Question

PLEASE ANSWER ALL PARTS FOR A THUMBS UP RATING! THANK YOU!

1) In the journal entries to record the issuance of materials into production, the costs of both direct and indirect materials are credited to the Materials Inventory account and debited directly to Work in Process Inventory.

True

False

2) Because service departments do not directly contribute to the production of goods, their costs are generally considered period costs rather than assigned to an individual product, department or activity.

True

False

3) Under a FIFO process costing system, the calculation of direct materials cost per-equivalent-unit includes both the costs incurred this period and those remaining in beginning inventory from last period.

True

False

4) The predetermined plant-wide overhead rate is determined by dividing actual overhead costs incurred for the year by the amount of capacity used for the year.

True

False

Answer 1

Solution 1:

False, In the journal entries to record the issuance of materials into production, the costs of both direct and indirect materials are credited to the Materials Inventory account and debited to Work in Process Inventory and manufacturing overhead respectively.

Solution 2:

False, Because service departments cost are allocated to production departments.

Solution 3:

False, Under a FIFO process costing system, the calculation of direct materials cost per-equivalent-unit includes the costs incurred this period only.

Solution 4:

False, The predetermined plant-wide overhead rate is determined by dividing estimated overhead costs by the Estimated quantity of allocation base.