1) Product costs appear as cost of goods sold in income statements and as finished-goods inventory values in balance sheets.

2) Two extremes of product costing are job-order costing and normal costing.

3) The entry to record the requisition of direct materials would include a debit to WIP Inventory.

4) A job-order cost system associates costs with particular jobs.

5) A job-order cost system is especially appropriate for situations where basically similar units flow through production on a fairly continuous basis.

6) Labour time tickets indicate the direct labour time worked by an individual on each job.

7) The work-in-process account will have a balance only if there is unfinished work in the factory.

8) Materials inventory, work in process, and cost of goods sold would appear in the asset section of the balance sheet.

9) Most firms use actual costing because it provides product cost information on a timely basis.

10) The most widely used approach in disposing of an overhead variance is proration.

11) The proration method of disposing of overhead variances prorates the variance among three accounts including Direct-Materials Inventory, WIP Inventory and Finished Goods Inventory.

12) Job-order costing can be used only in manufacturing environments.

13) In nonprofit organizations, the product is usually called a program or a class of service.

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