Deck 3: Job-Order Costing: Cost Flows and External Reporting

Question 1

Entry (16)in the below T-account represents the cost of goods manufactured transferred to Finished Goods from Work in Process.

Answer 1

False

Question 2

Entry (11)in the below T-account could represent overhead cost applied to Work in Process.

Answer 2

False

Question 3

In the Schedule of Cost of Goods Sold,Unadjusted cost of goods sold = Beginning finished goods inventory + Cost of goods manufactured − Ending finished goods inventory.

Answer 3

True

Question 4

The following entry would be used to record the transfer of $40,000 of direct material and $10,000 of indirect material from the storeroom to production:

Question 5

Entry (1)in the below T-account represents the purchase rather than use of raw materials.

Question 6

Entry (4)in the T-account below represents raw materials requisitioned for use in production.

Question 7

Advertising costs should NOT be charged to the Manufacturing Overhead account.

Question 8

Entry (4)in the below T-account could represent the cost of overhead applied to Work in Process.

Question 9

When raw materials are purchased,they are recorded as an asset.

Question 10

The absorption cost approach provides for the absorption of all manufacturing costs,fixed and variable,into units of product.

Question 11

Entry (4)in the below T-account could represent the cost of property taxes and insurance incurred on the factory.

Question 12

The $10,000 balance in the T-account below represents overapplied manufacturing overhead for the period.

Question 13

Assume that a company closes out any manufacturing overhead overapplied or underapplied to cost of goods sold.Then in the Schedule of Cost of Goods Sold,Adjusted cost of goods sold = Unadjusted cost of goods sold + Overapplied overhead - Underapplied overhead.

Question 14

If a company uses a predetermined overhead rate,actual manufacturing overhead costs of a period will be recorded in the Manufacturing Overhead account and will be recorded on the job cost sheets.

Question 15

On a manufacturing company's income statement,direct labor is separately listed as an expense.

Question 16

In the Schedule of Cost of Goods Sold,Cost of goods available for sale = Ending finished goods inventory + Cost of goods manufactured.

Question 17

In the Schedule of Cost of Goods Manufactured,Total raw materials available = Ending raw materials inventory + Purchases of raw materials.

Question 18

In the Schedule of Cost of Goods Manufactured,Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory.

Question 19

The following entry would be used to record depreciation on manufacturing equipment:

Question 20

The journal entry for cost of goods manufactured includes the costs of units that are partially completed.

Question 21

In a job-order costing system,indirect labor cost is usually recorded as a debit to:

A) Manufacturing Overhead.
B) Finished Goods.
C) Work in Process.
D) Cost of Goods Sold.

Question 22

Under a job-order costing system,the dollar amount transferred from Work in Process to Finished Goods is the sum of the costs charged to all jobs:

A) started in process during the period.
B) in process during the period.
C) completed and sold during the period.
D) completed during the period.

Question 23

If the actual manufacturing overhead cost for a period exceeds the manufacturing overhead cost applied,then manufacturing overhead would be considered to be overapplied.

Question 24

If a company closes any underapplied or overapplied manufacturing overhead to the Cost of Goods Sold account,then Cost of Goods Sold will be debited if manufacturing overhead is overapplied for the period.

Question 25

The schedule of cost of goods manufactured contains three elements of product costs-direct materials,direct labor,and manufacturing overhead-and it summarizes the portions of those costs that remain in ending Work in Process inventory and that are transferred out of Work in Process into Finished Goods.

Question 26

Refer to the T-account below:
Entry (12)could represent which of the following?

A) Direct labor cost incurred in production.
B) Purchases of raw materials.
C) The cost of goods manufactured transferred to Finished Goods.
D) The cost of indirect materials incurred in production.

Question 27

When manufacturing overhead is applied to production,it is added to:

A) the Cost of Goods Sold account.
B) the Raw Materials account.
C) the Work in Process account.
D) the Finished Goods inventory account.

Question 28

Two of the reasons why manufacturing overhead may be underapplied are:
(1)the estimated total manufacturing overhead cost may have been too high; and (2)the estimated total amount of the allocation base may have been too low.

Question 29

In the Schedule of Cost of Goods Manufactured,Total direct materials = Raw materials used in production - Ending raw materials inventory.

