COST ACCOUNTING
MANUFACTURING OVERHEAD
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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increase Finished Goods Inventory RM7, 000 and decrease Work in Process Inventory RM7, 000.
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increase Cost of Goods Sold RM7, 000 and decrease Finished Goods Inventory RM7, 000.
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increase Finished Goods Inventory RM4, 500 and decrease Work in Process Inventory RM4, 500.
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increase Accounts Receivable RM7, 000 and increase Sales RM7, 000.
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Detailed explanation-1: -The correct answer is job cost sheet. A sheet which is used to record all the cost associated with the manufacturing of the products and services is known as the job cost sheet.
Detailed explanation-2: -Explanation: The original source document that reports how much time was spent working on a job was the time ticket. The time ticket or better known as time cards are received from employees and management and entered into the accounting records during the payroll process.
Detailed explanation-3: -Once a job is completed, the total costs assigned to the job are transferred from work‐in‐process inventory to finished goods inventory. Once the job is sold and delivered, the job costs are transferred from finished goods inventory to cost of goods sold.