ACC 212- CHAPTER 2

job order costing

companies that make customized/unique products/services

processing cost

companies that make the same products/services

cost of goods manufactured (cost of goods completed)

cost of all jobs completed during the period

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

d

What is the most common method for disposing of the balance in Manufacturing Overhead? a) Closing it out to Finished Goods b) Making a direct adjustment to Cost of Goods Sold c) Closing it out to Work in Process d) Allocating it among Work in Process, Finished Goods, and Cost of Goods Sold

b

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

b

An allocation base is a(n) ______. a) activity that causes overhead costs to change b) measure used to assign all manufacturing costs to products and services c) measure of activity used to assign overhead costs to products and services

c

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

c

Companies that use job-order costing ______. a) make a very few products in large numbers b) use a series of standardized processes c) make unique products

c

Costs are transferred from raw materials inventory to ______. a) either finished goods or work in process b) manufacturing overhead only c) either work in process or manufacturing overhead d) work in process inventory only e) finished goods inventory only

c

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

c

Materials requisition forms are used to ______. a) specify the cost of materials to be ordered b) summarize the cost of a job c) record the cost of raw materials in the accounting system d) control the flow of materials from inventory into production

c & d

When materials are requisitioned into production, ______. a) indirect materials are recorded in Work in Process b) indirect materials are recorded as a separate line item on the job cost sheet c) direct materials are recorded in Work in Process d) direct materials are recorded on the job cost sheet

c & d

finished goods inventory

cost of jobs that have been completed but not yet sold

raw material inventory

cost of material purchased from suppliers, but not yet in production

when materials are purchased, the total cost is ______________ to the cash or accounts payable acc

credited

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

d

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

d

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

d

When goods are sold to customers, ______. a) the inventory accounts are not affected b) costs are transferred from Finished Goods to Sales Revenue c) costs are transferred from Work in Process to Finished Goods d) costs are transferred from Finished Goods to Cost of Goods Sold

d

when materials are purchased, the total cost is ______________ to the raw materials inventory acc

debited

if labor can be traced to a specific job, the cost is __________ to work in process inventory & add to the individual ___________________

debited, job cost sheet

JE: Record over/underapplied MOH

Dr. COGS Cr. MOH

JE: selling of job

Dr. Cash/Acc Receivable Cr. Sales Revenue Dr. COGS Cr. Finished Goods Inventory

JE: Record transferring costs to finished goods

Dr. Finished Goods Inventory Cr. WIP Inventory

JE: Record Actual MOH

Dr. MOH Cr. Property Taxes Payable Cr. Prepaid Insurance Cr. Acc Deprec

JE: Purchase of Materials

Dr. Raw Materials Inventory Cr. Accounts Payable

Journal Entry: A company purchases $40,000 of direct materials and $30,000 of indirect materials on account.

Dr. Raw Materials Inventory $70000 Cr. Accounts Payable $70000

JE: Record Applied MOH

Dr. WIP Cr. MOH

JE: Issue of Materials

Dr. WIP Dr. MOH Cr. Raw Materials Inventory

JE: Record direct & indirect labor costs

Dr. WIP Dr. MOH Cr. Wages Payable

Nonmanufacturing costs increase ______.

Selling, General & Administrative expense accounts

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

a

The cost of goods manufactured report includes ______ manufacturing overhead costs. a)applied b)actual

a

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

a

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

a

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

a

Labor costs ______. a) may be direct or indirect b) are recorded in basically the same way as material costs c) are always recorded directly into Work in Process d) are determined from the job cost sheets

a & b

manufacturing overhead costs must be _________ to jobs based on the predetermined overhead rate, that was estimated at the beginning

applied

processing formula

avg unit cost = total cost / total units produced

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

b

The document used to record the time workers spend on each job and task is a ______. a) production order b) direct labor time ticket c) materials requisition form d) job cost sheet

b

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

b

when a job is sold, its total manufacturing cost is transferred out of finished goods inventory and into...

cogs

overapplied manufacturing overhead means a(n) ___________ in COGS

decrease

work in process inventory is __________ materials

direct

raw material inventory includes both...

direct & indirect materials

direct labor time ticket

doc that shows how much time a worker spent on various jobs during the week

nonmanufacturing costs are expensed...

during the period incurred

predetermined overhead rate=

estimated manufacturing overhead / estimated total cost driver

T/F: Job-order costing can only be used in manufacturing firms.

false

T/F: Materials purchases are initially recorded in Raw Materials and then all materials used are transferred to Work in Process.

false

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

false

The cost of jobs that have been completed but not yet sold are contained in _____________ ______________Inventory.

finished goods

material requisition form

form that lists the quantity & cost of the direct materials used

operations costing

hybrid of both job order & processing cost

underapplied manufacturing overhead means a(n) ___________ in COGS

increase

manufacturing overhead are ______________ materials

indirect

applied manufacturing overhead

indirect manufacturing costs that are assigned to specific jobs

cost d river

measure that causes the amount of manufacturing overhead cost incurred

applied manufacturing overhead=

predetermined overhead rate x actual cost driver

ll materials that will be used in future production are first recorded in the ____________ ___________ Inventory account.

raw materials

job cost sheet

record of the total cost of each job

what industry mainly uses job-order costing?

service industries (providing unique products)

material requisition form is used to control...

the physical flow of materials out of inventory & into production

Overhead costs are debited to Work in Process when ______.

they are applied to jobs

work in process inventory

total cost of jobs that aree in process at any point in time

Direct costs are ______ to products, and overhead costs are ______.

traced; applied

allocation base

used to assign the manufacturing overhead cost to a job