Deck 4: Product Costs and Job Order Costing

Question 1

Fabric used in the manufacture of baseball jerseys is an example of: $\begin{array}{}\underline{\text{Direct Material}} & \underline{\text{Product Cost}}\end{array}$

A) $\begin{array}{}\text{Yes} & \text{No}\end{array}$
B) $\begin{array}{}\text{Yes} & \text{Yes}\end{array}$
C) $\begin{array}{}\text{No} & \text{Yes}\end{array}$
D) $\begin{array}{}\text{No} & \text{No}\end{array}$

Answer 1

B

Question 2

Which of the following is $\textbf{ not }$ associated with period costs?

A)Selling of a product
B)Creation of overhead
C)The passage of time
D)Administration of the business

Answer 2

Creation of overhead

Question 3

Any costs that a company incurs to acquire raw materials and convert them to finished goods ready for sale are referred to as

A)Direct costs.
B)Period costs.
C)Manufacturing costs.
D)None of these ans choices are correct.

Answer 3

Manufacturing costs.

Question 4

At what point are manufacturing costs expensed?

A)When finished goods are sold
B)When they are transferred out of Work in Process
C)When they are entered into production
D)At the end of the accounting period

Question 5

Which of the following items would not be classified as direct material for an automobile manufacturer?

A)Steel
B)Paint
C)tires
D)Screws

Question 6

Manufacturing costs are first recorded as an asset on the balance sheet and then expensed on the income statement at the time

A)They are purchased
B)They are put into production.
C)They are completed.
D)They are sold.

Question 7

Which of the following is an example of direct labor for Toyota Motor Company?

A)Assembly line worker
B)Fork-lift driver
C)Line foreman
D)Company president

Question 8

Which of the following expenses are reported on the income statement as expenses when they are incurred?

A)Product costs
B)Period costs
C)Indirect material
D)Direct material

Question 9

Which of the following is an example of direct labor for Dole Food Company?

A)Truck driver who transports fruit to customers.
B)Truck driver who transports labors to field
C)Plant supervisor
D)Fruit picker

Question 10

Which of the following types of cost is $\textbf{ not }$ related to inventory?

A)Direct material
B)Indirect labor
C)Product costs
D)Period costs

Question 11

Which of the following would be classified as direct material for a furniture manufacturer?

A)Wood
B)Glue
C)Screws
D)Wood cleaner

Question 12

Oil to keep the factory machinery lubricated is an example of: $\begin{array}{}\underline{\text{Direct Material}} & \underline{\text{Period Cost}}\end{array}$

A) $\begin{array}{}\text{Yes} & \text{No}\end{array}$
B) $\begin{array}{}\text{Yes} & \text{Yes}\end{array}$
C) $\begin{array}{}\text{No} & \text{Yes}\end{array}$
D) $\begin{array}{}\text{No} & \text{No}\end{array}$

Question 13

Janitorial supplies used in the factory restrooms is an example of: $\begin{array}{}\underline{\text{Direct Labor}} & \underline{\text{Period Cost }}\end{array}$

A) $\begin{array}{}\text{Yes} & \text{No}\end{array}$
B) $\begin{array}{}\text{Yes} & \text{Yes}\end{array}$
C) $\begin{array}{}\text{No} & \text{Yes}\end{array}$
D) $\begin{array}{}\text{No} & \text{No}\end{array}$

Question 14

Wages of the president of the company is an example of:
$\begin{array}{}\underline{\text{Indirect Labor}} & \underline{\text{Period Cost }}\end{array}$

A) $\begin{array}{}\text{Yes} & \text{No}\end{array}$
B) $\begin{array}{}\text{Yes} & \text{Yes}\end{array}$
C) $\begin{array}{}\text{No} & \text{Yes}\end{array}$
D) $\begin{array}{}\text{No} & \text{No}\end{array}$

Question 15

The cost of storing finished goods inventory is an example of $\begin{array}{}\underline{\text{Period Cost}} & \underline{\text{Overhead}}\end{array}$

A) $\begin{array}{}\text{Yes} & \text{No}\end{array}$
B) $\begin{array}{}\text{Yes} & \text{Yes}\end{array}$
C) $\begin{array}{}\text{No} & \text{Yes}\end{array}$
D) $\begin{array}{}\text{No} & \text{No}\end{array}$