Question 30

In the Schedule of Cost of Goods Manufactured,Raw materials used in production = Beginning raw materials inventory + Purchases of raw materials − Ending raw materials inventory.

Question 31

The journal entry to record applying overhead during the production process is:

Question 32

Refer to the T-account below:
Entry (4)could represent which of the following except?

A) Indirect labor cost incurred.
B) Factory insurance cost.
C) Overhead cost applied to Work in Process.
D) Depreciation on factory equipment.

Question 33

Refer to the T-account below:
Entry (5)could represent which of the following?

A) Payments for raw materials.
B) Requisitions of raw materials to be used in production.
C) Purchases of raw materials.
D) Overhead cost applied to Work in Process.

Question 34

Refer to the T-account below:
Entry (8)could represent which of the following?

A) Payment of insurance for the upcoming period.
B) Insurance cost incurred on the factory which is added to the Manufacturing Overhead account.
C) Overhead cost applied to Work in Process.
D) Overhead cost applied to Finished Goods.

Question 35

The entire difference between the actual manufacturing overhead cost for a period and the applied manufacturing overhead cost is typically closed to the Work In Process account.

Question 36

In a job-order costing system,which of the following events would trigger recording data on a job cost sheet?

A) the purchase of direct materials
B) the payment of fire insurance on the factory building
C) the payment for product advertising
D) none of the above

Question 37

Refer to the T-account below:
The ending balance of $8,000 represents which of the following?

A) Underapplied overhead.
B) Manufacturing overhead that will be carried over to the next period.
C) Overapplied overhead.
D) A bookkeeping error.

Question 38

A credit balance in the Manufacturing Overhead account at the end of the year means that manufacturing overhead was overapplied.

Question 39

In a job-order costing system,manufacturing overhead applied is recorded as a debit to:

A) Raw Materials inventory.
B) Finished Goods inventory.
C) Work in Process inventory.
D) Cost of Goods Sold.

Question 40

Which of the following statements is true?

A) Only statement I is true.
B) Only statement II is true.
C) Both statements I and II are true.
D) Statements I, II, and III are all true.

Question 41

Gullett Corporation had $26,000 of raw materials on hand on November 1.During the month,the Corporation purchased an additional $75,000 of raw materials.The journal entry to record the purchase of raw materials would include a:

A) debit to Raw Materials of $101,000
B) credit to Raw Materials of $75,000
C) debit to Raw Materials of $75,000
D) credit to Raw Materials of $101,000

Question 42

When closing overapplied manufacturing overhead to Cost of Goods Sold,which of the following would be true?

A) Work in Process will decrease.
B) Cost of Goods Sold will increase.
C) Net income will decrease.
D) Gross margin will increase.

Question 43

Brendal Corporation is a manufacturer that uses job-order costing.The company has supplied the following data for the just completed year:
Results of operations:
How much is the total manufacturing cost added to Work in Process during the year?

A) $1,215,000
B) $1,803,000
C) $1,498,500
D) $2,023,500

Question 44

During March,Zea Inc.transferred $50,000 from Work in Process to Finished Goods and recorded a Cost of Goods Sold of $56,000.The journal entries to record these transactions would include a:

A) credit to Cost of Goods Sold of $56,000
B) debit to Finished Goods of $56,000
C) credit to Work in Process of $50,000
D) credit to Finished Goods of $50,000

Question 45

Firlit Corporation incurred $69,000 of actual Manufacturing Overhead costs during October.During the same period,the Manufacturing Overhead applied to Work in Process was $70,000.The journal entry to record the incurrence of the actual Manufacturing Overhead costs would include a:

A) debit to Work in Process of $70,000
B) credit to Work in Process of $70,000
C) debit to Manufacturing Overhead of $69,000
D) credit to Manufacturing Overhead of $69,000

Question 46

In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold,the cost of goods manufactured is computed according to which of the following equations?

