Podcast
Questions and Answers
What does a cost accounting system include?
What does a cost accounting system include?
It accumulates production costs and assigns them to products and services.
Job order production is most likely used by companies that produce what?
Job order production is most likely used by companies that produce what?
Customized wedding cakes
To determine the cost of producing each job or job lot, companies use what system?
To determine the cost of producing each job or job lot, companies use what system?
Job order costing system
Choose the product(s) that are most likely to be manufactured as a job, rather than as a job lot.
Choose the product(s) that are most likely to be manufactured as a job, rather than as a job lot.
Designate the following as either from job order or process operations.
Designate the following as either from job order or process operations.
What does a cost accounting system help managers to do?
What does a cost accounting system help managers to do?
What are the three types of manufacturing costs in a job order costing system?
What are the three types of manufacturing costs in a job order costing system?
The principle of customization is applicable to both service and manufacturing companies.
The principle of customization is applicable to both service and manufacturing companies.
Which inventory account does not belong to a manufacturer?
Which inventory account does not belong to a manufacturer?
A job order costing system requires the company to keep separate records for each job.
A job order costing system requires the company to keep separate records for each job.
Companies use job cost sheets to track the costs of what?
Companies use job cost sheets to track the costs of what?
What is a job that involves producing more than one unit of a custom product called?
What is a job that involves producing more than one unit of a custom product called?
After jobs are complete, what is the job cost sheet used to provide a subsidiary ledger for?
After jobs are complete, what is the job cost sheet used to provide a subsidiary ledger for?
Manufacturing of products in a repetitive manner is referred to as (process/job order) __________________ operations while manufacturing custom products is referred to as (process/job order) _________________ operations.
Manufacturing of products in a repetitive manner is referred to as (process/job order) __________________ operations while manufacturing custom products is referred to as (process/job order) _________________ operations.
List the documents in the order they are used when recording direct materials costs in job order cost accounting.
List the documents in the order they are used when recording direct materials costs in job order cost accounting.
Which of the following are manufacturing costs?
Which of the following are manufacturing costs?
The correct order of cost flows in a job order costing system is?
The correct order of cost flows in a job order costing system is?
What is the journal entry to record the purchase of materials on account?
What is the journal entry to record the purchase of materials on account?
Job cost sheets can be used to?
Job cost sheets can be used to?
After jobs are completed and delivered to customers, where is the job cost sheet used?
After jobs are completed and delivered to customers, where is the job cost sheet used?
Journal entries are not required when direct materials are requisitioned.
Journal entries are not required when direct materials are requisitioned.
List the documents in the order they are used when recording indirect materials costs in job order cost accounting.
List the documents in the order they are used when recording indirect materials costs in job order cost accounting.
Time tickets are used in job order costing to report what?
Time tickets are used in job order costing to report what?
What are characteristics of materials ledger cards?
What are characteristics of materials ledger cards?
What is the journal entry to record the purchase of materials on account?
What is the journal entry to record the purchase of materials on account?
List the documents in the order they are used when recording indirect labor costs in job order costing.
List the documents in the order they are used when recording indirect labor costs in job order costing.
Companies use job cost sheets to track the costs of what?
Companies use job cost sheets to track the costs of what?
What is the journal entry to record direct labor in production?
What is the journal entry to record direct labor in production?
Materials requisitioned for use on a specific job are always considered to be direct materials.
Materials requisitioned for use on a specific job are always considered to be direct materials.
Time tickets are used in job order costing to record the time and cost of what?
Time tickets are used in job order costing to record the time and cost of what?
Manufacturing costs include direct materials, direct labor, and what?
Manufacturing costs include direct materials, direct labor, and what?
Requisitions are used in job order costing to record the cost and quantity of what?
Requisitions are used in job order costing to record the cost and quantity of what?
A company uses direct labor hours as its allocation base. Management estimates the company will have 10,000 hours of direct labor during the year and total overhead costs of $120,000.The predetermined overhead rate will be $______ per hour.
