1.) Actual manufacturing overhead costs incurred are as follows: direct and indi
ID: 2541121 • Letter: 1
Question
1.) Actual manufacturing overhead costs incurred are as follows: direct and indirect wages, insurance (prepaid), rent (prepaid), depreciation, and utilities. Which of the following would NOT be a part of the journal entry to record these manufacturing overhead costs?
a. credit prepaid insurance
b. credit prepaid rent
c. credit manufacturing overhead
2.) Which of the following would be used to record indirect labor cost?
a. Work in process would be debited
b. Raw materials would be debited
c. Manufacturing overhead would be debited
3.) Which of the following is NOT a characteristic of process costing?
a. Costs are traced to specific units
b. Products are homogenous.
c. Costs are traced to production processes rather than products.
4.) If a manufacturing company acquires raw materials, to what account is the cost of raw materials purchased debited?
a. Raw Materials Inventory
b. Work in Process
c. Raw Materials Purchases
5.) Which one of the following is a product cost?
a. Office salaries
b. Sales person’s salaries
c. Indirect labor
6.) Manufacturing Overhead costs have been over applied. This means that the Manufacturing Overhead account:
a. Has a credit balance
b. Has a debit balance
c. Has a zero balance
7.) Work in Process 1 has been completed. If this does NOT complete the manufacturing process, what should be done next?
a. None of these
b. Costs should be transferred to Finished Goods
c. Costs should be transferred to WIP – 2
8.) Finished Goods Inventory has and ending balance of $225,000. This indicates
a. Some jobs were completed but not yet sold
b. Some jobs will need to be started next period
c. Some jobs that were completed were sold this period
9.) Which of the following statements is true?
a. A process costing system will have a single work in process account.
b. A job costing system will have a separate work in process account for each of the major processes.
c. A process costing system will have a separate work in process account for each of the major processes.
10.) Manufacturing Overhead costs are applied into process by:
a. crediting Manufacturing Overhead
b. debiting raw materials inventory
c. crediting wages payable
11.) A limitation of using Activity Based Costing is that it:
a. Is expensive to Implement
b. Too many cost pools are used
c. Results in inaccurate product costing
Explanation / Answer
1. Answer is c. credit manufacturing overheads 2. Answrer is c. Manufacturing overheads would be debited 3. Answer is a. Cost are traced to specific units 4. Answer is a. raw material inventory 5. Answer is c. indirect labour 6. Annswer is a. have a credit balance 7. Answer is c. Cost should be transferred to WIP-2 8. Answer is a. Some of jobs have been completed but not sold. 9. Answer is c. Separate wok in process account for each major processes 10. Answer is c. Crediting the manufacturing overheads 11. Answer is b. Too many cost pools are used.
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