Deck 25: Manufacturing Accounting

Question 1

Direct labor includes the wages of:

A)an hourly worker producing the product.
B)the shop foreman.
C)maintenance workers.
D)administrators.

Answer 1

A

Question 2

The formula for cost of goods manufactured is:

A)raw materials plus direct labor minus overhead plus beginning work-in-process inventory plus ending work-in-process inventory.
B)raw materials minus direct labor plus overhead plus beginning work-in-process inventory plus ending work-in-process inventory.
C)beginning work-in-process plus total manufacturing cost minus ending work-in-process.
D)raw materials plus direct labor less overhead plus beginning work-in-process inventory less ending work-in-process inventory.

Answer 2

C

Question 3

Raw material inventory appears on the:

A)balance sheet.
B)income statement.
C)cost of goods manufactured statement.
D)Both A and C are correct.

Answer 3

D

Question 4

A clock card is:

A)the basis for payroll.
B)the basis for charging cost of goods sold.
C)a document to show movement of materials.
D)a document used to order materials.

Question 5

Which inventory account consists of manufacturing cost of goods that are complete?

A)Work-in-Process Inventory
B)Raw Material Inventory
C)Manufacturing Overhead
D)Finished Goods

Question 6

The second step in determining total manufacturing costs is to calculate:

A)the raw material cost for the month.
B)the direct labor cost for the month.
C)factory overhead cost for the month.
D)None of these answers are correct.

Question 7

The three main inventories do not include which of the following?

A)Indirect labor
B)Work-in-process
C)Raw materials
D)Finished goods

Question 8

Which inventory account consists of products currently being processed?

A)Finished Goods Inventory
B)Raw Material Inventory
C)Manufacturing Overhead Inventory
D)Work-in-Process Inventory

Question 9

Lumber used in construction of a building is part of:

A)raw material costs.
B)labor costs.
C)manufacturing overhead.
D)None of these answers are correct.

Question 10

Nails, depreciation, and foreman salaries are examples of:

A)raw materials.
B)direct labor.
C)manufacturing overhead.
D)none of the above.

Question 11

Total manufacturing costs incurred include:

A)direct labor costs.
B)raw materials costs.
C)manufacturing overhead.
D)all of the above.

Question 12

What inventories are included in determining the cost of goods sold?

A)Beginning and ending finished goods
B)Beginning and ending raw materials
C)Beginning and ending work-in-process
D)None of these answers are correct.

Question 13

Ending finished goods inventory is subtracted from ________ to get cost of goods sold.

A)cost of goods available for sale
B)cost of goods manufactured
C)net purchases
D)none of the above

Question 14

Calculate the cost of goods sold when beginning finished goods inventory equals $70,000, ending finished goods inventory $85,000, and cost of goods manufactured $600,000.

A)$615,000
B)$445,000
C)$685,000
D)$585,000

Question 15

Manufacturing overhead includes all manufacturing costs:

A)including raw materials.
B)including overhead.
C)excluding raw materials and direct labor.
D)None of these answers are correct.

Question 16

What inventories are included in determining total manufacturing costs?

A)Beginning and ending finished goods
B)Beginning and ending raw materials
C)Beginning and ending work-in-process
D)None of the above answers is correct.

Question 17

Manufacturing cost includes:

A)raw material.
B)direct labor.
C)manufacturing overhead.
D)All of these answers are correct.

Question 18

A material requisition is a:

A)document prepared to show the movement of materials or products between departments.
B)document used to order materials or supplies from the vendor or supplier.
C)document used for charging material to production.
D)document used to record receipt of materials or supplies from the vendor or supplier.

Question 19

The statement of cost of goods manufactured does not include:

A)direct labor costs.
B)raw material costs.
C)manufacturing overhead.
D)All of the above are included.

Question 20

Freight costs to bring the raw materials in should be charged to:

A)Work-in-Process Inventory.
B)Cost of Goods Sold.
C)Raw Materials Inventory.
D)Manufacturing overhead.

Question 21

Which is not an example of a source document?

A)Clock card
B)Bill of lading
C)Lot ticket
D)All are source documents.

Question 22

If a company had a beginning balance of $5,000 in Work-in-Process Inventory, an ending balance of $7,000 and incurred direct labor costs of $8,000 and overhead costs of $4,000, then the cost of goods manufactured during the month was $24,000.

Question 23

The three manufacturing inventories are raw materials, work-in-process, and finished goods.

Question 24

Finished goods inventory includes the total costs of manufacturing a product.

Question 25

Overhead includes labor costs of assembly line workers but not their supervisors.

Question 26

The bill of lading shows the cost of materials put into raw materials inventory.

Question 27

A lot ticket is a:

A)document prepared to show the movement of materials or products between departments.
B)document used to order materials or supplies from the storeroom.
C)document used for charging material to production.
D)None of these answers are correct.

Question 28

Cost of goods manufactured is determined before the income statement can be completed.

Question 29

A document that is prepared to show how items have been shipped to customers is a:

A)receiving report.
B)bill of lading.
C)lot tickets.
D)clock card.

Question 30

Hourly wages of production line employees is one of the costs included in the work-in-process inventory.

