Quiz05a - Quiz Chapter 05 - Solutions 1. The manufacturing...

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Page 1 Quiz – Chapter 05 - Solutions 1. The manufacturing operation that would be most likely to use a job-order costing system is: A) toy manufacturing. B) candy manufacturing. C) crude oil refining. D) shipbuilding. A is probably incorrect. Toys look like assembly line products (uniform) B is probably incorrect. Candy looks like assembly line products (uniform) C is incorrect. Barrels of oil are uniform, assembly line products D is the best answer. Large ships are likely to be unique products 2. A proper journal entry to close over-applied overhead to Cost of Goods Sold would be: A) D. Cost of Goods Sold XXX Cr. Work In Progress XXX B) D. Cost of Goods Sold XXX Cr. Manufacturing Overhead XXX C) D. Cost of Goods Sold XXX Cr. Finished Goods XXX D) D. Manufacturing Overhead XXX Cr. Cost of Goods Sold XXX D is the best answer. If you are over-applied that means that you applied (credits) more than you actually spent (debits). You therefore have a credit balance in your Manufacturing Overhead account, and you need to debit it in order to zero out the account. Only D has a debit to Manufacturing Overhead. The credit would be to Cost of Goods Sold if the variance were immaterial.
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Page 2 3. A proper journal entry to record issuing raw materials to be used on a job would be: A) D. Finished Goods XXX Cr. Materials Inventory XXX B) D. Materials Inventory XXX Cr. Work In Process XXX C) D. Work In Process XXX Cr. Raw Materials XXX D) D. Materials Inventory XXX Cr. Finished Goods XXX C is correct. You are taking materials out of Materials Inventory. You need a credit to such an account in order to reduce it. A & C are the only journal entries that do that. The raw materials go into Work In Process. You need to increase Work In Process with a debit. Only C does this.
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This note was uploaded on 10/02/2008 for the course MGMT 122 taught by Professor Saouma during the Spring '08 term at UCLA.

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Quiz05a - Quiz Chapter 05 - Solutions 1. The manufacturing...

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