learnsmart ch 2

typical cost drivers include: (choose all that apply) a. machine-hours b. utilities cost c. flight-hours d. computer time e. machine depreciation

a. machine-hours c. flight-hours d. computer time

categories of manufacturing costs include: (choose all that apply) a. manufacturing overhead b. direct materials c. direct labor d. administrative expenses e. selling expenses

a. manufacturing overhead b. direct materials c. direct labor

actual manufacturing overhead was $50,000, while overhead applied to jobs was $45,000. the entry to dispose of undersupplied or over applied overhead would: a. credit manufacturing overhead $50,000 b. debit manufacturing overhead $50,000 c. debit manufacturing overhead $5,000 d. credit manufacturing overhead $5,000

d. credit manufacturing overhead $5,000

raw materials inventory was $5,000 at the beginning of the year and $12,000 at the end of the year. during the year, a total of $27,000 in raw materials were purchased. the raw materials purchased includes $4,000 of indirect materials that were put into manufacturing overhead during the period. the cost of direct materials used during the period was: a. $20,000 b. $30,000 c. $16,000 d. $24,000

c. $16,000

a predetermined overhead rate is calculated by dividing the _____ total manufacturing overhead by the _____ total amount of the allocation base a. actual; actual b. actual; estimated c. estimated; estimated d. estimated; actual

c. estimated; estimated

the journal entry to record shipping goods to customers includes a credit to: a. manufacturing overhead b. work in process c. finished goods d. cost of goods sold

c. finished goods

job-order costing would mots likely be used in a(n) a. oil refinery b. soda bottling factory c. dairy farm that produces raw milk d. construction company

d. construction company

labor costs that are easily traced to a job are called _____ labor costs

direct

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

the united states requires _____ costing for tax reports

absorption

units of product that are only partially complete are contained in _____ _____ _____ inventory

work in process

the difference between direct labor and indirect labor is that direct labor: a. can be easily traced to jobs, while indirect labor cannot b. is a manufacturing overhead cost, while indirect labor is not c. is a variable cost, while indirect labor is a fixed cost d. is a manufacturing cost and indirect labor is a period cost

a. can be easily traced to jobs, while indirect labor cannot

gemini has sales of $50,000, cost of goods sold of $20,000, and selling and administrative expenses of $25,000. gross margin is: a. $5,000 b. $45,000 c. $30,000 d. $25,000

c. $30,000

the journal entry to record the purchase of materials credits a. work in progress b. raw materials c. accounts payable d. manufacturing overhead

c. accounts payable

a journal entry that debits finished goods and credits work in process records the: a. beginning of a job b. sale of a job c. completion of a job d. end of a period

c. completion of a job

a factor that causes overhead costs is called a: a. cost object b. manufacturing cost c. cost driver d. predetermined overhead rate

c. cost driver

raw materials is a(n) _____ account

inventory

the schedule of cost of goods _____ summarizes costs that remain in work in progress inventory and that have been transferred to finished goods inventory

manufactured

entry for manufacturing overhead when the period ends

manufacturing overhead is closed

entry for manufacturing overhead when overhead is applied to work in progress

manufacturing overhead is credited

entry for manufacturing overhead when actual overhead is incurred

manufacturing overhead is debited

a credit balance in the manufacturing overhead account means overhead was _____

overapplied

the process used to assign overhead costs to products is called overhead _____

allocation

what side of the manufacturing overhead account is actual manufacturing overhead entered on? a. the debit side, if actual is greater than applied b. the credit side, if actual is greater than applied c. always the credit side d. always the debit side

d. always the debit side

completed units that have not yet been sold are found in _____ _____ inventory

finished goods

the formula for applying overhead to a specific job

predetermined overhead rate x amount of allocation base incurred by job

a normal costing system applies overhead by job by multiplying a(n) _____ _____ rate by the _____ amount of the allocation base incurred by the job

predetermined overhead; actual

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

raw materials

which of the following are used to calculate cost of goods available for sale on the schedule of cost of goods sold? (choose all that apply) a. cost of goods manufactured b. ending finished goods inventory c. beginning finished goods inventory d. cost of goods sold

a. cost of goods manufactured c. beginning finished goods inventory

when overhead is undersupplied, a _____ must be made to the manufacturing overhead account to close it out a. credit b. debit

a. credit

what kinds of costs are assigned to units of product in absorption costing? (choose all that apply) a. fixed manufacturing costs b. fixed selling and administrative costs c. variable selling and administrative costs d. variable manufacturing costs

a. fixed manufacturing costs d. variable manufacturing costs

manufacturing overhead: (choose all that apply) a. includes some materials and some labor b. consists of traceable costs c. consists of only manufacturing costs d. consists of only variable costs e. is an indirect cost

a. includes some materials and some labor c. consists of only manufacturing costs e. is an indirect cost

a job cost sheet contains: (choose all that apply) a. materials costs charged to the job b. selling costs charged to the job c. labor costs charged to the job d. manufacturing overhead costs charged to the job e. the selling price of the job

