Respond that the following statements are TRUE or FALSE:

1) A predetermined overhead allocation rate is used to allocate direct materials cost to various processes or departments.

2) The adjusting entry for over allocated or under allocated manufacturing overhead is usually prepared at the beginning of the accounting period.

Multiple Choice Questions:

3) In a process costing system, which of the following are the four-steps of tracking product costs?

A) Verify, analyze, record, and adjust

B) Assign, analyze, approximate, and allocate

C) Accumulate assigns, allocate, and adjust

D) Arrive, analyze, assume, and allocate

4) Costs incurred on goods sold are transferred to the Cost of Goods Sold account from the:

A) Finished Goods Inventory account.

B) Work-in-Process Inventory account.

C) Production cost report.

D) Sales price report.

5) Delaware Company purchased raw materials worth $500 for cash. The journal entry to record this transaction will include:

A) A debit to Cash for $500 and a credit to Raw Materials Inventory for $500.

B) A debit to Accounts Payable for $500 and a credit to Raw Materials Inventory for $500.

C) A debit to Raw Materials Inventory for $500 and a credit to Accounts Payable for $500.

D) A debit to Raw Materials Inventory for $500 and credit to Cash for $500.