acc 102 - week 3 - ch. 3

Job #4260 consisted of 1,000 units at a total cost of $200,000. The cost transferred to Cost of Goods Sold for the sale of 600 of the units is _____

$120,000 $200,000 ÷ 1,000 × 600 = $120,000.

Meep Industries had unadjusted cost of goods sold of $300,000. Overhead was overapplied by $20,000. Adjusted cost of goods sold is ______.

$280,000. $300,000 - $20,000 = $280,000.

Given: Cost of goods manufactured of $410,000; beginning finished goods inventory of $110,000 and ending finished goods inventory of $125,000, calculate unadjusted cost of goods sold.

$395,000 $110,000 + $410,000 - $125,000 = $395,000

The accounts involved in closing underapplied or overapplied overhead using the simpler method are _____.

Cost of goods sold and Manufacturing overhead

Underapplied or overapplied manufacturing overhead can be disposed of by closing it to _____

Cost of goods sold or allocating it to Work in process, Finished goods, and Cost of goods sold

When a job is completed, its costs are transferred into _____

Finished Goods

When jobs are sold, their costs are transferred out of

Finished Goods

Which account is credited when manufacturing overhead is applied?

Manufacturing overhead

George Corporation recognized $1,000 of accrued property taxes on its manufacturing facility. The journal entry to record this debits ______.

Manufacturing overhead $1,000 and credits Property taxes payable $1,000

If a company incurs $2,000 of factory rent, $1,000 of factory utilities, and $5,000 of miscellaneous factory costs, the journal entry to record these transactions would be to debit _____.

Manufacturing overhead $8,000 and credit Accounts payable $8,000

Which of the following costs are found on the balance sheet of a manufacturer? Raw Materials Direct Labor Selling and Administrative Manufacturing Overhead

Raw Materials Direct Labor Manufacturing Overhead

All the costs appearing on the job cost sheets of the jobs that are being worked on are found in the ______ account.

Work in Process

A company requisitioned $40,000 in direct materials and $30,000 in indirect materials from the storeroom to be used in production. The journal entry to record this transaction debits _____

Work in process $40,000, debits Manufacturing overhead $30,000, and credits Raw materials $70,000

The journal entry to record issuing both direct and indirect materials into production debits_____

Work in process and Manufacturing overhead

The Manufacturing Overhead account is debited when _____

actual overhead costs are incurred

Overhead is overapplied if _____

actual overhead is less than applied overhead

Overhead is underapplied if ______

actual overhead is more than applied overhead

Which of the following costs are charged directly to the income statement? administrative costs direct materials selling costs direct labor manufacturing overhead

administrative costs selling costs

A journal entry debiting Salaries expense and crediting Salaries and wages payable could be recording _____

administrative salaries

Methods to dispose of underapplied or overapplied manufacturing overhead are ______. close it to Finished goods close it to Work in process allocate it to Work in process, Finished goods, and Cost of goods sold allocate it to Raw materials, Work in process, and Finished goods close it to Cost of goods sold

allocate it to Work in process, Finished goods, and Cost of goods sold close it to Cost of goods sold

The journal entry to record selling and administrative salaries debits _____.

an expense account and credits Cash or a liability

ob cost sheets and the work in process account contain ______ manufacturing overhead.

applied

Raw materials is a(n) _____

asset

Raw Materials is a(n) _____ account

asset or inventory

When preparing financial statements in a job-order costing system, finished goods flow first to the _____ _____ and then to the _____.

balance sheet income statement

Finished goods _____

consist of completed, unsold goods

Applied manufacturing overhead is ______ to the Manufacturing overhead account.

credited

Actual manufacturing overhead is ______ to the Manufacturing overhead account.

debited

Underapplied or overapplied overhead is the _____.

difference between overhead applied to work in process and actual overhead

A journal entry that debits Manufacturing overhead and credits Accounts payable would not be used to record _____

direct labor costs

A journal entry that includes Manufacturing overhead and Cost of goods sold is recorded to _____

dispose of underapplied or overapplied overhead

The cost of jobs still unfinished at the end of a period are included in ______.