a. materials costs charged to the job c. labor costs charged to the job d. manufacturing overhead costs charged to the job

the predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find: a. overhead applied to the job b. the predetermined overhead rate for the job c. actual overhead d. the total cost of the job

a. overhead applied to the job

the united states requires absorption costing for: (choose all that apply) a. tax reports b. internal financial reports c. external financial reports

a. tax reports c. external financial reports

overapplied or underapplied overhead is the difference between a. estimated total overhead and total overhead applied b. actual total overhead and total overhead applied c. actual total overhead and estimated total overhead

b. actual total overhead and total overhead applied

manufacturing overhead costs: (choose all that apply) a. do not impact the average cost per unit b. are indirect costs c. consist of many different items d. tend vary significantly, in total, from one period to the next

b. are indirect costs c. consist of many different items

the unit product cost is the same as the: (choose all that apply) a. cost that would be incurred if another unit were produced b. average product cost per unit c. incremental unit cost d. total job cost divided by number of units

b. average product cost per unit d. total job cost divided by number of units

what accounts are debited when goods are sold on account? a. finished goods and sales revenue b. cost of goods sold and accounts receivable c. cost of good sold and finished goods d. finished goods and accounts receivable

b. cost of goods sold and accounts receivable

to calculate a predetermined overhead rate, divide estimated manufacturing overhead by: a. estimated units of production b. estimated allocation base c. actual manufacturing overhead d. estimated direct labor hours

b. estimated allocation base

manufacturing overhead consists of all: a. costs other than direct labor and direct materials b. manufacturing costs other than direct labor and direct materials c. manufacturing costs d. indirect costs

b. manufacturing costs other than direct labor indirect materials

which of the following costs are charged directly to the income statement? (choose all that apply) a. direct materials b. selling costs c. administrative costs d. direct labor e. manufacturing overhead

b. selling costs c. administrative costs

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

balance sheet; income statement

a journal entry that debits manufacturing overhead and credits accounts payable count not record the incurrence of: a. factory utilities cost b. rent on factory equipment c. miscellaneous factory overhead costs d. direct labor costs

d. direct labor costs

what account is debited for the issuance of indirect materials? a. raw materials b. work in process c. accounts payable d. manufacturing overhead

d. manufacturing overhead

a journal entry that debits manufacturing overhead and credits accounts payable could be made to record: (choose all that apply) a. the purchase of indirect materials b. rent expense on factory equipment c. factory utilities expense d. depreciation on factory equipment

b. rent expense on factory equipment c. factory utilities expense

smith, inc. uses a job-order costing system with the predetermined overhead rate of $12 per machine-hour. the job cost sheet for job #42a listed $12,000 in direct labor cost, $18,000 in direct materials cost, 1,200 direct labor-hours and 1,100 machine-hours. the total cost of job #42a is _____

$43,200

fillia, inc. worked on three jobs this period: job 14c, which cost $15,000; job 23a, which cost $28,000; and job 45b, which cost $23,000. at the end of the period, only job 14c was still in process (unfinished). the cost of goods manufactured this period is _____

$51,000

steps for requisitioning and issuing materials

1. a production oder is issued 2. the production department prepares a materials requisition form 3. the materials requisition form is presented to the storeroom clerk 4. the storeroom clerk issues materials

steps for computing predetermined overhead rate

1. estimate the total amount of the allocation base 2. estimate the total fixed manufacturing overhead and variable overhead per unit for the upcoming period 3. estimate the total manufacturing overhead for the upcoming period 4. compute the predetermined overhead rate

steps to compute the predetermined overhead rate

1. estimate the total amount of the allocation base 2. estimate the total fixed manufacturing overhead and variable overhead per unit for the upcoming period 3. estimate the total manufacturing overhead for the upcoming period 4. compute the predetermined overhead rate

place these items in the order in which they appear on the schedule of cost of goods sold - unadjusted cost of good sold - finished goods inventory, beginning - cost of goods available for sale - deduct: finished goods inventory, ending - add: cost of goods manufactured

1. finished goods inventory, beginning 2. add: cost of goods manufactured 3. cost of goods available for sale 4. deduct: finished goods inventory, ending 5. unadjusted cost of goods sold

steps for calculating direct materials on the schedule of cost of goods manufactured

1. raw materials inventory, beginning 2. add: purchases of raw materials 3. total raw materials available 4. deduct: raw materials inventory, ending 5. raw materials used in production 6. deduct: indirect materials included in manufacturing overhead

place these items from the income statement in the order in which they should appear - gross margin - net operating income - selling and administrative expenses - cost of goods sold - sales

