ACT 220 Chapter 3
the journal entry to record the purchase of materials credits _________
accounts payable
the journal entry to record the purchase of materials credits the _________
accounts payable
the manufacturing overhead account is debited when ___________
actual overhead costs are incurred
the manufacturing overhead account is debited when ____________
actual overhead costs are incurred
to calculate the adjusted cost of goods sold ___________
add underapplied overhead to or subtract overapplied overhead from unadjusted cost of goods sold
a journal entry debiting salaries expense and crediting salaries and wages payable could record _________
administrative salaries
cost of good manufactured is the sum of:
all amounts transferred from work in process to finished goods during a period
raw materials
any materials that go into the final product
all manufacturing overhead costs are recorded in the Manufacturing Overhead account __________
as they are incurred
raw materials inventory is an __________
asset
how are direct labor costs expensed at the same time direct labor costs are added to _____________ they're also added to ________________
at the same time direct labor costs are added to work in process they are also added to the individual job cost sheet
when preparing financial statements in a job-order costing system, finished goods flow first to the ____________ and then to the ______________
balance sheet, income statement
the simpler method of closing out the balance of Manufacturing overhead is ___________
closing it out to Cost of goods sold
a journal entry that debits finished goods and credits work in process records the ______________
completion of a job
finished goods
consist of completed units of product that have not yet been sold to customers
amount transferred from Work in Process to Finished Goods is referred to as
cost of goods manufactured
what accounts are debited when goods are sold on account
cost of goods sold and accounts receivable
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
raw materials inventory represents the _________________________
cost of materials not yet used in production
the ______ side of the manufacturing overhead account is always used to record manufacturing overhead applied to the production and the __________ side is always used to record actual manufacturing costs incurred
credit debit
George Corporation recognized $1000 of accrued property taxes on it manufacturing facility the journal entry to record this debits __________
manufacturing overhead $1000 and credits property taxes payable $1000
if a company incurs $2000 of factory rent, $1000 of factory utilities, and $5000 of miscellaneous factory costs, the journal entry to record these transactions would be a debit to __________
manufacturing overhead $8000 and credit accounts payable $8000
manufacturing overhead cost is applied to work in process by
multiplying the predetermined overhead rate by the actual quantity of the allocation base consumed by each job
gross margin minus selling and administrative expenses equals __________
net operating income
when labor costs are incurred _____________ are added directly to the work in process account
only direct labor costs
underapplied or overapplied overhead is the difference between _____________________ and _________________
overhead applied to WIP and actual overhead
[learnsmart starts] 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
when materials are purchased they are recorded in the ___________________________________ account
raw materials inventory
gross margin is calculated by subtracting _________ from _____________
sales - cost of goods sold
a journal entry that debits advertising expense and credits cash would record the incurrence of a ______
selling cost
a journal entry that debits advertising expense and credits cash would record the incurrence of a ________
selling cost
the schedule of cost of goods _______ summarizes costs that remain in finished goods inventory and that have been transferred to 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
cost of goods manufactured includes
the manufacturing cost of goods finished during the period
cost of goods manufactured
the manufacturing costs associated with units of product that were finished during the period
how are manufacturing overhead costs assigned to Work in Process
they are assigned by using the predetermined overhead rate
how are nonmanufacturing costs expensed
treated as period expenses and charged directly to the income statement
(true/ false) the transfer of costs from one inventory account to the next parallels the physical transfer of goods from one inventory to the next
true
a debit balance in manufacturing overhead means overhead was __________________
underapplied
work-in-process
units of product that are only partially complete and will require further work before they are ready for sale to the customer
when only a portion of the units involved in a job are sold, the ___________
units product cost is used to calculate the amount transferred from finished goods to cost of goods sold
costs of partially completed units are accounted for in _____________
work in process
costs of partially completed units are accounted for in ______________
work in process
the journal entry to record the issuance of direct materials into production debits _________
work in process
to transform direct materials into completed jobs, direct labor cost is added to
work in process
units of product that are only partially complete are contained in the _____________________ inventory
work in process
when a job is completed, which account is credited
work in process
when a job is completed, which account is credited?
