Inventory and Direct Labor

Topics: Cost accounting, Manufacturing, Inventory Pages: 41 (9111 words) Published: May 28, 2014
Chapter 2--Job Order Costing
Student: ___________________________________________________________________________ 1. Cost accounting systems are used to supply cost data information on costs incurred by a manufacturing process or department. 
True    False  

2. A manufacturer may employ a job order cost system for some of its products and a process cost system for others. 
True    False  
3. A job order cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory. 
True    False  
4. A process cost accounting system provides for a separate record of the cost of each particular quantity of product that passes through the factory. 
True    False  
5. A process cost accounting system accumulates costs for each of the departments or processes within the factory. 
True    False  
6. A process cost accounting system is best used by manufacturers of like units of product that are not distinguishable from each other during a continuous production process. 
True    False  
7. The process cost system is appropriate where few products are manufactured and each product is made to customers' specifications. 
True    False  
8. A job order cost system would be appropriate for a crude oil refining business. 
True    False  
9. A law firm would use a job order cost system to accumulate all of the costs associated with a particular client engagement, such as lawyer time, copying charges, filing fees, and overhead. 
True    False  

10. The job order costing system is not used by service organizations. 
True    False  
11. The job order costing system is used by service firms to determine revenues, expenses, and ultimately profit. 
True    False  
12. Perpetual inventory controlling accounts and subsidiary ledgers are maintained for materials, work in process, and finished goods in cost accounting systems. 
True    False  
13. When the goods are sold, their costs are transferred from Work in Process to Finished Goods. 
True    False  
14. The materials requisition serves as the source document for debiting the accounts in the materials ledger. 
True    False  
15. Materials are transferred from the storeroom to the factory in response to materials requisitions. 
True    False  
16. The document that serves as the basis for recording direct labor on a job cost sheet is the time card. 
True    False  
17. The document that serves as the basis for recording direct labor on a job cost sheet is the time ticket. 
True    False  
18. Depreciation expense on factory equipment is part of factory overhead cost. 
True    False  
19. Factory overhead is applied to production using a predetermined overhead rate. 
True    False  
20. If factory overhead applied exceeds the actual costs, the factory overhead account will have a credit balance. 
True    False  
21. If factory overhead applied exceeds the actual costs, overhead is said to be underapplied. 
True    False  
22. If the underapplied factory overhead amount is material, it is transferred to Cost of Goods Sold at the end of the fiscal year. 
True    False  
23. If the underapplied factory overhead amount is immaterial, it is transferred to Cost of Goods Sold at the end of the fiscal year. 
True    False  
24. Each account in the cost ledger in a job order system is called a job cost sheet. 
True    False  
25. In the job order system, the finished goods account is the controlling account for the factory overhead ledger. 
True    False  
26. The inventory accounts generally maintained by a manufacturing firm are only finished goods and materials. 
True    False  
27. Generally accepted accounting principles require companies to use only one factory overhead rate for product costing. 
True    False  
28. Interim financial statements for a manufacturing business would report overapplied factory overhead as a deferred item on the balance sheet. 
True    False  
29. The debit to factory overhead for...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay about Accounting: Inventory and Direct Labor
  • Manufacturing and Direct Labor Essay
  • Essay about Costs and Direct Labor Cost
  • Costs and Direct Labor Essay
  • Balance Sheet and Direct Labor Essay
  • Inventory Essay
  • Inventory Essay
  • Inventories Essay

Become a StudyMode Member

Sign Up - It's Free