A) Cost of goods manufactured = Total manufacturing costs + Ending work in process inventory - Beginning work in process inventory
B) Cost of goods manufactured = Total manufacturing costs + Beginning work in process inventory - Ending work in process inventory
C) Cost of goods manufactured = Total manufacturing costs + Beginning finished goods inventory - Ending finished goods inventory
D) Cost of goods manufactured = Total manufacturing costs + Ending finished goods inventory - Beginning finished goods inventory

Question 47

During July at Loeb Corporation,$83,000 of raw materials were requisitioned from the storeroom for use in production.These raw materials included both direct and indirect materials.The indirect materials totaled $4,000.The journal entry to record the requisition from the storeroom would include a:

A) debit to Work in Process of $79,000
B) debit to Work in Process of $83,000
C) credit to Manufacturing Overhead of $4,000
D) debit to Raw Materials of $83,000

Question 48

Lister Corporation is a manufacturer that uses job-order costing.The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year.The company has supplied the following data for the just completed year:
Results of operations:
The total amount of manufacturing overhead applied to production is:

A) $1,547,000
B) $576,000
C) $624,000
D) $674,000

Question 49

In the Schedule of Cost of Goods Manufactured and Cost of Goods Sold,the "Total raw materials available" is computed by adding together the "Beginning raw materials inventory" and:

A) Ending raw materials inventory
B) Raw materials used in production
C) Purchases of raw materials
D) Indirect materials included in manufacturing overhead

Question 50

Firebaugh Corporation is a manufacturer that uses job-order costing.The company has supplied the following data for the just completed year:
What is the journal entry to record raw materials used in production?

A)
B)
C)
D)

Question 51

Overapplied manufacturing overhead would result if:

A) the plant was operated at less than normal capacity.
B) manufacturing overhead costs incurred were less than estimated manufacturing overhead costs.
C) manufacturing overhead costs incurred were less than manufacturing overhead costs charged to production.
D) manufacturing overhead costs incurred were greater than manufacturing overhead costs charged to production.

Question 52

Piekos Corporation incurred $90,000 of actual Manufacturing Overhead costs during June.During the same period,the Manufacturing Overhead applied to Work in Process was $92,000.The journal entry to record the application of Manufacturing Overhead to Work in Process would include a:

A) debit to Manufacturing Overhead of $92,000
B) debit to Work in Process of $90,000
C) credit to Manufacturing Overhead of $92,000
D) credit to Work in Process of $90,000

Question 53

During June,Buttrey Corporation incurred $67,000 of direct labor costs and $7,000 of indirect labor costs.The journal entry to record the accrual of these wages would include a:

A) debit to Work in Process of $67,000
B) credit to Work in Process of $74,000
C) debit to Work in Process of $74,000
D) credit to Work in Process of $67,000

Question 54

Gallon Corporation had $24,000 of raw materials on hand on April 1.During the month,the Corporation purchased an additional $52,000 of raw materials.During April,$62,000 of raw materials were requisitioned from the storeroom for use in production.These raw materials included both direct and indirect materials.The indirect materials totaled $2,000.The debits to the Work in Process account as a consequence of the raw materials transactions in April total:

A) $60,000
B) $62,000
C) $0
D) $52,000

Question 55

On December 1,Mogro Corporation had $26,000 of raw materials on hand.During the month,the Corporation purchased an additional $60,000 of raw materials.During December,$62,000 of raw materials were requisitioned from the storeroom for use in production.The debits entered in the Raw Materials account during the month of December total:

A) $26,000
B) $86,000
C) $60,000
D) $62,000

Question 56

At the beginning of December,Altro Corporation had $26,000 of raw materials on hand.During the month,the Corporation purchased an additional $76,000 of raw materials.During December,$72,000 of raw materials were requisitioned from the storeroom for use in production.The credits entered in the Raw Materials account during the month of December total:

A) $26,000
B) $102,000
C) $76,000
D) $72,000

Question 57

If manufacturing overhead is underapplied,then:

A) actual manufacturing overhead cost is less than estimated manufacturing overhead cost.
B) the amount of manufacturing overhead cost applied to Work in Process is less than the actual manufacturing overhead cost incurred.
C) the predetermined overhead rate is too high.
D) the Manufacturing Overhead account will have a credit balance at the end of the year.

Question 58

Leelanau Corporation uses a job-order costing system.The following data are for last year:
Leelanau applies overhead using a predetermined rate.What amount of overhead was applied to work in process last year?

