Problem 11 Listed below are 8 transaction effects under the actual and normal co
ID: 2444423 • Letter: P
Question
Problem 11 Listed below are 8 transaction effects under the actual and normal costing methods. Identify which account listed as A through G is affected by PRINTING the letter of the correct answer in the answer space.
Accounts
Normal Costing
Answer
A - Raw Materials Inventory
1. Increases when indirect labor costs are incurred
B - Finished Goods Inventory
2. Increases when goods are completed
C - Work in Process Inventory
3. Increases when direct labor costs are incurred
D - Manufacturing Overhead
4. Decreases when manufacturing overhead is applied
E - Cost of Goods Sold
Actual Costing
F - Some other account
5. Increases when manufacturing overhead is applied
G - Does not exist under this method
6. Decreases when goods are sold
7. Decreases when goods are completed
8. Increases when indirect materials are transferred to production
Accounts
Normal Costing
Answer
A - Raw Materials Inventory
1. Increases when indirect labor costs are incurred
B - Finished Goods Inventory
2. Increases when goods are completed
C - Work in Process Inventory
3. Increases when direct labor costs are incurred
D - Manufacturing Overhead
4. Decreases when manufacturing overhead is applied
E - Cost of Goods Sold
Actual Costing
F - Some other account
5. Increases when manufacturing overhead is applied
G - Does not exist under this method
6. Decreases when goods are sold
7. Decreases when goods are completed
8. Increases when indirect materials are transferred to production
Explanation / Answer
1. D
2. B
3. F
4. D
5. F
6. B
7. C
8. D
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