Question 31

The balance sheet contains all three manufacturing inventories.

Question 32

A shop foreman's salary is not considered direct labor.

Question 33

The steps of the accounting cycle for a manufacturing company are different from those used for a merchandise company.

Question 34

A cost of goods manufactured statement should be prepared before the income statement has been prepared.

Question 35

Lumber used in a furniture plant would be considered raw materials inventory.

Question 36

A report issued by the payroll department to categorize all the types of labor incurred during the week is a:

A)labor distribution report.
B)receiving report.
C)flow chart.
D)None of these answers are correct.

Question 37

If a company had a beginning balance of $5,000 in Raw Materials, an ending balance of $3,000 and purchased $27,000 of materials during the month, then the raw material cost for the month was $29,000.

Question 38

If a company had a beginning balance of $5,000 in Finished Goods Inventory, an ending balance of $8,000 and cost of goods manufactured was $47,000 during the month, then the cost of goods sold for the month was $44,000.

Question 39

In entries to record the movement of material, labor, and overhead through the operation of a company, the credit is the source and the debit is the destination.

Question 40

The first step in the preparation of the cost of goods manufactured is to add in and subtract out the two raw material inventory balances.

Question 41

From the following information, calculate (a)cost of raw materials used and (b)total manufacturing costs.
a. ________
b. ________

Question 42

What is the journal entry to record issuing raw materials from the storeroom?

A)Debit Raw Materials Inventory; Credit Work-in-Process
B)Debit Overhead-Control; Credit Work-in-Process
C)Debit Work-in-Process; Credit Overhead-Control
D)Debit Work-in-Process; Credit Raw Materials Inventory

Question 43

Calculate the (a)cost of raw materials used and (b)total manufacturing costs from the following information.
a. ________
b. ________

Question 44

During the week ended November 30, total factory payroll incurred was $6,000. Of this total, 80% was for direct labor. The entry to record the payroll distribution would include:

A)debit Work-in-Process Inventory for $4,800 and Overhead-Control for $1,200.
B)debit Work-in-Process Inventory for $6,000.
C)debit Work-in-Process Inventory for $4,800 and Overhead-Applied for $1,200.
D)debit Work-in-Process Inventory for $4,800 and Indirect Labor Expense for $1,200.

Question 45

Finished goods are listed on the statement of cost of goods manufactured.

Question 46

What is the journal entry to record the direct labor summarized on the labor distribution report?

A)Debit Finished Goods; credit Payroll
B)Debit Work-in-Process; credit Payroll
C)Debit Payroll; credit Direct Labor
D)Debit Payroll; credit Cash

Question 47

From the following, calculate the cost of raw materials used and total manufacturing costs:

Question 48

In a manufacturing company, the purchase of materials on account should be recorded as follows:

A)
B)
C)
D)

Question 49

List four of the six source documents covered in this unit, and explain the function of each in the accounting process.

Question 50

From the following, calculate the cost of raw materials used, total manufacturing costs and cost of goods manufactured:

Question 51

The entry to record the requisition of supplies from the storeroom would include:

A)debit to Raw Materials; and credit to Work-in-Process.
B)debit to Overhead-Applied; credit to Overhead-Control.
C)debit to Work-in-Process; and credit to Overhead-Control.
D)debit to Overhead-Control; and credit to Supplies Inventory.

Question 52

Calculate the (a)cost of goods manufactured from the following information.

Question 53

Describe the three elements of manufacturing cost.

Question 54

All expenses are listed on the income statement of a manufacturer.

Question 55

From the following information calculate total manufacturing costs and cost of goods manufactured.

Question 56

Seascape Interiors produces artist supplies. Listed below are the costs of production and inventory.
Compute:
a. Cost of raw materials used in production
b. Total manufacturing costs
c. Total cost of goods manufactured

Question 57

Classify each of the following as raw materials, direct labor, or overhead:

Question 58

What is the journal entry to record issuing supplies from the storeroom?

A)Debit Overhead-Applied; credit Raw Materials Inventory
B)Debit Overhead-Control; credit Supplies Inventory
C)Debit Supplies Inventory; credit Overhead-Applied
D)Debit Overhead-Applied; credit Supplies Inventory

Question 59

Journal entries crediting Payroll and debiting Work-in-Process Inventory are made for:

A)administrative salaries.
B)hourly manufacturing labor.
C)foremen's salaries.
D)raw materials.

Question 60

The entry for indirect materials (such as glue, etc.)requisitioned for use in production is:

A)
B)
C)
D)None of these answers are correct.

Question 61

The estimated manufacturing overhead cost was $20,000 and estimated machine hours were 10,000. Actual manufacturing overhead cost was $22,000 and actual machine hours were 12,000. The overhead application rate per hour based on machine hours is:

A)$1.83.
B)$2.00.
C)$4.00.
D)$5.00.

Question 62

Adams Manufacturing has estimated manufacturing overhead at $72,000 and has estimated direct labor of 10,000 direct labor hours at $9.00 per hour. The overhead rate per direct labor dollar would be:

A)$0.80
B)$8.00.
C)$1.25.
D)$7.20.

