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Reviewer Acctg 9
Reviewer Acctg 9
ANSWER: d EASY
2. Which of the following costing systems allows management to quickly recognize materials, labs, and overhead variances and
take measures to correct them?
ANSWER: d EASY
3. In a normal cost system, debits to Work in Process Inventory would not be made for
a. actual overhead.
b. applied overhead.
c. actual direct material.
d. actual direct labor.
ANSWER: a EASY
ANSWER: d EASY
5. Job order costing and process costing have which of the following characteristics?
ANSWER: d EASY
ANSWER: d EASY
7. Additional accounts that comprise the balance of a single general account is a
a. worksheet.
b. journal.
c. subsidiary ledger.
d. book of original entry.
ANSWER: c EASY
8. In a job order costing system, the dollar amount of the entry that debits Finished Goods Inventory and credits Work in
Process Inventory is the sum of the costs charged to all jobs
ANSWER: d EASY
9. Total manufacturing costs for the year plus beginning Work in Process Inventory cost equals
ANSWER: c EASY
10. Which of the following would be least likely to be supported by subsidiary accounts or ledgers in a company that employs a
job order costing system?
ANSWER: d EASY
11. A journal entry includes a debit to Work in Process Inventory and a credit to Raw Material Inventory. The explanation for
this would be that
ANSWER: c EASY
12. The source document that records the amount of raw material that has been requested by production is the
ANSWER: d EASY
13. A material requisition form should show all of the following information except
a. job number.
b. quantity required.
c. unit cost.
d. purchase order number.
ANSWER: d EASY
14. Which of the following statements about job order cost sheets is true?
a. All job order cost sheets serve as the general ledger control account for Work in Process Inventory.
b. Job order cost sheets can serve as subsidiary ledger information for both Work in Process Inventory and Finished
Goods Inventory.
c. If material requisition forms are used, job order cost sheets do not need to be maintained.
d. Job order cost sheets show costs for direct material and direct labor, but not for manufacturing overhead since it is
an applied amount.
ANSWER: b EASY
15. Clyde Jenkins is an auditor for the General Accounting Office. Clyde is investigating invoices sent by Proper Paper Products
charging the Army $30 per roll for toilet paper. Proper Paper uses a job order costing system. Where should Clyde look to find total
production costs related to the toilet paper?
ANSWER: d EASY
16. The primary accounting document in a job order costing system is a(n)
a. bill of materials.
b. job order cost sheet.
c. employee time sheet.
d. materials requisition.
ANSWER: b EASY
17. The cost sheets for incomplete jobs at the end of the period comprise the subsidiary ledger for
ANSWER: c EASY
18. The __________ provides management with an historical summation of total costs for a given product.
ANSWER: a EASY
19. Which of the following journal entries records the accrual of the cost of indirect labor used in production?
ANSWER: d EASY
20. In job order costing, payroll taxes paid by the employer for factory employees are commonly accounted for as
a. direct labor cost.
b. manufacturing overhead cost.
c. indirect labor cost.
d. administrative cost.
ANSWER: b EASY
PROBLEMS:
PROBLEM 1 (1-5)
The following partially completed T-accounts summarize transactions for Faaberg Company during the year:
Raw Materials
Bal. 4,500 8,000
4,700
Finished Goods
Bal. 1,700 19,900
21,700
Work in Process
Bal. 3,600 21,700
5,700
8,000
7,800
Manufacturing Overhead
2,300 7,800
3,000
2,700
The direct labor cost is the debit to Work in Process in this journal entry.
PROBLEM 2
Gilford Inc. uses a job-order costing system. Costs going through the company's work in process account during June are
given below. Manufacturing overhead is applied to production using a predetermined overhead rate based on
direct labor cost.
Work in Process
Balance 0 Transferred out 95,000
Direct materials 20,000
Direct labor 30,000
Manufacturing overhead 60,000
Balance 15,000
Only Job 105 was still in process at the end of the month. This job had been charged with $3,000 in direct materials cost.
Required:
b. Determine the total amount of materials cost charged to completed jobs during the month.
Ans:
a. Since only Job 105 was in process at the end of the month, all of the $15,000 balance in the Work in
Process account must apply to it.
Thus, direct labor cost in Job 105 is $4,000, and manufacturing overhead cost is 200% $4,000 =
$8,000. Therefore,
b. Since $20,000 in materials cost was charged to Work in Process, and since only $3,000 in materials
cost applies to Job 105, the difference of $17,000 represents the cost charged to completed jobs
during the month.
Alagan Company is a manufacturing firm that uses job-order costing. At the beginning of the year, the
company's inventory balances were as follows:
The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the
beginning of the year, the company estimated that it would work 37,000 machine-hours and incur $222,000 in
manufacturing overhead cost. The following transactions were recorded for the year:
Required:
Prepare the appropriate journal entry for each of the items above. You can assume that all transactions with
employees, customers, and suppliers were conducted in cash.
Ans:
i. Cash 1,233,000
Sales 1,233,000