Question 16

The wages of security guards to protect the factory building are an example of: $\begin{array}{}\underline{\text{Indirect Labor}} & \underline{\text{Product Cost}}\end{array}$

A) $\begin{array}{}\text{Yes} & \text{No}\end{array}$
B) $\begin{array}{}\text{Yes} & \text{Yes}\end{array}$
C) $\begin{array}{}\text{No} & \text{Yes}\end{array}$
D) $\begin{array}{}\text{No} & \text{No}\end{array}$

Question 17

Wages of sewing machine operators making baseball jerseys is an example of: $\begin{array}{}\underline{\text{Direct Labor}} & \underline{\text{Period Cost }}\end{array}$

A) $\begin{array}{}\text{Yes} & \text{No}\end{array}$
B) $\begin{array}{}\text{Yes} & \text{Yes}\end{array}$
C) $\begin{array}{}\text{No} & \text{Yes}\end{array}$
D) $\begin{array}{}\text{No} & \text{No}\end{array}$

Question 18

Coffee beans at Starbucks are an example of: $\begin{array}{}\underline{\text{Direct Material}} & \underline{\text{Period Cost}}\end{array}$

A) $\begin{array}{}\text{Yes} & \text{No}\end{array}$
B) $\begin{array}{}\text{Yes} & \text{Yes}\end{array}$
C) $\begin{array}{}\text{No} & \text{Yes}\end{array}$
D) $\begin{array}{}\text{No} & \text{No}\end{array}$

Question 19

Which of the following items would not be classified as direct material for Dole Food Company?

A)Pineapple
B)Sugar
C)Stainless steel pots
D)Glass jars

Question 20

Wood used in the manufacturing of furniture is an example of: $\begin{array}{}\underline{\text{Indirect Material}} & \underline{\text{Overhead}}\end{array}$

A) $\begin{array}{}\text{Yes} & \text{No}\end{array}$
B) $\begin{array}{}\text{Yes} & \text{Yes}\end{array}$
C) $\begin{array}{}\text{No} & \text{Yes}\end{array}$
D) $\begin{array}{}\text{No} & \text{No}\end{array}$

Question 21

The three components of product cost include:

A)Direct material,indirect material,and labor.
B)Material,direct labor,and indirect labor.
C)Direct material,direct labor,and overhead.
D)Indirect material,indirect labor,and overhead.

Question 22

Which of the following is not classified as a variable product cost?

A)Direct materials
B)Electricity
C)Sales commissions
D)Indirect materials

Question 23

Period costs are expensed when they are

A)Incurred.
B)At the time of payment.
C)Entered into production.
D)None of these ans choices are correct.

Question 24

Which of the following is $\textbf{ not }$ another term companies use to refer to manufacturing overhead?

A)Facility cost
B)Manufacturing support
C)Factory support
D)Manufacturing burden

Question 25

Which of the following is $\textbf{ not }$ classified as a fixed period cost?

A)Packaging for delivery
B)Depreciation on delivery trucks
C)Marketing Vice President's salary
D)Advertising

Question 26

Direct labor costs include all of the following $\textbf{ except }$

A)Wages of workers who transform direct materials into the finished product.
B)Supervisors who oversee the production process.
C)Wages of workers who actually have his or her hands on the product or on the machine as the product is being made.
D)Benefits paid to the workers who transform direct materials into finished products.

Question 27

Period costs are associated with the

A)Selling of products.
B)The administration of the business.
C)Both selling of products and the administration of the business.
D)Neither selling of products nor the administration of the business..

Question 28

A cost that a company incurs that is $\textbf{ not }$ a product cost is referred to as

A)Contribution cost.
B)Nonmanufacturing cost.
C)Manufacturing overhead.
D)None of these ans choices are correct.

Question 29

Which of the following is $\textbf{ not }$ classified as an overhead cost?

A)Electricity to run factory machines
B)Insurance to protect the factory contents
C)Security guards that protect the factory building
D)Advertising cost to promote the finished goods

Question 30

Which of the following is $\textbf{ not }$ another term companies use to refer to manufacturing overhead?

A)Factory overhead
B)Manufacturing administration
C)Factory burden
D)Manufacturing burden

Question 31

Which of the following is $\textbf{ not }$ an indirect material?

