Solved by verified expert :1.Process costing is used in those
situations where many different products or services are produced each period
to customer specifications.
2. The basic approach in job-order costing
is to accumulate costs in a particular operation or department for an entire
period (month, quarter, year) and then to divide this total by the number of
units produced during the period.
3. If a company uses predetermined
overhead rates, actual manufacturing overhead costs of a period will be
recorded in the Manufacturing Overhead account, but they will not be recorded
on the job cost sheets for the period.
4. In a job-order cost system, indirect
labor is assigned to a job by using the labor time ticket as a source document.
5. The formula for computing the
predetermined overhead rate is:
Estimated total units in base ÷ Estimated total manufacturing costs
6. The fact that one department may be
labor intensive while another department is machine intensive may explain in
part the existence of multiple predetermined overhead rates in larger
companies.
7. If a company closes any underapplied or
overapplied overhead to the Cost of Goods Sold account, then Cost of Goods Sold
will be credited if manufacturing overhead is overapplied for the period.
8. The following entry would be used to
record the transfer of material from the storeroom to production if 80% of the
material was direct material and 20% was indirect material:
Level: Easy LO:
4 Ans: T
9. If a job is not completed at the end of
the year, then no manufacturing overhead cost should be applied to that job.
10. When raw materials are purchased, they
are recorded as an expense.
11. In a job-order cost system,
depreciation on factory equipment should be charged directly to the Work in
Process account.
12. The entire difference between the
actual manufacturing overhead cost for a period and the applied manufacturing
overhead cost is typically closed to the Work In Process account.
13. If the actual manufacturing overhead
costs for a period exceed the manufacturing overhead costs applied, then
overhead would be considered to be overapplied.
14. The absorption cost approach is so
named because it provides for the absorption of all manufacturing costs, fixed
and variable, into units of product.
