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Exam 2: Job Order Costing

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Question 61

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Which of the following is the correct flow of manufacturing costs?

A) Raw materials, work in process, finished goods, cost of goods sold
B) Raw materials, finished goods, cost of goods sold, work in process.
C) Work in process, finished goods, raw materials, cost of goods sold
D) Cost of goods sold, raw materials, work in process, finished goods.

E) A) and D)
F) C) and D)

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Question 62

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A receiving report is prepared when purchased materials are first received by the manufacturing department.

A) True
B) False

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Question 63

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Job order cost accounting systems may be used for planning and controlling a service business.

For which of the following businesses would the job order cost system be appropriate?

A manufacturing business reports just two types of inventory on its balance sheet: work in process inventory and finished goods inventory.

At the end of the fiscal year, the balance in Factory Overhead is small. This balance would normally be:

During the period, labor costs incurred on account amounted to $275,000 including $200,000 for production orders and $75,000 for general factory use. In addition, factory overhead applied to production was $32,000. From the following, select the entry to record the actual factory overhead costs incurred.

Each account in the cost ledger is called a:

Job order cost accounting systems can be used only for companies that manufacture a product.

The recording of the application of factory overhead costs to jobs would include a credit to:

Using the job order cost system, service organizations are able to bill customers on a weekly or monthly basis, even when the job has not been completed.

If factory overhead applied exceeds the actual costs, the factory overhead account will have a credit balance.

Costs that are used in generating revenues during the current period, but are not involved in the manufacturing process are often referred to as:

A separate account for each material is found in a

Generally accepted accounting principles require companies to use only one factory overhead rate for product costing.

The Winston Company estimates that the factory overhead for the following year will be $1,250,000. The company has decided that the basis for applying factory overhead should be machine hours, which is estimated to be 50,000 hours. The total machine hours for the year was 54,300. The actual factory overhead for the year was $1,375,000. Determine the over or under applied amount for the year.

The inventory accounts generally maintained by a manufacturing firm are only finished goods and materials.

At the end of the period, Carson Company had the following balances in selected accounts: Required: a. Assuming the factory overhead balance is relatively small, prepare the journal entry to close the Factory Overhead account if the balance in the account is a debit balance. What does a debit balance mean? b. Assuming the factory overhead balance is relatively small, prepare the journal entry to close the Factory Overhead account if the balance in the account is a credit balance. What does a credit balance mean?

Prepare the journal entry for materials and labor, based on the following:

Activity-based costing is a method of accumulating and allocating costs by department.