A company that produces a large number of standardized units

A company that produces a large number of standardized units would normally use a job order costing system. True or False

When the time ticket information is entered into the accounting system, the journal entry is a debit to Factory Payroll and a credit to Work in Process Inventory. True or False

Solution

ANS

(A) FALSE

Because it is not compulsory for a company producing a large number of standardized units use a job order costing system. They can use other costing system as well such as Batch order costing system.

(B) FALSE

Because when time tickets related to a specific job are recorded, the total labor cost incurred (hours * wage rate) is debited to Goods in Process Inventory and credited to Factory Payroll.