ACCT2101 Chapter 2

Cost accounting focuses on the measuring, recording, and reporting of:

• Product Costs

• Future Costs

• Manufacturing Processes

• Managerial Accounting Decisions

A company is more likely to use a job order cost system if:

• it manufactures a large volume of similar products

• its production is continuous

• it manufactures products with unique characteristics

• it uses a periodic inventory system

When incurred, factory labor costs are debited to:

• Work in Process Inventory

• Factory Wages Expense

• Factory Labor

• Payroll Liabilities

Manufacturing overhead is underapplied if:

• actual overhead is less than applied

• actual overhead is greater than applied

• the predetermined overhead rate equals the actual rate

• actual overhead equals applied overhead

Raw materials are assigned to a job when:

• the job is sold

• the materials are purchased

• the materials are received from the vender

• the materials are issued by the materials storeroom