COST ACCOUNTING
JOB ORDER COSTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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cost of goods sold
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cost of completed jobs
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over-applied factory overhead
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under-applied factory overhead
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Detailed explanation-1: -The cost of finished goods includes all expense along the way and includes the three main components that go into the production of goods–direct labor, direct materials and overhead. In addition, when finished goods are maintained in inventory, a firm will incur carrying costs.
Detailed explanation-2: -When jobs are completed, the total cost of the job is recorded as a debit to Finished goods and a credit to Work in process.
Detailed explanation-3: -Answer: c. The finished goods inventory account is an asset account and a debit to finished goods inventory indicates an increase in finished goods.
Detailed explanation-4: -The work-in-process inventory account is used to record the cost of products that are in production but that are not yet complete. The finished goods inventory account is used to record the costs of products that are complete and ready to sell.