7) When a job is completed and all costs have been accumulated on a job cost she
ID: 2514300 • Letter: 7
Question
7) When a job is completed and all costs have been accumulated on a job cost sheet, the journal entry that should be made is
a. Finished Goods Inventory
Direct Materials
Direct Labor
Manufacturing Overhead
b. Work In Process Inventory
Direct Materials
Direct Labor
Manufacturing Overhead
c. Raw Materials Inventory
Work In Process Inventory
d. Finished Goods Inventory
Work In Process Inventory
8) The three categories of manufacturing costs comprising the cost of work in process are direct
labor, direct materials, and:
a. indirect expenses
b.direct expenses
c.sales salaries expense
d.factory overhead
9) Which of the following would be accounted for using a job order cost system?
a. The production of personal computers.
b. The production of automobiles.
c. The refining of petroleum.
d. The construction of a new campus building.
10) In 2011, Masset sold 3,000 units at $300 each. Variable expenses were $210 per unit, and fixed expenses were $120,000. What was Masset’s 2011 net income?
a. $150,000
b. $270,000
c. $630,000
d. $900,000
Explanation / Answer
7. (d) Finished goods inventory
Work in process inventory
8. (d) factory overhead
9. (d) The construction of a new campus building
10. (a) $150,000
Sales = 3000units * $300 = 900,000
variable expenses = 3000units * 210 = 630,000
contribution = sales - variable expenses
contribution = 900,000 - 630,000 = 270,000
Income = contribution - fixed expenses
Income = 270,000 - 120,000 = $150,000
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