ACC Ch. 3

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

(BLANK) consists of units of product that are only partially complete and will require further work before they are ready for sale to the customer.

Work in process

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

recognition of accrued property taxes

What side of the Manufacturing overhead account is applied manufacturing overhead entered on?

Always the credit side

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

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

Raw Materials

the basic material from which a product is made.

A debit balance in Manufacturing overhead means overhead was

: underapplied

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 Blank___

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

The journal entry to record accrued property taxes for a factory building debits Blank__

Manufacturing overhead and credits Property taxes payable

Which of the following statements are true?

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.

Overhead is overapplied if

actual overhead is less than applied overhead

Overhead is overapplied if Blank

actual overhead is less than applied overhead

Overhead is underapplied if Blank

actual overhead is more than applied overhead

Overhead is underapplied if Blank__

actual overhead is more than applied overhead

The more accurate method of closing out the balance in Manufacturing overhead is:

allocating it among Work in process, Finished goods, and Cost of goods sold.

The journal entry to record selling and administrative salaries debits

an expense account and credits Cash or a liability

The journal entry to record selling and administrative salaries debits Blank

an expense account and credits Cash or a liability

The journal entry to record selling and administrative salaries debits Blank__

an expense account and credits Cash or a liability

A journal entry that debits Work in process and credits Manufacturing overhead is recording the

application of manufacturing overhead costs

The simpler method of closing out the balance of Manufacturing overhead is ___

closing it out to Cost of goods sold

Actual manufacturing overhead is Blank______ to the Manufacturing overhead account.

debited

Underapplied or overapplied overhead is the Blank

difference between overhead applied to work in process and actual overhead

When labor costs are incurred, Blank______ labor costs are added directly to the Work in Process account.

direct

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

direct

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

direct labor costs

Unadjusted cost of goods sold is calculated by subtracting

ending finished goods inventory from goods available for sale.

What methods can be used to dispose of underapplied or overapplied manufacturing overhead?

Close it to Cost of goods sold. Closed proportionally to Work in process, Finished goods, and Cost of goods sold.

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

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

nonmanufacorting overhead costs go into what account

manufacotoring overhead account

The cost of goods is the sum of all amounts transferred from Work in process to Finished goods during a period.

manufactored

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.

manufactored

cost of goods manufactored

manufacturing costs associated with units of product that were finished during the period. As jobs are sold their costs are transferred from finished goods to COGS

Manufacturing overhead consists of all Blank_____

manufacturing costs other than direct labor and direct materials

Which account is credited when manufacturing overhead is applied?

manufacturing overhead

Gross margin minus selling and administrative expenses equals Blank_

net operating income

Selling and administrative costs incurred are treated as Blank

period expenses

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

raw 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

Costs of partially completed units are accounted for in Blank

work in process

the cost of goods manufactured for a period is the

sum of all amounts transferred between the Work in process account and the Finished goods account during that period

A credit balance in the Manufacturing Overhead account of Y dollars means that the overhead is ----- by of Y dollars.

overapplied

A journal entry that debits Raw Materials and credits Accounts Payable is recording the Blank______. Multiple choice question.

pruchase of materials

Net operating income is calculated by subtracting ______ from ______.

selling and administrative expenses; gross margin

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

overapplied or underapplied overhead

The cost of goods manufactured for a period is the ______

sum of all amounts transferred between the Work in process account and the Finished goods account during that period

When a job is completed, its costs are transferred into

finished goods

Which of the following would not be charged to the Manufacturing overhead account?

nonmanufactoring costs

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

recognition of accrued property taxes

Work in Process consists of

actual direct materials cost actual direct labor cost applied manufacturing overhead (partially complete products)

Actual manufacturing overhead costs are recorded in the Manufacturing Overhead account

as they are incurred

A journal entry that debits Manufacturing overhead and credits Accounts payable could be made to record Blank_

factory utilities expense rent expense on factory equipment

Completed units that have not yet been sold are found in what inventory.

finished goods

Selling and administrative costs incurred are treated as Blank_

period expenses

selling and administrative costs are treated as

period expenses and charged directly to the income statement

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

sold

Which of the statements regarding closing out over or underapplied overhead is correct?

Closing to Cost of goods sold is simpler, and allocating is more accurate.

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 Blank______.

$120,000

Raw materials inventory was $5,000 at the beginning of the year and $12,000 at the end of the year. During the year, a total of $27,000 in raw materials were purchased, including $4,000 of indirect materials that were put into manufacturing overhead during the period. Calculate the cost of direct materials used during the period. Multiple choice question.

$16,000

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

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

Finished goods

units of product that have been completed but not yet sold to customers

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

What side of the Manufacturing overhead account is actual manufacturing overhead entered on?

Always the debit side

Which of the following costs are charged directly to the income statement?

Selling costs Administrative costs

The journal entry to record $10,000 in manufacturing overhead applied to Job #40 debits Blank_

Work in process $10,000 and credits Manufacturing overhead $10,000

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 journal entry to record the purchase of materials credits

accounts payable

The journal entry to record the purchase of materials credits Blank

accounts payable

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

administrative salaries

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

administrative salaries

A journal entry that debits Work in process and credits Manufacturing overhead is recording the Blank

application of manufacturing overhead costs

A journal entry that debits Work in process and credits Manufacturing overhead is recording the Blank______. Multiple choice question.

application of manufacturing overhead costs

To calculate direct materials on the schedule of cost of goods manufactured, add purchases to beginning raw materials inventory and subtract

ending raw materials inventory and Indirect materials used

Labor costs charged to Manufacturing Overhead represent Blank______ labor costs.

indirect

The cost of goods is the sum of all amounts transferred from Work in process to Finished goods during a period

manufactured

Manufacturing overhead is applied with a debit to

work in process

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

work in process