A) $138,500
B) $121,500
C) $130,000
D) $203,500

Question 59

Farrel Corporation is a manufacturer that uses job-order costing.The company has supplied the following data for the just completed year:
$\begin{array}{lr}\text {Direct labor cost. }&\$574,000\\\text {Manufacturing overhead: }\\\text {Indirect labor cost }&\$163,000\\\text {Other manufacturing overhead costs incurred }&\$584,000\\\end{array}$
What is the journal entry to record the direct and indirect labor costs incurred during the year?

A) $\begin{array}{lr}\text {Wages Payable }&737,000\\\text {Direct Labor. }&&574,000\\\text {Manufacturing Overhead }&&163,000\\\end{array}$

B) $\begin{array}{lr}\text {Work in Process }&574,000\\\text {Manufacturing Overhead. }&163,000\\\text {Wages Payable }&&737,000\\\end{array}$

C)
D)

Question 60

In October,Raddatz Inc.incurred $73,000 of direct labor costs and $6,000 of indirect labor costs.The journal entry to record the accrual of these wages would include a:

A) debit to Manufacturing Overhead of $6,000
B) debit to Work in Process of $79,000
C) credit to Manufacturing Overhead of $6,000
D) credit to Work in Process of $79,000

Question 61

Tomlison Corporation is a manufacturer that uses job-order costing.The company has supplied the following data for the just completed year:
$\begin{array}{lr}\text {Cost of goods manufactured. }&\$1,589,000\\\text {Cost of goods sold (unadjusted). }&\$1,517,000\\\end{array}$
The journal entry to record the unadjusted Cost of Goods Sold is:

A) $\begin{array}{lr}\text {Finished Goods . }&1,517,000\\\text {Cost of Goods Sold }&&1,517,000\\\end{array}$

B) $\begin{array}{lr}\text {Cost of Goods Sold. }&1,517,000\\\text {Finished Goods }&&1,517,000\\\end{array}$

C) $\begin{array}{lr}\text {Finished Goods }&1,589,000\\\text {Cost of Goods Sold }&&1,589,000\\\end{array}$

D) $\begin{array}{lr}\text {Cost of Goods Sold. }&1,589,000\\\text {Finished Goods }&&1,589,000\\\end{array}$

Question 62

Molzahn Corporation is a manufacturer that uses job-order costing.The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year.The company has supplied the following data for the just completed year:
Results of operations:
Manufacturing overhead is overapplied or underapplied by:

A) $165,000 Overapplied
B) $94,000 Underapplied
C) $165,000 Underapplied
D) $94,000 Overapplied

Question 63

Tatar Corporation is a manufacturer that uses job-order costing.The company has supplied the following data for the just completed year:
Results of operations:
How much is the ending balance in the Raw Materials inventory account?

A) $37,000
B) $120,000
C) $83,000
D) $517,000

Question 64

Hougham Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. The cost of raw materials requisitioned for use in production during the year was:

A) $109,000
B) $145,000
C) $103,000
D) $124,000

Question 65

Compute the amount of raw materials used during November if $30,000 of raw materials were purchased during the month and if the inventories were as follows:

A) $31,500
B) $29,500
C) $27,000
D) $33,000

Question 66

Maysonet Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. The cost of completed jobs transferred from Work in Process to Finished Goods during the year was:

A) $520,000
B) $572,000
C) $538,000
D) $504,000

Question 67

Tusa Corporation is a manufacturer that uses job-order costing.The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year.The company has supplied the following data for the just completed year:
Results of operations:
The adjusted Cost of Goods Sold for the year is:

A) $1,518,000
B) $1,506,500
C) $1,642,000
D) $1,529,500

Question 68

St.Johns Corporation uses a job-order costing system and has provided the following partially completed summary T-accounts for the just completed period:
Manufacturing overhead for the period was:

A) $7,000 Underapplied
B) $73,000 Underapplied
C) $73,000 Overapplied
D) $7,000 Overapplied

Question 69

Tenneson Corporation's cost of goods manufactured for the just completed month was $151,000 and its inventories were as follows:
How much was the cost of goods available for sale on the Schedule of Cost of Goods Sold?