A)Supplies used in supporting the production process which may not be part of the final product
B)Direct material that is not a significant part of the product
C)Material used that is inexpensive,so it is not cost effective to trace their cost back to the product
D)Office supplies used by human resources

Question 32

Which of the following is $\textbf{ not }$ classified as a variable period cost?

A)Sales commissions
B)Packaging for delivery
C)Depreciation on delivery trucks
D)All of these ans choices are variable period costs.

Question 33

Direct labor is considered a

A)Period cost
B)Overhead
C)Variable cost
D)Mixed cost

Question 34

Which of the following is $\textbf{ not }$ classified as a period cost?

A)The cost of toner for the sales department laser printer
B)The salary for the president of the company
C)The cost of utilities for the factory building
D)All of the ans choices are classified as period costs.

Question 35

Costs a company incurs that are not product costs are referred to as

A)Period costs.
B)Contribution costs.
C)Accrued costs.
D)None of these ans choices are correct.

Question 36

Which of the following is $\textbf{ not }$ classified as a fixed product cost?

A)Machine depreciation
B)Electricity
C)Factory rent
D)Production manager's salary

Question 37

Which of the following is $\textbf{ not }$ classified as a direct labor cost?

A)Wages of the store manager at Starbucks
B)Wages of the assemblers who put planes together at Boeing
C)Wages of computer animators at Pixar
D)Ring engravers at Josten's

Question 38

A category of costs that include all the costs associated with the general management of the company is referred to as

A)Indirect costs.
B)General and administrative costs.
C)Selling costs.
D)All of these ans choices are correct.

Question 39

Finished Goods Inventory includes which of the following costs?

A)Direct material
B)Direct labor
C)Overhead
D)All of these ans choices are correct.

Question 40

Direct materials are sometimes referred to as

A)Overhead
B)Raw materials
C)Period costs
D)None of these ans choices are correct.

Question 41

Which of the following items is $\textbf{ not }$ classified as direct labor for Family Ice Cream Parlor?

A)Salary of workers making banana splits
B)Salary of workers adding toppings to sundaes
C)Salary of store manager
D)All of these ans choices classified as direct labor.

Question 42

When a product is sold to a customer,which of the following inventory accounts is increased or decreased?

A)Work in Process is decreased and Finished Goods is increased
B)Finished Goods is increased and Cost of Goods Sold is decreased
C)Finished Goods is decreased and Cost of Goods Sold is increased
D)Raw Materials is decreased and Cost of Goods Sold is increased.

Question 43

Which of the following items is $\textbf{ not }$ classified as indirect materials for a furniture manufacturing company?

A)Sanded and finished wood used to make bed frames
B)Decorative brads used on the arms of chairs
C)Glue used to strengthen joints
D)All of these ans choices are classified as indirect materials.

Question 44

Finished Goods Inventory increases by the

A)Cost of goods manufactured.
B)Overhead applied.
C)Cost of selling the product.
D)Cost of goods sold.

Question 45

When indirect materials are used,which of the following accounts increases?

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

Question 46

Which of the following items is $\textbf{ not }$ classified as direct material for Family Ice Cream Parlor?

A)The cost of empty ice cream cones
B)The cost of milk used in the manufacturing of ice cream
C)The cost of hairnets worn by production line workers
D)The cost of strawberries used in the manufacturing of ice cream

Question 47

The finished goods inventory account records the costs of all products that have been

A)Started but not yet complete.
B)Completed.
C)Completed and sold.
D)None of these ans choices are correct.

Question 48

Which of the following accounts does $\textbf{ not }$ appear on the Balance Sheet?

A)Cost of Goods Sold
B)Raw Materials
C)Work in Process
D)Finished Goods

Question 49

Work in Process Inventory decreases when

A)Raw materials are purchased.
B)Raw materials are used.
C)Products are finished.
D)Products are sold.

Question 50

The work in process inventory account records the costs of all products that have been

A)Started but not yet complete.
B)Completed.
C)Completed and sold.
D)None of these ans choices are correct.

Question 51

When products are completed,which of the following accounts is increased?

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

Question 52

Which of the following is $\textbf{ not }$ classified as manufacturing overhead?

A)The cost of depreciation on office equipment
B)The cost of wages paid to the forklift operator in the factory
C)The cost of wages for the plant manager
D)All of these ans choices are classified as manufacturing overhead.

