor must be manufacturing costs are indirect costs

The total cost of Work in Process Inventory ______.

includes beginning Work in Process plus current costs is divided between ending inventory and costs transferred to the next process or Finished Goods

The Sarbanes Oxley Act ______. is all it takes to create an ethical culture in an organization recommends that all public companies adopt a code of ethics for senior financial officers includes rules that should help employees make ethical decisions imposes penalties for whistleblowers

includes rules that should help employees make ethical decisions

Cost of goods manufactured ______

includes the manufacturing costs of goods finished during the period

Selling and administrative costs first appear on the ______.

income statement

Costs that differ between decision alternatives are called differential or __ costs

incremental

Materials are treated as __costs when it is not worth the cost or effort to trace them to specific products.

indirect

Salaries of managers and maintenance personnel are examples of ______ labor costs. direct indirect

indirect

Labor costs charged to Manufacturing Overhead represent ______.

indirect labor costs

labor costs charged to manufacturing overhead represent

indirect labor costs

labor costs charged to manufacturing overhead represent:

indirect labor costs

salaries of managers and maintenance personnel are examples of

indirect labor costs

manufacturing overhead costs include

indirect materials, factory supervisor's salaries, and factory depreciation

Direct materials and direct labor are both ______ costs. period manufacturing nonmanufacturing selling and administrative

manufacturing

When using process costing, ______

manufacturing costs are assigned to products as they move from one process to another

-manufacturing overhead -direct materials -direct labor

manufacturing costs include _________

Actual manufacturing overhead consists of all ______.

manufacturing costs other than direct labor and direct materials

Actual manufacturing overhead consists of all ______. costs other than direct labor and direct materials manufacturing costs other than direct labor and direct materials indirect costs manufacturing costs

manufacturing costs other than direct labor and direct materials

Actual manufacturing overhead consists of all ______. indirect costs manufacturing costs other than direct labor and direct materials costs other than direct labor and direct materials manufacturing costs

manufacturing costs other than direct labor and direct materials

MOH consists of all:

manufacturing costs other than direct labor and direct materials

All costs other than direct materials and direct labor that are incurred to produce a product are called indirect costs or _____________

manufacturing overhead

Factory costs such as cleaning supplies, taxes, insurance, and janitor wages are classified as ______. manufacturing overhead direct materials indirect labor period costs

manufacturing overhead

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 raw materials purchased includes $4,000 of indirect materials that were put into manufacturing overhead during the period. The cost of direct materials used during the period was:

$16,000

Calculate total current manufacturing costs given the following: Direct materials cost: $62,000 Direct labor cost: $78,000 Manufacturing overhead applied: $46,000 Actual manufacturing overhead: $51,000 Beginning Work in process inventory: $32,000 Ending Work in process inventory: $35,000

$186,000

Calculate total current manufacturing costs given the following: Direct materials cost: $62,000 Direct labor cost: $78,000 Manufacturing overhead applied: $46,000 Actual manufacturing overhead: $51,000 Beginning Work in process inventory: $32,000 Ending Work in process inventory: $35,000 $183,000 $186,000 $191,000

$186,000

Sammy Co. uses process costing to account for the production of popcorn. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 20,000 units for materials and 18,200 units for conversion costs. Beginning inventory consisted of $6,200 in materials and $4,400 in conversion costs. May costs were $47,000 for materials and $32,000 for conversion costs. Ending inventory still in process was 4,000 units (100% complete for materials, 55% for conversion). The cost per equivalent unit for conversion costs using the weighted average method would be: 2.00 $2.66 $1.75 $2.35

$2.00 Cost per equivalent unit for conversion = ($4,400 + $32,000)/18,200 = $2.00

Factory labor charges that cannot be easily traced to a job are treated as ______

manufacturing overhead

Factory labor charges that cannot be easily traced to a job are treated as ______.

manufacturing overhead

For a toy maker, rent, utilities, and insurance are all part of _______

manufacturing overhead

Indirect materials and indirect labor are classified as ______. period costs manufacturing overhead nonspecific materials nonspecific labor

manufacturing overhead

what is a clearing account?

manufacturing overhead

Labor charges that cannot be easily traced to a job are considered ______.

manufacturing overhead indirect labor

Frank, Inc. recognized $20000 in depreciation on factory equipment. The journal entry would debit:

manufacturing overhead $20000 and credit accumulated depreciation $20000

the journal entry to record depreciation on factory equipment debits:

manufacturing overhead and credits accumulated depreciation

-indirect materials -factory supervisors' salaries -factory depreciation

manufacturing overhead costs include:

Given: Cost of goods manufactured of $410,000, beginning finished goods inventory of $110,000, and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold. $535,000 $395,000 $520,000 $425,000

$395,000

Given: cost of goods manufactured of $410,000; beginning finished goods inventory of $110,000 and ending finished goods inventory of $125,000, unadjusted cost of goods sold is:

$395,000

Given: Cost of goods manufactured of $410,000; beginning finished goods inventory of $110,000 and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.

$395,000 ($110,000 + $410,000 - $125,000 = $395,000)

Given: Cost of goods manufactured of $410,000, beginning finished goods inventory of $110,000, and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.

$395,000 Reason: Unadjusted cost of goods sold=$110,000 + $410,000 - $125,000=$395,000.

Murphy Manufacturing estimated $100,000 in manufacturing overhead and 5,000 direct labor hours for 2016. Actual overhead for the year was $120,000 and 7,500 actual direct labor-hours were used. How much overhead was applied to a job completed during 2016 that used 200 direct labor-hours? $4,000 $3,200 $4,800 $100,000

$4,000

Smith, Inc. uses a job order costing system with the predetermined overhead rate of $12 per machine hour. The job cost sheet for Job 42A listed $12,000 in direct labor cost, $18,000 in direct materials cost, 1,200 direct labor hours and 1,100 machine hours. The total cost of Job 42A is $______

$43,000 Total cost of Job 42= Direct materials + Direct Labor+Predetermined overhead rate x Actual machine hours+$18,000+$12,000+($12 per machine hour X 1,100 machine hours)

Fillia, Inc. worked on three jobs this period: Job 14C, which cost $15,000; Job 23A, which cost $28,000, and Job 45B, which cost $23,000. At the end of the period, only Job 14C was still in process (unfinished). the cost of goods manufactured this period is $______

$51,000 The cost of goods manufactured, is the cost of jobs completed during the period. Jobs 23A and 45B

A company reports Gross margin of $100,000, Cost of goods sold of $70,000, and Selling and administrative expenses of $45,000. Net operating income (loss) is ______.

$55,000

Luver Corporation's Gross profit is $100,000, Cost of goods sold equals $70,000, and Selling and administrative expenses total $45,000. Calculate the net operating income (loss).

$55,000

Luver Corporation's Gross margin is $100,000, Cost of goods sold equals $70,000, and Selling and administrative expenses total $45,000. Net operating income is ______.

$55,000 ($100,000 - $45,000 = $55,000)

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?

$65,000

When classifying costs, ____ costs relate to making a product and ____ costs relate to delivering and selling a product.

manufacturing,nonmanufacturing

Manufacturing overhead consists of ______.

many different kinds of indirect costs

Companies that use job-order costing make ______.

many different products

Job-order costing is used for ______.

many different products with unique production requirements

Costs incurred to get the final product to the customer are known as __ or selling expenses.

marketing

What document specifies the type and quantity of direct materials used on a specific job?

material requisition form

Direct materials costs are recorded on the job cost sheet when the ______.

materials are issued to the job

indirect

materials are treated as ________ costs when it is not worth the cost or effort to trace them to specific products

The type and quantity of materials to be drawn from the storeroom and the job that will be charged for the materials is specified on the ______

materials requisition form

The type and quantity of materials to be drawn from the storeroom and the job that will be charged for the materials is specified on the ______.

materials requisition form

What document specifies the type and quantity of direct materials used on a specific job?

materials requisition form

When using process costing, which of the following can be added in any department?

materials, labor and overhead

Labor costs ______.

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

An allocation base is a(n)

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

An allocation base is a(n) 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

An allocation base is a(n) ______.

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

An allocation base is a(n) ______. measure of activity used to assign overhead costs to products and services 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

Controlling involves ______. putting the company's plan into action measuring actual results preparing annual budgets establishing goals for the company

measuring actual results

A department store is part of the ______ companies category of business. service merchandising manufacturing

merchandising

Wholesalers and retailers are both types of __ companies

merchandising

Compared to a plantwide overhead rate system, a multiple predetermined overhead rate system is

more complex, but more accurate

Which of the following statements is true?

-Classifying a cost a product or period can impact reported profitability -The distinction between product and period costs have more to do with financial accounting than managerial accounting

The total cost of a job includes ______.

-Direct Materials Cost -Direct Labor Cost -Applied Manufacturing Overhead

When comparing financial and managerial accounting, which of the following apply to managerial accounting?

-Emphasizes the future -Reports are prepared as needed -Reports at the decision making level.

Companies with strong ethical cultures:

-Have higher levels of customer satisfaction -Have higher productivity than those without such cultures.

Which of the following statements is true?

-Occupancy costs can be either direct or indirect -A regional sales manager's salary would be a direct cost of the regional office in which the sales manager works

Which of the following statements are true?

-Product costs "attach" to units of product as they are purchased for resale or produced -GAAP requires all manufacturing costs to be treated as product costs

Materials requisition forms are used for:

-Recording the cost of raw materials in the accounting system -Controlling the flow of materials into production

Fixed Costs:

-Remain constant in total -Become progressively smaller per unit as the level of activity increases.

Which of the following statements is true?

-Restaurants provide tangible products to consumers -Nonmanufacturing firms are increasing as a proportion of the marketplace

Nonmanufacturing costs include:

-Sales commissions -company president's salary

Which of the following statements is true?

-There are many different ways to categorize costs -Costs are treated differently in different situations

Which of the following statements are true?

-When materials are purchased they are recorded in the raw materials inventory -Raw materials traced to specific jobs are transferred to Work in process as direct materials

GAAP requires:

-all manufacturing costs be charged to products -that manufacturing costs be treated as assets until sold

What methods can be used to dispose of underapplied or overpplied manufacturing overhead (MOH)?

-allocate it to Work in Process, Finished Goods, and COGS. -make a direct adjustment to Cost of Goods Sold (COGS)

Cost objects include:

-anything for which cost data is desired -customers -activities.

what methods can be used to dispose of underapplied or overapplied manufacturing overhead?

-closing it out to cost of goods sold -allocating it among work in process, finished goods, and cost of goods sold

Categories of manufacturing costs include:

-direct materials -direct labor -manufacturing over head

Manufacturing costs include:

-direct materials -direct labor -manufacturing overhead

When materials are requisitioned into production:

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

In an attempt to reduce the opportunities for error and fraud, SOX places additional responsibilities on:

-external auditors -boards of directors -all managers

examples of what manufacturing costs would include:

-factory insurance -factory supervisor's salary

Which of the following are examples of indirect labor costs?

-factory supervisor salary -factory security guard -Restaurant kitchen manager

The Sarbanes-Oxley (SOX) Act:

-has many implications for managers -was primarily aimed at renewing investor confidence.

When faced with an ethical dilemma:

-identify and evaluate the alternative courses of action -identify the parties that will be affected by the situation

Manufacturing overhead costs:

-include some materials and labor -are indirect costs -must be manufacturing costs

Process Costing:

-is used for homogeneous projects -is used for mass production

actual overhead costs may not be proportional to the actual amount of the allocation base used because

-many actual overhead costs are fixed -overhead spending may not be under control

A job cost sheet contains:

-materials costs charged to the job -labor costs charged to the job -manufacturing overhead costs charged to the job

Labor costs:

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

Which of the following statements is true?

-most managers today are driven primarily by economic results -most public companies now issue corporate social responsibility reports -the triple bottom line is a component of sustainability accounting

A relevant cost:

-must pertain to the future -differ between alternatives -is a differential cost

actual overhead costs may not be proportional to the amount of the allocation base used because:

-overhead spending may not be under control -many actual overhead costs are fixed

A journal entry that debits Manufacturing overhead (MOH) and credits Accounts Payable could be made to record:

-rent expense on factory equipment -factory utilities expense

Companies assign costs to products and services to:

-understand product profitability -establish selling prices -value ending inventory

Which of the following statements is true? Every firm can be identified as one type of organization: manufacturer, merchandiser or service company. Some firms operate as more than one type of organization: manufacturer, merchandiser and/or service company.

Some firms operate as more than one type of organization: manufacturer, merchandiser and/or service company.

The definition of a(n) ____ cost is a cost that has already been incurred.

Sunk

Which of the following would NOT be part of direct labor cost? Supervisor salaries Attorney salaries Plumber wages Assembly-workers wages

Supervisor salaries

True or False: One reason to use a predetermined overhead rate is to eliminate the effect of seasonal factors

TRUE

False; implentation

Taking actions that carry out the company's plan is a key part of the control process

Select the correct statement

The US economy is moving more towards the service industry

planning, implementing, and controlling

The continuous, ongoing cycle of management functions include ______.

How are manufacturing overhead costs distributed in each process?

The costs are distributed based on a predetermined overhead rate.

Which of the following are similarities between job-order costing and process costing?

The flow of costs through the manufacturing accounts is basically the same for both costing systems. The same basic manufacturing accounts are used for both costing systems. The purpose is to assign raw materials, labor and manufacturing overhead to products.

planning

The future-oriented aspect of the management process is

A cost driver is ______. the rate that is used to apply manufacturing overhead to products and services the total estimated manufacturing overhead cost another name for predetermined overhead rate a measure that explains or influences the amount of manufacturing overhead cost incurred

a measure that explains or influences the amount of manufacturing overhead cost incurred

Equivalent units of production equals the number of units transferred to the next department (or finished goods) plus equivalent units in ending WIP under which method(s) of costing?

Weighted-average only

Managerial accounting provides information for internal use and financial accounting provides information to external users.

What is the primary difference between managerial and financial accounting?

A normal cost system assigns overhead to jobs using:

a predeterminded overhead rate

identify the parties that will be affected by the situation identify and evaluate the alternative courses of action

When faced with an ethical dilemma ______.

A normal cost system assigns overhead to jobs using ______.

a predetermined overhead rate

Which of the following statements are true?

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.

-pertains to the future -differs between alternatives

a relevant cost ________

Nonprofit organization

Which of the following is NOT one of the three categories of businesses?