ending Work in process inventory

Manufacturing overhead costs include ______. office equipment depreciation direct materials factory insurance the factory supervisor's salary the CEO's salary

factory insurance the factory supervisor's salary

Cost of goods manufactured _____

includes manufacturing costs of goods finished during the period

Selling and administrative costs first appear on the ______.

income statement

Actual manufacturing overhead was $50,000, while overhead applied to jobs was $45,000. Work in process contained 10% of applied overhead, Finished goods contained 40%, and Cost of goods sold contained 50%. Assuming the company uses the proration method to dispose of over and under applied overhead, cost of goods sold will be ______. decreased by $5,000 increased by $5,000 decreased by $2,500 increased by $2,500

increased by $2,500

Labor costs charged to Manufacturing Overhead represent ______ labor costs.

indirect

Actual overhead costs may not be proportional to the actual amount of the allocation base used because ______. actual costs may be proportional to the actual use of the allocation base many actual overhead costs are fixed overhead spending may not be under control overhead costs are all variable costs

many actual overhead costs are fixed overhead spending may not be under control

The schedule of cost of goods _____ summarizes costs that remain in Work in process inventory and that have been transferred from Work in process to Finished goods inventory.

maufactured/produced

Gross margin minus selling and administrative expenses equals _____.

net operating income

When labor costs are incurred, ______ labor costs are added directly to the Work in Process account. Multiple choice question.

only direct

A credit balance in Manufacturing overhead means overhead is _____.

overapplied

The difference between overhead applied to work in process and actual overhead is _____

overapplied or underapplied overhead

The Manufacturing Overhead account is credited when _____

overhead is applied to Work in Process

A journal entry that debits Raw Materials and credits Accounts Payable is recording the _____

purchase of materials

Any purchased materials that will go into the finished product are first recorded in the _____ _____ inventory account.

raw materials

The journal entry to record the purchase of materials debits _____

raw materials

A journal entry that debits Manufacturing overhead and credits Property taxes payable records the _____

recognition of accrued property taxes

The schedule of cost of goods ______ summarizes the portions of those costs that remain in ending Finished Goods inventory and that are transferred out of Finished Goods into Cost of Goods Sold.

sold

When calculating the cost of direct materials on the schedule of cost of goods manufactured, the cost of indirect materials is _____

subtracted from raw materials used in production

Cost of goods manufactured is the _____

sum of all jobs transferred from Work in process to Finished goods

Cost of goods manufactured is the ______

sum of all jobs transferred from Work in process to Finished goods

The value of work in process is equal to _____

the cost of all unfinished jobs

The transfer of costs from one inventory account to the next parallels the physical transfer of goods from one inventory to the next.

true

Underapplied or overapplied overhead occurs because overhead is applied to jobs using a predetermined rate based on estimates of costs and activity levels.

true

A debit balance in Manufacturing overhead means overhead is ______.

underapplied

When only a portion of the units involved in a job are sold, the ______.

unit product cost is used to calculate the amount transferred from finished goods to cost of goods sold

Units of product that are only partially complete are contained in _____ _____ process inventory.

work in

When a job is completed, the job costs are transferred OUT OF _____

work in process

Given the following, compute the cost of goods manufactured. Direct material cost: $40,000 Direct labor cost: $100,000 Applied overhead: $120,000 Beginning work in process inventory: $30,000 Ending work in process inventory: $12,000

$278,000 Cost of goods manufactured = $30,000 + $40,000 + $100,000 + $120,000 - $12,000 = $278,000

Given the following, calculate total manufacturing costs to account for: Direct materials: $40,000 Direct labor: $100,000 Manufacturing overhead applied: $120,000 Actual manufacturing overhead: $110,000 Beginning Work in process inventory: $30,000 Ending Work in process inventory: $12,000

$290,000 $40,000 + $100,000 + $120,000 + $30,000 = $290,000. Applied, not actual overhead is used in the calculation.

