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Exam 26: Accounting for Manufacturing Activities

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Question 21

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Cleaning materials and lubricants used in factory operations and maintenance are considered manufacturing overhead.

A) True
B) False

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Question 22

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Benefits of maintaining inventory records on a perpetual basis include all of the following except:

A) provides improved cost control.
B) easier to identify potential shortages.
C) avoid annual physical counts.
D) improved customer experiences.

E) B) and D)
F) B) and C)

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Question 23

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The amounts of the raw materials used,direct labor,and manufacturing overhead for a fiscal period are reported on the statement of cost of goods manufactured.

The end-of-period adjusting entries are

Closing entries for a manufacturing firm include all of the following except

Whaler utilizes automated machines to sew sails for its whaling ships.The manufacturing records indicate the Model Z7B sail uses $4,500 of fabric,requires 2 direct labor hours to finish and tie off threads and 5 hours of machine sewing time.The direct labor rate averages $12.50 per hour.Manufacturing overhead is added to the product cost of a sail based on a rate of $40 per machine hour.The company applies a 32% markup on cost.What is the sales price of a Model Z7B sail?

The ending balance of the work in process inventory is recorded by debiting Work in Process Inventory and crediting

Fill in the missing line items on the Income Statement given.Include correct indentations,underlines,dates,and capitalization when needed.

If the ending finished goods inventory is greater than the beginning finished goods inventory,the cost of goods sold will be higher than the cost of goods manufactured.

The following information appears on the Statement of Cost of Goods Manufactured for the Poster Company at the end of the year. Manufacturing Overhead for the year was:

Other than the adjusting entries that are made to Manufacturing Summary and to Income Summary for inventory,there are several adjustments that are normally made.List at least three and discuss why they are made and what accounts are affected.

The ending inventory of raw materials is shown on the worksheet of a manufacturing business in the Cost of Goods Manufactured ____________________ column.

Six adjusting entries are made for inventory accounts in a manufacturing operation.

The raw materials inventory is shown in the ____________________ section of the balance sheet of a manufacturing business.

The statement of cost of goods manufactured

The Cost of Goods Sold section of the income statement for a manufacturing business shows the work in process inventory.

What is the postclosing Trial Balance and why is it prepared?

What are the three inventory accounts for a manufacturing firm? List the three inventory accounts and indicate for each the name(s)of the statement(s)in which it appears.

On the completed worksheet of a manufacturing business,the accounts related to materials purchases,direct labor,and factory overhead

For a manufacturing business,net sales minus cost of goods ____________________ equals gross profit on sales.