Question

1. Three costs in every product are

		direct materials, direct labor, and period costs
		direct materials, work in process, and manufacturing overhead
		direct materials, direct labor, and manufacturing overhead
		direct materials, work in progress, and finished goods

2. What is the journal entry for under applied overhead?

		Manufacturing overhead                           Finished Goods Inventory
		Finished Goods Inventory                        Manufacturing Overhead
		Manufacturing overhead                          Cost of goods sold
		Cost of goods sold                            Manufacturing overhead

3. Use a piece of scrap paper to prepare a cost of Goods Manufactured from the following numbers: Direct materials -$69,000. Direct Labor-$27,000. Factory Overhead $34,000.

Beginning work in process inventory $15,000. Ending Work in process Inventory $19,500 What are the total manufacturing costs incurred?

		$103,000
		$130,000
		$96,000
		$157,000

4. Use a piece of scrap paper to prepare a cost of Goods Manufactured from the following numbers: Direct materials -$69,000. Direct Labor-$27,000. Factory Overhead $34,000.

Beginning work in process inventory $15,000. Ending Work in process Inventory $19,500

What is the cost of goods manufactured?

		$130,000
		$103,000
		$125,500
		$145,000

5. Which describes process costing?

		unique products
		special orders
		small quantities of one of a kind items
		homogeneous product

Answer 1

Question 1:

Correct answer is option C = direct materials, direct labor, and manufacturing overhead

To make a product ,necessary costs are direct materials, direct labor, and manufacturing overhead.

Why other options are incorrect?

option a - Period costs are not a necessary part of the manufacturing process.Therefore,they are not assigned to product costs. period costs are usually associated with the selling function of the business.

option b - Work in process is itself comprises of direct materials, direct labor and factory overheads.

option d - finished goods are goods that are ready for sale and it is not a cost but a product consisting of various costs.

Question 2:

Under applied overheead means actual overheads are more than applied overheads.

Correct answer is option D =

Cost of goods sold

                           Manufacturing overhead

journal entry to record it as follows

	Cost of goods sold	xxx
	Manufacturing overhead		xxxx