Given the following, calculate the cost of goods available for sale. Cost of goods manufactured: $410,000 Beginning Finished goods inventory: $110,000 Ending Finished goods inventory: $125,000

$520,000 $410,000 + $110,000 = $520,000

Which of the following statements are true? - Direct labor costs flow through the Raw materials inventory account. - When materials are purchased they are recorded in the Raw materials inventory account. - Raw materials inventory only includes the cost of direct materials. - Raw materials inventory represents the cost of materials not yet used in production.

- When materials are purchased they are recorded in the Raw materials inventory account. - Raw materials inventory represents the cost of materials not yet used in production.

The journal entry to record manufacturing overhead applied to Job #40 debits _____

Work in process and credits Manufacturing overhead

Manufacturing overhead costs include ______. assembly worker wages marketing costs factory rent factory utilities factory maintenance wages

factory rent factory utilities factory maintenance wages

Actual overhead costs appear in the Work in Process account but not on the job cost sheet.

false

Period costs flow from Finished Goods to Cost of Goods Sold.

false

Job B was not completed by April 30. If an April balance sheet is prepared, the costs accumulated for Job B will NOT appear on it.

fasle

The sum of all amounts transferred from work in process to the finished goods accounts represents the cost of good _____

manufactured

Selling and administrative costs incurred are treated as _____

period expenses

Costs of partially completed units are accounted for in _____

work in process

Given the following, calculate total manufacturing costs added to production: Direct materials: $62,000 Direct labor: $78,000 Manufacturing overhead applied: $46,000 Actual manufacturing overhead: $51,000 Beginning work in process inventory: $32,000 Ending work in process inventory: $35,000

$186,000 Total manufacturing costs = $62,000 + $78,000 + $46,000 = $186,000. Adjust for work in process when calculating the cost of goods manufactured.

Given: Cost of goods manufactured of $234,000; beginning finished goods inventory of $18,000; and ending finished goods inventory of $24,000, calculate unadjusted cost of goods sold.

$228,000 $18,000 + $234,000 - $24,000 = $228,000

Given the following, calculate the cost of goods available for sale. Cost of goods manufactured: $234,000 Beginning Finished goods inventory of $18,000 Ending Finished goods inventory of $24,000

$252,000 $234,000 + $18,000 = $252,000

Martin Industries had unadjusted cost of goods sold of $450,000. Overhead was underapplied by $30,000. Adjusted cost of goods sold is ______.

$480,000. $450,000 + $30,000 = $480,000.

Luver Corporation's Gross margin is $100,000, Cost of goods sold equals $70,000, and Selling and administrative expenses total $45,000. Net operating income is ______.

$55,000 $100,000 - $45,000 = $55,000

Jonas Corporation used $20,000 of direct materials, incurred $40,000 of direct labor cost, and applied $30,000 of manufacturing overhead to jobs this period. No jobs were incomplete at the beginning of the period, but at the end of the period, jobs with a total cost of $25,000 were unfinished. What was the cost of goods manufactured for this period?

$65,000 Cost of goods manufactured = ($20,000 + $40,000 + $30,000) + $0 - $25,000 = $65,000

Raw materials inventory was $27,000 at the beginning of the year and $25,000 at the end of the year. During the year, $100,000 in raw materials were purchased, including $28,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period.

$74,000 Cost of direct materials = Beginning Inventory + Purchases - Indirect Materials - Ending Inventory ($27,000 + $100,000 - $28,000 - $25,000 = $74,000)

A journal entry that debits Work in process and Manufacturing overhead and credits Raw materials records the _____

issuance of materials

Closing underapplied or overapplied overhead proportionally to Work in Process, Finished Goods, and Cost of Goods Sold is ______. more accurate than closing the entire balance to Cost of goods sold calculated by multiplying applicable percentages by the over or under applied overhead more complex than closing the entire balance to Cost of Goods Sold based on the total ending balance of Work in process, Finished goods and Cost of goods sold

more accurate than closing the entire balance to Cost of goods sold calculated by multiplying applicable percentages by the over or under applied overhead more complex than closing the entire balance to Cost of Goods Sold