Budgeting

Which of the following is not an activity that managers perform on a regular, routine basis?

merchandising

Wholesalers and retailers are both types of ________ companies

MOH is applied with a debit to:

Work in Process

When a job is completed, its costs are transferred out of ______.

Work in Process

A product requires processing in two departments, A and B. Products start in Dept. A. Costs transferred out of Dept. A will be transferred to ______.

Work in Process - Dept B

When using process costing _____

a separate production report is prepared for each process

When using process costing, ______.

a separate production report is prepared for each process

All manufacturing costs are assigned to units of product and all nonmanufacturing costs are treated as period cost under costing

absorption

Recording the transfer of partially completed products from one processing department to another requires a debit and a credit to the _______ accounts in both of the processing departments

Work in Process Inventory

Recording the transfer of partially completed products from one processing department to another requires a debit and a credit to the _______ accounts in both of the processing departments.

Work in Process Inventory

The journal entry to record direct labor costs into Processing Department #1 is to debit ______

Work in Process Inventory (Dept. #1) and credit Salary or Wages Payable

The journal entry to record direct labor costs into Processing Department #1 is to debit ______.

Work in Process Inventory (Dept. #1) and credit Salary or Wages Payable

MOH is applied with a debit to:

Work in process

Manufacturing overhead is applied with a debit to ______.

Work in process

in process costing, manufacturing overhead costs are distributed to each department

according to the amount of allocation base incurred in the department

In process costing, manufacturing overhead costs are distributed to each department:

according to the amount of the allocation base incurred in the department

Which of the following would not be a good allocation base for manufacturing overhead? accounting direct labor hours units of products machine hours

accounting hours

Which of the following would not be a good allocation base for manufacturing overhead

accounting hours are not related to manufacturing

The journal entry to record the purchase of materials credits ______

accounts payable

The journal entry to record the purchase of materials credits ______.

accounts payable

Recording the transfer of partially completed products from one processing department to another, requires a debit and a credit to the ________ account in both of the processing departments.

Work in process

The journal entry to record the issuance of direct materials into production debits:

Work in process

When a job is completed, which account is credited?

Work in process

The journal entry to record $10,000 in manufacturing overhead applied to job #40 debits:

Work in process $10,000 and credits MOH $10,000

The journal entry to record $10,000 in manufacturing overhead applied to Job #40 debits ______.

Work in process $10,000 and credits Manufacturing overhead $10,000

A company requisitioned $40,000 in direct materials and $30,000 in indirect materials from the storeroom to be used in production. The journal entry to record this transaction would debit:

Work in process $40,000, debit MOH $30,000 and credit Raw materials $70,000

A company requisitioned $40,000 in direct materials and $30,000 in indirect materials from the storeroom to be used in production. The journal entry to record this transaction would debit ______.

Work in process $40,000, debit Manufacturing overhead $30,000 and credit Raw materials $70,000

The journal entry to record issuing both direct and indirect materials into production debits:

Work in process and MOH

The journal entry to record issuing both direct and indirect materials into production debits ______.

Work in process and Manufacturing overhead

the journal entry to record the purchase of materials credits:

accounts payable

Differences between job-order and process costing include that process costing ______.

accumulates cost by department, is used for indistinguishable products

What accounts are debited in a journal entry that records putting both direct and indirect materials into production?

Work in process and Manufacturing overhead

What accounts are debited in the journal entry to record issuing both direct and indirect materials to be used in production

Work in process and Manufacturing overhead

Which account is debited when manufacturing overhead is applied?

Work in process inventory

In the formula Y = A + BX, X represents the estimated

X= Total amount of the allocation base Y = The estimated total manufacturing overhead cost A = The estimated total fixed manufacturing over head cost B = The estimated variable manufacturing overhead cost per unit of the allocation base

irrelevant

a _______ cost will not influence a decision

direct cost

a cost that can be easily traced to a specific cost object

sunk cost

a cost that has already been incurred and is irrelevant; should be disregarded when making decisions

merchandising

a department store is part of the ________ companies category of business

When goods are sold, _____

a journal entry to record the sale and a journal entry to record the cost of goods sold must be made

Cost plus pricing occurs when

a markup percentage is added to the cost of a job

Cost-plus pricing occurs when ______.

a markup percentage is added to the cost of a job

A cost driver is ____

a measure that explains or influences the amount of manufacturing overhead cost incurred

A cost driver is ______.

a measure that explains or influences the amount of manufacturing overhead cost incurred

A cost driver is ______. the rate that is used to apply manufacturing overhead to products and services the total estimated manufacturing overhead cost a measure that explains or influences the amount of manufacturing overhead cost incurred another name for predetermined overhead rate

a measure that explains or influences the amount of manufacturing overhead cost incurred

Differences between job-order costing and process costing include that product costing:

accumulates costs by department is used for indistinguishable products

The MOH account is debited when:

actual OH costs are incurred

The Work in Process account accumulates:

actual direct material, actual direct labor, and applied overhead costs

As jobs are worked on the Work in Process account accumulates ______.

actual direct materials and direct labor costs and applied overhead costs

The journal entry to record selling and administrative salaries debits ______.

an expense account and credits Cash or a liability

The job order costing system may inaccurately assign cost to jobs due to

an inappropriate allocation base

The process of discovering and communicating meaningful patterns and insights from data to find more intelligent ways of operating a business is known as__

analytics

When using process costing, materials, labor and overhead may be added in ______ processing department.

any

cost object

any item a manager wants to know the cost of

A journal entry that debits Work in Process inventory and credits Manufacturing overhead is recording the:

application of manufacturing overhead costs

A journal entry that debits Work in process and credits Manufacturing overhead is recording the ______.

application of manufacturing overhead costs

A journal entry that debits work in process and credits MOH is recording

application of manufacturing overhead costs

a journal entry that debits work in process and credits manufacturing overhead is recording the

application of manufacturing overhead costs

a journal entry that debits work in process and credits manufacturing overhead is recording the:

application of manufacturing overhead costs

On the job cost sheet and work in process accounts, the ______ manufacturing overhead is recorded.

applied

the cost of goods manufactured report includes ______ manufacturing overhead costs. actual applied

applied

Select all that apply Work in Process consists of ______.

applied manufacturing overhead actual direct labor cost actual direct materials cost

Work in Process consists of ______

applied manufacturing overhead actual direct materials cost actual direct labor cost

The total cost of a job is calculated by adding the total of direct labor cost, direct materials cost and ______.

applied manufacturing overhead cost

Predetermined overhead rates:

are based on some secondary allocation measure

Nonprofit organizations ______. have no need for any type of accounting information only need financial accounting information must make decisions that use managerial accounting information

must make decisions that use managerial accounting information

Gross margin minus selling and administrative expenses equals ______.

net operating income

Gross profit minus selling and administrative expenses equals ______. net operating assets cost of goods sold net operating income cost of goods manufactured

net operating income

Gross profit minus selling and administrative expenses equals ______. net operating income cost of goods sold net operating assets cost of goods manufactured

net operating income

Gross profit minus selling and administrative expenses equals:

net operating income

There are two broad classifications of costs: manufacturing costs and __ costs

nonmanufacturing / period

Which of the following is NOT one of the three categories of businesses? Merchandising company Manufacturing firm Service company Nonprofit organization

nonprofit organization

Ending Work in Process Inventory represents the cost of goods ______. not yet completed not yet sold to be started on next period

not yet completed

what is the difference between the entries to record depreciation on office equipment and depreciation on factory equipment?

one debits depreciation expense, while the other debits manufacturing obverhead

When labor costs are incurred, _________ are added directly to the Work in Process account.

only direct labor costs

When computing equivalent units using the weighted-average method, _____

only partially completed units in ending inventory are part of the calculation

When computing equivalent units using the weighted-average method, ______.

only partially completed units in ending inventory are part of the calculation

The distinction between manufacturing and nonmanufacturing costs applies ______. only to companies that make a physical product only to merchandisers to all companies that make or sell products only to service companies

only to companies that make a physical product

Products such as clothing that are produced in batches by can vary considerably from model to model may use ____ costing.

operation

When products have both similar and individual characteristics, ______ costing is used.

operation

A blend of process and job order costing is called__ costing

operations

____ costing is a blend of job-order costing and process costing.

operations

The Sarbanes-Oxley (SOX) Act focuses on three factors that affect the accounting reporting environment: __, __, and __

opportunity incentive character

A foregone benefit from choosing one path over another is a(n) ____ ____.

opportunity cost

A credit balance in the MOH account means overhead was ________.

overapplied

A credit balance in the Manufacturing Overhead account means overhead was ___

overapplied

If there is a credit balance in the Manufacturing Overhead account after overhead have been applied to all jobs it means overhead was

overapplied

If there is a credit balance in the Manufacturing Overhead account after overhead have been applied to all jobs it means overhead was__

overapplied

If there is a credit balance in the Manufacturing overhead account after overhead have been applied to all jobs it means overhead was ____.

overapplied

The difference between overhead applied to jobs and actual overhead is ____

overapplied or underapplied overhead

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

overapplied or underapplied overhead

The difference between overhead applied to jobs and actual overhead is:

overapplied or underapplied overhead

The difference between overhead applied to work in process and actual overhead is

overapplied or underapplied overhead

The difference between overhead applied to work in process and actual overhead is:

overapplied or underapplied overhead

the difference between overhead applied to work in process and actual overhead is

overapplied or underapplied overhead

If the Manufacturing Overhead account has a credit balance at the end of the period that indicates that overhead was ______ and Cost of Goods Sold must be ______.

overapplied, decreased

Materials are treated as ____ costs when it is not worth the cost or effort to trace them to specific products.

overhead

The process used to assign overhead costs to products is called overhead __________

overhead allocation

The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the __ job

overhead applied to

The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the ______ the job.

overhead applied to

The predetermined overhead rate is multiplied by the actual cost driver usage for a job to calculate the ______ the job. overhead applied to total cost of predetermined overhead rate for actual overhead for

overhead applied to

The predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find ______.

overhead applied to the job

The predetermined overhead rate is multiplied by the actual cost driver usage for a job to find:

overhead applied to the job

Actual overhead costs may not be proportional to the actual amount of the allocation base used because ______.

overhead spending may not be under control many actual overhead costs are fixed

To keep track of labor time and costs many firms have replaced

paper time tickets with computerized systems

To keep track of labor time and costs, many firms have replaced ______.

paper time tickets with computerized systems

Industries/products more suitable for process costing than job-order costing include

paper towels breakfast cereal sunscreen

An equivalent unit is a measure used to convert ______ completed units into the equivalent of a full unit.

partially

An equivalent unit is a measure used to convert _______ completed units into the equivalent of a full unit

partially

Costs associated with running a business and selling the product as opposed to making it are called __costs.

period nonmanufacturing

Non manufacturing costs incurred during a period are treated as

period expenses

Nonmanufacturing costs incurred during a period are treated as ______.

period expenses

Nonmanufacturing costs incurred during a period are treated as ______. liabilities assets product costs period expenses

period expenses

Nonmanufacturing costs incurred during a period are treated as:

period expenses

Selling and administrative costs incurred are treated as ______.

period expenses

Select all that apply A relevant cost ______. is always an opportunity cost pertains to the future differs between alternatives will not influence a decision

pertains to the future differs between alternatives

A journal entry debiting Work in Process Inventory and crediting Raw Materials Inventory records ______

placing materials into production

A journal entry debiting Work in Process Inventory and crediting Raw Materials Inventory records ______.

placing materials into production

Determining tactics that management will use to achieve objectives is part of ______. planning controlling implementing

planning

Determining tactics that management will use to achieve objectives is part of ______. planning implementing controlling

planning

Determining the key factors that are important to a company's success is a major component of the __ function.

planning

Determining the key factors that are important to a company's success is a major component of the ____ function.

planning

The first step in__ is to establish goals or objectives and tactics to achieve them

planning

The future-oriented aspect of the management process is ______. planning implementing controlling

planning

The formula for applying overhead to a specific job is ______.

predetermined overhead rate × amount of allocation base incurred by job

A normal costing system applies overhead by job by multiplying a(n) ______ ______ rate by the _______ amount of the allocation base incurred by the job.

predetermined overhead, actual

Direct Materials and Direct Labor together are referred to as ____ costs.

prime

Direct materials and direct labor together are referred to as __costs.

prime

The weighted average method includes costs for

prior and current periods

The weighted-average method includes costs for ______.

prior and current periods

In the ______ costing system, transferred in costs are treated as just another category of costs, like materials or conversion costs.

process

Process costing accumulates costs by

process OR department OR operation

Costs are assigned to products as they move along the production process when using ______.

process costing only

Work is performed on products, and materials, labor, and overhead costs are added to products in a(n) ______ department.

processing

Work is performed on products, and materials, labor, and overhead costs are added to products in a ___ department.

processing OR operating OR assembly

Both job-order costing and process costing provide a mechanism to compute unit ________ cost.

product

The difference between __ costs and __ costs determines how and when the cost will be matched up against revenue on the income statement.

product period

attach

product costs ________ to units of product as they are purchased for resale or produced

Information about the number of units and costs that flow through a manufacturing process during an accounting period is provided on the ________

production report

Which of the following is not a characteristic of operation costing?

products are homogeneous

Equivalent units of production are needed to ______

properly prepare GAAP-based financial statements determine the cost of partially completed units

The production report _____

provides information to record manufacturing costs in accounting system

a journal entry that debits Raw Materials and credits Accounts Payable is recording the

purchase of materials

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

raw materials

Any purchased materials that will go into the finished product are first recorded in the ___ ___ inventory account

raw materials

The journal entry to record the purchase of materials debits ______

raw materials

__ __ consists of any materials that will be included as part of a finished products.

raw materials

the journal entry to record the purchase of materials debits:

raw materials

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

raw materials inventory

All materials that will be used in future production are first recorded in the *blank* *blank* account

raw, materials

A journal entry that debits Manufacturing overhead and credits Property taxes payable records the ______.

recognition of accrued property taxes

a journal entry that debits manufacturing overhead and credits property taxes payable records the

recognition of accrued property taxes

a journal entry that debits manufacturing overhead and credits property taxes payable records the:

recognition of accrued property taxes

The first step in preparing a weighted-average production report is ______

reconcile the number of physical units

The first step in preparing a weighted-average production report is ______.

