Exam 4: Accounting Entries for a Job Costing System

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: Ending inventories-June 30 Direct materials £19,000 Work in progress ? Finished goods 105,000 Beginning inventories-June 1 Direct materials £22,200 Work in progress 40,000 Finished goods 208,500 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?

A debit to the Materials (Stores ledger account) indicates

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

Figure 4-1 Walter Company uses a job-order costing system to account for product costs. The following information pertains to 2011: Materials placed into production £140,000 Indirect labour 40,000 Direct labour (10,000 hours) 160,000 Depreciation of factory building 60,000 Other factory overhead 100,000 Increase in work-in-progress inventory 30,000 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?

____ is the recognition and recording of costs.

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

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

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

The entry to record total manufacturing overhead applied would be a. Overhead Control $\quad$ XX $\quad$ Work in Progress $\quad$ XX b. Finished Goods Inventory $\quad$ XX $\quad$ Work in Progress $\quad$ XX c. Work in Progress $\quad$ XX $\quad$ Overhead Control $\quad$ XX d. Overhead Control $\quad$ XX $\quad$ Accounts Payable $\quad$ XX

Figure 4-1 Walter Company uses a job-order costing system to account for product costs. The following information pertains to 2011: Materials placed into production £140,000 Indirect labour 40,000 Direct labour (10,000 hours) 160,000 Depreciation of factory building 60,000 Other factory overhead 100,000 Increase in work-in-progress inventory 30,000 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?

An entry to record the sale of goods would be a. Cost of Goods Sold $\quad$ XX $\quad$ Finished Goods $\quad$ XX b. Finished Goods $\quad$ XX $\quad$ Cost of Goods Sold $\quad$ XX c. Cost of Goods Sold $\quad$ XX $\quad$ Work in Progress $\quad$ XX d. Work in Progress $\quad$ XX $\quad$ Cost of Goods Sold $\quad$ XX

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

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

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

Factory depreciation would be recorded using which of the following entries? a. Overhead Control $\quad$ XX $\quad$ Accounts Payable $\quad$ XX b. Overhead Control $\quad$ XX $\quad$ Accumulated Depreciation $\quad$ XX c. Depreciation Expense $\quad$ XX $\quad$ Accumulated Depreciation $\quad$ XX d. Accumulated Depreciation $\quad$ XX $\quad$ Overhead Control $\quad$ XX

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

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

Refer to Figure 4-3. What will be the entry to record material purchases using the backflush approach? A) Materials and In Progress 40,000 Accounts Payable 40,000 B) Materials 40,000 Accounts Payable 40,000 C) Accounts Payable 40,000 Materials and In Process 40,000 D) Accounts Payable 40,000 Materials 40,000

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

The following information pertains to Davis, Inc.: Direct materials purchases £62,400 Beginning direct materials 10,400 Factory overhead 58,400 Beginning work in progress 10,600 Cost of goods manufactured 164,000 Ending finished goods 20,000 Gross profit 21,000 Selling and administrative expenses 7,000 Beginning finished goods 16,000 Ending work in progress 8,000 Ending direct materials 12,400 Direct labour ? Direct materials used ? Net income (loss) ? Total manufacturing costs added ? Cost of goods sold ? Sales ?