Question

1. Which of the following statements is true of the accounting for finished goods when a job is completed?

Overhead costs are assigned to Finished Goods using a predetermined rate.

Finished Goods is debited when goods are sold.

The cost of completed units is credited to Work-in-Process and debited to Finished Goods.

The costs of the completed job are retained in Work-in-Process until the proceeds are collectible for the job.

2. Slim Technology Inc. records the following amounts before reconciling the overhead variance.

Applied overhead	$567,000
Actual overhead	555,000
Normal cost of goods sold	701,250

Calculate the cost of goods sold for Slim Technology Inc. after adjusting for any overhead variance.

$677,250

$12,000

$701,250

$689,250

3. Lithium Metals Inc. recorded sales of $200,000 and cost of goods sold of $160,000 in June 20X1. Its selling and administrative expenses totaled $12,000. Calculate the net operating income.

$28,000

$40,000

$52,000

$12,000

1. A company completed a job on March 31, 20X1. Its cost of goods sold was $1,500. It sold the job on account to a customer at cost plus 20%. Which of the following is the journal entry to recognize the cost of the job?

Debit Overhead Control by $1,500 and Credit Cost of Goods Sold by $1,500

Debit Cost of Goods Sold by $1,500 and Credit Finished Goods by $1,500

Debit Cost of Goods Sold by $1,800 and Credit Sales Revenue by $1,800

Debit Accounts Receivable by $1,800 and Credit Cost of Goods Sold by $1,800

2. The Overhead Control of a company has an underapplied variance of $200. Which of the following is the journal entry to record the closing of the underapplied overhead?

Debit Overhead Control by $200 and Credit Cost of Goods Sold by $200

Debit Cost of Goods Sold by $200 and Credit Overhead Control by $200

Debit Budget Control by $200 and Credit Overhead Control by $200

Debit Overhead Control by $200 and Credit Budget Control by $200

Answer 1