Deck 25: Manufacturing Accounting

Question 1

Ending finished goods inventory is subtracted from cost of goods available for sale to get:

A)cost of goods manufactured.
B)cost of goods sold.
C)net purchases.
D)None of the above

Answer 1

B

Question 2

The three major manufacturing inventories do NOT include which of the following?

A)Indirect labor
B)Work-in-process
C)Raw materials
D)Finished goods

Answer 2

A

Question 3

The three manufacturing inventories are raw materials,work-in-process,and merchandise inventory.

Answer 3

False

Question 4

What inventories are included in determining the cost of goods sold?

A)Beginning and ending finished goods
B)Beginning and ending raw materials
C)Beginning and ending work-in-process
D)None of these answers is correct.

Question 5

When manufacturing a product,direct labor includes the wages of:

A)an hourly worker producing the product.
B)the shop foreman.
C)maintenance workers.
D)administrators.

Question 6

Manufacturing overhead includes all manufacturing costs except which of the following?

A)Raw materials
B)Overhead
C)Direct labor
D)Both A and C

Question 7

Calculate the cost of goods sold when beginning finished goods inventory equals $80,000,ending finished goods inventory $65,000,and cost of goods manufactured $600,000.

A)$615,000
B)$445,000
C)$685,000
D)$585,000

Question 8

Raw material inventory appears on the:

A)balance sheet.
B)income statement.
C)cost of goods manufactured statement.
D)Both A and C are correct.

Question 9

Paint used in painting the final product would be considered raw materials inventory.

Question 10

The statement of cost of goods manufactured does NOT include:

A)direct labor costs.
B)selling and administrative costs.
C)manufacturing overhead.
D)All of the above are included.

Question 11

Under a perpetual inventory system,freight costs to bring the raw materials in should be charged to:

A)Work-in-Process Inventory.
B)Cost of Goods Sold.
C)Raw Materials Inventory.
D)Manufacturing overhead.

Question 12

What inventories are included in determining total manufacturing costs?

A)Beginning and ending finished goods
B)Beginning and ending raw materials
C)Beginning and ending work-in-process
D)None of the above answers is correct.

Question 13

Total manufacturing costs incurred include:

A)direct labor costs.
B)raw materials costs.
C)manufacturing overhead.
D)All of the above

Question 14

Which inventory account consists of products currently being processed?

A)Finished Goods Inventory
B)Raw Material Inventory
C)Manufacturing Overhead Inventory
D)Work-in-Process Inventory

Question 15

Metal used in construction of a tank is part of:

A)raw material costs.
B)labor costs.
C)manufacturing overhead.
D)None of these answers is correct.

Question 16

Manufacturing costs do NOT include:

A)raw material.
B)selling expenses.
C)manufacturing overhead.
D)All of these answers are correct.

Question 17

Screws,electricity for manufacturing,and production supervisor salary are examples of:

A)raw materials.
B)direct labor.
C)manufacturing overhead.
D)None of the above

Question 18

The first step in determining total manufacturing costs is to calculate:

A)the raw material used for the month.
B)the direct labor cost for the month.
C)factory overhead cost for the month.
D)None of these answers is correct.

Question 19

The formula for cost of goods manufactured is:

A)raw materials plus direct labor minus overhead plus beginning work-in-process inventory plus ending work-in-process inventory.
B)raw materials minus direct labor plus overhead plus beginning work-in-process inventory plus ending work-in-process inventory.
C)beginning work-in-process plus total manufacturing cost minus ending work-in-process.
D)raw materials plus direct labor less overhead plus beginning work-in-process inventory less ending work-in-process inventory.

Question 20

Which inventory account consists of manufacturing cost of goods that are complete?

A)Work-in-Process Inventory
B)Raw Material Inventory
C)Manufacturing Overhead
D)Finished Goods Inventory

Question 21

Finished goods inventory is listed on the schedule of cost of goods sold.

Question 22

If a company had a beginning balance of $5,000 in Raw Materials,an ending balance of $3,000 and purchased $27,000 of materials during the month,then the raw material used for the month was $25,000.

Question 23

Seascape Interiors produces artist supplies.Listed below are the costs of production and inventory.

Compute:
a.Cost of raw materials used in production
b.Total manufacturing costs
c.Total cost of goods manufactured

Question 24

Classify each of the following as raw materials,direct labor,or overhead:

Question 25

All expenses are listed on the income statement of a manufacturer.

Question 26

A cost of goods manufactured statement should be prepared before the income statement has been prepared.

Question 27

A shop foreman's salary is not considered indirect labor.

