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Account Chapter 2

In: Business and Management

Submitted By gigadeath
Words 7365
Pages 30
1. Product cost information is used by managers to (1) establish product prices, (2) control operations, and (3) develop financial statements. 2. a. Job order cost system and process cost system. b. The job order cost system provides a separate record of each quantity of product that passes through the factory. c. Process cost systems accumulate costs for each department or process within a factory. 3. Job order costing is used by firms that sell custom goods and services to customers. The job order system is frequently associated with firms that will produce a product or service specifically to a customer order. 4. No. A job order cost system is not appropriate because workers could not physically differentiate between the products being worked on in different orders. 5. Work in Process 6. Materials should not be issued by the storekeeper without a properly authorized materials requisition. Both the storekeeper and the recipient of the materials should initial the materials requisition when the materials are issued to indicate release of the proper amount of materials from the storeroom. 7. a. Purchase invoice or receiving report b. Materials requisition 8. A job cost sheet is the subsidiary ledger to the work in process control account. The cost of materials, labor, and overhead are listed on the job cost sheet for each job. A summary of all the job cost sheets during an accounting period is the basis for journal entries to the control accounts. 9. a. The clock card is a means of recording the hours spent by employees in the factory. The time ticket is a means of recording the time the employee spends on a specific job or, in cases of indirect labor (factory overhead), the department in which the time was spent. b. The total time reported on an employee’s time tickets for a payroll period is...

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