work in process
which account is debited to record direct labor costs
work in process
the journal entry to record $10000 in manufacturing overhead applied to job #40 debits
work in process $10000 and credits Manufacturing overhead $10000
when jobs are completed, their costs are transferred from ___________________to ________________
work in process to finished goods inventory
calculate the total manufacturing costs - direct materials: $40000 - direct labor: $120000 - beginning work in process inventory: $30000 - ending work in process inventory: $12000
$260000 $40000 +$100000 +$120000 = $260000
a company reports gross margin of $100000, cost of goods sold of $70000, and selling and admin expenses of $45000 net income (loss) is:
$55000 gross margin - selling & admin expenses 100000- 45000
raw materials inventory was $27000 at the beginning of the year and $25000 at the end of the year during the year $100000 in raw materials were purchased including $28000 of indirect materials that were put into manufacturing overhead during the period calculate the cost of direct materials used during the period
$74000
work in process consists of _____________
- actual direct labor cost - actual direct materials cost - applied manufacturing overhead
work in process consists of:
- actual direct labor cost - actual direct materials cost - applied manufacturing overhead
how to clear an account
- actual manufacturing overhead costs are debited to the account as they are incurred throughout the year - overhead is applied to Work in Process using the predetermined overhead rate
in a normal costing system, the manufacturing overhead account is debited for:
- actual overhead costs - the cost of indirect materials
what methods can be used to dispose of underapllied or overapplied manufacturing overhead?
- allocate it to Work in process, finished goods, and Cost of goods sold - close it to Cost of goods sold
in a normal costing system, Work in Process is debited for:
- direct materials - manufacturing overhead applied
a journal entry that debits manufacturing overhead and credits accounts payable could be made to record ___________
- factory utilities expense - rent expense on factory equipment
when jobs are sold, their costs are transferred from ____________ to ___________ and at this point the various costs are recorded as an ________ on the ___________
- finished goods - cost of goods sold - expense - income statement
actual overhead costs may not be proportional to the actual amount of the allocation base used because:
- many actual overhead costs are fixed - overhead spending may not be under control
raw materials inventory was $5000 at the beginning of the year and $12000 at the end of the year during the year, a total $27000 in raw materials were purchased including 4000 of indirect materials that were put into manufacturing overhead during the period
16000 beginning inventory + purchases - indirect materials - ending inventory 5000+ 27000 - 12000 - 4000 = 16000
cost of goods manufactured of $234000; beginning finished goods inventory of $18000 and ending finished goods inventory of $24000, calculate unadjusted cost of goods sold
228000 18000 + 234000 - 24000 = 228000
calculate cost of goods available for sale: - cost of goods manufactured of $234000 - beginning finished goods inventory of $18000 - ending finished goods inventory of $24000
252000 234000+18000
meep industries had unadjusted cost of goods sold of $300000. overhead was overapplied by $20000 adjusted cost of goods sold is ________________
280000
cost of goods manufactured of $410000; beginning finished goods inventory of $110000 and ending finished goods inventory of $125000, calculate unadjusted cost of goods sold
395000 110000 + 410000 - 125000 = 395000
Fillila Inc worked on three jobs this period: Job 14C, which cost $15000; job 23A which cost $28000, and Job 45B, which cost $23000. At the end of the period, only Job 14C was still in process (unfinished). The cost of goods manufactured this period is $___________
51000
the journal entry to record $1000 in expired prepaid insurance on factory equipment is debit:
manufacturing overhead $1000 and credit prepaid insurance $1000
actual manufacturing overhead is _________ to the Manufacturing overhead account
debited
difference between the entries to record depreciation on office equipment and depreciation on factory equipment is that one _____________
debits depreciation expense, while the other debits manufacturing overhead
the journal entry to record depreciation on office equipment debits __________
depreciation expense and credits accumulated depreciation
a journal entry that debits Manufacturing overhead and credits Accumulated depreciation records __________
depreciation on factory equipment
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
unadjusted cost of goods sold is calculated by subtracting ____________ from ___________
ending finished goods inventory from goods available for sale
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
the cost of jobs still unfinished at the end of a period are included in ____________
ending work in process inventory
how are manufacturing overhead costs expensed
entered directly into the Manufacturing Overhead account as they are incurred
period costs are recorded as
expenses on the income statement in the period incurred
(true/false) actual overhead costs appear in the Work in Process account but not the job cost sheet
false
(true/false) period costs flow from finished goods to cost of goods sold
false
completed units that have not yet been sold are found in _______________ inventory
finished goods
when a job is completed, its costs are transferred into__________
finished goods
when a job is completed, which account is debited
finished goods
Himber, Inc. just completed a job that cost $14000 in direct materials, $12000 in direct labor, and $8000 in applied manufacturing overhead. The journal entry to record completion of the job debits ________
finished goods $34000 and credits work in process $34000
when goods are sold on account, what accounts are credited
finished goods and sales
a journal entry debiting cost of goods sold and crediting finished goods is made when __________
goods are sold
net operating income is calculated by subtracting _______ from _______
gross margin - selling and admin expenses
labor costs charged to manufacturing overhead represent
indirect labor costs
labor costs charged to manufacturing overhead represent ____________
indirect labor costs
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
manufactured
manufacturing overhead consists of all_______
manufacturing costs other than direct labor and direct materials