Chapter 15 Smartbook

Companies use job cost sheets to track the costs of:

materials, labor, and overhead costs of a job

All of the following are manufacturing costs except: direct materials overhead costs office salaries direct labor

office salaries

Fill in the Blank Question Fill in the blank question. The journal entry to record indirect materials costs used in production includes a debit to factory .

overhead

Both service companies and manufacturing companies have: (Check all that apply).

overhead and direct labor

Job cost sheets can be used to: (Check all that apply.)

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

List the following documents in the order in which they are used when recording direct materials costs in job order cost accounting, with the first document on top. Receiving reports Materials ledger cards Job cost sheets Materials requisitions

rec'v reports, materials ledger cards, materials req, job cost sheets

List the following documents in the order in which they are used when recording indirect labor costs in job order costing, with the first document on top.

time tickets, factory overhead, allocated to specific

List the following documents in the order in which they are used when recording indirect labor costs in job order costing, with the first document on top.

time tickets, factory overhead, and allocated

The correct order of cost flows in a job order costing system is:

work in process; finished goods, cost of goods sold

A cost accounting system includes which of the following?

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

At the end of the accounting period, a company's overhead was underapplied by $150. If not adjusted, how does this affect net income?

Net income will be overstated by $150.

Mass production

Process operations

Allocate overhead costs to jobs

credit factory overhead

The journal entry to record indirect materials in production is to:

debit Factory Overhead and credit Raw Materials Inventory

Purchase indirect utilities

debit factory overhead

Purchase indirect materials

debit raw materials inv

A Schedule of Cost of Goods Manufactured includes all of the following costs:

direct materials used, factory overhead applied, direct labor used

The journal entry to record the allocation of factory overhead is:

Debit Work in Process Inventory and credit Factory Overhead

Allocate overhead to jobs

During the accounting period

At the end of the accounting period, a company's overhead was overapplied by $400. The Factory Overhead account was properly adjusted. What effect did the adjustment have on net income?

It increased net income by $400.

A Schedule of Cost of Goods Manufactured includes all of the following costs except:

cost of goods sold

Use of Indirect Materials

credit raw mat inv

If the factory overhead is underapplied, then the adjusting journal entry to close the factory overhead account includes a: (Check all that apply.)

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

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

credited

Job order production is most likely used by companies that produce:

customized wedding cakes

The journal entry to record the allocation of factory overhead to work in process is:

debit Work in Process Inventory and credit Factory Overhead

If the factory overhead is overapplied, then the adjusting journal entry to close the factory overhead account includes a: (Check all that apply.)

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

direct labor used

debit work in process inv

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

debited

The three types of manufacturing costs in a job order costing system include:

direct labor, direct materials and overhead

A cost accounting system

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

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

indirect materials inventory

Custom orders

job order production

Producing products that are individually designed to meet the needs of a specific customer where each customized product is manufactured separately is the definition of: Multiple choice question.

job order production

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

process, job order

One important difference between service companies and manufacturing companies is that:

service companies do not have raw materials inventory

List the following documents in the order in which they are used when recording direct labor costs in job order costing, with the first document on top.

time tickets, job costs sheets, factory wages payable

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

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Adjust overhead account for over- or underapplied overhead

At the end of the accounting period

Calculate the predetermined overhead rate

At the start of the accounting period

Managers use a predetermined overhead rate for which of the following reasons? (Check all that apply.)

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

A company incurs factory overhead costs of $1,200 and applied $1,500. If the difference is considered immaterial, then the: (Check all that apply.)

adjusting entry will require a credit to Cost of Goods Sold and Factory Overhead account has a credit balance of $300 before adjusting.

Manufacturing costs include direct materials, direct labor, and

applied overhead costs

Manufacturing costs include direct materials, direct labor, and

applied overhead costs.

The predetermined overhead rate is calculated:

at the start of the accounting period