1. Which of the following statements is true of the accounting for finished good
ID: 2339935 • Letter: 1
Question
1. Which of the following statements is true of the accounting for finished goods when a job is completed?
Overhead costs are assigned to Finished Goods using a predetermined rate.
Finished Goods is debited when goods are sold.
The cost of completed units is credited to Work-in-Process and debited to Finished Goods.
The costs of the completed job are retained in Work-in-Process until the proceeds are collectible for the job.
2. Slim Technology Inc. records the following amounts before reconciling the overhead variance.
Calculate the cost of goods sold for Slim Technology Inc. after adjusting for any overhead variance.
$677,250
$12,000
$701,250
$689,250
3. Lithium Metals Inc. recorded sales of $200,000 and cost of goods sold of $160,000 in June 20X1. Its selling and administrative expenses totaled $12,000. Calculate the net operating income.
$28,000
$40,000
$52,000
$12,000
1. A company completed a job on March 31, 20X1. Its cost of goods sold was $1,500. It sold the job on account to a customer at cost plus 20%. Which of the following is the journal entry to recognize the cost of the job?
Debit Overhead Control by $1,500 and Credit Cost of Goods Sold by $1,500
Debit Cost of Goods Sold by $1,500 and Credit Finished Goods by $1,500
Debit Cost of Goods Sold by $1,800 and Credit Sales Revenue by $1,800
Debit Accounts Receivable by $1,800 and Credit Cost of Goods Sold by $1,800
2. The Overhead Control of a company has an underapplied variance of $200. Which of the following is the journal entry to record the closing of the underapplied overhead?
Debit Overhead Control by $200 and Credit Cost of Goods Sold by $200
Debit Cost of Goods Sold by $200 and Credit Overhead Control by $200
Debit Budget Control by $200 and Credit Overhead Control by $200
Debit Overhead Control by $200 and Credit Budget Control by $200
Applied overhead $567,000 Actual overhead 555,000 Normal cost of goods sold 701,250Explanation / Answer
Dear student, only one question is allowed at a time. I am answering the first question
1)
1)
Overhead costs are assigned to work in progress at the time of production and not to finished goods. So, the first statement is False
2)
When goods are sold, cost of goods sold is debited and finished goods inventory is credited. So, the second statement is also False
3)
When goods are completed, cost of goods completed is transferred from Work in progress account to Finished goods inventory account. So, the third statement is True
4)
When goods are completed, cost of goods completed is transferred from Work in progress account to Finished goods inventory account. So, the fourth statement is False
So, as per above discussion, option 3 is the correct option
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