reconcile the number of physical units

Managers must conduct a review of the company's internal control system and issue a report of their effectiveness. This was enacted as part of SOX in an attempt to ______. reduce the opportunity for error and fraud counteract the incentives to commit fraud emphasize the importance of the character of managers and employees

reduce the opportunity for error and fraud

Managers must conduct a review of the company's internal control system and issue a report of their effectiveness. This was enacted as part of SOX in an attempt to:

reduce the opportunity for error and fraud

Variable costs ______. remain constant in total and vary per unit vary both in total and per unit remain constant both in total and per unit remain constant per unit and vary in total

remain constant per unit and vary in total

Total manufacturing overhead costs tend to:

remain fairly constant

Select all that apply A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record ______.

rent expense on factory equipment factory utilities expense

a journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record:

rent expense on factory equipment factory utilities expense

classifying a cost as product or period can affect the

reported profitability of the company's products, customers, and divisions

examples of indirect labor costs include

restaurant kitchen managers factory security guards factory supervisors

The journal entry to record labor cost credits

salary and wages payable

Indirect materials include ______. laptop computer keyboards salt and pepper supervisor salaries factory rent and insurance

salt and pepper

costs incurred to get the final product to the customer are known as ____ expenses.

selling

net operating income is calculated by subtracting ___ from ____

selling and administrative expenses gross margin

Net operating income is calculated by subtracting ______ from ______.

selling and administrative expenses; gross margin

A journal entry that debits Advertising expense and credit Cash would record the incurrence of a:

selling cost

examples of products that may use operation costing include

shoes, clothing, jewelry

Select all that apply Opportunity costs ______. are out-of-pocket costs should be considered in decision making are uncommon in decision making are the costs of not doing something

should be considered in decision making are the costs of not doing something

Fill in the blanks to complete the sentence. Today most public companies issue corporate __ __of 2 reports that provide sustainability-related information.

social responsibility

The schedule of cost of goods ___ summarizes costs that remain in Finished goods inventory and that have been transferred to Cost of goods sold.

sold

Equivalent units must be computed because ______

some units take a long time to manufacture it assigns appropriate value to all units for financial statement reporting costs of unfinished units must be included in Work in Process

Job order costing requires a good record-keeping system that uses __documents that trace direct costs to specific jobs.

source

Units completed - units in beginning inventory = units ______

started and completed

Units completed - units in beginning inventory = units ______.

started and completed

Units completed - units in beginning inventory = units ________

started and completed

The job cost sheet serves as a ____ ____ to the overall work in process inventory account.

subsidiary ledger

The job cost sheet serves as a(n) __ __to the overall Work in Process Inventory account.

subsidiary ledger

When all of a company's job cost sheets are viewed collectively they form what is known as a ________.

subsidiary ledger

When calculating the cost of direct materials on the schedule of cost of goods manufactured the cost of indirect materials is:

subtracted from raw materials used in production

When calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is ______.

subtracted from raw materials used in production

When calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is:

subtracted from raw materials used in production

when calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is:

subtracted from raw materials used in production

Cost of goods manufactured is the ______.

sum of all jobs transferred from Work in process to Finished goods

The balance of work in process inventory may be calculated by ______.

summing the costs of all jobs in process

Select all that apply Labor costs ______. are always recorded directly into Work in Process are determined from the job cost sheets 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 may be direct or indirect

Select all that apply Labor costs ______. 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 may be direct or indirect

Applied manufacturing overhead costs are credited to the Manufacturing Overhead account ______

as the costs are applied to jobs

Applied manufacturing overhead costs are credited to the Manufacturing Overhead account ______.

as the costs are applied to jobs

Applied manufacturing overhead costs are credited to the Manufacturing Overhead account ______. as they are incurred when the jobs are sold at the end of the period as the costs are applied to jobs

as the costs are applied to jobs

Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account ______.

as they are incurred

raw materials is an ____ account

asset

In a service firm, salaries of administrative personnel, rent and utilities, and nonbillable employee time are ______.

assigned to client or account using an allocation base

Under FIFO costing, partially completed units in beginning inventory are _______

assumed to be completed first

Under FIFO costing, partially completed units in beginning inventory are _______.

assumed to be completed first Reason: FIFO costing assigns the same conversion cost, but material costs may or may not be included in units already in process.

Bar codes can be used to ______.

automatically record and post direct labor costs to jobs

The basic formula for process costing is ______. average unit cost = total manufacturing cost/total units produced total cost = actual direct materials + actual direct labor + applied overhead average unit cost = total units produced/total manufacturing costs

average unit cost = total manufacturing cost/total units produced

when preparing financial statements in a job-order costing system, finished goods flow first to the ___ _____ and then to the ___ ____

balance sheet income statement

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

based on some secondary allocation measure

Similarities between job-order costing and process costing include the ______.

basic purpose to assign and compute product costs, flow of costs through the manufacturing accounts, manufacturing accounts used

occupancy costs can

be either direct or indirect

Select all that apply Fixed costs ______. become progressively smaller per unit as the level of activity increases remain constant on a per unit basis remain constant in total become progressively larger per unit as the level of activity increases

become progressively smaller per unit as the level of activity increases remain constant in total

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

before the period begins

To calculate cost per equivalent unit using the weighted-average method, add the cost of ______ WIP inventory to costs added during the period and divide by the equivalent units of production.

beginning

To calculate cost per equivalent unit using the weighted-average method, add the cost of _______ inventory to current costs and divide by ________ units

beginning equivalent

When computing the equivalent units of production under the weighted-average method, partially completed ______ inventory is ignored.

beginning WIP

which are used to calculate cost of goods available for sale on the schedule of cost of goods sold?

beginning finished goods inventory, cost of goods manufactured

The formula to reconcile the number of physical units the company worked on during the period is units in ______.

beginning inventory + units started = units completed + units in ending inventory

When computing the equivalent units of production under the weighted-average method, partially completed ______ inventory is ignored.

beginning work in process

In both the FIFO and weighted-average methods, costs to be accounted for include ______ WIP inventory while costs accounted for include ______ WIP inventory.

beginning, ending

The type and quantity of each type of direct material needed to complete a unit of product is listed on the ______.

bill of materials

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 ______.

billable hours

Select all that apply In an attempt to reduce the opportunities for error and fraud, SOX places additional responsibilities on ______. boards of directors external auditors all managers all investors

boards of directors external auditors all managers

A production report presents ______

both costs to be accounted for and costs accounted for

A production report presents ______.

both costs to be accounted for and costs accounted for

A cost is treated as a direct cost when is it ______. a material used in production of the product both possible and reasonable to trace it to a cost object not worth the effort to trace it to a cost object a labor cost

both possible and reasonable to trace it to a cost object

A production report includes ______

both unit and cost information

A production report includes ______.

both unit and cost information

Costs per equivalent unit are used to value

both units in ending inventory and units transferred to the next department

Costs per equivalent unit are used to value ______.

both units in ending inventory and units transferred to the next department

Costs assigned to units of product in absorption costing include ______ manufacturing costs.

both variable and fixed manufacturing

A __ lays out plans in financial terms so that managers can determine the resources needed to achieve their objectives.

budget

A(n) ____ lays out plans in financial terms so that managers can determine the resources needed to achieve their objectives.

budget

The difference between direct labor and indirect labor is that direct labor ______.

can be easily traced to jobs, while indirect labor cannot

Cost objects ______. can be products, customers, or jobs are only used in financial accounting may only be assigned direct costs

can be products, customers, or jobs

Allocation bases that do not driver overhead costs:

can cause product costs to be distorted

The period ends, then MOH is debited, credited or closed?

closed

The simpler method of closing out the balance of Manufacturing overhead is ______.

closing it out to Cost of goods sold

weighted average method

combines costs and outputs from the current and prior periods

-have higher productivity than those without such cultures -have higher levels of customer satisfaction

companies with strong ethical cultures _________

Nonmanufacturing costs include ______. insurance on plant equipment assembly-line worker wages company president's salary sales commissions

company president's salary sales commissions

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

completed (or manufactured)

A journal entry that debits Finished goods and credits Work in process records the:

completion of a job

Manufacturing overhead costs ______.

consist of many different items are indirect costs

Finished goods ______.

consists of completed, unsold goods

Finished goods ______. consists of goods that require additional processing before being sold is the same as cost of goods manufactured consists of completed, unsold goods consists of goods that have been sold to customers during the period

consists of completed, unsold goods

Job-order costing would most likely be used in a(n)

construction company

Job-order costing would most likely be used in a(n) ______.

construction company

Job-order costing would most likely be used in a(n) ______. construction company dairy farm that produces raw milk soda bottling factory oil refinery

construction company

Identifying a problem and taking corrective action is part of the ______ process. implementing control planning

control

Identifying a problem and taking corrective action is part of the ______ process. implementing planning control

control

Select all that apply Materials requisition forms are used to ______. 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 record the cost of raw materials in the accounting system

When a customer's order is filled and units are sold there is a ______ (debit/credit) to Finished Goods and a ______ (debit/credit) to COGS.

credit, debit

When a customer's order is filled and units are sold, there is a ______ to Finished Goods and a ______ to Cost of Goods Sold.

credit, debit

the correct journal entry to apply manufacturing costs to processing dept 1 is ____ manufacturing overhead and _____ work in process dept 1

credit, debit

Overhead is applied to Work in process, then MOH is debited, credited or closed?

credited

when overhead is applied to work in process manufacturing is :

credited

Raw materials being purchases is a ______ to Raw Materials Account

debit

The journal entry to record material cost in the second department includes a ____ to Work in Process-Department #2.

debit

what side is always used to record the actual manufacturing costs incurred?

debit

The journal entry to record the transfer of completed units to finished goods is ________ Finished Goods Inventory and _______ Work in Process Inventory

debit credit

The journal entry to record the transfer of completed units to finished goods is ______Finished Goods Inventory and_________ Work in Process Inventory.

debit Credit

A total of $10,000 in manufacturing overhead was applied to Job #40. The journal entry to record this would:

debit $10,000 to Work in process Inventory and credit $10,000 to manufacturing overhead.

The journal entry to record $20,000 in depreciation on factory equipment is _______.

debit MOH $20,000 and credit Accumulated Depreciation $20,000

A company incurred $10,000 in direct labor costs and $8,000 in indirect labor costs. The journal entry to record this transaction would:

debit Work in process inventory $10,000 and Manufacturing overhead $8,000 and credit Wages payable $18,000

A company spent $2000 on factory rent, $1000 on factory utilities, and $5000 on misc factory cost. The journal entry to record these transactions would be:

debit manufacturing overhead cost and credit accounts receivables

Actual manufacturing overhead costs are accumulated on the ___ side of the manufacturing overhead account and applied costs are shown on the ___ side.

debit, credit

Actual manufacturing overhead costs are accumulated on the ______ side of the Manufacturing Overhead account and applied costs are shown on the ______ side. credit, debit debit, credit

debit, credit

The journal entry to record the transfer of completed units to finished goods is _____ finished goods and ____ work in process

debit, credit

The journal entry to record the transfer of completed units to finished goods would be to ______ (debit/credit) Finished Goods and ______ (debit/credit) WIP.

debit, credit

If the Manufacturing Overhead account has a ______ balance at the end of the period that indicates that overhead was underapplied and Cost of Goods Sold must be ______.

debit, increased

If the Manufacturing overhead account has a ____ balance at the end of the period that indicates that overhead was underapplied and cost of goods sold must be ____.

debit, increased

Actual manufacturing overhead is ______ to the Manufacturing overhead account.

debited

Actual overhead is incurred, then MOH is debited, credited or closed?

debited

when actual overhead is incurred manufacturing is :

debited

Actual manufacturing overhead is ______ to the Manufacturing overhead account.

debited (Applied overhead is credited to the account.)

The difference between the entries to record depreciation on office equipment and depreciation on factory equipment is that one:

debits Depreciation expense, while the other debits MOH

The journal entry to record depreciation on office equipment

debits depreciation expenses and credits Accumulated depreciation

ALL managerial functions involve ______. motivating others long term strategy decision making taking corrective action

decision making

ALL managerial functions involve ______. taking corrective action decision making long term strategy motivating others

decision making

operational decisions

decisions made during the implementation phase

implementation

decisions such as deciding how many employees to hire, salary schedules, and training policies are made during the ________ phase of the management process

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

difference between overhead applied to jobs and actual overhead

Underapplied or overapplied overhead is the:

difference between overhead applied to work in process and actual overhead

underapplied or overapplied overhead is the

difference between overhead applied to work in process and actual overhead

The difference in costs between two alternatives is called a(n) ______ cost. opportunity sunk common differential

differential

Labor costs that are easily traced to a job are called ______ laor costs

direct

A cost that can be easily traced to a specific cost object is a __cost, whereas costs that cannot be traced or are not worth the effort to trace are __ costs.

direct indirect

Hands-on work that can be easily traced to a specific product is called ____ ____.

direct labor

In an automobile manufacturing plant, assembly-line workers' wages are __ __ costs.

direct labor

Labor costs that can be easily and conveniently traced to specific products are ______ costs. selling manufacturing overhead indirect labor direct labor

direct labor

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

direct labor direct materials manufacturing overhead

conversion cost

direct labor cost plus manufacturing overhead

A journal entry that debits Manufacturing overhead and credits Accounts payable would NOT be used to record ______. miscellaneous factory overhead costs rent on factory equipment factory utilities costs direct labor costs

direct labor costs

A journal entry that debits Manufacturing overhead and credits Accounts payable would not be used to record ______.

direct labor costs

Widely used allocation bases in manufacturing include ______.

direct labor hours units of product machine hours direct labor cost

The document used to record the time workers spend on each job and task is a ______.

direct labor time ticket

Major inputs such as lumber and fixtures that can be easily traced to a specific job are called __ __

direct materials

Major material inputs that can be easily traced to a specific job are __ __.

direct materials

prime costs

direct materials + direct labor

The components of prime costs are ______. direct labor and manufacturing overhead direct materials and direct labor direct materials and manufacturing overhead

direct materials and direct labor

When materials are requisitioned into production, ______.

