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Exam 3: Job-Order Cost Accounting

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Question 51

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When a janitor in the production facility incurs labour costs, what occurs?

A) The Work in Process account increases.
B) Additional Manufacturing Overhead costs are applied.
C) Direct labour is added to Work in Process.
D) Actual Manufacturing Overhead increases.

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Question 52

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You want to determine the amount of cost of goods sold.Where is the best place to find the information you need?

A) From the Raw Materials Inventory control account
B) From an analysis of all the control accounts in the cost system
C) From the work in process inventory records
D) From the finished goods inventory records

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Question 53

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At the point that manufacturing labour costs are incurred, to what account are they debited?

Use the following information for questions Payne Company developed the following data for the current year: $\begin{array}{ll} \text { Beginning work in process inventory } &\$68,000\\ \text { Direct materials used.} &104,000\\ \text { Actual overhead. } &88,000\\ \text { Overhead applied } &92,000\\ \text { Cost of goods manufactured } &450,000\\ \text { Total manufacturing costs.} &428,000\\\end{array}$ -How much is Payne Company's direct labour cost for the year?

Of the three manufacturing costs, which one is the most difficult to assign to a cost object?

Where would you expect to find overhead applied in the monthly financial statements?

On the financial statements at year end, all product costs could be found in Raw Materials, Work in Process, Finished Goods, and Cost of Goods Sold.

Which is most often used in a job-order cost system?

A company incurred indirect labour related to production jobs during 2016.Which account should increase as a result of this cost being incurred?

Harna, Inc.uses a job-order cost system.During the year the company decreased Manufacturing Overhead by $300,000.Which of the following most likely should be recorded at the same time?

A job-order cost system identifies costs with a particular activity within the production process, such as mixing, or cutting.

Which one of the following would most likely use a process cost system?

A materials requisition slip showed that total materials requested were $21,250 with $750 of this amount consisting of indirect materials.What entry is made to record the transfer of materials from the storeroom? a) $\begin{array}{lr} \text { Work in Process Inventory } &20,500\\ \text {Manufacturing Overhead } &750\\ \text { Raw Materials Inventory } &&21,250\\\end{array}$ b) $\begin{array}{lr} \text { Work in Process Inventory. } &21,250\\ \text {Raw Material Inventory. } &&21,250\\\end{array}$ c) $\begin{array}{lr} \text { Direct Materials} &20,500\\ \text {Indirect Materials. } &750\\ \text { Work in Process Inventory } &&21,250\\\end{array}$ d) $\begin{array}{lr} \text {Manufacturing Overhead } &21,250\\ \text { Raw Materials Inventory } &&21,250\\\end{array}$

Which one of the following is an important feature of a job-order cost system?

At the end of the year, Manufacturing Overhead has been over-applied.What occurred to create this situation?

As manufacturing overhead is incurred, it is added to the individual job.

How often are postings to subsidiary accounts in a costing system made?

Cost accounting is primarily concerned with allocating overhead.

Tool Time Inc.uses job-order costing for its brand new line of homework machines.The cost incurred for production during 2016 totalled $7,000 of materials, $2,500 of direct labour costs, and $1,000 of manufacturing overhead applied.The company ships all goods as soon as they are completed which results in no finished goods inventory on hand at the end of any year.Beginning work in process totalled $5,500, and the ending balance is $2,500.During the year, the company completed 20 machines.How much is the cost per machine?

When overhead is under-applied at the end of a year,