Deck 4: Accounting Entries for a Job Costing System

Question 1

The entry to record total manufacturing overhead applied would be

Answer 1

C

Question 2

Refer to Figure 4-2. What is the total amount of debits to Work in Progress-Assembly Department for October?

A)£120,000
B)£126,000
C)£134,000
D)cannot be determined

Answer 2

£134,000

Question 3

Refer to Figure 4-2. The journal entry to record goods completed and transferred out of the Assembly Department would include a

A)debit to Finished Goods Inventory for £120,000.
B)credit to Materials Inventory for £120,000.
C)debit to Work in Progress-Assembly Department for £120,000.
D)debit to Work in Progress-Finishing Department for £120,000.

Answer 3

debit to Work in Progress-Finishing Department for £120,000.

Question 4

Assume the following data for Gross, Inc., for February: $\begin{array}{lr}\text { Beginning finished goods inventory } & £ 60,000 \\\text { Beginning work-in-prgress inventory } & 40,000 \\\text { Ending work-in-progress inventory } & 80,000 \\\text { Ending finished goods inventory } & 50,000 \\\text { Actual factory overhead costs } & 200,000 \\\text { Direct materials used } & 160,000 \\\text { Direct labour } & 100,000\end{array}$ What is the cost of goods manufactured for February?

A)£470,000
B)£420,000
C)£460,000
D)£430,000

Question 5

Factory depreciation would be recorded using which of the following entries?

Question 6

A debit to the Materials (Stores ledger account) indicates

A)materials were purchased.
B)materials were requisitioned.
C)materials were put into production.
D)materials were ordered.

Question 7

Assume the following information for Knight Ltd. for the year ended December 31, 2011: $\begin{array}{lr}\text { Sales } & £ 2,250 \\\text { Cost of goods manufactured for the year } & 1,350 \\\text { Beginning finished goods inventory } & 450 \\\text { Ending finished goods inventory } & 495 \\\text { Selling and administrative expenses } & 300\end{array}$ What is the cost of goods sold for the year ended December 31, 2011?

A)£1,305
B)£1,605
C)£1,350
D)£1,650

Question 8

As goods are sold, the cost of the goods is transferred from

A)Finished Goods to Cost of Goods Sold.
B)Work in Process to Cost of Goods Sold.
C)Overhead to Finished Goods.
D)Work in Process to Finished Goods.

Question 9

Assume the following data for Graham Services, an architecture firm, for February: $\begin{array}{lr}\text { Beginning materials inventory } & £ 20,000 \\\text { Beginning work-in-progress inventory } & 40,000 \\\text { Ending work-in-progress inventory } & 50,000 \\\text { Ending materials inventory } & 10,000 \\\text { Actual overhead costs } & 100,000 \\\text { Direct materials used } & 60,000 \\\text { Direct labour } & 200,000\end{array}$ What is the cost of services sold for February?

A)£370,000
B)£350,000
C)£360,000
D)£330,000

Question 10

____ is the recognition and recording of costs.

A)Cost accumulation
B)Cost measurement
C)Cost assignment
D)Job order costing

Question 11

Assume the following information: $\begin{array}{lr}\text { Direct materials used } & £ 90,000 \\\text { Direct labour } & 130,000 \\\text { Factory overhead } & 150,000 \\\text { Beginning work-in-progress inventory } & 15,000 \\\text { Beginning finished goods inventory } & 20,000 \\\text { Ending work-in-progress inventory } & 42,000 \\\text { Selling and administrative expenses } & 37,500\end{array}$ What was the cost of goods manufactured during the year?

A)£370,000
B)£365,000
C)£343,000
D)£333,000

Question 12

Figure 4-1
Walter Company uses a job-order costing system to account for product costs. The following information pertains to 2011: $\begin{array}{lr}\text { Materials placed into production } & £ 140,000 \\\text { Indirect labour } & 40,000 \\\text { Direct labour (10,000 hours) } & 160,000 \\\text { Depreciation of factory building } & 60,000 \\\text { Other factory overhead } & 100,000 \\\text { Increase in work-in-progress inventory } & 30,000\end{array}$ Factory overhead rate is £18 per direct labour hour.

-Refer to Figure 4-1. What is the total amount debited to Finished Goods Inventory in 2011?