Question 53

Raw Materials Inventory decreases when

A)Materials are purchased.
B)Materials are used.
C)Materials are transferred to Finished Goods Inventory.
D)Goods are sold.

Question 54

Finished Goods represents products that are

A)In the process of being completed.
B)Ready to be sold.
C)Sold.
D)None of these ans choices are correct.

Question 55

Work in Process Inventory increases when

A)Raw materials are purchased.
B)Raw materials are used.
C)Products are finished.
D)Products are sold.

Question 56

Raw Materials Inventory increases when

A)Materials are purchased.
B)Materials are used.
C)Materials are transferred to Work in Process.
D)Goods are sold.

Question 57

Which of the following items is $\textbf{ not }$ classified as indirect labor for a furniture manufacturing company?

A)The production foreman's salary
B)Wages paid to the workers on the assembly line
C)The forklift driver who delivers raw materials to the production floor
D)All of these ans choices are classified as indirect labor.

Question 58

When direct materials are used,which of the following accounts increases?

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

Question 59

When products are completed,which of the following accounts is decreased?

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

Question 60

When a company purchases materials for use in the production process,the cost of those materials is recorded in which of the following accounts?

A)Finished Goods Inventory
B)Work in Process Inventory
C)Raw Materials Inventory
D)Supplies Expense

Question 61

Which of the following is the correct journal entry to record the cost of goods manufactured?

A) Finished Goods Inventory
Work in Process Inventory

B) Work in Process Inventory
Manufacturing Overhead Control

C) Manufacturing Overhead Control
Cash or other Payables

D) Finished Goods Inventory
Manufacturing Overhead Control

Question 62

Basil Industries reported the following information for December:
$$\begin{array}{|l|r|}\hline \text{Beginning balance, Raw Materials Inventory} & \$187,500 \\\hline \text{Beginning balance, Work in process Inventory} & 300,000 \\\hline \text{Beginning balance, Finished Goods Inventory} & 106,250 \\\hline \text{Purchases of raw materials} & 337,500 \\\hline \text{Factory electricity} & 62,500 \\\hline \text{Direct labor payroll} & 200,000 \\\hline \text{Depreciation on factory equipment} & 218,750 \\\hline \text{Insurance on factory building} & 50,000 \\\hline \text{Indirect materials used in production} & 43,750 \\\hline \text{Total raw materials used in production} & 406,250 \\\hline \text{Indirect labor payroll} & 150,000 \\\hline \text{Cost of goods manufactured} & 1,250,000 \\\hline \text{Cost of goods sold} & 1,312,500 \\\hline\end{array}$$ How much manufacturing overhead was incurred by Basil during December?

A) $481,250
B) $525,000
C) $462,000
D) $475,000

Question 63

If the beginning balance in Raw Materials Inventory is $5,000,the ending balance is $3,500,and $60,000 was the amount transferred to Work in Process Inventory,what is the amount of materials purchased during the period?

A) $58,500
B) $60,000
C) $61,500
D) $68,500

Question 64

Cottonwood,Inc.has the following information regarding its Raw Materials Inventory account:
$\begin{array}{ll}\text { Direct materials used during the month } & \$ 672,700 \\\text { Raw materials purchased during the month } & \$ 683,200 \\\text { Ending balance Raw Materials Inventory } & \$ 21,250\end{array}$ What is the beginning balance of Cottonwood's Raw Materials Inventory account?

A) $31,750
B) $10,750
C) $693,950
D) $661,950

Question 65

Mounce's Chocolate Delight's bakery had $2,000 in inventory at the beginning of the month.During the month she used $45,000 of material and had $1,500 in ending inventory.How much inventory did the bakery purchase during the month?

A) $44,500
B) $45,000
C) $45,500
D) $48,500

Question 66

SW Industries has the following information regarding its Raw Materials Inventory account:
$\begin{array}{ll}\text { Direct materials used during the month } & \$ 257,800 \\\text { Beginning balance Raw Materials Inventory } & \$ 55,000 \\\text { Ending balance Raw Materials Inventory } & \$ 57,500\end{array}$ What is the cost of materials purchased by SW Industries during the month?

A) $255,300
B) $260,300
C) $370,300
D) $145,300

Question 67

If the ending balance in Raw Materials Inventory is $3,500,$60,000 was purchased,and $61,500 was transferred to Work in Process Inventory during the period,what was the amount in beginning inventory?

