Business 1B Sec ON 1 Week 2 Quiz

Business 1B Sec ON 1 Week 2 Quiz | chatbot las positas college

Item 1

There are two basic types of cost accounting systems: job order costing and custom order costing.

·         True

·         False

 

Item 2

The total costs on job cost sheets for jobs that are not yet completed equals the balance in the Finished Goods Inventory account.

·         True

·         False

 

Item 3

Job order costing would be appropriate for companies that produce pencils.

Group starts True or False

·         True ,

·         False

 

Item 4

Period costs for a manufacturing company, such as general and administrative expenses, reduce inventory accounts and as a result increase cost of goods sold.

·         True

·         False

 

Item 5

A company’s Factory Overhead account shows total debits of $1,248,000 and total credits of $1,292,000 at the end of the year. Underapplied overhead equals $44,000.

·         True

·         False

 

Item 6

Direct materials and direct labor costs are debited to the Factory Overhead account in a job costing system.

·         True

·         False

 

Item 7

When overhead applied exceeds actual overhead cost, overhead is said to be overapplied.

·         True 

·         False

 

Item 8

When overhead is underapplied at the end of a period, the adjusting journal entry includes a credit to Cost of Goods Sold.

·         True

·         False

 

 

Item 9

At the current year-end, Ruiz Company found that its overhead was underapplied by $2,500, and this amount was not considered material. Based on this information, Ruiz should:      

·         close the $2,500 to Finished Goods Inventory.   

·         close the $2,500 to Cost of Goods Sold. 

·         carry the $2,500 to the income statement as "Other Expense".

·         do nothing about the $2,500, since it is not material, and it is likely that overhead will be overapplied by the same amount next year.         

·         carry the $2,500 to the next period.

 

Item 10

A company that uses job order costing reports the following information for March. Overhead is applied at the rate of 60% of direct materials cost. The company has no beginning Work in Process or Finished Goods inventories at March 1. Jobs 1 and 3 are not finished by the end of March, and Job 2 is finished but not sold by the end of March.

 

                Job 1      Job 2      Job 3

Direct materials used     $ 10,000                $ 14,000                $ 3,000

Direct labor used              $ 18,000                $ 8,000  $ 6,000

 

Determine the total dollar amount of Finished Goods Inventory at the end of March.

·         $44,800.                

·         $37,000.

·         $7,800.

·         $30,400

·         $75,200.

 

Item 11

The two basic types of cost accounting systems are:       

·         Job order costing and customized service costing.           

·         Job order costing and process costing.

·         Job order costing and periodic costing.

·         Job order costing and perpetual costing.              

·         Job order costing and customized product costing.

 

Item 12

Andrew Industries purchased $165,000 of raw materials on account during the month of March. The beginning Raw Materials Inventory balance was $22,000, and the materials used to complete jobs during the month were $141,000 direct materials and $13,000 indirect materials. How should Andrews record the purchase of raw materials for March?

 

·         Debit Accounts Payable $187,000; credit Raw Materials Inventory $187,000         

·         Debit Accounts Payable $165,000; credit Raw Materials Inventory $165,000

·         Debit Raw Materials Inventory $187,000; credit Cash $187,000   

·         Debit Work in Process Inventory $165,000; credit Raw Materials Inventory $165,000

·         Debit Raw Materials Inventory $165,000; credit Accounts Payable $165,000

 

Item 13

A company that makes which of the following types of products would best be suited for a job costing system?               

·         Snack chips        

·         Swimming suits

·         Custom jewelry               

·         Fruit juice

·         Phone chargers

 

Item 14

At the beginning of the year, a company estimates total overhead costs of $1,120,000. The company applies overhead using machine hours and estimates that it will use 2,800 machine hours during the year. What amount of overhead should be applied to a job that uses 25 machine hours that year?

·         $2,500.

·         $5,000.

·         $10,000.

·         $7,500.

·         $8,000.