A) $137,000
B) $185,000
C) $151,000
D) $136,000

Question 70

Plasencia Corporation is a manufacturer that uses job-order costing.The company closes out any overapplied or underapplied overhead to Cost of Goods Sold at the end of the year.The company has supplied the following data for the just completed year:
Results of operations:
The net operating income is:

A) $1,318,000
B) $1,008,000
C) $728,000
D) $1,038,000

Question 71

The following accounts are from last year's books at Sharp Manufacturing:
Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs.What is the manufacturing overapplied or underapplied for the year?

A) $6,000 underapplied
B) $6,000 overapplied
C) $26,000 underapplied
D) $26,000 overapplied

Question 72

The following accounts are from last year's books at Sharp Manufacturing:
Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs.What is the amount of cost of goods manufactured for the year?

A) $252,000
B) $454,000
C) $510,000
D) $460,000

Question 73

Ruddick Corporation is a manufacturer that uses job-order costing.The company has supplied the following data for the just completed year:
$\begin{array}{lr}\text {Cost of goods manufactured. }&\$1,486,000\\\text {Cost of goods sold (unadjusted). }&\$1,337,000\\\end{array}$
The journal entry to record the transfer of completed goods from Work in Process to Finished Goods is:

A) $\begin{array}{lr}\text {Finished Goods . }&1,337,000\\\text {Work in Process }&&1,337,000\\\end{array}$

B) $\begin{array}{lr}\text { Finished Goods.}&1,486,000\\\text {Work in Process }&&1,486,000\\\end{array}$

C) $\begin{array}{lr}\text {Work in Process }&1,337,000\\\text {Finished Goods }&&1,337,000\\\end{array}$

D) $\begin{array}{lr}\text {Work in Process }&1,486,000\\\text {Finished Goods }&&1,486,000\\\end{array}$

Question 74

Solt Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. The Cost of Goods Manufactured for the year was $415,000.The unadjusted Cost of Goods Sold for the year was:

A) $503,000
B) $415,000
C) $403,000
D) $453,000

Question 75

Calfee Corporation is a manufacturer that uses job-order costing.The company has supplied the following data for the just completed year:
$\begin{array}{ll}\text { Beginning inventories: }\\\text { Raw materials. }&\$40,000\\\text { Work in process }&\$19,000\\\text { Estimated total manufacturing overhead at the beginning of the year }&\$595,000\\\text { Estimated direct labor-hours at the beginning of the year }&35,000 \text { direct labor-hour }\end{array}$
Results of operations:
The ending balance in the Work in Process inventory account is:

A) $200,000
B) $162,000
C) $220,000
D) $181,000

Question 76

Shane Corporation has provided the following data concerning last month's operations. How much is the unadjusted cost of goods sold on the Schedule of Cost of Goods Sold?

A) $161,000
B) $157,000
C) $160,000
D) $193,000

Question 77

The following accounts are from last year's books of Sharp Manufacturing:
Sharp uses job-order costing and applies manufacturing overhead to jobs based on direct labor costs.What is the amount of direct materials used for the year?

A) $164,000
B) $154,000
C) $132,000
D) $168,000

Question 78

During September at Renfro Corporation,$65,000 of raw materials were requisitioned from the storeroom for use in production.These raw materials included both direct and indirect materials.The indirect materials totaled $4,000.The journal entry to record this requisition would include a debit to Manufacturing Overhead of:

A) $65,000
B) $4,000
C) $0
D) $61,000

Question 79

Cai Corporation uses a job-order costing system and has provided the following partially completed T-account summary for the past year. The cost of indirect materials requisitioned for use in production during the year was:

A) $74,000
B) $10,000
C) $40,000
D) $13,000

Question 80

Fisher Corporation uses a predetermined overhead rate based on direct labor cost to apply manufacturing overhead to jobs.The following information about Fisher Corporation's Work in Process inventory account has been provided for the month of May:
During the month,Fisher Corporation's Work in Process inventory account was credited for $120,500,which represented the Cost of Goods Manufactured for the month.Only one job remained in process on May 31; this job had been charged with $9,600 of applied overhead cost.The amount of direct materials cost in the unfinished job would be:

A) $10,600
B) $16,700
C) $12,800
D) $23,400