Question 28

Calculate the (a)cost of raw materials used and (b)total manufacturing costs from the following information.

a.________
b.________

Question 29

From the following information,calculate (a)cost of raw materials used and (b)total manufacturing costs.

a.________
b.________

Question 30

Overhead includes labor costs of assembly line supervisors but not the assembly workers.

Question 31

The second step in the preparation of the statement of cost of goods manufactured is to add in and subtract out the two raw material inventory balances.

Question 32

Work in Process inventory includes the total costs of manufacturing a product.

Question 33

If a company had a beginning balance of $5,000 in Work-in-Process Inventory,an ending balance of $7,000 in Work-in-Process Inventory and incurred direct labor costs of $8,000 and overhead costs of $4,000,then the cost of goods manufactured during the month was $24,000.Raw Materials used were $10,000.

Question 34

The steps of the accounting cycle for a manufacturing company are different from those used for a merchandise company.

Question 35

The income statement reports the work in process inventory.

Question 36

Calculate the cost of goods manufactured from the following information.

Question 37

Cost of goods manufactured is determined before the income statement can be completed.

Question 38

If a company had a beginning balance of $8,000 in Finished Goods Inventory,an ending balance of $5,000 in Finished Goods Inventory and cost of goods manufactured was $47,000 during the month,then the cost of goods sold for the month was $44,000.

Question 39

Hourly wages of production line employees is one of the costs included in the work-in-process inventory.

Question 40

From the following,calculate the cost of raw materials used and total manufacturing costs:

Question 41

The Manufacturing Overhead-Control account is used for the:

A)application of overhead to production and it has a debit balance.
B)accumulation of all actual overhead costs and it has a credit balance.
C)application of overhead to production and it has a credit balance.
D)accumulation of all actual overhead costs and it has a debit balance.

Question 42

A material requisition is a:

A)document prepared to show the movement of materials or products between departments.
B)document used to order materials or supplies from the vendor or supplier.
C)document used for charging material to production.
D)document used to record receipt of materials or supplies from the vendor or supplier.

Question 43

Which is NOT an example of a source document?

A)Clock card
B)Bill of lading
C)Lot ticket
D)All are source documents.

Question 44

A document that is prepared to show how items have been shipped to customers is a:

A)receiving report.
B)bill of lading.
C)lot tickets.
D)clock card.

Question 45

A clock card is:

A)the basis for payroll.
B)the basis for charging cost of goods sold.
C)a document to show movement of materials.
D)a document used to order materials.

Question 46

In a manufacturing company,the purchase of raw materials on account should be recorded as follows:

A)
$$\begin{array}{|l|}\hline \text {Raw Material Inventory}\\\hline \text {Accounts Payable}\\\hline\end{array}$$
B)
$$\begin{array}{|l|}\hline \text {Work-in-Process Inventory}\\\hline \text {Accounts Payable}\\\hline\end{array}$$
C)
$$\begin{array}{|l|}\hline \text {Finished Goods Inventory}\\\hline \text {Accounts Payable}\\\hline\end{array}$$
D)
$$\begin{array}{|l|}\hline \text {Accounts Payable}\\\hline \text {Raw Materials Inventory}\\\hline\end{array}$$

Question 47

Omega.com sold 25 jet skis on account for $7,000 which cost $5,000.The entry to record the sale would include:

A)credit to Finished Goods Inventory $5,000.
B)credit to Account Receivable for $7,000.
C)debit to Cost of Goods Sold for $7,000.
D)all of the above.

Question 48

The journal entry to record the direct labor summarized on the labor distribution report would include a:

A)Credit to Payroll Expense
B)Debit to Work-in-Process Inventory
C)Credit to Payroll Payable
D)Both B and C

Question 49

The journal entry to record issuing raw materials from the storeroom would include a:

A)Credit Raw Materials Inventory
B)Credit Work-in-Process Inventory
C)Debit Work-in-Process Inventory
D)Both A and C

Question 50

The journal entry to record issuing supplies from the storeroom would include a:

A)Debit to Manufacturing Overhead-Applied
B)Credit to Manufacturing Overhead-Control
C)Credit to Manufacturing Overhead-Applied
D)Debit to Manufacturing Overhead-Control

Question 51

Describe the three elements of manufacturing cost.

Question 52

The entry to record the requisition of supplies from the storeroom would include a:

A)debit to Raw Materials Inventory.
B)debit to Overhead-Control.
C)debit to Supplies Inventory.
D)debit to Work in Process Inventory.

