Accounting 2020 Test 1

Created by pappyhardy 

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15 terms · Part 2 of test 1

Which of the following journal entries represents cost of Goods Manufactured?

Debit Finished Goods and Credit Work in Process.

The journal entry to record indirect materials used in the factory is?

Debit Manufacturing Overhead and Credit Raw Materials

The Journal entry to record depreciation on selling and administration equipment is:

Debit Depreciation Expense and credit Accumulated Depreciation.

The journal entry to record the incurrence of direct labor cost is:

debit Work in Process and credit Salaries Payable.

The Journal entry to record the expiration of insurance related to factory operations is:

debit Manufacturing Overhead and credit Prepaid Insurance.

For the current year, Paxman Company incurred $150,000 in actual manufacturing overhead cost. The Man OH account showed that overhead was under applied in the amount of $6000 for the year. If the predetremined overhead rate was $8.00 per direct labor hour, how many hours were worked during the year?

150,000-6,000=144,000 applied/8.00 = 18,000 hours.

A manufacturing company applies overhead based on direct labor hours. At the beginning of the year, they estimated that total overhead cost for the year would be $600,000 and 100,000 direct labor hours would be worked. For the year, actual overhead costs incurred were $610,000 and actual direct labor hours worked were 104,000. The journal entry to apply overhead costs for all jobs during the year would include a:

600,000/100,000=6.00 x 104,000 = 624,000
Debit W.I.P. = 624,000 and Credit Man OH = 624,000 therefore the journal entry would be a credit to Manufacturing OH for 624,000

A manufacturing company applies overhead based on direct labor hours. At the beginning of the year, they estimated that total overhead cost for the year would be $600,000 and 100,000 direct labor hours would be worked. For the year, actual overhead costs incurred were $610,000 and actual direct labor hours worked were 104,000. At the end of the year, prior to recording adjusting and closing entries, is Man OH over applied or under applied and by what dollar amount?

Actual = 610,000
Applied = 624,000
14,000 over applied

The following is a for Jones Corporation prior to recording adjusting and closing entries at year-end: Sales=1,000,000 CofGS = 700,000 Actual OH = 350,000 Applied OH = 340,000. The 10,000 difference between actual and applied OH is to be closed to CofGS. The journal entry to close out the Man OH account (for the over under-applied overhead) will include a:

debit CofGS 10,000 and credit Man OH 10,000

The following is a for Jones Corporation prior to recording adjusting and closing entries at year-end: Sales=1,000,000 CofGS = 700,000 Actual OH = 350,000 Applied OH = 340,000. The 10,000 difference between actual and applied OH is to be closed to CofGS. What will Gross Margin be reported as on the income statement?

Sales = 1,000,000 - CofGS = <710,000 (700,000+10,00)>= Gross Margin of 290,000

"Do rough milling work on products" is an example of a (an) _____ activity?

Unit-Level

"Use the general factory building" is an example of a (an ______ activity?

Organization-Sustaining

"Receive raw materials from suppliers" is an example of a (an) _____ activity?

Batch Level.

When a company shifts from a traditional coast system in which manufacturing overhead is applied based on direct labor-hours to an activity-based costing system in which there are batch-level and product-level costs, the unit product cost of low volume products typically _____ whereas the unit product costs of high volume products typically _____.

increase; decrease.

Manufacturing companies that benefit the most from activity-based costing are those where overhead costs are a ____ percentage of total product cost and where there is ____ diversity among the various products they produce.

high; considerable

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