Accounting 2
Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials. How should Andrews journalize the purchase of raw materials for March?
Debit Raw Materials Inventory $165,000; credit Accounts Payable $165,000
When Factory Wages Payable costs for labor are allocated in a job cost accounting system:
Work in Process Inventory and Factory Overhead are debited and Factory Wages Payable is credited.
Factory overhead costs may include all of the following except
selling costs
A job cost sheet shows information about each of the following items except:
the costs incul\\\\]red by the marketing department in selling the job.
A source document that production managers use to request materials for production and that is used to assign materials costs to specific jobs or to overhead is a
Materials requisition.
A production department's output for the most recent month consisted of 10,000 units completed and transferred to the next stage of production and 7,000 units in ending Work in Process inventory. The units in ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method.
13,500 units units completed transferred to next stage 10,000 Units in ending Work in Process inventory (7,000 * 50% complete) 3,500 10,000+3,500
Wilturner Company incurs $80,000 of labor related directly to the product in the Assembly Department, $29,000 of labor not directly related to the product but related to the Assembly Department as a whole, and $16,000 of labor for services that help production in both the Assembly and Finishing departments. The amount of direct labor and factory overhead respectively are:
80,000 and 45,000
Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 of direct materials and $13,000 of indirect materials. What is the ending Raw Materials Inventory balance for March?
Beginning RM $22,000 + RM Purchased $165,000 - Direct RM used $141,000 - Indirect RM used $13,000 = $33,000 Ending RM Balance
Metaline Corp. uses the weighted average method for inventory costs and had the following information available for the year. The number of units transferred to finished goods during the year is:
Beginning WIP 250 Started 3,700 Ending WIP (450) Transferred 3,500
Beginning Finished Goods Inventory + Cost of goods manufactured - Ending Finished Goods Inventory =
Cost of goods sold
Job A3B was ordered by a customer on September 25. During the month of September, Jaycee Corporation requisitioned $2,500 of direct materials and used $4,000 of direct labor. The job was not finished by the end of the month, but needed an additional $3,000 of direct materials and additional direct labor of $6,500 to finish the job in October. The company applies overhead at the end of each month at a rate of 200% of the direct labor cost incurred. What is the balance in the Work in Process account at the end of September relative to Job A3B?
DM $2,500 + DL $4,000 + OH ($4,000 * 2) = WIP for Job A3B $14,500
Wilturner Company incurs $78,000 of labor related directly to the product in the Assembly Department, $27,000 of labor not directly related to the product but related to the Assembly Department as a whole, and $14,000 of labor for services that help production in both the Assembly and Finishing departments. The journal entries to record the labor would include:
Debit Work in Process Inventory $105,000; debit Factory Overhead $14,000.
Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 of direct materials and $13,000 of indirect materials. What journal entry should Andrew use to account for direct materials used in March:
Debit Work in Process Inventory $141,000; credit Raw Materials Inventory $141,000.
Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct labor usage is
Debit Work in Process Inventory $163,000; credit Factory Payroll Payable $163,000.
Dazzle, Inc. produces beads for jewelry making use. The following information summarizes production operations for June. The journal entry to record June production activities for direct material usage is
Debit Work in Process Inventory $96,000; credit Raw Materials Inventory $96,000.
A company's beginning Work in Process inventory consisted of 24,000 units that were 90% complete with respect to direct labor. A total of 94,000 were finished during the period and 29,000 remaining in Work in Process inventory were 60% complete with respect to direct labor at the end of the period. Using the weighted-average method, the equivalent units of production with regard to direct labor were:
EUP completed & transferred out 94,000 EUP in End WIP (29,000 * 60%) 17,400 EUP 111,400
During November, the production department of a process operations system completed and transferred to finished goods 20,000 units that were in process at the beginning of November and 140,000 units that were started and completed in November. November's beginning inventory units were 100% complete with respect to materials and 35% complete with respect to conversion. At the end of November, 39,000 additional units were in process in the production department and were 100% complete with respect to materials and 40% complete with respect to conversion. Compute the number of equivalent units with respect to materials for November using the weighted-average method.
Equivalent Units DM Completed and transferred 160,000 * 100% 160,000 Ending Work in Process Direct materials 39,000 * 100% 39,000 Equivalent units 199,000
A key idea in process costing that refers to the number of units that could have been started and completed given the costs incurred during the period is known as
Equivalent units of production
Products that have been completed and are ready to be sold by the manufacturer are called
Finished goods inventory
A system of accounting in which costs are accumulated and then measured per unit at the end of a period by combining costs per equivalent unit from various departments is a:
Process costing system.
An example of direct labor cost is
Product assembler wages
Goods a company acquires to use in making products are called
Raw materials inventory
For product costs associated with a particular product to be reported on the income statement
The product must be sold.
The balance in the Work in Process Inventory at any point in time is equal to:
The sum of the costs for all jobs in process but not yet completed.
A direct cost is a cost that is
Traceable to a single cost object.
A company that makes which of the following types of products would best be suited for a job costing system
custom jewelry
A company that uses a job order costing system would make the following entry to record the flow of direct materials into production:
debit Work in Process Inventory, credit Raw Materials Inventory.
conversion costs equals
direct labor + factory overhead
Prime Costs equals
direct materials + direct labor
Manufacturing costs other than direct materials and direct labor, and are not readily traceable to specific units or batches of production are called
factory overhead
The cost of workers who assist in, or supervise, the manufacturing process, not linked to specific units of product is called
indirect labor
A document in a job order costing system that is used to record the costs of producing a job is a(n)
job cost sheet
Features of a job costing system include all but which of the following:
mass production