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Exam 10: Accounting Systems for Manufacturing Businesses

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Question 1

True/False

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Period costs are costs that are incurred for the production requirements of a certain period.

A) True
B) False

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Question 2

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Factory overhead is applied to production using a predetermined overhead rate.

A) True
B) False

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Question 3

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Which of the following items would not be classified as a part of factory overhead?

Heedy Winery accumulates the costs incurred in the labeling process in an activity cost pool. Costs for the labeling process are estimated to be $320,000, and the winery expects to generate 640,000 labels for the coming year. Production for its top-selling wine is estimated at 160,000 bottles. How much overhead from the labeling process will be allocated to this particular variety of wine?

Which of the following businesses is most likely to use a job order costing system?

Which of the following statements is true of financial accounting?

The amount of time spent by each employee and the labor costs incurred for each individual job or for factory overhead are recorded on the:

Manufacturers implement the philosophy of just-in-time processing to produce products with high quality, low cost, and instant availability.

Each account in the subsidiary ledger for work in process is called a:

The cost of materials entering directly into the manufacturing process is classified as factory overhead cost.

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

For a manufacturing business, inventory that is still in the process of being manufactured is referred to as:

The sale of a finished good on account would:

In job order cost accounting system, perpetual inventory records are maintained in controlling accounts and subsidiary ledgers for materials, work in process, and finished goods.

Matt, Inc., a toy manufacturing company uses job order cost system. The time tickets from September jobs are summarized below. $\begin{array}{ll}\$ 3,500 & \text { Job } 100 \\1,800 & \text { Job } 101 \\1,200 & \text { Job } 102 \\2,800 & \text { Job } 103 \\1,700 & \text { Factory supervision }\end{array}$ Factory overhead is applied to jobs on the basis of a predetermined overhead rate of $25 per direct labor hour. The direct labor rate is $30 per hour. a. Determine the total factory labor costs transferred to Work in Process and Factory Overhead for September. b. Determine the amount of factory overhead applied to production for September.

Managerial accounting reports information primarily for stakeholders that are external to the company.

After the goods are completed, their costs are transferred from Work in Process to Finished Goods.

Which of the following is not true about why a service firm will use the job order costing system?

The following information is available for the first month of operations for Crawford, Inc.: $\begin{array}{|l|l|}\hline \$ 570,000 & \text { Sales } \\\hline 210,000 & \text { Gross profit } \\\hline 20,000 & \text { Indirect labor } \\\hline 9,000 & \text { Indirect materials } \\\hline 7,500 & \text { Other factory overhead } \\\hline 250,000 & \text { Materials purchased } \\\hline 420,000 & \text { Total manufacturing costs } \\\hline 10,000 & \text { Materials irventory, end of period } \\\hline\end{array}$ Refer to the information provided for Crawford Inc. What is the cost of goods sold?

The cost of materials entering directly into the manufacturing process is classified as: