Accounting 202 - Chapter 3.1 Review Test Quiz

The correct answer is job costing and process costing. Job costing is used when each product or service is unique and requires different resources and materials. Process costing is used when products are mass-produced and go through a series of standardized processes. These two types of costing systems are used in different situations to accurately allocate costs and determine the profitability of products or services.

A labor time record is a source document used to track the hours worked by employees. It helps in monitoring and recording the amount of time spent by employees on different tasks or jobs. This information is essential for calculating wages, analyzing productivity, and managing labor costs. A labor time record is specific to tracking employee hours and is not related to job cost record, process costing, or job costing, which are different methods or concepts used in accounting and cost management.

A job cost record is a document that accumulates and tracks the costs associated with a specific job or project. It includes detailed information such as labor costs, material costs, overhead costs, and any other expenses related to the job. This record helps in monitoring and analyzing the costs incurred during the job, allowing for better cost control and accurate job costing. It is an essential tool for businesses to evaluate the profitability of individual jobs and make informed decisions regarding pricing and resource allocation.

Raw materials records provide evidence and documentation of the quantity and value of raw materials held by the company. These records typically include details such as receipts, usage, and adjustments made to the inventory. By referring to the raw materials records, the company can substantiate the balance of the raw materials inventory account shown on the balance sheet. This ensures accuracy and transparency in reporting the value of the raw materials held by the company.

A job cost record is used to accumulate the costs of a job. It is a document that tracks all the costs associated with a specific job or project. This includes labor costs, material costs, and any other expenses incurred during the job. The job cost record helps in determining the total cost of the job, which is essential for budgeting, estimating, and analyzing the profitability of the job. It provides a comprehensive overview of all the costs involved and helps in making informed decisions regarding the job.

A manufacturer of plywood would most likely use a process costing system. Process costing is used when a large volume of identical or similar products are produced in a continuous process, such as plywood manufacturing. It involves allocating costs to each process or department involved in the production process, and then dividing the total costs by the number of units produced to determine the cost per unit. This method is suitable for industries where products go through multiple stages of production and require the accumulation of costs at each stage.

A manufacturer of luxury yachts would likely use a job costing system. Job costing is a method used to determine the cost of producing a unique product or service. Since luxury yachts are typically customized and built to order, each yacht is considered a separate job. Job costing allows the manufacturer to track and allocate costs to each individual yacht, taking into account the specific materials, labor, and overhead expenses associated with that particular job. This enables the manufacturer to accurately determine the cost of each yacht and set prices accordingly.

In the flow of costs, raw materials inventory comes first. Raw materials are the basic materials that are used to produce finished goods. These materials are purchased and stored in the raw materials inventory until they are used in the production process. Once the raw materials are used, they move into the work in process inventory, where they are transformed into partially completed goods. From there, the goods move into the finished goods inventory, where they await sale. Finally, when the goods are sold, the cost of goods sold is recorded. Therefore, the correct order is raw materials inventory, work in process inventory, finished goods inventory, and cost of goods sold.

Work in process inventory comes second in the flow of costs. The flow of costs starts with raw materials inventory, which is then transferred to work in process inventory as the materials are used in the production process. Once the production is complete, the cost is transferred to finished goods inventory. Finally, when the goods are sold, the cost is recorded as cost of goods sold. Therefore, work in process inventory is the second stage in the flow of costs.

When direct materials are requisitioned, they are used in the production process and become part of the work in process inventory. Work in process inventory represents the partially completed goods that are still being worked on in the manufacturing process. This inventory account includes the cost of direct materials, direct labor, and manufacturing overhead that have been incurred but are not yet completed. Therefore, the correct answer is work in process inventory.

A materials requisition is a document that informs the storeroom to send specific materials to the factory floor. This document is typically used to request materials needed for production or manufacturing processes. It provides details such as the type and quantity of materials required, as well as any specific instructions or specifications. The storeroom then uses this information to gather and deliver the requested materials to the factory floor.