Question 63

Omega.com sold 25 jet skis for $7,000 which cost $5,000. The entry to record the sale would include:

A)credit to Finished Goods Inventory $5,000.
B)credit to Sales for $7,000.
C)debit to Cost of Goods Sold for $5,000.
D)all of the above.

Question 64

Candyland completed the manufacturing process. The entry to transfer the product to finished goods is:

A)
B)
C)
D)

Question 65

The following data are available for Skyway: If overhead is applied based on machine hours, the predetermined overhead rate is:

A)$2.00.
B)$20.00.
C)$0.50.
D)200%.

Question 66

Sylvan Manufacturing applies overhead based on direct labor hours. At the beginning of the year, it estimated that overhead costs would be $75,000 and direct labor hours would be 10,000. The applied overhead rate per direct labor hour is:

A)$7.50.
B)$15.00.
C)$0.1333.
D)none of the above.

Question 67

Which of the following journal entries would be made to apply the cost of indirect labor to production?

A)
B)
C)
D)

Question 68

Estimated manufacturing overhead costs were $40,000 and the number of estimated machine hours was 10,000. Actual overhead costs were $40,500 and the actual number of machine hours used was 10,200. Based on machine hours, the overhead application rate per hour is:

A)$3.97.
B)$3.92.
C)$4.00.
D)$4.05.

Question 69

The entry to record selling a product that cost $14,000 would be a credit to Finished Goods Inventory $14,000, and a debit to Cost of Goods Sold $14,000.

Question 70

The entry to record rent expense $9,000, supervision expense $19,000, and depreciation expense $7,000 to overhead is:

A)debit Overhead-Applied $35,000; credit Rent Expense $9,000, Supervision $19,000, Depreciation Expense $7,000.
B)debit Overhead-Control $35,000; credit Rent Expense $9,000, Supervision $19,000, Depreciation Expense $7,000.
C)debit Overhead-Applied $35,000; credit Overhead-Control $35,000.
D)None of these answers are correct.

Question 71

If the overhead applied rate based on direct labor hours is $7.00 and the actual labor hours are 5,000, what is the amount credited to Overhead-Applied?

A)$3500
B)$350
C)$35,000
D)None of the above

Question 72

Molly Manufacturing is using a manufacturing overhead application rate of 125% of machine hours. Machine hours are $9/hour and uses 35 hours. How much overhead should be applied to the job?

A)$315.00
B)$393.75
C)($393.75)
D)($315.00)

Question 73

The overhead application rate may be based on:

A)machine hours.
B)direct labor hours.
C)direct labor dollars.
D)All of these answers are correct.

Question 74

The following data are available for Starbrite Corporation: If overhead is applied based on direct labor hours, the predetermined overhead rate is:

A)$45.
B)$450.
C)$222.
D)$2,220.

Question 75

If direct labor for the month is $40,000, overhead is applied based on direct labor, annual overhead is $600,000, and annual direct labor is $1,000,000, what is the entry to charge direct labor to production?

A)Debit Work-in-Process Inventory $40,000; credit Payroll $40,000
B)Debit Overhead-Applied $40,000; credit Work-in-Process Inventory $40,000
C)Debit Work-in-Process Inventory $24,000; credit Overhead-Applied $24,000
D)Debit Work-in-Process Inventory $66,000; credit Overhead-Applied $66,000

Question 76

The Overhead-Control account is used for the:

A)application of overhead to production and it has a debit balance.
B)accumulation of all actual overhead costs and it has a credit balance.
C)application of overhead to production and it has a credit balance.
D)accumulation of all actual overhead costs and it has a debit balance.

Question 77

If direct labor for the month is $30,000, overhead is applied based on direct labor, annual overhead is estimated to be $500,000, and annual direct labor is estimated to be $800,000, what is the entry to apply overhead to production?

A)Debit Work-in-Process Inventory $18,750; credit Payroll $18,750
B)Debit Overhead-Applied $18,750; credit Work-in-Process Inventory $18,750
C)Debit Work-in-Process Inventory $18,750; credit Overhead-Applied $18,750
D)Debit Work-in-Process Inventory $30,000; credit Overhead-Applied $30,000

Question 78

The Overhead-Applied account is used for the:

A)application of overhead to production and it has a credit balance.
B)accumulation of all actual overhead costs and it has a credit balance.
C)application of overhead to production and it has a debit balance.
D)accumulation of all actual overhead costs and it has a debit balance.

Question 79

Madison Manufacturing is using a manufacturing overhead application rate of 110% of direct labor dollars. If direct labor was 10 hours at $15 per hour, how much overhead should be applied to the job?

A)$135
B)$165
C)$160
D)$150

Question 80

If direct labor for the month is $80,000, and overhead is applied based on 75% of direct labor dollars, what is the entry to apply overhead?

A)Debit Work-in-Process Inventory $80,000; credit Payroll $80,000
B)Debit Overhead-Applied $60,000; credit Work-in-Process Inventory $60,000
C)Debit Work-in-Process Inventory $60,000; credit Overhead-Applied $60,000
D)Debit Work-in-Process Inventory $80,000; credit Overhead-Applied $80,000