Question 53

A report issued by the payroll department to categorize all the types of labor incurred during the week is a:

A)labor distribution report.
B)receiving report.
C)flow chart.
D)None of these answers is correct.

Question 54

The entry for indirect materials (such as glue,etc. )requisitioned for use in production is:

A)
$$\begin{array}{|l|}\hline \text {Raw Materials Inventory}\\\hline \text {Work-in-Process Inventory}\\\hline\end{array}$$
B)
$$\begin{array}{|l|}\hline \text {Manufacturing Overhead -Control}\\\hline \text {Supplies Inventory}\\\hline\end{array}$$
C)
$$\begin{array}{|l|}\hline \text {Work-in-Process Inventory}\\\hline \text {Raw Materials Inventory}\\\hline\end{array}$$
D)None of these answers is correct.

Question 55

Candyland completed the manufacturing process.The entry to transfer the product to finished goods is:

A)
$$\begin{array}{|l|}\hline \text {Raw Materials Inventory}\\\hline \text {Finished Goods Inventory}\\\hline\end{array}$$
B)
$$\begin{array}{|l|}\hline \text {Finished Goods Inventory}\\\hline \text {Cost of Goods Sold}\\\hline\end{array}$$
C)
$$\begin{array}{|l|}\hline \text {Finished Goods Inventory}\\\hline \text {Work-in-Process Inventory}\\\hline\end{array}$$
D)
$$\begin{array}{|l|}\hline \text {Finished Goods Inventory}\\\hline \text {Raw Materials Inventory}\\\hline\end{array}$$

Question 56

Journal entries crediting Payroll Payable and debiting Work-in-Process Inventory are made for:

A)administrative salaries.
B)hourly manufacturing labor.
C)foremen's salaries.
D)raw materials.

Question 57

During the week ended November 30,total factory payroll incurred was $8,000.Of this total,80% was for direct labor.The entry to record the payroll distribution would include:

A)debit Work-in-Process Inventory for $6,400 and Manufacturing Overhead-Control for $1,600.
B)debit Work-in-Process Inventory for $8,000.
C)debit Work-in-Process Inventory for $6,400 and Manufacturing Overhead-Applied for $1,600.
D)debit Work-in-Process Inventory for $6,400 and Indirect Labor Expense for $1,600.

Question 58

A lot ticket is a:

A)document prepared to show the movement of materials or products between departments.
B)document used to order materials or supplies from the storeroom.
C)document used for charging material to production.
D)None of these answers is correct.

Question 59

From the following,calculate the cost of raw materials used,total manufacturing costs and cost of goods manufactured:

Question 60

From the following information calculate total manufacturing costs and cost of goods manufactured.

Question 61

The following data are available for Skyway:
$$\begin{array} { | l | l | } \hline \text { Estimated machine hours } & 40,000 \text { hours } \\\hline \text { Estimated overhead costs } & \$ 80,000 \\\hline\end{array}$$
If overhead is applied based on machine hours,the predetermined overhead rate is:

A)$2.00.
B)$20.00.
C)$0.50.
D)200%.

Question 62

XYZ Company has direct labor for the month of $40,000.XYZ's annual overhead is $600,000 and annual direct labor cost is $1,000,000.Overhead is applied based on direct labor.What is the entry to charge direct labor to production?

A)Debit Work-in-Process Inventory $40,000;credit Payroll Payable $40,000
B)Debit Manufacturing Overhead-Applied $40,000;credit Work-in-Process Inventory $40,000
C)Debit Work-in-Process Inventory $24,000;credit Manufacturing Overhead-Applied $24,000
D)Debit Work-in-Process Inventory $66,000;credit Manufacturing Overhead-Applied $66,000

Question 63

If direct labor for the month is $100,000,and overhead is applied based on 75% of direct labor dollars,what is the entry to apply overhead?

A)Debit Work-in-Process Inventory $75,000;credit Payroll Payable $75,000
B)Debit Overhead-Applied $75,000;credit Work-in-Process Inventory $75,000
C)Debit Work-in-Process Inventory $75,000;credit Manufacturing Overhead-Applied $75,000
D)Debit Work-in-Process Inventory $100,000;credit Manufacturing Overhead-Applied $100,000

Question 64

Which of the following journal entries would be made to apply the cost of indirect labor to production?