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

Select all that apply When materials are requisitioned into production, ______. direct materials are recorded on the job cost sheet indirect materials are recorded in Work in Process direct materials are recorded in Work in Process indirect materials are recorded as a separate line item on the job cost sheet

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

Categories of manufacturing costs include:

direct materials, direct labor, manufacturing overhead

product costs

direct materials, direct labor, manufacturing overhead

A cost that can be reasonably traced to a specific cost object is a(n) ____ cost, whereas cost that cannot be traced or are not worth the effort are ____ costs.

direct, indirect

a journal entry that includes Manufacturing Overhead and Cost of Goods Sold is recorded to:

dispose of underapplied or over-applied overhead

A journal entry that includes Manufacturing overhead and Cost of goods sold is recorded to ______.

dispose of underapplied or overapplied overhead

A journal entry that involves Manufacturing overhead and Cost of goods sold is recorded to ______.

dispose of underapplied or overapplied overhead

To calculate the unit product cost using the job cost sheet ______.

divide the total job cost by the number of units produced

Calculating the number of physical units worked on during the period is ______

done the same way under FIFO as under the weighted-average method

Calculating the number of physical units worked on during the period is ______.

done the same way under FIFO as under the weighted-average method

Operations costing is similar to job-order costing because ______.

each batch is charged for its own specific materials

Costs are transferred from raw materials inventory to:

either Work in Process or Manufacturing overhead (MOH)

Equivalent units of production can be computed using:

either the weighted-average or FIFO method

Costs are transferred from raw materials inventory to ______.

either work in process or manufacturing overhead

Costs are transferred from raw materials inventory to ______. finished goods inventory only manufacturing overhead only work in process inventory only either finished goods or work in process either work in process or manufacturing overhead

either work in process or manufacturing overhead

Unadjusted costs of goods sold is calculated by subtracting:

ending finished goods inventory from goods available for sale

To calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ______.

ending raw materials inventory and Indirect materials used

To calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ______.

ending raw materials inventory and indirect materials used

To calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract __________.

ending raw materials inventory and indirect materials used

to calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ___

ending raw materials inventory and indirect materials used

to calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract ______. only beginning raw materials inventory ending raw materials inventory and indirect materials used only ending raw materials inventory beginning raw materials inventory and indirect materials used

ending raw materials inventory and indirect materials used

cost of jobs still unfinished at the end of a period are included in:

ending work in process inventory

In order to track the cost of partially completed units, they must be converted into a(n) _______ number of fully completed units.

equivalent

In order to track the cost of partially completed units, they must be converted into a(n) ____________ number of fully completed units

equivalent

To report ending inventory, partially completed units are translated into ______ units

equivalent

To report ending inventory, partially completed units are translated into ____ number of partially completed units x percentage completion

equivalent or equal units

Number of partially completed units x Percentage completion = ______ ______

equivalent units

Equivalent units of production under the weighted-average method equal _____

equivalent units in ending work in process plus units transferred out

Equivalent units of production under the weighted-average method equal ______.

equivalent units in ending work in process plus units transferred out

Predeterminded over rate per direct labor hour is

estimated manufacturing overhead/esitmated direct labor hours

To calculate a predetermined overhead rate, divide estimated total manufacturing overhead by the ______.

estimated total cost driver

The formula for a predetermined overhead rate is ______. 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 actual total cost driver / actual total manufacturing overhead cost

estimated total manufacturing overhead cost / estimated total cost driver

The formula for a predetermined overhead rate is:

estimated total manufacturing overhead cost/ estimated total cost driver

A predetermined overhead rate it calculated by dividing the _____ total manufacturing overhead by the __________ total amount of the allocation base

estimated, estimated

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

estimated; estimated

A Predetermined Overhead Rate (POHR) is calculated by dividing the ____ Total Manufacturing Overhead (MOH) by the ____ total cost driver

estimated;estimated

The standards of conduct for judging right from wrong is referred to as__

ethics

salt and pepper

example of indirect materials

When using process costing, nonmanufacturing costs are ______.

expensed during the period incurred

A journal entry that debits Manufacturing overhead and credits Prepaid insurance records the:

expiration of prepaid factory insurance

Ideally an allocation base should ______.

explain or influence the amount of overhead incurred

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

explain or influence the amount of overhead incurred

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

explain or influence the amount of overhead incurred

Ideally an allocation base should:

explain or influence the amount of overhead incurred

The United States requires absorption costing for ______ financial reports.

external

The united States requires absorption costing for _________ financial reports

external financial reports

Select all that apply Manufacturing overhead costs include ______.

factory insurance the factory supervisor's salary

Select all that apply Examples of indirect labor costs include ______. restaurant cooks factory security guards restaurant kitchen managers factory supervisors

factory security guards restaurant kitchen managers factory supervisors

A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record ______.

factory utilities expense rent expense on factory equipment

a journal entry that debits manufacturing overhead and credits accounts payable could be made to record:

factory utilities expense and rent expense on factory equipment

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

false

True or false: Job-order costing can only be used in manufacturing firms.

false

True or false: The root cause of inaccurately assigning costs to jobs is generally due to poor tracking of direct labor costs.

false

True or false: When using process costing, labor and overhead can be added in any department, but materials can only be added in the first processing department.

false because they can all be added in any processing department

Managers need ___ information to budget and control spending.

financial

Intended users of __ of 2 accounting information include investors and regulators; business owners and employees are included in the intended users of __of 2 accounting.

financial managerial

The distinction between product versus period costs really has more to do with

financial accounting

Completed units that have not yet been sold are found in ___ ___ inventory

finished goods

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

finished goods

When production is completed in the last processing department, units are transferred to the ____ ____ account.

finished goods

When production is completed in the last processing department, units are transferred to the ______ ______ account.

finished goods

Cost of goods completed is transferred from Work in Process Inventory to _____

finished goods inventory

A(n) __ cost does not change in total and a(n) __ cost does not change per unit.

fixed variable

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

summing the costs of all jobs in process

The balance of work in process inventory may be calculated by ______. 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 subtracting the cost of finished goods inventory from the sum of all manufacturing costs

summing the costs of all jobs in process

The balance of work in process inventory may be calculated by:

summing the costs of all jobs in process.

A cost that has already been incurred is called a(n) __cost

sunk

What type of cost is irrelevant and should be disregarded when making decisions? Sunk Differential Opportunity

sunk

When applied to business, __ means a company can meet today's needs without sacrificing future generations from meeting their own needs.

sustainability

When applied to business, ____ means a company can meet today's needs without sacrificing future generations from meeting their own needs.

sustainability

When using ______, the number of units both started and completed during the period must be computed

the FIFO method

When using ______, the number of units both started and completed during the period must be computed.

the FIFO method

-was primarily aimed at renewing investor confidence -has many implications for managers

the SOX Act _________

Nonmanufacturing costs increase ______.

the Selling, General & Administrative expense accounts

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

the Selling, General & Administrative expense accounts

the value of work in process is equal to:

the cost of all unfinished jobs

period; product

the difference between _______ costs and _________ costs determines how and when the cost will be matched up against revenue on the income statement

differential cost

the difference in cost between two alternatives

Differential cost is:

the difference in costs between two alternatives

differential cost

the difference in costs between two alternatives

only to companies that make a physical product

the distinction between manufacturing and non manufacturing costs applies ____________

planning

the first step in _______ is to establish goals or objectives and tactics to achieve them

In a job-order costing system costs flow first to:

the inventory accountants and then to cost of goods sold

In a job-order costing system costs flow first to ______.

the inventory accounts and then to cost of goods sold

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

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

the manufacturing overhead cost is debited

When actual manufacturing overhead costs are incurred, ______. work in process inventory is credited the manufacturing overhead cost is credited the manufacturing overhead cost is debited work in process inventory is debited

the manufacturing overhead cost is debited

When actual manufacturing overhead costs are incurred, ______. work in process inventory is debited the manufacturing overhead cost is debited work in process inventory is credited the manufacturing overhead cost is credited

the manufacturing overhead cost is debited

Which of the following would not be considered a job in a a service firm that uses job order costing

the tax department in an accounting firm - this is a department - a job would be an individual client

When comparing the FIFO method of computing equivalent units to the weighted-average method, ______

the weighted-average method blends together work and costs from prior periods with the current period, whereas FIFO separates the two periods

When comparing the FIFO method of computing equivalent units to the weighted-average method, ______.

the weighted-average method blends together work and costs from prior periods with the current period, whereas FIFO separates the two periods

Overhead costs are debited to Work in Process when ______.

they are applied to jobs

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

they are applied to jobs

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

they are applied to jobs

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

time ticket

An hour by hour summary of an employees activities through the day is found on the

time ticket

An hour-by-hour summary of an employee's activities throughout the day is found on the

time ticket

The document used to record the time workers spend on each job and task is called a ______.

time ticket

Which of the following costs would NOT be classified as manufacturing overhead?

tires used to make vehicles

Product costs "attach"

to units of product as they are purchased for resale or produced

In deciding whether a cost is fixed or variable, think about whether the ______ cost will change. total per unit

total

In the formula Y = a + bX, X represents the estimated ______.

total amount of the allocation base

In the formula Y = a + bX, a represents the estimated ______.

total fixed manufacturing overhead cost

Costs ______ in are treated as another category of cost, just like materials or conversion costs.

transferred

The equivalent units completed are treated the same as units ______ out for purposes of determining the cost per unit.

transferred

When unit costs are transferred from Department A to Department B, Department B will treat the costs as ______.

transferred in

When unit costs are transferred from Department A to Department B, Department B will treat the costs as:

transferred in

the equivalent units completed are valued the same as units ___ for purposes of determining the cost per unit

transferred out

True or false: A particular cost may be direct or indirect depending on the cost object. True False

true

True or false: Job cost sheets serve as a subsidiary ledger to the overall Work in Process Inventory account.

true

True or false: The Manufacturing Overhead account is a temporary account used to accumulate actual and applied overhead costs.

true

True or false: The equivalent units of production computed under the weighted-average method does not take into account the percentage completed of the beginning inventory.

true

True or false: The flow of costs through manufacturing accounts is basically the same for job-order costing and process costing.

true

cost control is a critical concern for most organizations

true

true

true/false: cost control is a critical concern for most organizations

false

true/false: preparing a budget is part of the controlling process

true

true/false: some firms operate as more than one type of organization: manufacturer, merchandiser and/or service company

false

true/false: taking actions that carry out the company's plan is a key part of the control process

false

true/false: virtually all accounting and business problems have clear right or wrong answers

false

true/false: when faced with an ethical dilemma, it is only important to identify those who may be harmed by the decision

After journal entries have been posted, the calculated gross profit is _____

unadjusted because it is based on applied manufacturing overhead

Martin Industries had unadjusted cost of goods sold of $450,000. Overhead was underapplied by $30,000. Adjusted cost of goods sold is:

unadjusted cost of goods sold + underapplied overhead: 450,000 +30,000

A debit balance in Manufacturing overhead means overhead was ___

underapplied

If there is a debit balance in Manufacturing Overhead after overhead has been applied to all jobs it means overhead was

underapplied

a debit manufacturing overhead means it was

underapplied

When only a portion of the units involved in a job are sold, the ______.

unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold

when only a portion of the units involved in a job are sold, the:

unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold

Select all that apply Decision making ______. is another term for planning uses feedback from other managerial processes requires up-to-date information relies primarily on financial accounting information

uses feedback from other managerial processes requires up-to-date information

Select all that apply Decision making ______. relies primarily on financial accounting information uses feedback from other managerial processes requires up-to-date information is another term for planning

uses feedback from other managerial processes requires up-to-date information

Cost of goods manufactured is the ______. value of all jobs in Finished Goods at the end of a period average value of the Work in Process account value of all jobs transferred from Work in Process to Finished Goods value of all jobs transferred from Finished Goods to Cost of Goods Sold

value of all jobs transferred from Work in Process to Finished Goods

The three V's that make data big are __,__,__

volume, velocity, variety

Select all that apply The Sarbanes-Oxley (SOX) Act ______. was primarily aimed at renewing investor confidence is focused on the managerial accounting system puts more responsibility on accountants and less on managers has many implications for managers

was primarily aimed at renewing investor confidence has many implications for managers

A processing department is an organization unit ______.

where work is performed on a product, and materials, labor, and overhead are added

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

whether the products produced are similar or different

The major difference between job order and process costing is:

whether the products produced are similar or different

Costs transferred in from Department A to Department B ______.

will always be 100% completed with respect to department a

Costs of partially completed units are accounted for in ______.

work in process

Recording the transfer of partially completed products from one processing department to another, requires a journal entry that affects the ______ account of both processing departments.

work in process

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

work in process

When a job is completed, the job costs are transferred out of:

work in process

When using process costing, a separate ______ account is maintained for each processing department.

work in process

manufacturing overhead is applied with a debit to:

work in process

units of product that are only partially complete are contained in the _____ _____ ____ Inventory

work in process

when a job is completed, what account is credited?

work in process

when using process costing, each processing department has a separate _____ _____ ____ account.

work in process

a company incurred $10000 in direct labor costs and $8000 in indirect labor costs. The journal entry to record this transaction debits:

work in process $10000 and manufacturing overhead $8000 and credits salaries and wages payable $18000

a company requisitioned $40000 in direct materials and $30000 in indirect materials from the storeroom to be used in production. The journal entry to record this transaction would debit:

work in process $40000, debit manufacturing overhead $30000, and credit raw materials $70000

the journal entry to apply overhead cost to processing department 1 is to debit

work in process Dept 1 and credit manufacturing overhead

The journal entry to record direct materials costs in processing Department #1 is debit ______.

work in process department 1 and credit raw materials

To calculate total manufacturing costs you:

you CANNOT add prime costs (PC) to conversion costs (CC)

The basic formula for process costing is

Average unit cost = total manufacturing cost/ total units produced.

implementing

Decisions made during the implementing, _______ phase are sometimes called operational decisions.

implementation

Decisions such as deciding how many employees to hire, salary schedules, and training policies are made during the ______ phase of the management process.

Process costing assigns costs to units by each _______that they pass through. (Enter only one word per blank.)

Department

The journal entry to record depreciation on office equipment debits ______.

Depreciation Expense and credits Accumulated Depreciation

planning

Determining tactics that management will use to achieve objectives is part of ______.

planning

Determining the key factors that are important to a company's success is a major component of the ________function

In an automobile manufacturing plant, assembly-line workers' wages are____ ____ costs.

Direct Labor

Labor costa that are easily traced to a job are called _____ labor costs

Direct Labor Cost

Conversion costs include ______.

Direct Labor and Manufacturing overhead

A laptop computer manufacturer would consider the computer's processor chip to be a(n) ____ cost.

Direct Material

When using process costing, major material inputs used in production that can be traced to the product are ______.

Direct Materials

For a juice maker, grapes would be considered a(n)

Direct material

Under process costing, which manufacturing costs are assigned to the product as it moves from one manufacturing process to the next? Direct materials, direct labor and conversion costs Direct materials, indirect materials, and manufacturing overhead Direct materials, direct labor and indirect labor Direct materials, direct labor and manufacturing overhead

Direct materials, direct labor and manufacturing overhead In process costing, direct materials, direct labor, and manufacturing overhead are assigned to the product as it moves from one manufacturing process to the next.

