module 5 b

Which of the following costs incurred by a paper manufacturer would be included in the group of costs referred to as conversion costs?

assembly labor's wages

If a company uses a process cost system to account for the costs in its five production departments, how many work in process accounts will it use?

5

The cost of production of completed and transferred goods during the period amounted to $540,000, and the finished products shipped to customers had total production costs of $375,000. The journal entry for the transfer of costs from work in process to finished goods is

Finished Goods 540,000 Work in Process 540,000

Which of the following is not a characteristic of a job order cost system?

It accumulates cost for each department within the factory.

Which of the following would be most likely to use a process cost system?

lawn fertilizer manufacturer

In a job order cost accounting system used by a service business, which of the following items would normally not be included as part of overhead?

direct labor

An account in the work in process subsidiary ledger in which the costs charged to a particular job order are recorded is called what?

job cost sheet

A type of cost accounting system that provides for a separate record of the cost of each particular quantity of product that passes through the factory is called what?

job order cost system

Which of the following systems provides for a separate record of the cost of each particular quantity of product that passes through the factory?

job order cost system

Which of the following would use a process cost system?

lumber mill

The cost of materials that have not yet entered into the manufacturing process are called what?

materials inventory

The process of assigning indirect cost to a cost object, such as a job is called what?

cost allocation

A report prepared periodically for each processing department summarizing the product costs incurred by the department and the allocation of those costs between completed and partially completed units is termed a

cost of production report

Which of the following products would be manufactured using a job order cost system?

graduation invitation

In process cost accounting, the costs of direct materials and direct labor are charged directly to

processing departments

What type of cost accounting system would be most appropriate for a construction contractor?

Job order cost system

Materials purchased on account during the month totaled $190,000. Materials requisitioned and placed in production totaled $165,000. The journal entry for the materials purchased on account is

Materials 190,000 Accounts Payable 190,000

The journal entry for the purchase of $45,000 of raw materials is

Materials 45,000 Accounts Payable 45,000

Materials purchased on account during the month amounted to $190,000. Materials requisitioned and placed in production totaled $156,000. The journal entry for the transaction for materials requisitioned by the production department is

Work in Process 156,000 Materials 156,000

In a process cost system, the cost of completed production in Department A is transferred to Department B by which of the following journal entries?

debit Work in Process—Dept. B; credit Work in Process—Dept. A

When a job is sold to a customer on account, what is the entry to record the cost of jobs sold out of finished goods and into cost of goods sold??

debit cost of goods sold and credit finished goods

What is the entry to record the flow of completed jobs into finished goods?

debit finished goods and credit work in process

What is the entry to record the flow of direct labor into production in a job order cost accounting system?

debit work in process, credit wages payable

The two categories of cost comprising conversion costs are

direct labor and factory overhead

The cost of a manufactured product (product cost) generally consists of which of the following?

direct material, direct labor, applied factory overhead

The number of production units that could have been completed within a given accounting period, given the resources consumed is called what?

equivalent units of production

The direct materials costs, direct labor costs, and factory overhead costs of finished products that have not been sold are called what?

finished goods inventory

The subsidiary ledger that contains the individual accounts for each kind of commodity or product produced is called what?

finished goods ledger

The method of inventory costing based on the assumption that the costs of merchandise sold should be charged against revenue in the order in which the costs were incurred is called what?

first-in, first-out (FIFO) method

The form or electronic transmission used by a manufacturing department to authorize materials issuances from the storeroom is called what?

materials requisitions

The rate used to apply factory overhead costs to the goods manufactured which is the rate is determined by dividing the budgeted overhead cost by the estimated activity usage at the beginning of the fiscal period is called what?

predetermined factory overhead rate

Which of the following is the correct flow of manufacturing costs?

raw materials, work in process, finished goods, cost of goods sold

Which of the following costs incurred by a tool manufacturer would not be included in conversion costs?

raw steel

In a job order cost system, when goods that have been ordered are received, the quantity received and the condition of the goods are entered on a

receiving report

For which of the following businesses would a process cost system be appropriate?

shampoo manufacturer

Which of the following would most likely use a job order cost system?

swimming pool installer

All of the following are characteristics of a process cost system except

the system accumulates costs per job

The form that records the amount of time that workers have worked on specific jobs is called what?

time tickets

At the end of the fiscal year, the balance in Factory Overhead is small. The balance would be

transferred to Cost of Goods Sold

What are the direct material costs, direct labor costs, and factory overhead (applied) costs that have entered into the manufacturing process, but are associated with products that have not been finished, called?

work in process

What type of cost accounting system would be most appropriate to be used by an oil refinery?

Process cost system

Which of the following is not a characteristic of a process cost system?

The system measures costs for each completed job.

A company estimated $420,000 of factory overhead cost and 16,000 direct labor hours for the period. During the period, a job was completed with $4,500 of direct materials and $3,000 of direct labor. The direct labor rate was $15 per hour. What is the factory overhead applied to the job? (Hint: You must first determine the Predetermined Factory Overhead Rate and covert the $3,000 direct labor cost to Hours Applied to the Job. Once you have the Predetermined Factory Overhead Rate that is multiplied times Hours Applied to the Job to get the correct answer.)

$5,250

Cavy Company estimates that the total factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 40,000 hours. The machine hours for the month of April for all of the jobs were 4,780. If the actual factory overhead totaled $141,800, determine the over- or underapplied amount for the month.

$7,575 overapplied

What is the journal entry to apply overhead into production in a job order cost accounting system.

debit work in process, credit factory overhead

A measure of activity that is related to changes in cost. Used in analyzing and classifying cost behavior. Activity bases are also used in the denominator in calculating the predetermined factory overhead rate to assign overhead costs to cost objects.

activity base

During the period, labor costs incurred amounted to $175,000, including $150,000 for production orders and $25,000 for general factory use. Factory overhead applied to production was $32,000. The journal entry for the actual factory overhead costs incurred is

actory Overhead 25,000 Wages Payable 25,000

For which of the following would the job order cost system be appropriate?

antique furniture repair shop

Which of the following costs are not included in finished goods inventory?

chief financial officer's salary