A company uses direct labor hours as its allocation base. Management estimates the company will have 10,000 hours of direct labor during the year and total overhead costs of $120,000.The predetermined overhead rate will be $______ per hour.
List the documents in the order they are used when recording direct labor costs in job order costing.
List the documents in the order they are used when recording direct labor costs in job order costing.
The base to which overhead costs are linked, such as direct labor or machine hours, is known as the overhead _______________ base.
The base to which overhead costs are linked, such as direct labor or machine hours, is known as the overhead _______________ base.
The journal entry to record direct labor will result in a(n):
The journal entry to record direct labor will result in a(n):
A company has a predetermined overhead rate of 50% of direct labor costs. Job 62 incurs $560 in labor costs. Overhead allocated to Job 62 will be $____________.
A company has a predetermined overhead rate of 50% of direct labor costs. Job 62 incurs $560 in labor costs. Overhead allocated to Job 62 will be $____________.
The journal entry to record the use of direct materials in production is a(n):
The journal entry to record the use of direct materials in production is a(n):
The journal entry to record the allocation of factory overhead to work in process is:
The journal entry to record the allocation of factory overhead to work in process is:
Managers use a predetermined overhead rate for which of the following reasons?
Managers use a predetermined overhead rate for which of the following reasons?
A company uses direct labor costs as its allocation base. Management estimates the company will incur $150,000 of direct labor cost during the year and total overhead costs of $200,000. What is their predetermined overhead rate?
A company uses direct labor costs as its allocation base. Management estimates the company will incur $150,000 of direct labor cost during the year and total overhead costs of $200,000. What is their predetermined overhead rate?
Overhead may be applied based on?
Overhead may be applied based on?
Match the following overhead costs with their source documents.
Match the following overhead costs with their source documents.
A company works on three jobs and incurs the following: Direct materials - $50,000 and Direct labor - $100,000. The company uses a predetermined overhead rate of 60% of direct labor costs. How much overhead will be allocated to the three jobs?
A company works on three jobs and incurs the following: Direct materials - $50,000 and Direct labor - $100,000. The company uses a predetermined overhead rate of 60% of direct labor costs. How much overhead will be allocated to the three jobs?
The journal entry to record the allocation of factory overhead is:
The journal entry to record the allocation of factory overhead is:
The journal entry to record indirect materials costs used in production includes a debit to factory?
The journal entry to record indirect materials costs used in production includes a debit to factory?
The journal entry to record indirect labor used in production is to:
The journal entry to record indirect labor used in production is to:
The journal entry to record the accrual of factory utilities is to:
The journal entry to record the accrual of factory utilities is to:
Factory overhead includes direct materials and direct labor.
Factory overhead includes direct materials and direct labor.
Match the following activities to their effect on the general ledger accounts.
Match the following activities to their effect on the general ledger accounts.
A Schedule of Cost of Goods Manufactured includes all of the following costs:
A Schedule of Cost of Goods Manufactured includes all of the following costs:
The journal entry to record indirect materials in production is to:
The journal entry to record indirect materials in production is to:
If the factory overhead is overapplied, then the adjusting journal entry to close the factory overhead account includes a:
If the factory overhead is overapplied, then the adjusting journal entry to close the factory overhead account includes a:
The journal entry to record indirect labor costs used in production includes a debit to Factory ___________.
The journal entry to record indirect labor costs used in production includes a debit to Factory ___________.
A company incurs factory overhead costs of $1,200 and applied $1,500. If the difference is considered immaterial, then the:
A company incurs factory overhead costs of $1,200 and applied $1,500. If the difference is considered immaterial, then the:
The journal entry to record depreciation on factory equipment is to:
The journal entry to record depreciation on factory equipment is to:
At the end of the accounting period, a company's overhead was under applied by $150. If not adjusted, how does this affect net income?
At the end of the accounting period, a company's overhead was under applied by $150. If not adjusted, how does this affect net income?
Match the following activities to their effect on the general ledger accounts.
Match the following activities to their effect on the general ledger accounts.
