ACCCOB3 Module 3 - Quiz 2 Theory Review

True or False: A company using job order costing will always produce the same output for each customer.

False - a company using job order costing will produce a DIFFERENT/UNIQUE output for each customer.

True or False: Total Manufacturing Cost during the period include the Work in Process at the beginning of the year.

False - Total Manufacturing Cost during the period DOES NOT INCLUDE the Work in Process at the beginning of the year.

True or False: A process costing system is most appropriate when a large volume of homogenous products are produced.

True

True or False: Actual cost of electricity consumed during in the factory is recorded in book as outright debit to Work in Process.

False - actual cost of electricity consumed during in the factory is recorded in book as DEBIT TO MOH.

True or False: Construction company would likely use process costing.

False - construction company would likely use JOB ORDER costing.

True or False: In a job order costing system, maintaining job cost sheet for each of the job is not necessary.

False - in a job order costing system, maintaining job cost sheet for each of the job IS NECESSARY.

True or False: Job Cost Sheet for each Job shows actual cost of Manufacturing Overheard actually incurred in the production of the product.

False - Job Cost Sheet for each Job shows the APPLIED cost of Manufacturing Overheard incurred in the production of the product.

True or False: Direct Labor cost of a job may be determined by multiplying the number of hours spent by the skilled worker in the job  with their pay rate per hour.

True

True or False: Manufacturing overhead are easy to trace to a particular job.

False - MOH is not easily traced to a particular job.

True or False: Overapplied overhead occurs when the total debits of manufacturing overhead exceeds its total credits.

False - overapplied overhead occurs when the total CREDITS of manufacturing overhead EXCEEDS its total DEBITS.

*Overapplied OH = CR > DR

The entry to record issuance of raw materials to production.

A. Debit Raw Materials; Credit Accounts Payable

B. Debit Raw Materials Expense; Credit Raw Materials

C. Debit Finished Goods; Credit Raw Materials

D. Debit Work In Process; Credit Raw Materials

D. Debit Work In Process; Credit Raw Materials

*Work In Process xxx

Raw Materials xxx

The entry to record indirect labor incurred in production is:

A. Debit Manufacturing Overhead; Credit Salaries Payable

B. Debit Raw Materials; Credit Salaries Expense

C. Debit Finished Goods; Credit Salaries Expense

D. Debit Work In Process; Credit Salaries Payable

A. Debit Manufacturing Overhead; Credit Salaries Payable

*Manufacturing Overhead xxx

Salaries Payable xxx

_____ is to job order costing as _____ is to process costing.

A. Construction, shampoo

B. Bread, soft drinks

C. Jollibee, Robinson Land

D. Dunkin Donuts, J-Co

A. Construction, shampoo

*Construction - job order; shampoo - process

Labor Time Ticket may show the following details EXCEPT:

A. Name of the worker

B. Supervisory hours of plant supervisor

C. Number of skilled workers

D. Direct labor rates

B. Supervisory hours of plant supervisor

Cost of Goods Manufactured are computed using the following information EXCEPT:

A. Total manufacturing costs

B. Work in process, ending

C. Work in process, beginning

D. Raw materials purchased

D. Raw materials purchased

To compute the Predetermined Overhead Manufacturing Overhead Rate, we use the formulas, ___________ manufacturing overhead divided by _______ direct labor hours.

A. Actual, previous

B. Estimated, estimated

C. Estimated, previous

D. Actual, current

B. Estimated, estimated

Cost of Goods Sold is computed using the following details except:

A. Finished goods, beginning

B. Selling expenses

C. Cost of goods manufactured

D. Finished goods, ending

B. Selling expenses

Manufacturing costs flow starts with Work in Process up to its completion to:

A. Finished goods

B. Cost of goods sold

C. Gross profit

D. Net operating income

B. Cost of goods sold

Not a product cost:

A. Direct materials

B. Direct labor

C. Administrative expense

D. Indirect labor

C. Administrative expense

Manufacturing Overhead applied to a job is recorded as:

A. Debit Manufacturing Overhead

B. Debit Work In Process

C. Debit Finished Goods

D. Not recorded

A. Debit Manufacturing Overhead