Instruction: Write "T" if the statement is TRUE. If FALSE, write "F" and underlinethe word that makes the statement incorrect.1. A knowledge of the costs of doing business is needed to estimate a job or tobid for jobs or contracts. The order generally goes to the highest bidder.2. Cost accounting is also used in preparing a company's budget which is theoverall financial plan for present activities.3. Raw material to one manufacturer is not considered finished goods by thesupplier of those materials.4. In the manufacturing of clothing, the earnings of cutters are indirect laborcosts.5. All costs incurred in the factory that cannot be considered direct materials ordirect labor are classified as factory burden._6. Oil used for lubricating the factory machinery is an operating supply._7. Manufacturing expenses includes costs that can be charged directly tospecific products.8. Wages and salaries of factory workers as supervisor is a direct labor cost._9. Service firms have only supplies in inventories, merchandising firms buy andsell products and hold merchandise inventories while manufacturing firms buy materialsand converts these inputs into saleable products_10. Work in Process Inventory are partially completed products._11. A particular product not completed at the end of the accounting periodbecomes part of work in process inventory.12. The depreciation of automobiles used by sales personnel is considered afactory overhead._13. Prime costs plus conversion costs equals total manufacturing costs.14. Finished goods inventory is an asset, but inventories of materials and workin process are not considered assets until production is completed.15. Marketing, selling, and administrative costs are broad classification of costsincurred by a manufacturing company.

Cost Accounting Cost Accounting which another branch of Accounting which is mainly concerned about…

Instruction: Write "T" if the statement is TRUE. If FALSE, write "F" and underline the word that makes the statement incorrect. i 1. A knowledge of the costs of doing business is needed to estimate a job or to bid for jobs or contracts. The order generally goes to the highest bidder. 2. Cost accounting is also used in preparing a company's budget which is the overall financial plan for present activities. 3. Raw material to one manufacturer is not considered finished goods by the supplier of those materials. 4. In the manufacturing of clothing, the earnings of cutters are indirect labor costs. _5. All costs incurred in the factory that cannot be considered direct materials or direct laber are classified as factory burdon

Instruction: Write "T" if the statement is TRUE. If FALSE, write "F" and underline the word that makes the statement incorrect. i 1. A knowledge of the costs of doing business is needed to estimate a job or to bid for jobs or contracts. The order generally goes to the highest bidder. 2. Cost accounting is also used in preparing a company's budget which is the overall financial plan for present activities. 3. Raw material to one manufacturer is not considered finished goods by the supplier of those materials. 4. In the manufacturing of clothing, the earnings of cutters are indirect labor costs. _5. All costs incurred in the factory that cannot be considered direct materials or direct laber are classified as factory burdon

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Number the following in the order of the flow of manufacturing costs for a company: a. Closing under/overapplied factory overhead to cost of goods sold b. Materials purchased c. Factory labor used and factory overhead incurred in production d. Completed jobs moved to finished goods e. Factory overhead applied to jobs according to the predetermined overhead rate f. Materials requisitioned to jobs g. Selling of finished product h. Preparation of financial statements to determine gross profit
INFO FOR QUESTIONS IN IMAGE 1. Compute the underapplied or overapplied overhead. [Underapplied OR Overapplied] [$ ] 2. Assume that the company closes any underapplied or overapplied overhead to Cost of Goods Sold. Prepare the appropriate journal entry. Record the entry to close the balance in the manufacturing overhead account to the cost of goods sold account. (Note: Enter debits before credits.) Event General Journal Debit Credit 1 3. Assume that the company allocates any underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold. Prepare the appropriate journal entry. Record the allocation of the underapplied/overapplied overhead to various accounts. (Note: Enter debits before credits.) Event General Journal Debit Credit 1 4. How much higher or lower will net operating income be if the underapplied or overapplied overhead is allocated to…
The basis used for allocating manufacturing overhead (such as machine hours or direct labor hours) should closely align with O a. estimation techniques used in other areas of financial reporting. O b. the GAAP rules for allocating overhead. O C. the incurrence of overhead costs. d. the way that competitors allocate overhead.
Standard costs are used in companies for a variety of reasons. Which of the following is a benefit of using standard costs? a. They are used to estimate the cost of inventory. b. They are used to control costs. c. They are used to plan direct materials, direct labor, and variable factory overhead. d. all of these choices
Q4. Referring to the concept of job costing in the manufacturing sector, identify how you will record the following journal entries: a)When raw materials are received. b)When raw materials are sent to the factory floor. c)When labor costs are incurred. d)When a job is completed. e)When a job is shipped to a customer. Note: You must assume significant values for each transaction of your own and prepare the journal entries for each case.
Bastille Company employ new employee and are assigned to make Statement of Cost of Manufactured, Statement of Cost of Goods Sold, and Income Statement. The results attached on picture below Questions : a. Identify the factory overhead item and the total in USD b. Identify the period cost and the total in USD c. If there is something wrong with the income statement above, correct the income statement above so all the item cost is where it should be.
In the Excel, or spreadsheet, approach to recording financial transactions, the Manufacturing Overhead account is used to record two things-all actual overhead expenses and the amount of manufacturing overhead applied to production using the predetermined overhead rate. True or False True False
Match each definition with its related term by selecting the appropriate term in the dropdown provided. Dropdown options: An accounting system that records all actual amounts after the expense has occurred. An accounting system that records all costs based on estimated amounts. An accounting system that records all direct materials and direct labor at actual amounts, while assigning manufacturing overhead costs using predetermined overhead rates. Difference between actual and planned results. Standards that are tight but are used to motivate individuals to work hard and achieve results. Standards that can be achieved only under perfect conditions. The difference between actual cost and the flexible budget for materials. The difference between actual labor hours and standard labor hours multiplied by the actual labor rate. The difference between actual labor hours and standard labor hours multiplied by the standard labor rate. The difference between actual price and standard price…
Determining the basis for applying manufacturing overhead costs involves OA. primarily the accumulation of direct labor hours since virtually all overhead costs are driven by direct labor hours. B. primarily the maintaining of accurate records of production volume since virtually all overhead costs are driven by the number of units proc OC. the determination of a measure of activity that is a causal factor in the incurrence of overhead cost. OD. actual rather than budgeted levels of activity. Reset Selection
2. Answer the Bot Please. Using a predetermined overhead rate, an appropriate amount of factory overhead should be added to a job cost sheet. Select one: True False Operating expenses that are incurred for the benefit of the business as a whole and that cannot be traced directly to any specific department are known as nonallocated expenses. Select one: True False The difference between a department's gross profit and its operating expenses is known as the departmental direct operating profit. Select one: True False
For each of the following statements, circle (T) or (F) to indicate whether the statement is true or false. No Statements True False 1. Managerial accounting focuses on external reporting (T) (F) A job order cost system is most appropriate when a large volume of uniform products are produced. 2. (T) (F) Job-order costing is used in manufacturing companies and process costing is used in service companies 3. (T) (F) 4. There should be a separate job cost sheet for each job. (T) (F) A major purpose of cost accounting is to measure, record, and report product costs. 5. (T) (F) An important feature of a job order cost system is that each job has its own unique characteristics. (T) (F)
1. Cost of completed jobs are debited to what account in managerial accounting? 2. Cost of jobs sold are debited to what account in managerial accounting? 3. Given that labor and materials are charged directly why is overhead applied to jobs?