Ch3. Job-Order Costing: Cost Flows & External Reporting

To calculate a predetermined overhead rate, divide estimated manufacturing overhead by the _____.

estimated allocation base

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

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

work-in-progress

Which of the following costs are classified as manufacturing overhead?

Factory Maintenance Wages Factory Rent Factory Utilities

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

Finished goods

What account is debited to record indirect labor costs?

Manufacturing Overhead

Actual overhead costs may be not be proportional to the actual amount of the allocation based used because:

Overhead spending may not be under control Many actual overhead costs are fixed

In a normal costing system, Work in Process is debited for:

Direct Materials Manufacturing Overhead Applied

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

Raw materials

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

finished goods

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 Good Manufactured = 20,000 + 40,0000+ 30,000 + 0 - 25,000 = 65,000

A journal entry debiting Cost of goods sold and crediting Finished goods is made when _____.

goods are sold

A credit balance in the manufacturing overhead account means overhead was _____.

overapplied

A journal entry that debits raw materials and credits Accounts Payable is recording the

purchase of materials

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 x 600

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

Selling costs Administrative costs

In a normal costing system, the manufacturing overhead account is debited for:

The cost of indirect materials The actual overhead costs

The journal entry to record the issuance of direct materials into production debit _____.

Work in process

When a job is completed, which account is credited?

Work in process

When the allocation method is used to close out the underapplied or overapplied balance remaining in manufacturing overhead, which accounts are affected?

Work in process Finished goods Cost of goods sold

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 unadjusted cost of goods sold + underapplied overhead: 450,000 +30,000

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 the 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

Match each event in the process of accounting for manufacturing overhead with the appropriate entry: First group: 1. Actual overhead is incurred 2. A job is completed 3. The period ends Second group: a. Manufacturing overhead is closed b. Manufacturing overhead is debited c. Manufacturing overhead is credited

1. B 2. C 3. A

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

Closing it out to cost of goods sold Allocating it among work in process, finished goods, and cost of goods sold.

The _____ side of the manufacturing overhead account is always used to record manufacturing overhead applied to production and the _____ side is always used to record the actual manufacturing cost incurred.

Credit Debit

The difference between the entries to record depreciation on office equipment and depreciation on factory equipment is that one ____.

Debit Depreciation Expense while the other debits Manufacturing Overhead

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

Direct labor costs The incurrence of direct labor costs should be recorded by debiting Work in process account.