Accounting-Chapter 19*

When a job is completed in a service organization, the job costs are transferred to the

Cost of service account

Which of the following is a product cost?

Drill bits for a drill press used in the plant assembly.

Which of the following is the formula to calculate the predetermined factory overhead rate?

Estimated total factory overhead costs divided by estimated activity base

Which of the following are the two main types of cost accounting systems for manufacturing operations?

Job order cost and process cost systems

Period costs are

Not involved in the production process

In a job order cost accounting system, when goods that have been ordered are received, the receiving department personnel count, inspect the goods, and complete a

Receiving Report

The basis for recording direct and indirect labor costs incurred is a summary of the period's

Time Tickets

Which of the following would record the labor costs to an individual job?

Time Tickets

False

True of False: A manufacturing business reports just two types of inventory on its balance sheet: work in process inventory and finished goods inventory.

False

True or False: A receiving report is prepared when purchased materials are first received by the manufacturing department.

True

True or False: Factory overhead is applied to production using a predetermined overhead rate.

False

True or False: In the job order costing system, the finished goods account is the controlling account for the factory overhead ledger.

True

True or False: Perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work in process, and finished goods in job order costing systems.

True

True or False: The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket.

True

True or False: The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit.

Recording jobs completed would include a credit to

Work in Process

A difference in quantity of materials used on two comparable jobs may be caused by

All the above

Sanders Inc. has applied $567,988 of overhead to jobs in the cost ledger. Actual overhead at the end of the year is $575,000. The adjustment for over- or underapplied overhead is

$7,012 underapplied, increase Cost of Goods Sold

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

A paper mill

The entries to record cost and sale of a finished good on account is

debit Cost of Goods Sold, credit Finished Goods, debit Accounts Receivable, credit Sales