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What is a cost accounting system?
What is a cost accounting system?
It helps managers determine selling prices and is used to control costs of manufacturing activities.
Producing products that are individually designed to meet the needs of a specific customer where each customized product is manufactured separately is referred to as:
Producing products that are individually designed to meet the needs of a specific customer where each customized product is manufactured separately is referred to as:
- Process operations
- Mass production
- Batch production
- Job order production (correct)
What are custom orders?
What are custom orders?
Job order production.
What is mass production?
What is mass production?
Which of the following are manufacturing costs?
Which of the following are manufacturing costs?
What is the correct order of cost flows in a job order costing system?
What is the correct order of cost flows in a job order costing system?
What does a cost accounting system accumulate?
What does a cost accounting system accumulate?
What do job cost sheets track?
What do job cost sheets track?
Job order production is most likely used by companies that produce:
Job order production is most likely used by companies that produce:
List the documents in the order used when recording direct materials costs in job order cost accounting.
List the documents in the order used when recording direct materials costs in job order cost accounting.
Manufacturing of products in a repetitive manner is referred to as:
Manufacturing of products in a repetitive manner is referred to as:
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?
Manufacturing costs include direct materials, direct labor, and:
Manufacturing costs include direct materials, direct labor, and:
All of the following are inventory accounts for a manufacturer except:
All of the following are inventory accounts for a manufacturer except:
When is the predetermined overhead rate calculated?
When is the predetermined overhead rate calculated?
Job cost sheets can be used to: (Check all that apply)
Job cost sheets can be used to: (Check all that apply)
List the documents in order used when recording indirect materials costs in job order costing.
List the documents in order used when recording indirect materials costs in job order costing.
List the documents in order used when recording indirect labor costs in job order costing.
List the documents in order used when recording indirect labor costs in job order costing.
What is the predetermined overhead rate if a company estimates 10,000 direct labor hours and $120,000 total overhead costs?
What is the predetermined overhead rate if a company estimates 10,000 direct labor hours and $120,000 total overhead costs?
What is the journal entry to record the allocation of factory overhead?
What is the journal entry to record the allocation of factory overhead?
What is the journal entry to record indirect materials in production?
What is the journal entry to record indirect materials in production?
List the documents in order used when recording direct labor costs in job order costing.
List the documents in order used when recording direct labor costs in job order costing.
What is the journal entry to record the allocation of factory overhead to work in process?
What is the journal entry to record the allocation of factory overhead to work in process?
What does the journal entry to allocate overhead costs to jobs entail?
What does the journal entry to allocate overhead costs to jobs entail?
What does the journal entry for purchasing indirect utilities involve?
What does the journal entry for purchasing indirect utilities involve?
What is the journal entry to record purchasing indirect materials?
What is the journal entry to record purchasing indirect materials?
What does the entry for the use of indirect materials involve?
What does the entry for the use of indirect materials involve?
What is the journal entry for direct labor used?
What is the journal entry for direct labor used?
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:
List the documents in order used when recording indirect labor costs in job order costing.
List the documents in order used when recording indirect labor costs in job order costing.
Managers use a predetermined overhead rate for which of the following reasons?
Managers use a predetermined overhead rate for which of the following reasons?
When is the predetermined overhead rate calculated?
When is the predetermined overhead rate calculated?
When is overhead allocated to jobs?
When is overhead allocated to jobs?
When is the overhead account adjusted for over- or underapplied overhead?
When is the overhead account adjusted for over- or underapplied overhead?
If the factory overhead is underapplied, then the adjusting journal entry to close the factory overhead account includes a:
If the factory overhead is underapplied, then the adjusting journal entry to close the factory overhead account includes a:
A Schedule of Cost of Goods Manufactured includes which costs?
A Schedule of Cost of Goods Manufactured includes which costs?
What effect does an adjustment for overapplied overhead have on net income?
What effect does an adjustment for overapplied overhead have on net income?
What happens to the Factory Overhead account for applied overhead costs?
What happens to the Factory Overhead account for applied overhead costs?
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:
One important difference between service companies and manufacturing companies is that:
One important difference between service companies and manufacturing companies is that:
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 ______.
If a company's overhead is underapplied by $150, how does this affect net income?
If a company's overhead is underapplied by $150, how does this affect net income?
What does the Factory Overhead account reflect for actual overhead costs?
What does the Factory Overhead account reflect for actual overhead costs?
A company incurs factory overhead costs of $1,200 and applied $1,500. If considered immaterial, the adjusting entry will require:
A company incurs factory overhead costs of $1,200 and applied $1,500. If considered immaterial, the adjusting entry will require:
Both service companies and manufacturing companies have:
Both service companies and manufacturing companies have:
Study Notes
Cost Accounting System
- A cost accounting system assists managers in setting selling prices and controlling manufacturing costs.
- It accumulates production costs and assigns them to specific products and services.
Job Order Production
- Customized products are manufactured separately to meet individual customer needs, known as job order production.
- Job order production is exemplified by companies making tailored items, such as wedding cakes.
Production Types
- Mass production refers to the manufacturing of products using process operations in a repetitive manner.
- Job order production contrasts with mass production, focusing on unique custom orders.
Manufacturing Costs
- Types of manufacturing costs include direct materials, direct labor, and applied overhead.
- Office salaries are not classified as manufacturing costs.
- A Schedule of Cost of Goods Manufactured encapsulates direct materials used, direct labor, and factory overhead applied.
Cost Flows
- The proper sequence of cost flows in a job order costing system is from work in process to finished goods, then to cost of goods sold.
Job Cost Sheets
- Companies utilize job cost sheets to monitor materials, labor, and overhead costs related to a specific job.
Overhead Rates
- The predetermined overhead rate is calculated at the start of the accounting period and is based on direct labor hours.
- During the accounting period, overhead costs are allocated to jobs, with adjustments made at the period's end for over- or underapplied overhead.
Journal Entries
- To record factory overhead allocation, debit Work in Process Inventory and credit Factory Overhead.
- Indirect materials are recorded by debiting Factory Overhead and crediting Raw Materials Inventory.
- Indirect labor costs employ a sequence of time tickets and factory overhead before allocating to specific jobs.
Inventory Accounts
- Common inventory accounts for manufacturers include raw materials inventory, work in process inventory, and finished goods inventory.
- Indirect materials inventory is not typically recognized as a separate inventory account.
Net Income Impact
- Adjustments for overapplied or underapplied overhead affect net income, positively impacting it when overhead is overapplied, and negatively when underapplied.
Differences Between Companies
- Service companies differ from manufacturing companies as they do not hold raw materials inventory.
- Both service and manufacturing companies incur overhead and direct labor costs.
Miscellaneous
- The process for recording costs involves various documents, including receiving reports, materials ledger cards, and job cost sheets, arranged in a specific order based on the type of costs being recorded.
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Description
Test your knowledge on cost accounting concepts with these flashcards from Chapter 15. Learn about cost accounting systems, job order production, and customized product orders to enhance your understanding of manufacturing costs.
