CHAPTER 1 SOLUTIONS
Part I Part II
1. T 8. T 15. T 1. p 8. l 15. r
2. F 9. F 16. F 2. h 9. b 16. e
3. T 10. F 17. F 3. q 10. f 17. n
4. T 11. F 18. F 4. a 11. s 18. i
5. T 12. T 19. T 5. j 12. m 19. k
6. T 13. F 20. F 6. d 13. c 20. g
7. F 14. T 7. t 14. o
Part III
1. (c) When finished goods are shipped to the customer, Cost of Goods Sold is debited and Finished Goods is credited.
2. (d) Standard costs are predetermined costs for direct materials, direct labor, and factory overhead that are established by using information accumulated from past experience and from scientific research. Budgets should be based on standard costs.
3. (a) Only manufacturing costs are inventoriable.
4. (d) Process costing accumulates costs by production process or department. It is used when units are not separately distinguishable from one another during one or more manufacturing processes.
5. (b) Cement production usually consists of manufacturing “long runs” of homogeneous products for which process costing is used. The other three industries would utilize job order costing.
6. (c) Plant depreciation is a factory overhead cost because it is a manufacturing cost that cannot be identified with specific jobs.
7. (b) When items in Work in Process are completed and transferred to the finished goods storeroom, Finished Goods is debited and Work in Process is credited.