A) $1,500
B) $2,000
C) $3,500
D) $5,000

Question 68

If the cost of goods sold is less than the cost of goods manufactured,then

A)Finished Goods Inventory increased during the period.
B)Finished Goods Inventory decreased during the period.
C)Overhead was overapplied.
D)None of these ans choices are correct.

Question 69

Which of the following is $\textbf{ not }$ included in the schedule of cost of goods manufactured?

A)Direct materials in inventory
B)Direct materials used in production
C)Direct labor
D)Overhead

Question 70

Finished Goods Inventory decreases by the

A)Cost of goods manufactured.
B)Overhead applied.
C)Cost of selling the product.
D)Cost of goods sold.

Question 71

Which of the following accounts is similar to the Inventory account of a merchandising company?

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

Question 72

Randy's Garden Supply Manufacturing Company had $105,000 in raw materials' inventory at the beginning of the month.During the month Randy used $920,000 and had $120,000 remaining in inventory at the end of the month.How much inventory did Randy purchase during the month?

A) $815,000
B) $905,000
C) $920,000
D) $935,000

Question 73

Which of the following is the correct journal entry to record the application of manufacturing overhead?

A) Manufacturing Overhead Control
Work in Process Inventory

B) Work in Process Inventory
Manufacturing Overhead Control

C) Manufacturing Overhead Control
Cash or other Payables

D) Finished Goods Inventory
Manufacturing Overhead Control

Question 74

If the beginning balance in the Raw Materials Inventory account for the month was $25,000,the ending balance of $22,000 and material used during the month was $130,000,what is the amount of materials purchased during the month?

A)$177,000
B)$130,000
C) $127,000
D) $133,000

Question 75

Basil Industries reported the following information for December:
$$\begin{array}{|l|r|}\hline \text{Beginning balance, Raw Materials Inventory} & \$187,500 \\\hline \text{Beginning balance, Work in process Inventory} & 300,000 \\\hline \text{Beginning balance, Finished Goods Inventory} & 106,250 \\\hline \text{Purchases of raw materials} & 337,500 \\\hline \text{Factory electricity} & 62,500 \\\hline \text{Direct labor payroll} & 200,000 \\\hline \text{Depreciation on factory equipment} & 218,750 \\\hline \text{Insurance on factory building} & 50,000 \\\hline \text{Indirect materials used in production} & 43,750 \\\hline \text{Total raw materials used in production} & 406,250 \\\hline \text{Indirect labor payroll} & 150,000 \\\hline \text{Cost of goods manufactured} & 1,250,000 \\\hline \text{Cost of goods sold} & 1,312,500 \\\hline\end{array}$$ What was the cost of the direct materials used by Basil in production?

A) $406,250
B) $362,500
C) $450,000
D) $381,250

Question 76

The cost of goods manufactured

A)Is always the same as the total direct costs.
B)Is recorded as a debit to the Cash or Accounts Receivable account.
C)Is recorded as a debit to the Finished Goods Inventory account.
D)Is also referred to as the cost of goods sold.

Question 77

Which of the following is the correct journal entry to record direct materials put into production?

A) Raw Materials Inventory
Work in Process Inventory

B) Work in Process Inventory
Finished Goods Inventory

C) Work in Process Inventory
Raw Materials Inventory

D) Finished Goods Inventory
Work in Process Inventory

Question 78

Which of the following is the correct journal entry to record manufacturing overhead incurred?

A) Manufacturing Overhead Control
Work in Process Inventory

B) Work in Process Inventory
Manufacturing Overhead Control

C) Manufacturing Overhead Control
Cash or other Payables

D) Finished Goods Inventory
Manufacturing Overhead Control

Question 79

If the beginning balance in Raw Materials Inventory is $5,000,the ending balance is $3,500,and $60,000 was purchased,what is the amount of materials transferred to Work in Process Inventory during the period?

A) $58,500
B) $60,000
C) $61,500
D) $68,500

Question 80

Which of the following is the correct journal entry to record the purchase of indirect materials on account?

A) Raw Materials Inventory
Accounts Payable

B) Manufacturing Overhead
Accounts Payable

C) Work in Process Inventory
Accounts Payable

D) Merchandise Inventory
Accounts Payable