A)
$$\begin{array}{|l|}\hline \text {Work-in-Process Inventory}\\\hline \text {Manufacturing Overhead-Control}\\\hline\end{array}$$
B)
$$\begin{array}{|l|}\hline \text {Manufacturing Overhead-Control}\\\hline \text {Payroll Payable}\\\hline\end{array}$$
C)
$$\begin{array}{|l|}\hline \text {Finished Goods Inventory}\\\hline \text {Manufacturing Overhead-Control}\\\hline\end{array}$$
D)
Work-in-Process Inventory
Manufacturing Overhead-Applied

Question 65

The overhead application rate may be based on:

A)machine hours.
B)direct labor hours.
C)direct labor dollars.
D)All of these answers are correct.

Question 66

Sylvan Manufacturing applies overhead based on direct labor hours.At the beginning of the year,it estimated that overhead costs would be $150,000 and direct labor hours would be 15,000.The applied overhead rate per direct labor hour is:

A)$7.50.
B)$15.00.
C)$10.00
D)None of the above

Question 67

Madison Manufacturing is using a manufacturing overhead application rate of 130% of direct labor dollars.A job uses 10 direct labor hours at $20 per hour.How much overhead should be applied to the job?

A)$235
B)$265
C)$260
D)$250

Question 68

Molly Manufacturing is using a manufacturing overhead application rate of 125% of machine cost.A job uses 35 machine hours at $9/hour.How much overhead should be applied to the job?

A)$315.00
B)$393.75
C)($393.75)
D)($315.00)

Question 69

Work-in-Process Inventory is credited when goods are transferred to finished goods.

Question 70

If the overhead applied rate based on direct labor hours is $7.00 and the actual labor hours are 500,what is the amount credited to Manufacturing Overhead-Applied?

A)$3,500
B)$350
C)$35,000
D)None of the above

Question 71

The bill of lading is a formal document issued to the carrier for shipping the finished product to a customer.

Question 72

The estimated manufacturing overhead cost was $25,000 and estimated machine hours were 10,000.Actual manufacturing overhead cost was $24,000 and actual machine hours were 12,000.The overhead application rate per hour based on machine hours is:

A)$2.50.
B)$2.00.
C)$2.40.
D)$2.08.

Question 73

The following data are available for Starbrite Corporation:
$$\begin{array} { | l | l | } \hline \text { Estimated direct labor hours } & 1000 \\\hline \text { Estimated overhead costs } & \$ 36,000 \\\hline\end{array}$$
If overhead is applied based on direct labor hours,the predetermined overhead rate is:

A)$45.
B)$36.
C)$450.
D)$360.

Question 74

The entry to record selling a product that cost $14,000 would be a credit to Finished Goods Inventory $14,000,and a debit to Cost of Goods Sold $14,000.

Question 75

In entries to record the movement of material,labor,and overhead through the operation of a company,the credit is the destination and the debit is the source.

Question 76

The Overhead-Applied account is used for the:

A)application of overhead to production and it has a credit balance.
B)accumulation of all actual overhead costs and it has a credit balance.
C)application of overhead to production and it has a debit balance.
D)accumulation of all actual overhead costs and it has a debit balance.

Question 77

Estimated manufacturing overhead costs were $60,000 and the number of estimated machine hours was 20,000.Actual overhead costs were $61,000 and the actual number of machine hours used was 20,500.Based on machine hours,the overhead application rate per hour is:

A)$3.00.
B)$2.93.
C)$3.10.
D)$3.13.

Question 78

The entry to record rent expense $9,000,supervision expense $19,000,and depreciation expense $7,000 to overhead is:

A)debit Manufacturing Overhead-Applied $35,000;credit Rent Expense $9,000,Supervision $19,000,Depreciation Expense $7,000.
B)debit Work in Process Inventory $35,000;credit Rent Expense $9,000,Supervision $19,000,Depreciation Expense $7,000.
C)debit Manufacturing Overhead-Applied $35,000;credit Manufacturing Overhead-Control $35,000.
D)None of these answers is correct.

Question 79

Adams Manufacturing has estimated manufacturing overhead at $125,000 and has estimated direct labor of 10,000 direct labor hours at $10.00 per hour.The overhead rate per direct labor dollar would be:

A)$0.80.
B)$8.00.
C)$1.25.
D)$7.20.

Question 80

Direct labor for the month is $50,000,and overhead is applied based on direct labor cost.Annual overhead is estimated to be $450,000,and annual direct labor is estimated to be $800,000.What is the entry to apply overhead to production?

A)Debit Work-in-Process Inventory $28,125;credit Payroll Payable $28,125
B)Debit Manufacturing Overhead-Applied $28,125;credit Work-in-Process Inventory $28,125
C)Debit Work-in-Process Inventory $28,125;credit Manufacturing Overhead-Applied $28,125
D)Debit Work-in-Process Inventory $50,000;credit Manufacturing Overhead-Applied $50,000