Put the steps for calculating direct materials on the schedule of cost of goods manufactured in order A. Deduct: Indirect materials included in manufacturing overhead B. Raw materials used in production C. Deduct: Raw materials inventory, ending D. Add: purchases of raw materials E. Raw materials inventory, beginning F. Total raw materials available

E. Raw materials inventory, ending D. Add: Purchases of raw materials F. Total raw materials available C. Deduct: Raw materials inventory, ending B. Raw materials used in production A. Deduct: Indirect materials included in manufacturing overhead

A processing department transferred 3,000 units to the next department. Ending work in process in the department contained 100 units that were 40% complete with regard to materials and 25% complete with regard to conversion costs. Using the weighted-average method, what were the equivalent units of production for materials costs in the department?

Equivalent units of production for material costs = 3,000 + (100 x 40%) = 3,040

Which of the following is included in computing equivalent units under the FIFO method, but not under the weighted-average method?

Equivalent units to complete beginning work in process

Which of the following is not a manufacturing cost category?

Selling & administrative costs

What are the different ways to compute the equivalent units of production?

Weighted-average method FIFO method

Manufacturing overhead ______.

- consists of many different types of costs - contains fixed costs i- s an indirect cost

The journal entry to record the transfer of partially completed products from processing Department #1 to processing Department #2 is to debit Work in Process Department ______.

#2 and credit work in process department 1

A journal entry debiting Cost of goods sold and crediting Finished goods is made when A. the period is completed B. Goods are sold C. Goods are started D. Goods are finished

B. Goods are sold

FIFO method

Bases costs solely on the costs and outputs from the current period

Product costs are also called ____ costs.

Inventoriable

Which of the following equations is correct?

Units in beginning WIP + units started or transferred in = Units in ending WIP + units completed and transferred out

product

direct materials, direct labor, and manufacturing overhead are all _______ costs

Categories of manufacturing costs include ______.

direct materials, direct labor, manufacturing overhead

Sammy Co. uses process costing to account for the production of popcorn. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 20,000 units for materials and 18,200 units for conversion costs. Beginning inventory consisted of $6,200 in materials and $4,400 in conversion costs. May costs were $47,000 for materials and $32,000 for conversion costs. Ending inventory still in process was 4,000 units (100% complete for materials, 55% for conversion). The cost per equivalent unit for materials using the weighted average method would be $2.00 $1.75 $2.35 $2.66

$2.66 Cost per equivalent unit for conversion = ($6,200 + $47,000)/20,000 = $2.66.

Given: Cost of goods manufactured of $234,000, beginning finished goods inventory of $18,000, and ending finished goods inventory of $24,000, calculate unadjusted cost of goods sold.

$228,000

Given: Cost of goods manufactured of $234,000, beginning finished goods inventory of $18,000, and ending finished goods inventory of $24,000, calculate unadjusted cost of goods sold. $258,000 $240,000 $252,000 $228,000

$228,000

Given: Cost of goods manufactured of $234,000; beginning finished goods inventory of $18,000; and ending finished goods inventory of $24,000, calculate unadjusted cost of goods sold.

$228,000 ($18,000 + $234,000 - $24,000 = $228,000)

Parker Corporation makes candy bars. One of its processing departments reported the following information for August. Beginning work in process costs included $50,000 in direct materials and $110,000 in conversion cost. A total of $144,000 of direct materials costs and $210,000 in conversion cost was incurred during the month. Equivalent units totaled 12,000 for direct materials and 8,000 for conversion cost. Using the first-in, first-out (FIFO) method, Parker's cost per equivalent unit for conversion during August would be: $13.75 $18.00 $6.25 $26.25

$26.25 The cost per equivalent unit under FIFO is calculated by dividing the current period's costs by the total number of equivalent units. So, dividing $210,000 by 8,000 equivalent units, the cost per equivalent unit is $26.25 for conversion cost.

Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000

$260,000

Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000 $302,000 $260,000 $242,000 $278,000

$260,000

Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000 $302,000 $278,000 $242,000 $260,000

$260,000

Paula's Fab Tee Company, which prints T-shirts, has three processing departments (printing, labeling, and packaging). The total cost per equivalent unit was $17.80 for the printing department, $0.80 for the labeling department, and $0.40 for the packaging department. The total cost of the 1,450 units that were transferred out of the Work in Process Inventory (Packaging) account to the Finished Goods Inventory account was: $25,810 $27,550 $26,390 $24,070

$27,550 Total cost per unit = Conversion cost + Additional inventory cost + Labeling, tagging, and packaging cost = $17.80 + $0.80 + 0.40 = $19. The total cost of units produced and transferred to finished goods inventory is $27,550 (1,450 units × $19 per unit).

Given the following, compute the cost of goods manufactured. Direct material cost: $40,000 Direct labor cost: $100,000 Applied overhead: $120,000 Beginning work in process inventory: $30,000 Ending work in process inventory: $12,000 $278,000 $302,000 $242,000 $260,000

$278,000

Gemini had Sales of $50,000, Unadjusted Cost of goods sold of $23,000, Overapplied Manufacturing Overhead of $3,000, and Selling and administrative expenses of $25,000. Calculate gross profit. $5,000 $24,000 $27,000 $30,000

$30,000

Gemini had sales of $50,000 unadjusted cost of goods sold of $23,000, overapplied manufacturing overhead of $3,000 and selling and administrative expenses of $25,000. Gross profit is:

$30,000

Canners Company uses weighted-average costing. Beginning WIP inventory had $3,650 of material costs. During the period, $5,00 of materials and $9,250 in conversion costs were added. If there are 250 equivalent units of production for materials, the cost per equivalent unit for materials is:

$34.60 ($3,650 + $5000)/250 = $34.60

Given the following, compute the conversion cost per equivalent unit using the weighted-average method. Conversion costs in beginning inventory $5,000 Conversion costs added in the current period $40,000 1,000 units were completed and transferred out during the period. 500 units in ending inventory are 50% complete.

$36

Given the following, compute the conversion cost per equivalent unit using the weighted-average method. Conversion costs in beginning inventory $5,000 Conversion costs added in the current period $40,000 1,000 units were completed and transferred out during the period. 500 units in ending inventory are 50% complete.

$36 Reason: ($5,000 + $40,000) / (1,000 + 500 × 50%) = $36 (Beginning Inventory+Current Costs) ----------------------------------------- (Equivalent Units) (Units in ending inventory*percentage of completion)

A company's calculated predetermined overhead rate is $90 per direct labor hour. If a job requires 4 direct labor hours, ______. the total cost of labor and overhead for the job is $360 $360 is assigned to the job to cover indirect costs the total cost of labor for the job is $360

$360 is assigned to the job to cover indirect costs

A company's calculated predetermined overhead rate is $90 per direct labor hour. If a job requires 4 direct labor hours:

$360 is assigned to the job to cover indirect costs

Given: Cost of goods manufactured of $410,000, beginning finished goods inventory of $110,000, and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.

$395,000

Which of the following items are included on a cost of goods manufactured report?

-Applied manufacturing overhead -Beginning and ending Work in Process Inventory -Beginning and ending Raw Materials 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? $115,000 $25,000 $65,000 $90,000

$65,000

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, including $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.

$74,000

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, including $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. $102,000 $130,000 $70,000 $74,000

$74,000

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, including $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. $130,000 $70,000 $102,000 $74,000

$74,000

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, including $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.

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

Using the FIFO method, what is the cost per equivalent unit if cost in beginning inventory is $3,000, current costs are $6,000, and there are 75 equivalent units of production?

$80 Reason: Cost per equivalent unit = $6,000/75 = $80.

Given $40,000 of current costs, $3,000 of costs in beginning inventory, and 500 equivalent units, the cost per equivalent unit using the weighted-average method is ____

$86

Given $40,000 of current costs, $3,000 of costs in beginning inventory, and 500 equivalent units, the cost per equivalent unit using the weighted-average method is

$86 (40,000+3000) --------------- (500)

The cleaning process of Komin Inc. has calculated its cost per equivalent unit for materials to be $800 and for conversion to be $300. 80 units were transferred out of the cleaning department. So, the cost of units transferred out from the process is: $24,000 $64,000 $88,000 $40,000

$88,000 Cost of units transferred out = ($800 × 80 equivalent units) + ($300 × 80 equivalent units) = $88,000.

What is the formula for the cost per equivalent unit using the weighted-average method?

(Beginning Inventory + Current Costs)/Equivalent Units

The formula for the cost per equivalent unit using the weighted-average method is ______.

(Cost of beginning work in process inventory + Cost added during the period) ÷ Equivalent units of production

marketing

(selling expenses) costs incurred to get the final product to the customer

The total cost of a job includes

- Applies manufacturing overhead - direct materials cost - direct labor cost

manufacturing overhead costs include

- Factory insurance - The factory supervisor's salary

Materials requisition forms are used for ______.

- Making journal entries in accounting records - Controlling the flow of materials into production

what methods can be used to dispose of underapplied or overapplied manufacturing overhead?

- closing it out to cost of goods sold -allocating it among work in process, finished goods, and cost of goods sold.

Job order costing would most likely be used in an

- construction company - Soda bottling company would be more likely to use process costing - companies that make different products each period use

Materials requisition forms are used for

- controlling the flow of materials into production - making journal entries in accounting records

Widely used allocation bases in manufacturing are

- direct labor hours - machine hours - direct labor cost - units of product

Typical cost drivers include

- flight hours - computer time - machine hours

A job cost sheet contains

- manufacturing overhead costs charged to the job - materials cost charged to the job - labor costs charged to the job

A job cost sheet contains ______.

- materials costs charged to the job - manufacturing overhead costs charged to the job - labor costs charged to the job

A bill of materials contains the ______.

- quantity of each direct material needed to complete a unit of product - type of each direct material needed to complete a unit of product

A bill of materials contains the

- quantity of each direct material needed to complete a unit of production - type of each direct material needed to complete unit of production

The unit product cost is the same as the

- total job cost divided by number of units - average product cost per unit

Cost assigned to units of production under absorption costing include

- variable manufacturing - fixed manufacturing

JVL Inc. adds all direct materials at the start of the production process. For a given period they had 100 units in beginning inventory that were 40% complete as to conversion costs. During the period, 1,500 units were started and completed. Ending inventory contained 200 units that were 30% complete as to conversion costs. Compute the equivalent units for direct materials using the FIFO method.

0 in beginning inventory + 1,500 started and completed + 200 in ending inventory = 1,700

The first step in assigning manufacturing overhead is to determine the *blank* *blank* or cost driver

1) allocation 2) base

Given 100 units in beginning inventory, 1,500 units started, and 200 units in ending inventory, the number of units started and completed equals ______.

1,300 Reason: 1,500 - 200 = 1,300. The other 100 units transferred out were in beginning inventory.

Given 100 units in beginning inventory, 1,500 units started, and 200 units in ending inventory, the number of units completed equals ______.

1,400 Reason: 100 + 1,500 - 200 = 1,400

Given 100 units in beginning inventory, 1,500 units started, and 200 units in ending inventory, the number of units started and completed equals ______

1,500 - 200 = 1,300 The other 100 units transferred out were in beginning inventory = 1,400

JVL Inc. adds all direct materials at the start of the production process. For a given period they had 100 units in beginning inventory that were 60% complete as to conversion costs. During the period, 1,500 units were started and completed. Ending inventory contained 200 units that were 30% complete as to conversion costs. Compute the equivalent units for conversion costs using the FIFO method.

1,600 units Reason: Since the beginning inventory is 60% complete, 40% is required to finish it. (100 × 40%) 40 in beginning inventory + 1,500 started and completed + (200 × 30%) 60 in ending inventory = 1,600

JVL Inc. adds all direct materials at the start of the production process. For a given period they had 100 units in beginning inventory that were 40% complete as to conversion costs. During the period, 1,500 units were started and completed. Ending inventory contained 200 units that were 30% complete as to conversion costs. Compute the equivalent units for direct materials using the FIFO method.

1,700 units Reason: 0 in beginning inventory + 1,500 started and completed + 200 in ending inventory = 1,700.

A FIFO costing process had 400 units in beginning inventory. If 2,000 units were started and 600 units are in ending inventory, ________ units were completed during the period.

1,800

A FIFO costing process had 400 units in beginning inventory. If 2,000 units were started and 600 units are in ending inventory,______ units were completed during the period.

1,800 (400+1200-600)

Place these items in order in which they appear on the schedule of Cost of Goods Sold Unadjusted cost of goods sold Add: underapplied overhead Deduct: Finished goods inventory, ending Adjusted cost of goods sold Cost of goods available for sale

1. Cost of goods available for sale 2. Deduct Finished goods inventory, ending 3. Unadjusted cost of goods sold 4. Add Underapplied overhead 5. Adjusted cost of goods sold

List the steps to assigning manufacturing overhead costs using a predetermined overhead rate in order

1. Determine the allocation base (cost driver) 2. Calculate the predetermined overhead rate 3.Assign manufacturing overhead to products

Labor costs:

1. May be direct or indirect 2. Are recorded in basically the same way as material costs

Which of the following statements are true?

1. Raw materials used in production are transferred to work in progress as direct materials 2. When materials are purchased they are recorded in the raw materials inventory account.

Place the steps in order as needed to prepare a production report using the weighted-average method.

1. Reconcile the number of physical units 2. Convert physical units into equivalent units 3. Calculate cost per equivalent unit 4. Reconcile the total cost of Work in Process Inventory 4. Prepare the report

When actual manufacturing overhead costs are incurred:

1. The manufacturing overhead cost is debited 2. A balance sheet account is credited

The (1) side of the manufacturing overhead account is always used to record manufacturing overhead applied to production and the (2) side is always used to record the actual manufacturing costs incurred. (Enter either debit or credit in each blank.)

1. credit 2. debit

Completed units that have not yet been sold are found in (1) (2) inventory. (Enter only one word per blank.)

1. finished 2. goods

Process costing:

1. is used for homogeneous products 2. is used for mass production

The cost of goods (1) is the sum of all amounts transferred from Work in process to Finished goods during a period. (Enter only one word per blank.)

1. manufactured

The schedule of cost of goods (1) summarizes costs that remain in Work in process inventory and that have been transferred from Work in process to Finished goods inventory. (Enter only one word per blank.)

