A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead.
True or False
True
Materials are transferred from the storeroom to the factory in response to materials requisitions.
True or False
True
Depreciation expense on factory equipment is part of factory overhead cost.
True or False
True
Cost accounting systems are used to supply cost data information on costs incurred by a manufacturing process or department.
True or False
True
The document that serves as the basis for recording direct labor on a job cost sheet is the time card.
True or False
False
When the goods are sold, their costs are transferred from Work in Process to Finished Goods.
True or False
False
Which of the following is not a characteristic of a job order costing system?
a. It is best suited for industries that manufactures custom goods.
b. It accumulates cost for each department within the factory.
c. It provides a separate record for the cost of each quantity of product that passes through the factory.
d. Uses only one work in process account.
b. It accumulates cost for each department within the factory.
Perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work in process, and finished goods in cost accounting systems.
True or False
True
Factory overhead is applied to production using a predetermined overhead rate.
True or False
True
Which of the following would most likely use a job order costing system?
a. A swimming pool installer
b. A paper mill
c. A company that manufactures chlorine for swimming pools
d. An oil refinery
a. A swimming pool installer
A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory.
True or False
True
During the period, labor costs incurred on account amounted to $250,000 including $200,000 for production orders and $50,000 for general factory use. In addition, factory overhead applied to production was $23,000. From the following, select the entry to record the factory overhead applied to production.
a. Work in Process 50,000
Factory Overhead 50,000
b. Factory Overhead 23,000
Work in Process 23,000
c. Work in Process 23,000
Factory Overhead 23,000
d. Factory Overhead 50,000
Accounts Payable 50,000
c.Work in Process 23,000
Factory Overhead 23,000
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:
a. purchase requisition
b. receiving report
c. purchase order
d. sales invoice
b. receiving report
The cost of production of completed and finished goods during the period amounted to $400,000, and the finished products shipped to customers had total production costs of $337,000. From the following, select the entry to record the transfer of costs from work in process to finished goods.
a. Finished Goods 337,000 Work in Process 337,000
b. Finished Goods 400,000 Work in Process 400,000
c. Work in Process 400,000 Finished Goods 400,000
d. Work in Process 337,000 Finished Goods 337,000
b.Finished Goods 400,000
Work in Process 400,000
The cost of production of completed and finished goods during the period amounted to $400,000, and the finished products shipped to customers had total production costs of $337,000. From the following, select the entry to record the transfer of costs from finished goods to cost of goods sold.
a. Finished Goods 400,000
Cost of Goods Sold 400,000
b. Finished Goods 337,000
Cost of Goods Sold 337,000
c. Cost of Goods Sold 337,000
Finished Goods 337,000
d. Cost of Goods Sold 400,000
Finished Goods 400,000
c.Cost of Goods Sold 337,000
Finished Goods 337,000
Materials purchased on account during the month amounted to $195,000. Materials requisitioned and placed in production totaled $168,000. From the following, select the entry to record the transaction on the day the materials were requisitioned by the production department.
a.Materials 168,000
Work in Process 168,000
b.Work in Process 195,000
Materials 195,000
c. Work in Process 168,000
Materials 168,000
d. Work in Process 168,000
Cash 168,000
c.Work in Process 168,000
Materials 168,000
During the period, labor costs incurred on account amounted to $250,000 including $200,000 for production orders and $50,000 for general factory use. In addition, factory overhead charged to production was $23,000. From the following, select the entry to record the direct labor costs.
a.Work in Process 200,000
Wages Payable 200,000
b.Work in Process 250,000
Wages Payable 250,000
c.Wages Payable 250,000
Work in Process 250,000
d. Wages Payable 200,000
Work in Process 200,000
a.Work in Process 200,000
Wages Payable 200,000
The Collins Company forecasts that total overhead for the current year will be $11,801,168 and that total machine hours will be 169,443 hours. Year to date, the actual overhead is $7,956,082 and the actual machine hours are 82,433 hours. If the Collins Company uses a predetermined overhead rate based on machine hours for applying overhead, what is that overhead rate?
a. $97 per machine hour
b. $47 per machine hour
c. $70 per machine hour
d. $143 per machine hour
c. $70 per machine hour
A process cost accounting system accumulates costs for each of the departments or processes within the factory.
True or False
True
During the period, labor costs incurred on account amounted to $250,000 including $200,000 for production orders and $50,000 for general factory use. In addition, factory overhead applied to production was $23,000. From the following, select the entry to record the actual factory overhead costs incurred.
a. Accounts Payable 50,000
Factory Overhead 50,000