One important difference between service companies and manufacturing companies is that:
One important difference between service companies and manufacturing companies is that:
A Schedule of Cost of Goods Manufactured includes all of the following costs except:
A Schedule of Cost of Goods Manufactured includes all of the following costs except:
A consulting firm has a predetermined overhead rate of $120 per labor hour. The Smith job required 5 hours to complete. The overhead cost applied to this job is $___________.
A consulting firm has a predetermined overhead rate of $120 per labor hour. The Smith job required 5 hours to complete. The overhead cost applied to this job is $___________.
The Factory Overhead account is (debited/credited) __________________ for applied overhead costs.
The Factory Overhead account is (debited/credited) __________________ for applied overhead costs.
After adjusting for over - or under applied overhead, the balance in the Factory Overhead account will be $_______________.
After adjusting for over - or under applied overhead, the balance in the Factory Overhead account will be $_______________.
At the end of the accounting period, a company's overhead was over applied by $400. The Factory Overhead account was properly adjusted. What effect did the adjustment have on net income?
At the end of the accounting period, a company's overhead was over applied by $400. The Factory Overhead account was properly adjusted. What effect did the adjustment have on net income?
Both service companies and manufacturing companies have?
Both service companies and manufacturing companies have?
A tax accounting firm pays tax preparers $44 per hour. The firm has a predetermined overhead rate of $24 per labor hour. The Jones tax return required 2.5 hours to complete. The total cost of this job is $_____________.
A tax accounting firm pays tax preparers $44 per hour. The firm has a predetermined overhead rate of $24 per labor hour. The Jones tax return required 2.5 hours to complete. The total cost of this job is $_____________.
The Factory Overhead account is _____________ (debited/credited) for actual overhead costs.
The Factory Overhead account is _____________ (debited/credited) for actual overhead costs.
If the factory overhead is under applied, then the adjusting journal entry to close the factory overhead account includes a:
If the factory overhead is under applied, then the adjusting journal entry to close the factory overhead account includes a:
Study Notes
Cost Accounting System
- Accumulates production costs for products and services.
- Used to determine selling prices and control manufacturing costs.
Job Order Production
- Suitable for customized products, such as wedding cakes and tailored dresses.
- Job order costing systems are employed to calculate costs for specific jobs or job lots.
Manufacturing Costs
- Three main types in job order costing: direct labor, direct materials, and overhead.
- Overhead includes all production costs excluding direct materials and direct labor.
Inventory Accounts
- Manufacturer inventory includes raw materials, work in process, and finished goods.
- Indirect materials inventory is not a typical inventory account for manufacturers.
Job Cost Sheets
- Track costs related to materials, labor, and overhead for individual jobs.
- Used after job completion to provide a subsidiary ledger for finished goods inventory and cost of goods sold.
Overhead Allocation
- Dependent on activity base, often direct labor or machine hours.
- Predetermined overhead rate is calculated to estimate total job costs before completion.
General Ledger Entries
- Journal entries documented for purchases of materials, labor costs, and allocations of overhead.
- Over- or under-applied overhead adjustments impact net income at the end of the accounting period.
Direct and Indirect Costs
- Direct materials and labor specifically linked to a job; indirect encompasses all other costs.
- Time tickets record hours for specific jobs, crucial for tracking labor costs.
Cost of Goods Manufactured
- Schedule includes direct materials used, direct labor, and applied factory overhead.
- Does not include cost of goods sold.
Differences Between Companies
- Service companies do not maintain raw materials inventories, unlike manufacturing firms.
- Both company types incur overhead and direct labor costs.
Adjustments for Over/Under Applied Overhead
- Overapplied overhead increases net income; underapplied decreases it.
- Adjusting entries are imperative to accurately reflect overhead balances, often requiring a debit or credit to cost of goods sold.
Documents Used in Job Order Costing
- Various documents such as receiving reports, materials requisitions, and time tickets are crucial for tracking costs and managing records efficiently.
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Description
Test your knowledge of cost accounting with these flashcards from ACCT 202 Chapter 15. This chapter covers essential concepts such as cost accumulation, job order production, and costing systems. Enhance your understanding and retention of critical accounting terms and principles.
