Chapter 3

Manufacturing overhead applied$ 150,000 Actual amount of manufacturing overhead costs120,000 What is the balance of the Manufacturing Overhead account and is overhead underapplied or overapplied at the end of the year?

Credit of $30,000,overapplied.

Which of the following occurs when finished jobs are shipped to customers? a. Debit to Cost of Goods Sold. b. Debit to Finished Goods. c. Debit to Work in Process. d. Credit to Raw Materials.

a. Debit to Cost of Goods Sold.

Which of the following best describes the journal entry to record the withdrawal of raw materials from the storeroom for use as direct and indirect materials in production? a. Debit Work in Process and credit Raw Materials. b. Debit Work in Process, debit Manufacturing Overhead, and credit Direct Materials. c. Debit Work in Process, debit Manufacturing Overhead, and credit Raw Materials. d. Debit Manufacturing Overhead and credit Raw Materials.

c. Debit Work in Process, debit Manufacturing Overhead, and credit Raw Materials.

Which of the following best describes the journal entry to record the use of direct and indirect labor in production? a. Debit Work in Process and credit Salaries and Wages Payable. b. Debit Work in Process, debit Manufacturing Overhead, and credit Direct Labor. c. Debit Work in Process, debit Manufacturing Overhead, and credit Salaries and Wages Payable. d. Debit Manufacturing Overhead and credit Salaries and Wages Payable.

c. Debit Work in Process, debit Manufacturing Overhead, and credit Salaries and Wages Payable.

For the month of October, Janus Corporation used $30,000 worth of direct materials in production and incurred direct labor costs of $60,000. Actual manufacturing overhead costs were $40,000, whereas $45,000 was the manufacturing overhead applied to work in process. What is the amount of total manufacturing costs added to production that would appear in the Schedule of Cost of Goods Manufactured for October?

$135,000 Three amounts are added together—direct materials used in production of $30,000, direct labor of $60,000, and manufacturing overhead applied to work in process of $45,000—to yield the total manufacturing costs added to production of $135,000.

Lubricating oil, waste cotton, and solder are used in the factory. Debit= Credit=

D=Manufacturing Overhead C=Raw Materials

The salary of the Production Supervisor is payable. Debit= Credit=

D=Manufacturing Overhead C=Salaries and Wages Payable

Manufacturing overhead is applied to jobs using a predetermined overhead rate. Debit= Credit=

D=Work in Process C=Manufacturing Overhead

Direct materials are issued into production for a specific job. Debit= Credit=

D=Work in Process C=Raw Materials

The wages of direct laborers who worked on a particular job are payable. Debit= Credit=

D=Work in Process C=Salaries and Wages Payable

Which of the following statements about manufacturing overhead costs is not correct? a. All manufacturing costs other than direct materials and direct labor are classified as manufacturing overhead costs. b. All manufacturing costs other than direct materials and direct labor are entered directly into the Manufacturing Overhead account. c. Depreciation on factory equipment is recorded with a debit to Depreciation Expense. d. Manufacturing overhead costs are recorded with a debit to Manufacturing Overhead account as they are incurred.

c. Depreciation on factory equipment is recorded with a debit to Depreciation Expense.

All of the following are product costs except ________. a. manufacturing overhead costs b. raw materials c. sales commissions d. direct labor

c. sales commissions

Which of the following occurs when manufacturing overhead is applied to Work in Process? a. Debit to Cost of Goods Sold. b. Debit to Manufacturing Overhead. c. Credit to Work in Process. d. Credit to Manufacturing Overhead.

d. Credit to Manufacturing Overhead.

Which of the following occurs when a job has been completed and transferred to the finished goods warehouse? a. Debit to Cost of Goods Manufactured. b. Debit to Cost of Goods Sold. c. Credit to Finished Goods. d. Credit to Work in Process.

d. Credit to Work in Process.

Zimmer, Incorporated started the month of January with beginning finished goods inventory of $20,000. The cost of goods manufactured during the month was $120,000 and the ending finished goods inventory was $50,000. What is the unadjusted cost of goods sold for January?

$90,000 Cost of goods available for sale = Beginning finished goods inventory + Cost of goods manufactured Cost of goods available for sale = $20,000 + $120,000 = $140,000 Unadjusted cost of goods sold = Cost of goods available for sale − Ending finished goods inventory Unadjusted cost of goods sold = $140,000 − $50,000 = $90,000

When companies incur selling and administrative costs, those costs ________. a. should be treated as product costs b. do not flow through the three inventory accounts c. should flow through the Manufacturing Overhead account d. should flow through the Work in Process account

b. do not flow through the three inventory accounts