1. manufactured

A credit balance in the Manufacturing Overhead account means overhead was (1). (Enter either overapplied or underapplied.)

1. overapplied

Any purchased materials that will go into the finished product are first recorded in the (1) (2) inventory account. (Enter only one word per blank.)

1. raw 2. materials

Materials requisition forms are used for

1. recording the cost of raw materials in the accounting system 2. controlling the flow of materials from inventory into production

The schedule of cost of goods (1) summarizes costs that remain in Finished goods inventory and that have been transferred to Cost of goods sold. (Enter only one word per blank.)

1. sold

GAAP requires

1. that manufacturing costs be treated as assets until sold 2. all manufacturing costs be charged to products

A debit balance in Manufacturing overhead means overhead was (1). (Enter either overapplied or underapplied.)

1. underapplied

Martin Corporation manufactures carpets. During the current period, one of its processing departments had a beginning inventory of 1,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion cost. It started an additional 8,000 units into production, but could complete only 5,000 units during the period. The ending inventory is 100% complete with respect to direct materials and 40% complete with respect to conversion cost. Under the first-in, first-out (FIFO) method, the equivalent units in beginning inventory for conversion cost would be: 200 800 1,000 1,200

200 Since the units in beginning inventory are 80 percent complete with respect to conversion cost, they require only 20 percent conversion effort during the current period. So, we multiply the 1,000 physical units by 20 percent to arrive at 200 equivalent units of conversion cost for the beginning inventory units.

direct materials used for the period cost $66,000. Direct labor cost $80,000. Applied overhead was $60,000. Beginning work in process inventory was $27,000 and ending work in process inventory was $25,000. Calculate the cost of goods manufactured.

208,000

Using the weighted-average method, what is the total equivalent units of production if there are 150 units transferred to finished goods and 215 units that are 60% complete in ending work in process inventory?

279

A company transferred 150 units to finished goods and has 215 units in ending work in process inventory that are 60% complete. Using weighted-average costing, the number of equivalent units is ______.

279 = 150 + (215 x 60%) = 279

-direct materials -direct labor -manufacturing overhead

3 categories of manufacturing overhead:

-opportunity -incentives -character

3 factors that the SOX Act focuses on that affect the accounting reporting environment

How many physical units are in ending inventory if 300 units were in beginning inventory, a total of 1,500 were started, and 1,300 were completed?

300 + 1,500 = 1,300 + Units in Ending Inventory = 500

A processing department transferred 3,000 units to the next department. Ending work in process in the department contained 100 units that were 40% complete with regard raw materials and 25% complete with regard to conversion costs. Use the weighted-average method, what were the equivalent units of production for materials costs in the department?

3040

Canners Company uses weighted-average costing. Beginning work in process inventory had $3,650 of material costs. During the period, $5,000 of materials and $9,250 in conversion costs were added. If there are 250 equivalent units of production for materials, the cost per equivalent unit for materials is ______.

34.60 = (3650+5000) / 250

Using the weighted-average method, if work in process inventory has 100 units that are 40% complete and 300 units were transferred to the next department during the period, there are a total of _______ equivalent units of production.

340

Using the weighted-average method, if work in process inventory has 100 units that are 40% complete and 300 units were transferred to the next department during the period, there are a total of ________ equivalent units of production

340

Using the weighted-average method, there are a total of ______ equivalent units of production if WIP inventory has 100 units that are 40% complete and 300 units were transferred to the next department during the period.

340

A company's beginning WIP contained 200 units that were 20% complete. Those units were completed and transferred to finished goods. During the period 4,300 units were started. Of the units started, 4,000 were transferred to finished goods. The 300 units in ending WIP were 30% complete. Using the weighted-average method, the equivalent units of production equals:

4,290 Beginning WIP + started and completed = Transferred out + ending WIP x % complete. 200 + 4,000 = 4,200 + (300 x 30%) = 4,290

A company's beginning work in process contained 200 units that were 20% complete. Those units were completed and transferred to finished goods. During the period 4,300 units were started. Of the units started, 4,000 were transferred to finished goods. The 300 units in ending work in process were 30% complete. Using the weighted-average method, the equivalent units of production equals ______.

4290 = 4200+300x 30%

How many physical units are in ending inventory if 300 units were in beginning inventory, a total of 1,500 were started, and 1,300 were completed?

500 Reason: 300 + 1,500 = 1,300 + Units in Ending Inventory

Fila Inc, worked on 3 jobs this period: Job 14C, which cost $15,000 Job 23A, which cost $28,000 and Job 45B, which cost $23,000 At the end of the period, only Job 14C was still in process. The costs of goods manufactured this period is

51,000

Costs in beginning work in process inventory was $4,500 and $37,800 in costs were added during the period. If there are 7,050 equivalent units, the cost per equivalent unit under the weighted-average method is $

6 = (4500+37800) / 7050

Corny Corp. uses a process costing system. January 1, 1,000 units were in inventory. During January 20,000 units were started and 15,000 units were completed. How many units were in ending inventory on January 31? 34,000 units 19,000 units 6,000 units 1,000 units

6,000 units Beginning inventory plus units started less units completed equals ending units in inventory. 1,000 + 20,000 − 15,000 = 6,000

A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of March, there were 5,000 units in the beginning work in process inventory; 70,000 units were started into production in March; and there were 25,000 units that were 60% complete in the ending work in process inventory at the end of March. What were the equivalent units of production for conversion costs for the month of March? 58,000 equivalent units 65,000 equivalent units 75,000 equivalent units 82,000 equivalent units

65,000 equivalent units First calculate completed and transferred units by taking 5,000 + 70,000 − 25,000 = 50,000. Both completed units and ending inventory are 100% complete with respect to direct materials, so the equivalent units for direct materials cost is the sum of 100% of the completed units plus 100% of the ending inventory. (50,000 × 100%) + (25,000 × 100%) = 75,000.

A department adds raw materials to a process at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of March, there were 5,000 units in the beginning work in process inventory; 70,000 units were started into production in March; and there were 25,000 units that were 60% complete in the ending work in process inventory at the end of March. What were the equivalent units of production for conversion costs for the month of March? 58,000 equivalent units 65,000 equivalent units 75,000 equivalent units 82,000 equivalent units

65,000 equivalent units First calculate completed and transferred units by taking 5,000 + 70,000 − 25,000 = 50,000. Then, convert ending inventory to equivalent units conversion costs (60% complete), (50,000 × 100%) + (25,000 × 60%) = 65,000.

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, including $28,000 of the indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period

74,000

A processing department transferred 3,000 units to the next department. Ending work in process in the department contained 100 units that were 40% complete with regard to materials and 25% complete with regard to conversion costs. Using the weighted-average method, what were the equivalent units of production for materials costs in the department?

= 3,000 + (100 x 40%) = 3,040

merchandising

A department store is part of the ______ companies category of business.

Select all that apply Which of the following statements are true? A direct cost is sometimes referred to as an opportunity cost. A particular cost is either direct or indirect, regardless of the cost object. A regional sales manager's salary would be a direct cost of the regional office in which the sales manager works. Occupancy costs can be either direct or indirect.

A regional sales manager's salary would be a direct cost of the regional office in which the sales manager works. Occupancy costs can be either direct or indirect.

Which of the following statements is true regarding process costing?

A separate production report is prepared for each major process.

The total cost of a job includes: check all that apply A. direct materials cost B. actual manufacturing overhead C. non-manufacturing cost D. direct labor cost E. Applied manufacturing overhead

A. Direct materials cost D. Direct Labor Cost E. Applied manufacturing overhead

Place these items from the income statement in the order in which they should appear A. Sales B. Net operating income C. Cost of goods sold D. Selling and administrative expenses E. Gross Margin

A. Sales C. Cost of goods sold E. Gross Margin D. Selling and administrative expenses B. Net operating income

Actual manufacturing overhead was $50,000, while overhead applied to jobs was $45,000. The entry to dispose of underapplied or overpapplied overhead would: A. Credit manufacturing overhead $5000 B. Debit manufacturing overhead $50000 C. Credit manufacturing overhead $50,000 D. Debit manufacturing overhead $5,000

A. credit manufacturing overhead $5,000 underapplied overhead results in 5000 debit balance in the overhead account. To dispose of it, manufacturing overhead should be credited for 5000

Match each event in the process of accounting for manufacturing overhead with the appropriate entry. A. Actual overhead is incurred B. Overhead is applied to work in process C. The period ends 1. Manufacturing Overhead is credited 2. Manufacturing overhead is closed 3. Manufacturing Overhead is debited.

A.--3 B.--1 C.--2

All manufacturing costs are assigned to units of product and all non manufacturing costs are treated as period costs under ________ costing

Absorption

What is the most common approach to product costing throughout the world?

Absorption costing

Which of the following would not be a good allocation base for manufacturing overhead?

Accounting hours

When a company creates overhead rates based on the actions it performs, it is employing an approach called _________________-________________ costing.

Activity Based

A measure such as direct labor hours or machine hours used to assign overhead costs to produce services is called a cost or a

Activity base - also commonly called an allocating base

Select all that apply Which of the following costs are charged directly to the income statement?

Administrative costs Selling costs

Select all that apply Which methods can be used to dispose of underapplied or overapplied manufacturing overhead? Allocate it to Work in Process, Finished Goods, and Cost of Goods Sold Make a direct adjustment to Cost of Goods Sold Close it out to Work in process Allocate it to Raw Materials, Work in Process, and Finished Goods Make a direct adjustment to Finished Goods

Allocate it to Work in Process, Finished Goods, and Cost of Goods Sold Make a direct adjustment to Cost of Goods Sold

What methods can be used to dispose of underapplied or overapplied manufacturing overhead?

Allocate it to Work in process, Finished goods, and Cost of goods sold. Close it to Cost of goods sold.

Applied manufacturing overhead is entered on what side of the Manufacturing overhead account?

Always the credit side

Applied manufacturing overhead is entered on what side of the Manufacturing overhead account?

Always the credit side (Recording applied overhead is not dependent on whether overhead is overapplied or underapplied.)

Why do companies use a predetermined overhead rate rather than an actual overhead rate?

An actual overhead rate is not known until the end of the period.

Which of the following companies would be most likely to use operations costing? A custom home builder A dog food manufacturer An automobile manufacturer A law firm

An automobile manufacturer

Manufacturing

Apple and Harley Davidson are examples of ______ firms.

When are applied manufacturing overhead costs credited to the manufacturing overhead account?

As the costs are applied to jobs

Which of the following are used to calculate Cost of goods available for sale on the schedule of cost of goods sold? check all that apply A. Cost of goods sold B. Beginning finished goods inventory C. Cost of goods manufactured D. Ending finished goods inventory

B. Beginning finished goods inventory C. Cost of goods manufactured. ***Ending finished goods inventory would be subtracted from goods available for sale to obtain cost of goods sold.

Gemini had sales of $50,000, Unadjusted cost of goods sold of $23,000, overapplied manufacturing overhead of $3,000 and selling and administrative expenses of $25,000. Gross profit is

Because manufacturing overhead is overapplied, it reduces cost of goods sold to $20,000 ($23,000-$3,000). Thus the gross profit is $50,000 - $20,000 or $30,000.

When is predetermined overhead rate calculated?

Before the period begins

When is the predetermined overhead rate calculated?

Before the period begins

The formula to reconcile the number of physical units is Units in_________ Inventory + Units Started = Units Computed + Units in _________ Inventory.

Beginning Ending

Cost of Direct Materials (formula)

Beginning Inventory + Purchases - Indirect Materials - Ending Inventory = Cost of Direct Materials

Which of the following items are included on a cost of goods manufactured report?

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

Unadjusted cost of goods sold (formula)

Beginning finished goods inventory + COG manufactured - ending finished goods = Unadjusted cost of goods sold

Which of the following statements are true regarding the weighted-average and FIFO methods of process costing?

Both methods are acceptable under GAAP. The FIFO method may be more accurate. The weighted-average method is more commonly used.

Which of the following products would be more suitable for process costing than job-order costing?

Breakfast Cereal, Gasoline, Sunscreen

Which of the following is not an activity that managers perform on a regular, routine basis? Implementing Budgeting Controlling Planning

Budgeting

Select all that apply Which of the following people would be more interested in managerial accounting data than in financial accounting data? Business owners Employees Creditors Investors

Business owners Employees

How are cost accumulated in process costing?

By department

Which of the following are true? A. Both job-order and process costing identify materials, labor and overhead costs by customer order. B. Unit costs are computed the same way regardless of the costing system used. C. Process costing should be used when a single product is produced on a continuous basis. D. Process costing accumulates costs by department, whereas job-order costing accumulates by job.

C & D

The predetermined overhead rate per direct labor dollars for a particular department

Can by calculated by dividing Estimated manu overhead by estimated direct labor cost

Select all that apply Which of the following statements are true? Classifying a cost a product or period can impact reported profitability. The distinction between product and period costs has more to do with financial accounting than managerial accounting. Inventoriable costs are expensed in the period in which they are incurred. All costs in a merchandising company are considered to be period costs.

Classifying a cost a product or period can impact reported profitability. The distinction between product and period costs has more to do with financial accounting than managerial accounting.

Select all that apply What methods can be used to dispose of underapplied or overapplied manufacturing overhead?

Close it to Cost of goods sold. Allocate it to Work in process, Finished goods, and Cost of goods sold.

Which of the statements regarding closing out over or underapplied overhead is correct?

Closing to Cost of goods sold is simpler, and allocating is more accurate.

Which of the statements regarding closing out over or underapplied overhead is correct? Closing to Cost of goods sold is simpler, and allocating is more accurate. Both methods are equally accurate. Both methods are equally simple. Allocating is simpler, and closing to Cost of goods sold is more accurate.

Closing to Cost of goods sold is simpler, and allocating is more accurate.

Typical cost drivers include (check all that apply) Computer Time Machine hours flight hours machine depreciation utilities cost

Computer time machine hours flight hours

Identifying a problem and taking corrective action is part of the ____ process.

Controlling

measuring actual results

Controlling involves ______.

Direct labor and manufacturing overhead costs are known as ____ costs.

Conversion

A factor that causes overhead costs is called a

Cost Driver - measure such as direct labor hours or machine hours used to assign overhead costs to product

When customers purchase products, the manufacturing costs associated with the products are transferred to ______.

Cost of Goods Sold

The entry to record the sale of finished goods to customers is to debit _____

Cost of Goods Sold and credit Finished Goods Inventory

The entry to record the sale of finished goods to customers is to debit ______.

