1. When Dimock Construction's Designer House #10 is completed, Dimock's
A) work in process is increased.
B) total assets are increased.
C) work in process is decreased.
D) total assets are decreased.
2. The total of the dollar amounts on the job order cost cards that have not been completed would be equal to the
A) cost of goods completed.
B) balance in the Finished Goods Inventory account.
C) Cost of Goods Sold account.
D) balance in the Work in Process Inventory account.
3. Costs assigned to the building of a house should appear on the income statement when
A) the house is completed.
B) the house is sold.
C) the purchase order to manufacture the house is received.
D) cash is collected for the sale of the house.
4. The basic document for keeping track of costs in a job order costing system is a
A) job order cost card.
B) labor time card.
C) process cost report.
D) materials requisition form.
5. Under a job order costing system, the dollar amount of the entry involved in the transfer of goods from work in process to finished goods is the total of the costs charged to all jobs
A) started during the period.
B) completed and sold during the period.
C) completed during the period.
D) started and completed during the period.
6. The balance in the Work in Process Inventory account on April 1 was $27,600, and the balance on April 30 was $22,600. Costs incurred during the month were as follows: direct materials, $41,250; direct labor, $21,300; and overhead, $32,600. What amount was transferred to the Finished Goods Inventory account for April?
7. Actual overhead during the year was more than applied overhead. If the amount is immaterial, what is the journal entry to close the Overhead account for the difference?
A) Overhead XX
Cost of Goods Sold XX
B) Cost of Goods Sold XX
C) Overhead XX
Finished Goods Inventory XX
D) Cost of Goods Sold XX
Finished Goods Inventory XX
Use the following to answer questions 8-12:
The following partially completed T accounts summarize the transactions of Carlton Company for last year:
Beg Bal 5,000 20,000 (2)
Work in Process Inventory
Beg Bal 9,000 64,700 (7)
(2) 7,000 29,000 (6)
Cost of Goods Sold
Finished Goods Inventory
Beg Bal 16,000
End Bal 13,000
5,000 Beg Bal
Sales Salaries Expense
Accumulated Depreciation (Factory)
80,000 Beg Bal
At the end of the year, the company closes out the balance in the Overhead account to Cost of Goods Sold.
8. The indirect labor cost is
9. The cost of goods manufactured is
10. The cost of goods sold (after adjusting for under- or overapplied overhead) is
11. The applied overhead is
12. The cost of direct materials used in production is
13. Which of the following activities would be part of the value chain of a manufacturer?
A) Inventory control
B) Product engineering
C) Cost accounting
D) Materials storage
14. According to the just-in-time philosophy,
A) maintaining inventories wastes resources and frequently covers up poor work or other problems.
B) push-through manufacturing flows are the most efficient.
C) inventories of finished goods should always be available to meet customer demand.
D) long production runs and large production lot sizes take advantage of economies of scale.
15. Backflush costing aims at reducing waste in the
A) accounting system.
B) cost of goods sold.
C) storage of raw materials.
D) production process.
16. For work done during August, Printing Press Company incurred direct materials costs of $120,000 and conversion costs of $260,000. The company employs a just-in-time operating philosophy and backflush costing. At the end of August, it was determined that the Work in Process Inventory account had been assigned $1,080 of costs, and the ending balance of the Finished Goods Inventory account was $1,220. There were no beginning inventory balances. What was the ending balance of the Cost of Goods Sold account for August?
17. The typical relationship between variable costs and volume may be described best as follows:
A) Costs increase in an erratic, unpredictable fashion with changes in volume.
B) Costs stay fairly constant with changes in volume.
C) Costs increase with changes in volume up to a certain point and then remain constant.
D) Costs increase in direct proportion to increases in volume.
18. For work done during August, Printing Press Company incurred direct materials costs of $130,000 and conversion costs of $237,000. The company employs a just-in-time operating philosophy and backflush costing. At the end of August, it was determined that the Work in Process Inventory account had been assigned $1,000 of costs, and the ending balance of the Finished Goods Inventory account was $3,000. There were no beginning inventory balances. What is the Cost of Goods Sold account's ending balance for August?
19. Which of the following costs is a variable manufacturing cost?
A) Depreciation costs computed using the straight-line method
B) Factory rent
C) President's salary
D) Direct labor costs
20. Suppose a company rents a building for $250,000 a year for the purpose of manufacturing between 80,000 and 140,000 units (the relevant range of activity). The rental cost per unit of production will __________ as production levels increase.
A) behave in a nonlinear fashion
D) remain fixed