 

Item 15

Marina Corporation applied overhead to jobs during the period as follows:

Jobs finished and sold    $ 46,000

Jobs started and in process         54,000

Jobs finished and unsold              100,000

 

The application of overhead has resulted in a $5,600 credit balance in the Factory Overhead account. The entry to dispose of this remaining factory overhead balance is:

                 

                 

·         Debit Work in Process Inventory $5,600; credit Factory Overhead $5,600.             

·         Debit Factory Overhead $5,600; credit Cost of Goods Sold $5,600.            

·         Debit Factory Overhead $5,600; credit Work in Process Inventory $5,600.

·         Debit Cost of Goods Sold $5,600; credit Factory Overhead $5,600.

 

Item 16

A document in a job order costing system that is a cost record maintained for each job is known as a(n):

 

·         Job lot.

·         Finished goods summary.           

·         Units-of-production sheet.        

·         Process cost system.     

·         Job cost sheet.

 

Item 17

Omega Construction manufactures homes to customer specifications. It most likely uses:           

·         Process costing.               

·         Periodic costing.              

·         Job order costing.           

·         Activity-based costing.

·         Unique costing.

 

Item 18

Portside Watercraft uses a job order costing system. During the month Portside purchased $153,000 of raw materials on credit; issued materials to production of $164,000, of which $24,000 were indirect. Portside incurred a factory payroll cost of $95,000, of which $25,000 was indirect labor. Portside uses a predetermined overhead rate of 170% of direct labor cost. The journal entry to record the application of factory overhead to production is:

                 

·         Debit Work in Process Inventory $119,000; credit Factory Overhead $119,000.    

·         Debit Work in Process Inventory $161,500; credit Factory Overhead $161,500.    

·         Debit Work in Process Inventory $55,800; credit Factory Overhead $55,800.

·         Debit Work in Process Inventory $95,000; credit Factory Payroll $95,000.               

·         Debit Factory Overhead $119,000; credit Work in Process Inventory $119,000.

 

Item 19

A company that uses job order costing purchases $70,000 in raw materials for cash. It then uses $16,000 of raw materials as indirect materials and uses $44,700 of raw materials as direct materials.

 

Prepare journal entries to record the (a) purchase of raw materials, (b) use of indirect materials, and (c) use of direct materials.

No          Transaction         General Journal                Debit     Credit

1              a.            Raw materials inventoryselected answer correct              70,000selected answer correct  not attempted

                                Cashselected answer correct      not attempted  70,000selected answer correct

                                                               

2              b.            Work in process inventoryselected answer incorrect       44,700selected answer incorrect               not attempted

                                Raw materials inventoryselected answer correct              not attempted  44,700selected answer incorrect

                                                               

3              c.             Factory overheadselected answer incorrect        16,000selected answer incorrect               not attempted

                                Raw materials inventoryselected answer correct              not attempted  16,000

Item 20

A company that uses job order costing incurred a monthly factory payroll of $194,000. Of this amount, $54,000 is indirect labor and $140,000 is direct labor.

 

Prepare journal entries to record the (a) use of direct labor and (b) use of indirect labor.

No          Transaction         General Journal                Debit     Credit

1              a.            Work in process inventoryselected answer correct          140,000selected answer correct                not attempted

                                Factory wages payableselected answer correct not attempted  140,000selected answer correct

                                                               

2              b.            Factory overheadselected answer correct            54,000selected answer correct  not attempted

                                Factory wages payableselected answer correct not attempted  54,000

 

Item 21

Ace Patios applies overhead using direct labor hours as its activity base. At the beginning of the year, the company estimates total direct labor hours of 20,900 and total overhead costs of $585,200 for the year.

 

1. Determine the company’s predetermined overhead rate.

2. Job A2 used 70 direct labor hours. What is the total of overhead costs applied to this job?

 

Complete this question by entering your answers in the tabs below.

Item 22

Shen Company reports the costs incurred below for the month ended May 31. The company has no beginning Work in Process Inventory. Overhead is applied using a predetermined overhead rate of 125% of direct materials costs. Job 4 was completed and Job 5 is still in process at month-end. Prepare a schedule of cost of goods manufactured for the month.

 

                Job 4      Job 5

Direct materials used     $ 3,000  $ 2,600

Direct labor used              3,700     360