Cost of Goods Sold and credit Finished Goods Inventory

Milton Corporation sold goods costing $50,000 for $75,000. Journal entries to be made could include entries debiting:

Cost of Goods Sold for $50,000 and Accounts Recievable for $75,000

What accounts are debited when goods are sold on account?

Cost of good sold and Accounts Receivable

Cost of goods available for sale (formula)

Cost of goods manufactured + Beginning Finished good inventory = COG's available for sale

Which of the following is not a category used to reconcile the number of physical units using the weighted average method of process costing? Units completed Units started Beginning units in inventory Cost of goods sold

Cost of goods sold The four categories used to reconcile the number of physical units under the weighted average method of process costing are beginning units in inventory, units started, units completed, and ending units in inventory.

What two accounts are involved when underapplied or overapplied overhead is closed out using the simpler method?

Cost of goods sold and Manufacturing overhead

Underapplied or overapplied manufacturing overhead can be disposed of by closing it to ______.

Cost of goods sold or allocating it to Work in process, Finished goods, and Cost of goods sold

The journal entry to record the more accurate allocation of overapplied or underapplied overhead includes entries to:

Cost of goods sold, Finished goods, Work in process, Manufacturing overhead

Under FIFO, the total costs accounted for is equivalent to: Beginning work in process costs + costs added this period Beginning work in process + costs assigned to units completed and transferred Costs assigned to units completed and transferred + costs added this period Costs assigned to units completed and transferred + costs assigned to ending work in process inventory

Costs assigned to units completed and transferred + costs assigned to ending work in process inventory Total costs accounted for = Costs assigned to units completed and transferred + costs assigned to ending work in process inventory. Total costs to account for = Beginning work in process costs + costs added this period.

Stiff fines and penalties are imposed by SOX in an effort to:

Counteract the incentive to commit fraud

Issuing raw materials into production requires a ______ to the Raw Materials account.

Credit

The correct journal entry to apply manufacturing overhead costs Process #1 would be to _______ Manufacturing Overhead and ______ Work in Process Inventory (Process #1).

Credit Debit

The journal entry to record labor costs for Process #1 is to _________ Salaries or Wages Payable and ___________ Work in Process Inventory.

Credit Debit

The sale of goods is recorded with a _______ to Finished Goods Inventory and a _______to Cost of Goods Sold.

Credit Debit

The journal entry to record the purchase of materials credits:

Credit Accounts Payable

On March 1, Baggett Company purchases raw materials worth $75,000 on credit. The journal entry to record the transaction would include: Credit to Raw Materials Inventory Credit to Work in Process Inventory Credit to Accounts Payable Credit to Manufacturing Overhead

Credit to Accounts Payable When materials are purchased, debit Raw Materials Inventory. The credit is to Cash or Accounts Payable, depending on how materials were purchased.

Which of the following formulas calculates cost per equivalent unit under FIFO costing?

Current Costs/Equivalent Units

Which of the following is a key different between process and job-order costing? A. Job-order costing is used for indistinguishable products, and process costing is used for different jobs that have unique production requirements B. Process costing accumulated costs by order, and job-order costing accumulates costs by department. C. Job-order costing systems compute unit costs by department, and process costing compute unit costs by job. D. Under process costing, it makes no sense to try to identify materials, labor and overhead costs with a particular customer order.

D

Place these items in the order in which they appear on the schedule of cost of goods sold A. Unadjusted cost of goods sold B. Deduct: Finished goods inventory, ending C. cost of goods available for sale D. Finished goods inventory, beginning E. Add: Cost of goods manufactured

D. Finished goods inventory, beginning E. Add: Cost of goods manufactured C. Cost of goods available for sale B. Deduct: Finished goods inventory, ending A. Unadjusted cost of goods sold

Total manufacturing costs (formula):

DM + DL + MOH(applied)

The purchase of raw materials is recorded with a _______ , Correct Unavailable to Raw Materials Inventory and a Blank ______ to Accounts Payable

Debit Credit

The purchase of raw materials is recorded with a _____ to Raw Materials Inventory and a ________to Accounts Payable.

Debit Credit

What is the entry to record the sale of finished goods to customers?

Debit COGS and Credit Finished Goods

what would the journal entry be to record direct materials costs in processing Department #1?

Debit Raw Materials and Credit Work in Process in Department #1.

A total of $10,000 manufacturing was applied to Job #40. The journal entry to record this entry would be:

Debit Work in Process $10,000 and Credit Manufacturing Overheard $10,000

What is the journal entry to record the transfer of partially completed products from Processing Department #1 to Processing Department #2?

Debit Work in Process (Department #2) and credit Work in Process (Department #1)

What is the journal entry to record the transfer of partially completed products from Processing Department #1 to Processing Department #2?

Debit Work in Process (Department #2) and credit Work in Process (Department #1).

What account is debited for the issuance of direct materials into production? Accounts payable manufacturing overheard work in process raw materials

Debit Work in process

When the Blending Department requisitions materials for use in the blending process, the cost is: Debited to the appropriate Work in Process Inventory Account Credited to the appropriate Work in Process Inventory Account Debited to the Manufacturing Overhead account Credited to the Manufacturing Overhead account

Debited to the appropriate Work in Process Inventory Account When raw materials are placed into production, the cost is debited to the appropriate Work in Process Inventory account and credited to the Raw Material Inventory account.

When production is complete and goods are to be held for sale: Finished Goods Inventory is debited and Work in Process Inventory is credited Work in Process Inventory is debited and Finished Goods Inventory is credited Work in Process Inventory is debited and Raw Material Inventory is credited Work in Process Inventory is debited and Manufacturing Overhead is credited

Finished Goods Inventory is debited and Work in Process Inventory is credited When production is complete and goods are to be held for sale Finished Goods Inventory is debited and Work in Process Inventory is credited.

Once production is completed, total manufacturing costs are transferred to ______.

Finished Goods inventory

When a job is completed, which account is debited?

Finished goods

Himber, Inc. just completed a job that cost $14,000 in direct materials, $12,000 in direct labor, and $8,000 in applied manufacturing overhead. The journal entry to record completion of the job would debit:

Finished goods $34,000 and credit Work in process $34,000

When a job is completed, which account is debited?

Finished goods inventory

____ costs remain constant in total and ____ costs remain constant per unit.

Fixed, Variable

Differences between a job order cost system and a process cost system include all of the following except: Unit cost computations Flow of costs Documents used to tract costs Point at which costs are totaled

Flow of costs Process costing system has the same flow of costs (direct materials >>work in processes>>finished goods>>cost of goods sold. Process costing uses multiple work in processes but the flow of cost is the same as in job order.

Reconciling the total cost of Work in Process Inventory is the ______ step in preparing a production report using the weighted-average method.

Fourth

product costs

GAAP requires all manufacturing costs be treated as ______

Select all that apply Which of the following statements are true? Product costs include all costs involved in making and selling a product. Product costs are always expensed in the same period in which the related products are produced. GAAP requires all manufacturing costs be treated as product costs. Product costs "attach" to units of product as they are purchased for resale or produced.

GAAP requires all manufacturing costs be treated as product costs. Product costs "attach" to units of product as they are purchased for resale or produced.

Which of the following expenses are associated with running the overall business?

General & administrative

Which of the following expenses are associated with running the overall business? General & administrative Manufacturing Marketing & selling

General & administrative

Carlisle, Inc. had sales revenue of $500,000, unadjusted cost of goods sold of $395,000, underpaid manufacturing overhead of $5,000 and selling and administrative expenses of $50,000. Calculate gross profit.

Gross profit = $500,000 - ($395,000 + $5,000) = $100,000

implementation

Hiring workers, dealing with suppliers and serving customers are all part of ______.

Service

Hotels and airlines are examples of _____ companies.

control

Identifying a problem and taking corrective action is part of the ______ process.

Decisions such as deciding how many employees to hire, salary schedules and training procedures are made during the ____ stage of the management process

Implementing

Hiring workers, dealing with suppliers and serving customers are all part of:

Implementing

Weighted-Average Method

In the _____ method, equivalent units of production are the number of units transferred to the next department or to finished goods plus equivalent units in ending work in process.

Period costs are expensed:

In the period in which they occur

Salaries of managers and maintenance personnel are examples of ____ labor costs.

Indirect

Which of the following is NOT one of the three common types of analytics? Prescriptive Predictive Descriptive Informative

Informative

The journal entry to record a cash payment of $400 for insurance on administrative office equipment debits _____ and credits cash.

Insurance expense

finanical; managerial

Intended users of ________ accounting information include investors and regulators; business owners and employees are included in the intended users of ________ accounting.

A(n) ____ cost will not influence a decision.

Irrelevant

A journal entry that debits Work in Process and MOH and credits Raw Materials records the:

Issuance of materials

A cost is treated as a direct cost when:

It is both possible and reasonable to trace it to a cost object

Chapter 2

Job Order Costing

Companies that make many different types of products each period use

Job order costing

Both process costing and job-order costing assign which of the following costs to products?

Labor Materials Manufacturing overhead

Which account is credited when MOH is applied?

MOH

The Journal entry to record depreciation on factory equipment debits:

MOH and credits Accumulated depreciation

The journal entry to record accrued property taxes for a factory building debits:

MOH and credits Property taxes payable

When using process costing, costs are accumulated by ______.

Major Process

What is the formula for applying overhead to a specific job? Estimated manufacturing overhead / estimated total cost driver usage Actual manufacturing overhead rate × actual cost driver usage for the specific job Predetermined overhead rate × the actual cost driver usage for the specific job Estimated manufacturing overhead / cost driver usage for the specific job

Predetermined overhead rate × the actual cost driver usage for the specific job

False

Preparing a budget is part of the controlling process.

Which of the following statements are true?

Process costing accumulates cost by department, whereas job-order costing accumulates costs by job. Process costing should be used when a single product is produced on a continuous basis.

Direct materials, direct labor, and manufacturing overhead are all ____ costs.

Product

Information about the number of units and costs that flow through a manufacturing process during an accounting period is provided on the

Production Report

The foundation of a process costing system is the ______.

Production Report

Which of the following statements are true regarding process costing production reports?

Production reports are used to determine how much cost to transfer from one process to the next. Production reports provide information accountants need to record manufacturing costs into the accounting system. Managers can use production reports to monitor and control production costs.

The entry to record issuing materials to be used in productions credits:

Raw Materials

The journal entry to record placing materials into production credits ______.

Raw Materials

Organize the following account in the order in which costs flow from one the the other in a process costing system.

Raw Materials WIP Finished Goods COGS

The journal entry to record the purchase of materials debits ______.

Raw Materials Inventory

A company purchases $40,000 of direct materials and $30,000 of indirect materials on account. The journal entry to record this transaction is debit ______.

Raw Materials Inventory $70,000 and credit Accounts Payable $70,000

To record the purchase of raw materials, debit ______.

Raw Materials Inventory and credit Accounts Payable

Organize the following accounts in the order in which costs flow from one to the other in a process costing system.

Raw Materials, Work in process, Finished goods, Cost of goods sold.

The journal entry to record issuing material to be used in production credits:

Raw materials

The journal entry to record issuing materials to be used in production credits ______.

Raw materials

The journal entry to record issuing materials to be used in production credits:

Raw materials

Select all that apply Which of the following statements are true?

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.

Select all that apply Which of the following statements are true? 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 only includes the cost of direct materials.

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.

Which of the following statements are true? check all that apply Raw materials only include the cost of direct materials Raw materials used in production are transferred to Work in process as 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 used in production are transferred to Work in process as direct materials. When materials are purchased they are recorded in the Raw materials inventory account.

Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $100,000 Manufacturing overhead applied: $120,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000

Reason: Total manufacturing costs = $40,000 + $100,000 + $120,000 = $260,000. Adjust for work in process when calculating the cost of goods manufactured.

A journal entry that debits MOH and credits Property taxes payable records the:

Recognition of accrued property taxes

The production report includes all of the following information except for: Reconciliation of the cost of beginning inventory Physical units Equivalent units Cost per equivalent unit

Reconciliation of the cost of beginning inventory The production cost report includes information about the number of physical units, equivalent units, cost per equivalent unit, and a reconciliation of the cost of work in process.

Cost transferred from Work in Process (WIP) Inventory to Finished Goods (FG) Inventory ______.

Remain in FG Inventory until goods are sold may be called cost of goods manufactured may be called cost of goods completed

Select all that apply Which of the following are most likely fixed costs? Rent Administrative salaries Property taxes Utilities

Rent Administrative salaries Property taxes

Select all that apply When comparing financial and managerial accounting, which of the following apply to managerial accounting? Information reported for whole company Reports at the decision making level Emphasizes the future Objective and reliable Reports are prepared as needed Mandatory for external reports

Reports at the decision making level Emphasizes the future Reports are prepared as needed

Select all that apply Which of the following are marketing or selling expenses? Sales salaries Sales commissions Advertising Administrative salaries

Sales salaries Sales commissions Advertising

Select all that apply Select the correct statements. The number of employees working in manufacturing has remained relatively constant over the past 40 years. Today, about 60% of people employed in America work in nonmanufacturing fields Over 50% of our nation's gross domestic product comes from manufacturing activities. The U.S. economy is moving more towards the service industry

The number of employees working in manufacturing has remained relatively constant over the past 40 years. The U.S. economy is moving more towards the service industry

Which of the following would not be considered a direct labor cost in a service firm that uses job - order costing

The salary of the manager at a hair salon

ethics

The standards of conduct for judging right from wrong is referred to as

Which of the following would not be considered a job in a service firm that uses job-order costing?

The tax department in an accounting firm

Which of the following statements are true? There are many different ways to categorize costs. When making decisions regarding costs, GAAP rules must be followed. Costs are treated differently in different situations.

There are many different ways to categorize costs. Costs are treated differently in different situations.

Which of the following statements are true regarding the weighted-average and FIFO methods of process costing?

There are trade-offs in terms of simplicity and accuracy. The two methods produce similar results when a company has stable production patterns.

a direct labor ____ ____ is a document used to record how long workers spend on each job and task.