A)£490,000
B)£510,000
C)£450,000
D)£550,000

Question 13

Which entry is recorded when materials are moved from storeroom to production?
a. Work in Frocess $\quad$ XX
$\quad$ Raw Materials $\quad$ XX
b. Raw Materials $\quad$ XX
$\quad$ Work in Process $\quad$ XX
c. Overhead Control $\quad$ XX
$\quad$ Raw Materi als $\quad$ XX
d. Materials Expense $\quad$ XX
$\quad$ Raw Materi als $\quad$ XX

Question 14

Refer to Figure 4-2. The journal entry to record materials purchased would include a

A)debit to Materials Inventory for £40,000.
B)debit to Materials Inventory for £44,000
C)credit to Accounts Payable for £44,000.
D)both b and c

Question 15

On April 9, 2011, Job XX4 was completed. The job cost sheet showed a total of £4,000 in direct materials and £6,000 in direct labour at a rate of £20 per direct labour hour. Factory overhead is applied at £30 per direct labour hour. The debit to Finished Goods Inventory to record the completion of Job XX4 is

A)£13,000.
B)£9,000.
C)£4,000.
D)£19,000.

Question 16

An entry to record the sale of goods would be

Question 17

Figure 4-1
Walter Company uses a job-order costing system to account for product costs. The following information pertains to 2011: $\begin{array}{lr}\text { Materials placed into production } & £ 140,000 \\\text { Indirect labour } & 40,000 \\\text { Direct labour (10,000 hours) } & 160,000 \\\text { Depreciation of factory building } & 60,000 \\\text { Other factory overhead } & 100,000 \\\text { Increase in work-in-progress inventory } & 30,000\end{array}$ Factory overhead rate is £18 per direct labour hour.

-Refer to Figure 4-1. What is the total amount credited to Materials (Stores ledger account) for Walter in 2011?

A)£480,000
B)£170,000
C)£140,000
D)£110,000

Question 18

A journal entry debiting Work in Progress would normally NOT be accompanied by a credit to

A)Materials.
B)Finished Goods.
C)Overhead Control.
D)Wages Payable.

Question 19

The following information is available for the current year for Sven's Brokerage Services: $\begin{array}{lr}\text { Sales } & £ 661,000 \\\text { Beginning work in progress } & 7,000 \\\text { Ending work in progress } & 6,000 \\\text { Direct labour } & 100,000 \\\text { Direct materials } & 30,000 \\\text { Overhead } & 150,000 \\\text { Selling expenses } & 80,000 \\\text { Administrative expenses } & 120,000\end{array}$ What is Sven's income before taxes for the year?

A)£180,000
B)£182,000
C)£380,000
D)£382,000

Question 20

In a job-order system, recording the use of indirect materials would include a debit to

A)Overhead Control.
B)Work in Progress.
C)Finished Goods.
D)Raw Materials.

Question 21

Refer to Figure 4-3. What will be the entry to record material purchases using the backflush approach? A)
$\begin{array}{lc}\text { Materials and In Progress } & 40,000 \\\quad \text { Accounts Payable } && 40,000 \\\end{array}$

B)
$\begin{array}{lc}\text { Materials } & 40,000 \\\quad \text { Accounts Payable } && 40,000 \\\end{array}$

C)
$\begin{array}{lc}\text { Accounts Payable } & 40,000 \\\quad \text { Materials and In Process } && 40,000 \\\end{array}$

D)
$\begin{array}{lc}\text { Accounts Payable } & 40,000 \\\text { Materials } && 40,000\end{array}$

Question 22

The following information has been extracted from the records of Haverhill Company:
a.Prepare a statement of cost of goods manufactured.
b.Prepare an income statement for the Haverhill Company for the year ending December 31, 2011.

Question 23

The following information pertains to Davis, Inc.:

Question 24

Refer to Figure 4-3. Which of the following would NOT be an entry under the backflush system, assuming the second trigger point is the completion of goods?
A)
$\begin{array}{lc}\text { Materials and In Frogress } & 40,000 \\\quad \text { Accounts Payable } && 40,000 \\\end{array}$

B)
$\begin{array}{lc}\text { Work in Process } & 40,000 \\\quad \text { Materials } && 40,000 \\\end{array}$

C)
$\begin{array}{lc}\text { Conversion Cost Control } & 46,000 \\\quad \text { Payroll } &&6,000 \\\quad \text { Accounts Payable } &&40,000 \\\end{array}$

D)
$\begin{array}{lc}\text { Cost of Goods Sold } & 82,000 \\\text { Finished Goods } && 82,000 \end{array}$

Question 25

The cost of goods sold for the Tricky Ltd. for the month of June 2011 was £450,000. Work-in-progress inventory at the end of June was 95 per cent of the work-in-progress inventory at the beginning of the month. Overhead is 80 per cent of the direct labour cost. During the month, £110,000 of direct materials were purchased. Revenues for Tricky were £600,000, and the selling and administrative costs were £70,000. Other information about Tricky's inventories and production for June was as follows:
a.Prepare a cost of goods manufactured and cost of goods sold statements.
b.Prepare an income statement.
c.What are the prime costs, conversion costs, and period costs?