Chapter 2
If the Manufacturing Overhead account has a _________ balance at the end of the period that indicates that overhead was underapplied and Cost of Goods Sold must be _____________
debit; increased
Hands on work that can be easily traced to a specific product is called _________ ________________.
direct labor
What are major inputs such as lumber and fixtures that can be easily traced to a specific job?
direct materials
A predetermined overhead rate is calculated by dividing the _________ total manufacturing overhead by the ___________ total cost driver.
estimated; estimated
What inventory consists of completed units that have not yet been sold?
finished goods inventory
When a job is completed, which account is debited?
finished goods inventory
What provides a detailed record of the costs incurred to complete a specific job
job cost sheet
Companies that use job-order costing:
make unique products
Cost of goods _______________ is the total cost of jobs completed during the period.
manufactured
The journal entry to record issuing materials to be used in production credits:
raw materials
What consists of any materials that will be included as part of a part of a finished product?
raw materials
When materials are purchased they are recorded in what account?
raw materials inventory account
The job cost sheet serves as a ____________ ______________ to the overall work in process inventory account
subsidiary ledger
If there is a debit balance in Manufacturing Overhead after overhead has been applied to all jobs means overhead was ____________
underapplied
Which account is debited when manufacturing overhead is applied?
work in process inventory
Materials requisition forms are used for:
- controlling the flow of materials from inventory - recording the cost of raw materials in the accounting system
Steps to assigning manufacturing overhead costs using a predetermined overhead rate:
- determine to allocation base (cost driver) - calculate the predetermined overhead rate - assign manufacturing overhead to products
Categories of manufacturing costs:
- direct labor - manufacturing overhead - direct materials
Which would be classified as manufacturing overhead?
- factory utilities - a factory supervisor's salary - depreciation on machinery
Manufacturing overhead costs:
- include some materials and labor - must be manufacturing costs - are indirect costs
Process costing:
- is used for homogeneous products - is used for mass production
What is included on a direct labor time ticket?
- the amount of time spend on each job - the number of jobs worked on
Steps from the schedule of COGS manufactured:
1. Total current manufacturing costs 2. Plus: Beginning WIP inventory 3. Less: Ending WIP inventory 4. Cost of goods manufactured
What accounts are debited in the journal entry to record manufacturing labor costs?
Work in process and manufacturing overhead
When calculating a predetermined overhead rate, the ideal allocation should be a ___________ ______________.
cost driver
