Chapter 3 Managerial accounting

applied manufacturing overhead is entered on what side of the manufacturing overhead account

always the credit side

which of the following appears on job cost sheets and in the work in process account?

applied manufacturing overhead

The cost of jobs still unfinished at the end of a period are included in: a. ending work in process inventory b. beginning finished goods inventory for the next period c. the income statement d. cost of goods manufactured

ending work in process inventory

the journal entry to record expired prepaid factory insurance debits

manufacturing overhead and credits prepaid insurance

the period ends

manufacturing overhead is closed

overhead is applied to work in process

manufacturing overhead is credited

Fillia Inc worked on three jobs this period: Job 14c, which costs 15000; Job 23a which costs 28000, and job 45b which costs 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 cost of goods manufactured is the cost of jobs completed during the period (jobs 23a and 45b).

a journal entry that debits manufacturing and credits accounts payable could be made to record

factory utilities expense, rent expense on factory equipment

sales minus cost of goods sold equals

gross margin

actual overhead is incurred

manufacturing overhead is debited

the journal entry to record 20,000 in deprecation on factory equipment is debit

manufacturing overhead 20,000 and credit accumulated depreciation 20,000

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 to debt

manufacturing overhead 8000 and credit accounts payable 8000

when the allocation method is used to close out the under-applied or over-applied balance remaining in manufacturing overhead, which accounts are affected

finished goods, costing of goods sold, work in process

Given: Cost of goods manufactured of $234,000; beginning finished goods inventory of $18,000; and ending finished goods inventory of $24,000, unadjusted cost of goods sold is:

$228,000unadjusted cost of goods sold = $18,000+ 234,000 - 24,000 = 228,000.

Luver corporations gross margin is $100,000, cost of goods sod equals 70,000 and selling and administrative expenses total 45,000 net operating income is

100,000-45,000=55,000

Milton corp sold goods costing $50,000 for $75,000

Cost of goods sold for $50,000 and accounts receivable for $75

cost of goods manufactured

Includes the manufacturing costs of goods finished during the period

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

overhead is under-applied if

actual overhead is more than applied overhead

When preparing financial statements in a job-order costing system, finished goods flow first to the _____ _____ and then to the _____ _____

balance sheet; income statement

cost of direct materials

beginning inventory + purchases - indirect materials - ending inventory

what methods can be used to dispose of under-applied or overapplied manufacturing overhead

close it to cost of goods sold, allocate it to work in process, finished goods and cost of goods sold

finished goods

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

work in process

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

what accounts are debited when goods are sold on account

cost of goods sold and accounts receivable

under-applied or over-applied 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

the journal entry to record the more accurate allocation of over-applied or under applied overhead includes entries to

cost of goods sold, work in process, finished goods, and manufacturing overhead

The (Credit/Debit) side of the manufacturing overhead account is always used to record manufacturing overhead applied to production and the (Credit/Debit) is always used to record the actual manufacturing costs incurred

credit, debit

the journal entry to record expired prepaid factory insurance debits

debit Manufacturing Overhead and credit Prepaid Insurance.

the journal entry to record depreciation on office equipment debits

depreciation expense and credits accumulated deprecation

A journal entry that debits MOH and credits Accounts Payable could NOT record the incurrence of:

direct labor costs

Total Manufacturing Costs

direct materials costs, direct labor cost and manufacturing overhead applied

a journal entry that includes manufacturing overhead and cost of goods sold is recorded to

dispose of under-applied or over-applied overhead

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

end raw materials inventory and indirect materials used

actual overhead costs appear in the work in process account but not on the job cost sheet

false

when a job is completed its costs are transferred into

finished goods

when jobs are sold their costs are transferred out of

finished goods

a journal entry that debits work in process and manufacturing overhead and credits raw materials records the

issuance of materials

gross margin minus selling and administrative expenses equals

net operating income

applied manufacturing overhead will most likely actual manufacturing overhead

not equal

when labor costs are incurred ______ are added directly to the work in process account

only direct labor costs

a credit balance in the manufacturing overhead account means overhead was

overapplied

actual overhead costs may not be proportional to the actual amount of the allocation base used because

overhead spending may not be under control; many actual overhead costs are fixed

when calculating the cost of direct materials on the schedule of cost of goods manufactured the cost of direct materials is

subtracted from raw materials used in production

the value of work in process is equal to

the cost of all unfinished jobs

manufacturing overhead costs include

the factory supervisors salary, and factory insurance

manufacturing overhead costs consist of all manufacturing costs other than direct materials and direct labor

true

manufacturing overhead is applied with a debit to

work in process

raw meterials

include any materials that go into the final product

george corporation recognized 1,000 of accrued property taxes on its manufacturing facility. the journal entry to record the debits

manufacturing overhead 1,000 and credits property taxes payable 1,000

a journal entry that debits advertising expense and credits cash would record the incurrence of a

selling cost

actual manufacturing overhead costs are recored in the manufacturing overhead account

as they are incurred