1. sales 2. cost of goods sold 3. gross margin 4. selling and administrative expenses 5. net operating income

steps from the schedule of cost of goods manufactured

1. total manufacturing costs 2. add: beginning work in process inventory 3. deduct: ending work in progress inventory 4. cost of goods manufactured

murphy manufacturing estimated total manufacturing overhead for 2015 to be $100,000 and uses direct labor-hours as the allocation base. they estimated that 5,000 hours would be used in 2015. actual overhead for 2015 was $120,000 and actual direct labor-hours were 7,500. how much overhead was applied to a job completed during 2015 that used 200 direct labor-hours? a. $4,000 b. $3,200 c. $100,000 d. $4,800

a. $4,000

which of the following would not be a good allocation base for manufacturing overhead? a. accounting hours b. machine hours c. units of product d. direct labor hours

a. accounting hours

to calculate the adjusted cost of goods sold: a. add underapplied overhead to or subtract over applied overhead from unadjusted cost of good sold b. subtract underapplied overhead from or add over applied overhead to cost of goods manufactured c. add underapplied overhead to or subtract over applied overhead from cost of goods manufactured d. subtract underapplied overhead from or add over applied overhead to unadjusted cost of goods sold

a. add underapplied overhead to or subtract over applied overhead from unadjusted cost of goods sold

which of the following are used to calculate cost of goods available for sale on the schedule of cost of goods sold? (choose all that apply) a. beginning finished goods inventory b. cost of goods sold c. ending finished goods inventory d. cost of goods manufactured

a. beginning finished goods inventory d. cost of goods manufactured

typical cost drivers include: (choose all that apply) a. computer time b. utilities cost c. flight-hours d. machine depreciation e. machine-hours

a. computer time c. flight-hours e. machine-hours

manufacturing overhead: (choose all that apply) a. contains fixed costs b. is an indirect cost c. is directly traceable to units produced d. consists of many different types of costs

a. contains fixed costs b. is an indirect cost d. consists of many different types of costs

a journal entry that debits depreciation expense and credits accumulated depreciation records: a. depreciation on office equipment b. the sale of office equipment c. depreciation on factory machinery d. depreciation on the factory building

a. depreciation on office equipment

which of the following costs can be directly traced to a particular product? (choose all that apply) a. direct labor b. direct materials c. manufacturing overhead

a. direct labor b. direct materials

widely used allocation bases in manufacturing are: (choose all that apply) a. direct labor cost b. machine hours c. non manufacturing costs d. direct labor hours e. units of product f. product revenue

a. direct labor cost b. machine hours d. direct labor hours e. units of product

when a job is completed, its costs are transferred into: a. finished goods b. cost of goods sold c. raw materials d. work in process

a. finished goods

actual overhead costs may not be proportional to the actual amount of the allocation base used because: (choose all that apply) a. many actual overhead costs are fixed b. overhead spending may not be under control c. the predetermined rate might not be estimated correctly d. overhead costs are all variable costs

a. many actual overhead costs are fixed b. overhead spending may not be under control

the manufacturing overhead account contains: a. many different kinds of indirect costs b. a single kind of indirect cost c. a single kind of direct cost d. many different kinds of direct costs

a. many different kinds of indirect costs

administrative costs are treated as: a. period expenses b. assets c. product costs d. liabilities

a. period expenses

why have direct labor costs decreased relative to overhead as a component of product costs? (choose all that apply) a. products have grown more sophisticated and complex b. production processes have become more automated c. labor has become more unionized d. more full-time labor is being used

a. products have grown more sophisticated and complex b. production processes have become more automated

which of the following information is contained on a time ticket? (choose all that apply) a. the job number of jobs worked on b. the nature of indirect tasks worked c. the amount of time spent on each job d. the materials used on each job worked

a. the job number of jobs worked on b. the nature of indirect tasks worked c. the amount of time spent on each job

a bill of materials contains the: (choose all that apply) a. type of each direct material needed to complete a unit of product b. job that will be charged for the cost of the materials c. type of materials to be drawn from the storeroom d. the quantity of materials to be drawn from the storeroom e. quantity of each direct material needed to complete a unit of product

a. type of each direct material needed to complete a unit of product e. quantity of each direct material needed to complete a unit of product

when a job is completed, the job costs are transferred out of: a. work in process b. cost of goods sold c. manufacturing overhead d. finished goods

a. work in process

which account(s) are debited in the journal entry to record manufacturing labor costs? a. work in process and manufacturing overhead b. salaries and wages payable c. work in process and salaries and wages payable d. manufacturing overhead and salaries and wages payable

a. work in process and manufacturing overhead

a measure such as direct labor-hours or machine hours used to assign overhead costs to products and services is called a cost driver or a(n) _____ _____

allocation base

the journal entry that debits work in process and manufacturing overhead and credits salaries and wages payable is recording: a. manufacturing overhead b. direct and indirect labor costs c. direct labor costs only d. indirect labor costs only

b. direct and indirect labor costs

which of the following costs is an example of manufacturing overhead? (choose all that apply) a. office equipment depreciation b. factory rent c. assembly labor d. sales commissions

b. factory rent

the predetermined overhead rate is multiplied by the actual allocation base incurred by a job to find: a. the total cost of the job b. overhead applied to the job c. the predetermined overhead rate for the job d. actual overhead

b. overhead applied to the job