Time sheet

Jones company uses a job order costing system with a predetermined overhead rate of 120% of direct labor cost. The job cost sheet for job #420 listed 4,000 in direct materials cost and 5000 in direct labor cost to manufacture 7500 units. The unit cost of job #420 is

Total cost of Job #420 = Direct Materials + Direct Labor + Predetermined overhead rate x Direct labor cost = $4,000 + $5,000 + 120% x $5,000 = $15,000 Unit product cost = $15,000/$7,500 = $2.00 per unit

Smith Inc uses a job order costing system system with the predetermined overhead rate of $12 per machine hour. The job cost sheet for Job #42A listed $12,000 in direct labor cost, $18,000 in direct materials cost, 1,200 direct labor hours and 1.100 machine hours. The total cost of Job #42A is $

Total cost of Job #42A = Direct materials + direct labor + predetermined overhead rate X actual machine-hours = $18,000 + $12,000 + ($12 per machine-hour X 1,100 machine-hours) = $43,200

Given the following, calculate total current manufacturing costs: Direct materials: $40,000; Direct labor: $10,000; Manufacturing overhead applied: $120,000; BWIP: $30,000; EWIP: $12,000

Total manufacturing costs = $40,000 + $100,000 + $120,000 = $260,000

Costs that are moved from one production process to another are called ________ _____ costs.

Transferred in

T/F - Underapplied or overapplied overhead occurs because overhead is applied to jobs using a predetermined rate based on estimates of costs and activity levels.

True

True or false: A production report prepared using the weighted-average method is structured very similarly to a production report using the FIFO method.

True

True or false: The equivalent units of production computed under the weighted-average method does not take into account the percentage completed of beginning inventory.

True

True or false: The equivalent units of production computed under the weighted-average method does not take into account the percentage completed of the beginning inventory.

True

True or false: The transfer of costs from one inventory account to the next parallels the physical transfer of goods from one inventory to the next.

True

True or false: When using process costing, direct labor costs are often combined with manufacturing overhead into a single cost category.

True

True or false: When using the FIFO method, the number of units both started and completed during the period must be calculated.

True

Process costing and job-order costing have the same basic purposes. What is a key difference between the two systems?

Under process costing, it makes no sense to try to identify materials, labor and overhead cost with particular customer order.

What is a key difference between process and job order costing? Process costing accumulates costs by order, and job order costing accumulates costs by department. Under process costing, it makes no sense to try to identify materials, labor, and overhead costs with a particular customer order. Job order costing is used for homogeneous products, and process costing is used for different jobs that have unique production requirements. Job order costing systems compute unit costs by major process, and process costing systems compute unit costs by job.

Under process costing, it makes no sense to try to identify materials, labor, and overhead costs with a particular customer order.

Which of the following statements are true?

Under the weighted-average method, beginning inventory costs are treated just like costs added during the current period. Costs that move from one process to another are called transferred-in costs.

Which of the following is NOT one of the V's of big data? Variety Velocity Volume Validity

Validity

variable costs

Vary in total remain constant per unit

Recording the transfer of partially completed products from one processing department to another, requires a journal entry that affects the ______ account of both processing departments.

WIP

When using process costing, a separate ______ account is maintained for each processing department.

WIP

The journal entry to apply overhead cost to processing Department #1 is to debit:

WIP-Department #1 and credit Manufacturing overhead

The journal entry to record direct materials costs in processing Department #1 is to debit:

WIP-Department #1 and credit Raw Materials

As jobs are worked on the Work in Process account accumulates ______. actual direct materials and applied direct labor and overhead costs actual direct materials, direct labor, and overhead costs actual direct materials and direct labor costs and applied overhead costs estimated direct materials and direct labor and applied overhead costs

actual direct materials and direct labor costs and applied overhead costs

The work in process account accumulates ______.

actual direct materials, actual direct labor, and applied overhead costs

The work in process account accumulates ______. actual direct materials, actual direct labor, and applied overhead costs actual direct material, applied direct labor, and applied overhead costs applied direct material, applied direct labor, and actual overhead costs actual direct materials, actual direct labor, and actual overhead costs

actual direct materials, actual direct labor, and applied overhead costs

The work in progress account accumulates:

actual direct materials, actual direct labor, and applied overhead costs

The Manufacturing Overhead account is debited when ______

actual overhead costs are incurred

The Manufacturing Overhead account is debited when ______.

actual overhead costs are incurred

Overhead is overapplied if ______.

actual overhead is less than applied overhead

Overhead is overapplied if ______. actual overhead is more than applied overhead actual overhead is less than applied overhead cost of goods manufactured is less than cost of goods sold adjusted cost of goods sold is more than unadjusted cost of goods sold

actual overhead is less than applied overhead

Overhead is underapplied if ______.

actual overhead is more than applied overhead

Overhead is underapplied if ______. actual overhead is more than applied overhead actual overhead is less than applied overhead cost of goods manufactured is less than cost of goods sold adjusted cost of goods sold is less than unadjusted cost of goods sold

actual overhead is more than applied overhead

Overhead is underapplied if:

actual overhead is more than applied overhead

To calculate the Total Current Manufacturing Costs on the Cost of Goods Manufactured Report:

add direct materials, direct labor, and applied Manufacturing overhead (MOH)

To calculate total current manufacturing costs on the Cost of Goods Manufactured report:

add direct materials, direct labor, and applied manufacturing overhead

To calculate the adjusted cost of goods sold:

add underapplied overhead to or subtract overapplied overhead from unadjusted cost of goods sold

Select all that apply At the end of the reporting period, any differences between actual and applied manufacturing overhead may be ______. reported on the income statement as a gain or loss ignored if the amount is insignificant adjusted directly to Cost of Goods Sold (COGS) adjusted to Work in Process, Finished Goods, and COGS

adjusted directly to Cost of Goods Sold (COGS) adjusted to Work in Process, Finished Goods, and COGS

The most common method for disposing of the balance in Manufacturing Overhead is ______. allocating it between Work in Process and Finished Goods inventory adjusting Finished Goods inventory adjusting Cost of Goods Sold allocating it between Cost of Goods Sold and inventory accounts

adjusting Cost of Goods Sold

A journal entry debiting Salaries expense and crediting Salaries and wages payable could record ______.

administrative salaries

A journal entry debiting Salaries expense and crediting Salaries and wages payable could record _______.

administrative salaries

A journal entry debiting salaries expenses and crediting salaries and wages payable could record:

administrative salary costs

GAAP requires

all manufacturing costs be treated as product costs

Manufacturing Overhead

all manufacturing costs except direct materials and direct labor - Consists of many different types of costs - is an indirect cost - contains fixed costs

Actual manufacturing overhead consists of:

all manufacturing costs other than direct labor and direct materials

Actual manufacturing overhead (MOH) consists of:

all manufacturing costs other than direct materials and direct labor.

The more accurate method of closing out the balance in Manufacturing overhead is ______.

allocating it among Work in process, Finished goods, and Cost of goods sold

The process used to assign overhead costs to products is called overhead

allocation

A measure such as direct labor-hours or machine hours used to assign overhead costs to products and services is called a cost driver or a(n)

allocation base

The first step in assigning manufacturing overhead is to determine the __ __ or cost driver

allocation base

The first step in assigning manufacturing overhead is to determine the ____ ____ or cost driver.

allocation base

Select all that apply A direct labor time ticket includes the ______. materials used on each job worked amount of time spent on each job job numbers of jobs worked on

amount of time spent on each job job numbers of jobs worked on

The journal entry to record general selling and administrative costs is debit ______.

an expense account and credit Cash or a payable

the journal entry to record general selling and administrative costs debits:

an expense account and credit cash/ a liability

The journal entry to record general selling and administrative costs debits:

an expense account and credits Cash or a liability

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

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

Managers keep track of how they are doing and determine if adjustments are needed during the __ phase

controlling

Direct labor + Manufacturing overhead = ______ cost

conversion

Direct labor and manufacturing overhead are referred to as __ costs.

conversion

Direct labor and manufacturing overhead costs are known as ______ costs. prime opportunity period conversion

conversion

The two equivalent unit figures that are most often computed in process costing are for materials and ______.

conversion

_____ cost is direct labor cost plus manufacturing overhead cost.

conversion

direct labor and manufacturing overhead are referred to as

conversion costs

When making a decision

cost control is a critical concern for most organizations

When making a decision:

cost control is a critical concern for most organizations

An allocation base should be ______.

cost driver

When calculating a predetermined overhead rate (POHR), the ideal allocation base should be a ____ ____.

cost driver

When calculating a predetermined overhead rate, the ideal allocation base should be a(n) __ __

cost driver

When calculating a predetermined overhead rate, the ideal allocation base should be a(n) ___

cost driver

Any item a manager wants to know the cost of is called a(n) __ __

cost object

any item a manager wants to know the cost of is called a(n)

cost object

products, customers, or jobs

cost objects can be _________

-activities -customers -anything for which cost data is desired

cost objects include _________

The amount transferred from Work in Process to Finished Goods is ______

cost of goods manufactured

The total cost transferred out of Work in Process inventory into Finished Goods inventory is ______.

cost of goods manufactured

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

cost of goods manufactured

What is used to calculate Cost of goods available for sale on the schedule of cost of goods sold?

cost of goods manufactured and beginning finished good inventory

what accounts are debited when goods are sold on account?

cost of goods sold and accounts receivable

What two accounts are involved when underapplied or overapplied overhead is disposed of?

cost of goods sold and manufacturing overhead

indirect cost

cost that cannot be traced or are not worth the effort to trace

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

costs are transferred from Finished Goods to Cost of Goods Sold

when goods are sold to customers:

costs are transferred from Finished Goods to Cost of Goods Sold.

When goods are sold to customers:

costs are transferred from finished goods to cost of goods sold

variable costs

costs that remain constant on a per unit basis

Stiff fines and penalties are imposed by SOX in an effort to ______. encourage whistleblowers to come forward reduce the opportunity for error and fraud counteract the incentive to commit fraud

counteract the incentive to commit fraud

Issuing raw materials into production requires a ______ to the Raw Materials account.

credit

what side of the manufacturing overhead account is always used to record manufacturing overhead applied to production?

credit

when overhead is underapplied, a ___ must be made to the manufacturing overhead account to close it out

credit

The correct journal entry to apply manufacturing overhead costs Process #1 would be to ________ Manufacturing Overhead and ________ Work in Process Inventory (Process #1).

credit debit

The journal entry to record labor costs for Process #1 is to ________ Salaries or Wages Payable and _______ Work in Process Inventory

credit debit

The ____ side of the manufacturing overhead account is always used to record manufacturing overhead applied to production and the ____ side is always used to record the actual manufacturing costs incurred

credit / debit

What of the following may be credited in the journal entry to record the purchase of materials?

credit accounts payable (debit raw materials inventory)

The journal entry to record labor cost in the first department is ____ Wages payable and ____ Work in process-Department #1.

credit, debit

The journal entry to record labor cost in the first department would be to ______ (debit/credit) Wages Payable and ______ (debit/credit) WIP.

credit, debit

Manufacturing overhead costs include ______. administrative taxes and insurance, sales commissions, and factory assembly workers' wages direct materials, administrative taxes and insurance, and sales commissions direct materials, sales commissions, and factory assembly workers' wages indirect materials, factory supervisors' salaries, and factory depreciation

indirect materials, factory supervisors' salaries, and factory depreciation

the journal entry to record a cash payment of $400 for insurance on administrative office equipment debits ___ and credits cash

insurance expense

Under FIFO costing, the cost of beginning inventory ______.

is automatically transferred out of Work in Process Inventory with units completed

The total cost of Work in Process Inventory _______

is divided between ending inventory and costs transferred to the next process or Finished Goods includes beginning Work in Process plus current costs

Managerial accounting information ______. is only used in profit making organizations is only used in nonprofit organizations is important for both profit making and nonprofit organizations

is important for both profit making and nonprofit organizations

A production report prepared using FIFO costing ______

is somewhat more detailed than a report prepared using the weighted-average method

A production report prepared using FIFO costing ______.

is somewhat more detailed than a report prepared using the weighted-average method

Gross profit, as calculated based on journal entries, _______

is unadjusted because it is based on applied, not actual, overhead

Select all that apply Process costing ______. 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

A journal entry that debits Work in Process and Manufacturing overhead and credits raw materials inventory records the

issuance of materials

A journal entry that debits Work in process and Manufacturing overhead and credits Raw materials records the ______

issuance of materials

A journal entry that debits Work in process and Manufacturing overhead and credits Raw materials records the ______.

issuance of materials

will applied manufacturing overhead most likely equal or not equal actual manufacturing overhead?

it would not equal because applied manufacturing overhead is an estimate, so only a coincidence would cause it to equal actual manufacturing overhead

The costs incurred for each unique product, project, or service are recorded on a document called a(n) __ __ sheet

job cost

The document that records the materials, labor, and manufacturing overhead costs charged to a job is the ______.

job cost sheet

A direct labor time ticket includes the ______.

job numbers of jobs worked on amount of time spent on each job

Job cost sheets are used to accumulate costs when ______ ______ costing.

job order

When many different jobs or products are worked on each period, the most likely costing system used is ______.

job order

The two common methods for determining unit product costs are ______ costing.

job order and process

Companies that make many different products each period use ______________ costing

job-order

When many different jobs or products are worked on each period, the most likely costing system used is:

job-order

______-______ costing is used for many different products with unique production requirements.

job-order

Which of the following is not a method that can be used to prepare process costing production reports? last-in, first-out (LIFO) method first-in, first-out (FIFO) method weighted-average method

last-in, first-out (LIFO) method

budget

lays out plans in financial terms so that managers can determine the resources needed to achieve their objectives.

Typical cost drivers include ______

machine-hours, flight-hours, computer time

What is the most common method for disposing of the balance in Manufacturing overhead?

making a direct adjustment to Cost of Goods sold

controlling

managers keep track of how they are doing and determine if adjustments are needed during the ______ phase

reduce the opportunity for error and fraud

managers must conduct a review of the company's internal control system and issue a report of their effectiveness. This was enacted as part of the SOX in attempt to __________

The cost of goods *blank* report summarizes the flow of manufacturing costs from Raw Materials to Work in Process Inventory and into Finished Goods.

manufactured

The cost of goods __ is the sum of all amounts transferred from Work in process to Finished goods during a period.

manufactured

The cost of goods ___ is the sum of all amounts transferred from Work in process to Finished goods during a period.

manufactured

The cost of goods ____ report summarizes the flow of manufacturing costs from raw materials to work in process inventory and into finished goods

manufactured

The schedule of cost of goods ___ summarizes costs that remain in Work in process inventory and that have been transferred from Work in process to Finished goods inventory.

manufactured

the cost of goods __ is the sum of all amounts transferred from work in process to finished goods during a period

manufactured

Apple and Harley Davidson are examples of ____ firms.

manufacturing